Donor Acquisition: Think Medium-Term

acquisition

If you’re thinking about doing paid donor acquisition, you need to learn to think in the medium-term.

Here’s the story…

Two organizations we’re honored to serve spent significant sums on donor acquisition right before the pandemic.  One spent about $500,000, the other spent a little less than $1,000,000.

Both efforts lost money that year.  The campaign that cost $500,000 raised about $390,000.  The campaign also acquired new donors, to be sure.  But loud voices in the organizations disparaged the campaign.

And it’s easy to see why the campaign was disliked IF you’re thinking in the short term. 

However, we recently looked back at all the donors that were acquired in that campaign.  The organization discovered that those donors had given over $4,100,000 since being acquired.

Getting a return of $4,100,000 on an investment of $500,000 is a pretty good deal.  What looked like a “loss” of $110,000 in the short term was a gain of $3,600,000 (and counting!) in the medium-term.

(Of course there have been costs to cultivate those donors in the intervening years, but they are super minimal.)

What’s more, the organization would have been in real trouble during the pandemic if they hadn’t had those donors helping out.

If your organization is thinking about moving into paid donor acquisition, I hope this story serves as encouragement.  Moving to paid donor acquisition is a big step forward in an organization’s growth.  And you can read this post too, which will help you think critically about how to “make the leap” for your organization in particular.    

In short-term thinking, investing in donor acquisition a losing proposition.  In medium-term thinking (and beyond), investing in donor acquisition is investing in the growth and stability of your organization.

It’s a Trap!

Trap.

Please please please, do not get stuck in the classic nonprofit trap of thinking, “We want to raise more money but we have to sound like us.”

First, let’s take just a moment to acknowledge the strategic absurdity of expecting to raise meaningfully more money this year but “say the same things we always say in the way we always say them.”

What I want to focus on is this: I know of no nonprofit with a thriving fundraising operation that “sounds like” they sounded when they started. Instead, they experimented with and tailored their message over time, in order to raise more and do the most good.

“Sound like us” or “sound like me” are good values, but should not be the primary values.

An organization’s primary value for their fundraising communications should be something like, “we will continuously evolve our fundraising messaging so we can fund more and more of our mission work.”

(I’m assuming we’re telling the truth, etcetera etcetera.)

What’s more, an organization should “sound” different when communicating with different audiences. You should sound different when talking to an experienced professional at a Foundation partner than you sound in an email asking non-donors to make their first gift.

The primary goal for an organization’s fundraising communications should not be to “sound like us.” The primary goal should be to evolve and improve “what you sound like” over time in order to raise the most money and keep as many donors as possible each year.

Three Reasons You Should Occasionally Let Your Fundraiser Try Something New

Something new.

If you have some control or influence over fundraising at your organization – please take a minute to read this.

Maybe you’re the Executive Director, or a Board member, or the Head of Programs. But you have some “say” over your fundraising strategy, content and language.

Here’s what I want you to do:

Let your Fundraiser try something new every once in a while. Even something you don’t like.

There are three main reasons you want to do this…

  1. No one piece of fundraising is going to make or break your year. So it’s fine if you try something new every once in a while, even if you’re a small organization. Most nonprofits overestimate the importance of any one particular piece of fundraising.
  2. If a smart Fundraiser doesn’t get to try new things every once in a while, they will likely leave. One of the reasons nonprofit fundraising has a massive turnover problem is that Fundraisers are told they will be responsible for the fundraising – and usually told they need to raise more money than last year – but also must take all of the advice from non-Fundraisers. Would you thrive in that environment?
  3. For your organization to raise a different amount of money, you must communicate differently than you have in the past. Put another way, your current communication plan and messaging are perfectly designed to raise the amount of money that you raised last year. If you want to raise meaningfully more, you need to make meaningful changes.

If you don’t accept a little risk by giving your Fundraisers the freedom and leeway they need to make changes, you haven’t given them the freedom and leeway they need to achieve the fundraising goals.

The Pandemic Fundraising Lesson That’s Applicable Tomorrow

pandemic

Isn’t it odd that, during the pandemic, many organizations whose work had nothing to do with the pandemic raised record amounts of money?

