Hindsight IN 2020

Hindsight.

“They say a wise man learns from others’ mistakes. I learn from others’ successes, why pay attention to the mistakes?”
~Behdad Sami

Thousands of smart fundraisers have gone before you. The best advice we can give small-to-medium-sized nonprofits for 2020 is to find out what successful fundraisers have done in the past and apply it to your organization’s fundraising.

If You See a Tactic a Lot, It’s Probably Working

One thing to pay attention to: if you see a tactic a lot from professionally run organizations, the results from it are probably great.

For instance, here’s a list of things we see (and use) all the time because they work great. Many organizations don’t like these tactics, but they work great:

  •  Telemarketing
  • Printed gift receipts with reply cards and reply envelopes
  • Appeals that boldly share stories of Need
  • Direct mail
  • Letters and emails that are highly repetitive
  • Fundraising messaging that’s so simple it makes expert internal stakeholders uncomfortable
  • Having detailed plans and revenue goals for Major Gifts Officers, with high accountability
    We learned each of these (and many more) from the successes of fundraisers who have gone before us.

They taught them to us because, out of all the available options, they worked the best.

So rather than reinventing the wheel, always look first to hindsight.

And of course, hindsight shouldn’t be the only place you look. But it’s the only proven resource that small-to-medium-sized nonprofits have, because testing and innovating are expensive.

Two Powerful Things

Here are two powerful things that FAR too few organizations (particularly Boards and leadership) do:

  1. Take time to ask the question, “For organizations at our stage, who has been successful at this before, and how did they do it?”
  2. Then trust the results of successful fundraising done before, more than trusting what internal stakeholders think will work, or what they like or don’t like.

Because in our experience, the successes of others won’t look like what you’re doing now.

At first blush, you’ll probably think it won’t work for your donors.

You probably won’t even like it.

But it will likely work.

So go to sofii.org and browse the results. Pay attention to the results-based teaching we do on this blog. Follow people who have a ton of direct response fundraising experience – people like Lisa Sargent, Jeff Brooks, Tom Ahern, Agents of Good, Mark Phillips of Bluefrog, and Simon Scrivener.

If you have the budget and time to innovate, that’s great! Please do it and share!

And if you’re a cash-strapped smaller nonprofit, learn from the past successes that the experts above are constantly sharing!

Are You Learning from Your Experiments?

experiments.

I tweeted this out last month, and it got a lot of love (well, for me anyway):

You ran a bunch of fundraising experiments in 2019 – have you learned everything you can learn from them?

And the appeals, e-appeals, and newsletters you sent out are not the only experiments you ran. Your whole fundraising program is an experiment. Your major donor program is an experiment. Your direct response program is an experiment.

Here are some example questions, and what they attempt to measure:

  1. What percentage of your donors did you retain in 2019 versus previous years? This will help you know, overall, how well your fundraising program performed last year.
  2. What percentage of your major donors did you retain in 2019 versus previous years? This will tell you how good your program is at retaining major donors – you know, your most important group of donors. Want to really get into the data? Measure the amount of major donor revenue you retained. That will show you if you’re retaining your highest value donors (which is best). Or if you’re just replacing lost revenue with new revenue each year. (H/T to Veritus Group for popularizing this idea.)
  3. Of your appeal letters, which one had the highest net revenue? Which one had the highest response rate? These will help you answer which appeals you should ‘repeat’ and do again this year – and which ones you should not do again this year.
  4. For each mailing, what’s your response rate by recency? For instance, if you send your appeals to all donors who have given a gift in the last 24 months, what’s the response rate and net revenue from the 18-24-month group? That will tell you whether you should continue to mail to those donors.

With the answers to questions like these, you can make the types of changes that smart organizations use to raise more money every year.

And if you make all the needed changes to the best of your ability, it’s like compound interest. 1 + 1 + 1 = 5. That’s where organizations see the big growth.

And it’s basically free money! It’s just measuring experiments that you’ve already run and using data to make your 2020 fundraising decisions.

Instead of “Hindsight is 2020,” I propose “Use hindsight in 2020!”

Why does Ask, Thank, Report, Repeat work?

Ask Thank Report Repeat.