What should that strange fact teach Fundraisers who are paying attention?  Because on the surface of things it sure doesn’t make sense.

I think there are a bunch of reasons, and here’s my attempt at a summary…

People give charitable gifts to exert a little control over the world.

All of us like feeling that we have control in their lives. The pandemic took away that control. Jobs were lost, jobs changed, we couldn’t leave the house, etc.

Yet people still had a deep need for control.

One of the things they did was give to charities. They gave, according to their priorities, to exert a little control over the world.  To remake a little bit of the world into the world they wish it was.

Those people – your donors – determined their priorities long ago. They had their priorities before they started giving to your organization, and will most likely have those priorities after they have finished giving to your organization.

The pandemic changed their circumstances, but did not change their priorities.

And For Today…

The principle we’re discussing is good to remember if North America slides into a recession. 

If (when?) that happens, the voices at nonprofits will start sharing their reasons that “we shouldn’t be asking donors for gifts right now.”

But remember: the recession might change donors’ circumstances, but it won’t change their priorities.

That’s exactly when you need to remember to be sold out for your cause.  Give your donors a chance to “exert a little control over the world” through your organization to help your cause or beneficiaries.

Everyone (and by that I mean your beneficiaries, your donors, and your organization) will be glad you did.

(H/t to Andrew who recently reminded me of this in a meeting.)

51 Birthday Thoughts on Fundraising

Fundraising

Today is my 51st birthday, and that’s a great excuse to share 51 pieces of advice and observations about the crazy wonderful world of fundraising.

In no particular order…

  1. If you’re not occasionally amazed that you can send out letters and emails to people and they send you money back, you’re not hooked up right.
  2. Pay close attention to all surveys and research on fundraising that are based on donor behavior. Put all surveys and research on fundraising that report on what donors say they will do into your “to read later” pile. 
  3. Every piece of fundraising should have a donor-shaped hole in it. 
  4. Fundraising is harder for younger people because they must create materials for an audience that’s primarily 40 to 50 years older than they are.
  5. The ability to differentiate between different types of fundraising, and different audiences for fundraising, is a sign of fundraising mastery.
  6. The older I get, I see that success in major donor fundraising is more manageable and measurable than I ever suspected.
  7. Large nonprofits don’t send out a lot of appeals and e-appeals because they are big.  They are big because they send out a lot of appeals and e-appeals.
  8. The “stories an organization tells itself” about Fundraising have a greater effect on how much money they raise than the stories they tell their donors.   
  9. Work hard to create repeatable “fundraising assets.”   Create “fundraising art projects” – which will be used once – only when necessary.
  10. Most nonprofits should mail their donors two more times than they did last year.
  11. A nonprofit website is only as effective as the questions asked when work starts.  If you start with the question, “How can we tell people all about our work?” you’ll get one type of website.  If you ask, “How can we make it easy for people to do something?” you’ll get another type of website.
  12. Each time I hear a song by Taylor Swift I think, “She’d make a great direct response fundraising writer.”  I’m aware this is a little weird.
  13. The only good news in appeal letters should be that the donor’s gift will solve the problem.  These are hard words to live by, but incredible for long-term fundraising success.
  14. Nonprofits have egos.  And they do not like to be vulnerable.  But vulnerability is the path to deeper relationship with donors.
  15. In nonprofit fundraising, your brand being relevant to a given situation/context is more important than your brand being consistent across all situations and contexts.
  16. There are some differences between direct mail for mass donors and direct mail for major donors, but not as many as most people believe.
  17. My ability to be compassionate is increasing as I age.
  18. If you’re not regularly getting complaints and unsubscribes, you’re leaving a lot of money on the table.  Complaints are a fee you pay to achieve a goal, not a fine you pay because you’ve done something wrong.
  19. The most effective Fundraisers and fundraising organizations have a tolerance for pain.  They endure the pain of creating messages that internal audiences don’t like, and the pain of sharing real needs, and the difficulty of being other-centered.  Fundraisers endure those pains because they know that they will raise more money for the organization if they do.
  20. Most donors care far more about what their gift did than they care about what your organization has been up to.
  21. Every generation creates a new philosophy for why they shouldn’t share the need.
  22. I believe that most critiques of donor-centricity are actually critiques of “donor centricity taken way too far.”  Donor centricity, when exercised properly, has healthy boundaries.
  23. For many of an organization’s donors, the fundraising you send them IS the relationship.  So how are you going to show up in that relationship?
  24. All strategy is sacrifice.
  25. Fundraising doesn’t create tension in donors, it reveals tension they already hold.
  26. Fundraising is so much better than “news.”  When fundraising reveals tension in a donor between the way the world is and the way they want the world to be, fundraising presents the donor with something impactful they can do right now to help.  News just moves on to the next story.  
  27. Letters that look like personal letters tend to perform better.
  28. When people critique fundraising by saying, “this doesn’t sound like me/us,” I always think, “Well, if ‘sounding like you’ were the key, wouldn’t you be raising a lot more money than you currently are?”
  29. Organizations that are optimistic about fundraising raise more money than organizations that are pessimistic about fundraising.
  30. If you want a donor to do something, ask her to do something that’s actually doable.  You have a greater chance of success asking a donor to “provide one new library book” than you will asking a donor to “provide new library books to local children.” 
  31. Fundraising success is much more a knowledge issue than a talent issue.  This is particularly true in direct response fundraising.
  32. There will always be fewer complaints than the organization fears there will be.  And the complaints that do come in will be less meaningful and impactful than organizations fear they will be.  And about 1/3 of complaints can be turned into donations on the spot if the person hearing the complaint is prepared.
  33. In general, having a ratio of about 2 asks (appeals) for every one report (newsletters) seems to maximize revenue and retention.
  34. I’ve never met a nonprofit whose fundraising failed because they were talking to the wrong people.  But I’ve met lots of nonprofits whose fundraising failed because they were talking to people about the wrong things.
  35. People tend to overvalue the importance of one piece of fundraising, and undervalue the total importance of all their fundraising.
  36. Ineffective fundraising is about the organization and its processes.  Effective fundraising is about the donor and her values.
  37. The ability to get to the point quickly is gold in direct response fundraising.
  38. Most fundraising isn’t written to persuade, it’s written not to offend.
  39. A powerful piece of fundraising causes the recipient to have to choose; am I in right now or am I out?
  40. Donors’ generosity during the pandemic is one of the most meaningful things I’ve ever seen.
  41. An organization handing you the keys to their fundraising is one of the biggest privileges you can be given.
  42. Fundraising, done properly, takes a toll on the Fundraiser.  You have to regularly expose yourself to tragedy and injustice and need, and then you have to share those things with donors.  Thankfully, the consequences of doing so are incredible instances of generosity and goodness.
  43. The first sentence of anything you write is the onramp to the rest of the piece.  If that first sentence is long or complex, fewer people will read.  When fewer people read, fewer people give.
  44. It is so hard to keep the main thing the main thing.
  45. Irony is when a person who is an amateur at fundraising tells me that fundraising I’ve made is “not professional.”
  46. There are no sure things in fundraising.  Everything is a bet.  Some bets are more likely to work than others. 
  47. Using two spaces between sentences is a small, donor-centered bet.  Having two spaces between sentences is quantifiably easier for people to read, and it’s more familiar to older donors.  Regardless of personal preference, if using two spaces between sentences helps more people read your fundraising, isn’t that a bet worth making?
  48. If you want to be effective at fundraising today and in the future, get good at getting attention.  It’s getting harder and harder to get donors’ attention.
  49. In my whole career I’ve seen one instance of the data showing that the organization was asking too often.  One.
  50. Effective direct response fundraising is so hard to create because it’s other-centered: it’s more about the donor and her values, and the beneficiaries, than it is about the organization sending it.
  51. The ability to do fundraising as a career is a gift.

Repurpose the Proven

story

In a movie directed by Oliver Stone in the second half of the 1980’s, Charlie Sheen plays a young man who follows a bad father figure, then turns to follow a good father figure. Can you name the movie?

If you said Platoon, you are right. If you said Wall Street, you are right. Both movies told the same story, and both were a huge success. The primary difference was that Platoon took us into the green jungles of Viet Nam circa 1967, and Wall Street took us into the concrete jungles of Manhattan circa 1985.

Here’s my point: Wall Street premiered less than 12 months after Platoon, but no one who saw it complained, “Hey, we were told this story last year!”

That’s a quote from Roy H. Williams, one of my favorite writers. 

It’s one of those quotes that’s not about fundraising, but it’s absolutely about fundraising.

Because if you’re going to get good at fundraising, you’re going to find yourself telling the same “story” over and over again.

The beneficiary will change.  The circumstances and details will change.  But it’ll be the same “story” in the way Platoon and Wall Street are the same story.

Because when you find a particular “story” that elicits the response in your donors that you’re looking for, you want to repeat that “story.”  Again and again and again.

You’ll get tired of it.  But no one will complain and say, “Hey, we were told this story last month.”  Because a vanishingly small number of donors will notice that the “story” was the same. 

There are types of stories that work better than others.  For instance, there’s a type of story that works best for appeals and e-appeals.  There’s a type of story that works best for newsletters and “report backs.” 

Again, you or your organization might get tired of the story types that work best for you.  But don’t let your organization’s boredom with any particular story type get in the way of creating effective communications for your donors.

What To Do When Your Fundraising Results Are Flat

results

If the growth of your fundraising has flattened out, it’s most likely a result of a belief that’s holding you back. 

So, if your results are flat, it’s time to take a critical look at your organization’s beliefs about fundraising.

Here’s a list of beliefs that often prevent organizations from reaching the next level:

  • “Our donors can’t give any more”
  • “We don’t work with people or animals, so we can’t raise much”
  • “Not very many people care about our issue”
  • “We can’t ask our donors again this year”
  • “Asking our donors in a different way would cause us to raise less”
  • “We need much younger donors”
  • “[Media channel] would not work for our donors”
  • “No one on that side of the city would care about what we do on this side of the city”
  • “Our work is too complex for us to have many donors”
  • “Our donors wouldn’t like that type of fundraising”
  • “That type of fundraising might be successful in [that] country, but it wouldn’t work in our country.”

Organizations trust their beliefs to be true because believing in them brought the organization the success it currently enjoys.

The problem is that many of these “beliefs” are actually “blind spots.”  (And that’s completely understandable: most people in fundraising positions at smaller nonprofits didn’t receive much training, and most people in leadership positions aren’t that enthusiastic about fundraising in the first place.)

And so we arrive at the problem: to see what’s hiding in our blind spots, we need to alter one of our fundamental beliefs about how the world works.  But our pride causes us to have a deep, natural aversion to learning that our fundamental beliefs have been wrong.

So the question becomes, “Is your organization’s hunger to do more of your mission strong enough to cause you to listen to things you’d rather not hear?”

If your organization’s hunger is strong enough, time to examine your beliefs. Your beliefs got you to where you are, but often won’t take you to the next level.

Which of your beliefs should you examine?  Which of your beliefs should you warmly thank for getting you this far… and then set aside?

Recipe for a Successful Direct Response Fundraising Career

data

Here’s my recipe for how to succeed in direct response fundraising.

FYI: anybody worth their salt is endlessly repeating steps 3 through 5.  And they’ve used their learning to get better at all types of fundraising – not just direct response.

Step #1

Develop a point of view that’s based on the best data you have available, or based on data from someone with market experience, at scale, that you trust.

This is hard for Fundraisers starting at smaller shops.  But there’s more good info available today than at any point in fundraising history.  There are quite a few people working to share the data and “point of view” that used to be available to only a privileged few.  Erica WassdorpJeff Brooks, Lisa Sargent, Tom Ahern, Mike Duerkson and Jen Love and John Lepp immediately spring to mind.

To give you an example of how much this has changed, I asked my mentor many times why he didn’t write a book to share all that he knew.  His response was always, “Why in the world would I give to my competitors all of the knowledge we worked so hard to learn?”

My attitude is that it’s the right thing to do to make this information more available to smaller nonprofits, and that it’s not a zero-sum game.

Step #2

Apply your point of view in your fundraising practice.  If your results consistently outperform previous results for your organization, your point of view is more accurate than the point of view that was previously used.

This means you have to practice for a while.  And you have to track results.  You build and test your point of view over time.

And some points of view absolutely work better than others.

Step #3

If you get new data that seems to contradict your point of view, investigate that data to see if a) it applies to your situation, and b) stands up to scrutiny.

Things go sideways on this step all the time. 

First, you must actively be looking for or testing for new data.  No “leaning back” here; you have to lean in.

Second, when new data arrives, you must always ask whether the new data applies to your situation/context and is a good next step.  In my experience, this often goes awry when smaller orgs apply learnings from bigger orgs that don’t apply to them.  For instance, Bill Jacobs at Analytical Ones helps medium and large nonprofits create “statistical models” that help the nonprofit know who to mail each appeal letter to.  It’s an incredible tool, but the “appropriate next step” for most small organizations is probably to start using standard RFM segmentation instead of “mailing every name in our database.” 

Third, does the “data” stand up to scrutiny?  A lot of studies get published in our industry that report what donors say they are going to do.  I pay almost no attention to what donors say they are going to do because there’s often a huge difference between what they say they will do and what they actually do.  Humans’ predictions of what they think they will do in the future are not nearly as helpful as data about what they’ve actually done in the past.

Step #4

If needed, update your point of view.

If the contradicting data applies to your situation/context, and the data stands up to scrutiny, then you need to update your point of view.

Step #5

Stay on the lookout for new data.

This is hard for people who don’t work at a fundraising agency, or don’t work at a nonprofit that runs tests.  Thankfully, there’s more information publicly available than ever before.  Here’s what I recommend to get some of it:

  • Subscribe to blogs that are data-based and share test results
  • Cultivate friendships with people who do testing
  • Get on mailing lists where testing results are occasionally shared, like SOFII
  • Pay attention to other fields, like psychology and behavioral economics – for instance, I’ve learned a lot about fundraising from Brené Brown, and Annie Duke’s Thinking In Bets, and Seth Godin’s The Practice – even though none of those books are about fundraising

As I said earlier, the professionals I respect are always on the lookout for new data.  I’d describe myself as a person who “lives in fear of finding out that there’s a better way to do something than what I currently recommend.”

Data that proves you wrong just shows you that there’s a stronger, more complete point of view out there for you to develop.

As you build and refine your point of view, do it consciously.  Take notice when you’re wrong.  Take notice when you’re right.

And then magically, after years of practicing, you’ll be able to help nonprofits of all kinds do even more of their world-changing work.

Complaints, Fees and Fines

complaint

There’s a difference between a fee and a fine:

  • A fee is what you pay in exchange for something. You pay a fee, and you get into Disneyland.
  • A fine is what you pay when you’ve done something wrong. You drive too fast, and you pay a fine for speeding.

Most nonprofits think of donor complaints as a fine for doing something wrong.  

I want to you to think of donor complaints as a fee you pay in exchange for raising more money and retaining more of your donors.

Most complaints happen for two reasons:

  • When you send your fundraising to more and more people – somebody is going to complain… because people will complain about anything.
    • Large nonprofits have whole departments of people that handle complaints. Why? Because they have so many donors that there will always be somebody who complains.
  • When you share the truth about what’s actually happening in the world – somebody is going to be uncomfortable, and they are going to complain.

Sending your fundraising to more people and sharing the truth about what’s happening in the world increases the amount of money you raise. 

At the same time, it increases the number of complaints you receive. 

The complaints are a “fee” you pay in order to do more of your mission.

Trying to grow your fundraising without increasing the number of complaints you get is like asking the kitchen staff of a small restaurant to feed a lot more people but have the same number of spills or drips as before. 

You wouldn’t ever ask that! You know that spills and drips are a “cost of doing business” in a kitchen that’s working hard and growing.

But nonprofit fundraising staffs are expected to grow without increasing complaints. Instead, complaints should be seen like a “cost of doing business” for a fundraising program that’s working hard and growing.

Complaints are like “fees” to make the leap to the next level of fundraising.  In exchange for raising more money, you have to deal with a few more complaints.

Complaints aren’t fun. But they’re not a sign that “a lot of people don’t like our fundraising.” They are just the occasional fee.

And isn’t paying a few fees worth it in order to raise more money, retain more of your donors, and do more of your mission?