I remember receiving an email from a woman I met at a conference where I spoke. She ended her email to me with this comment:

“Because of your knowledge, I’ve been kickin’ a** in fundraising, and it will only get better as we make more money, add more staff, and implement more of your plan!”

Reading this made me ask myself, “Why does Ask, Thank, Report, Repeat work so well?”

Here are just some of the reasons:

  1. Fundraising is not a talent issue – it’s a knowledge issue. Almost anyone can learn the fundraising fundamentals I teach. The key is that they must have the willingness to learn.
  2. Ask, Thank, Report, Repeat puts the donor at the center of the fundraising conversation. The system honors the donor and their stewardship decisions, and it gives them the credit for making the world a better place because of their donation.
  3. You’ll communicate more often to your donors when using Ask, Thank, Report, Repeat. The system requires you to Ask with clarity, Thank promptly, and Report back emotionally. Doing these things means you’ll communicate to your donors more often, which is an excellent thing for most nonprofits.

As you run fast into the year ahead, I encourage you to consider learning more about Ask, Thank, Report, Repeat. Embracing it will help you leverage the fundraising power behind this simple, donor-centered communication rhythm.

Want to know more? Get Jim’s recorded webinar and start learning how you can raise more money and steward important donor relationships during this crucial fundraising season.

To help you with your major donor fundraising this year-end, we’re running a series of Jim Shapiro’s most helpful posts.

We hope it provides you with some tips and tactics that skyrocket your major donor revenue during this important fundraising season.

Fundraising Assets > Fundraising Art Projects

Assets

There’s a question you should ask about every piece of fundraising communication your organization makes:

“How and when, with as little work as possible, could we use this again?”

That’s what the savvy fundraising organizations are doing. For instance:

  • This year’s Fiscal Year End letter looks and reads almost exactly the same as last year’s Fiscal Year End letter.
  • This year’s event script follows the exact same flow and timing as last year’s event script.
  • This year’s Back to School e-appeal uses the exact same offer and copy as last year, only the story has been updated.

When you start doing this, you and your organization benefit.

You benefit because you can get things done faster. It’s a LOT easier to update last year’s successful appeal than it is to make a whole new one.

Your organization benefits because you tend to raise more money this way. Why? Because you start paying really close attention to what works and what doesn’t. And you end up doing more of what works. Which raises you more money.

True Story

We work with several organizations that mail their donors about 10 appeals per year.

On average, 7 of the 10 appeals are updated versions of the same mailing sent the year before. Same for the email versions of those impacts.

Think about how much time that saves them!

There’s another benefit – it makes their income much more predictable. For instance, say last year’s successful February appeal raised $50k. If you mail the same thing again next February, you can count on raising about $50k or more. But if you create a whole new piece from scratch, you might raise $50k, you might raise $25k. Which scenario would you prefer?

For Comparison…

Most organizations approach each piece of fundraising as an Art Project:

  1. They assume this year’s letter needs to be different than last year.
  2. They assume they need to say things differently than they’ve been said before.
  3. If something worked last year (or last month!) it’s assumed that it won’t work again.

Based on those assumptions, they create something new and different each time.

Which is unfortunate because all of those assumptions are incorrect.

Those assumptions lead to what we call “art projects” – unique pieces of fundraising that take more work to create and tend not to repeat the successes of the past.

At a nonprofit, where time and money are often scarce, why would you choose to take that approach?

So, What Assets Do You Already Have?

That’s a question you should ask yourself immediately. Especially since we’re entering the busy fundraising season!

As you think about your fall – what fundraising assets do you have from this spring, from last year, or from three years ago that you could simply update and use?

Because if that piece of fundraising worked, you know your donors liked it.

And I have 26 years of experience that says if your donors liked something once, they’ll like it again.

It will save you time.

And I promise – no donor is going to contact you and say, “Hey! Wait a minute. This letter/email is just like that one you sent 7 months ago!”

It just doesn’t happen.

So go find an asset you’ve created. Use it this fall to save yourself some time. and raise a bunch of money.

And for any fundraising you create in the future, always ask yourself how and when it can be used again.

When to Attempt to Innovate

When to Attempt to Innovate

I wrote recently about how the vast majority of small nonprofits should not spend time and money attempting to innovate.

But there are times when attempting to innovate is the right thing to do:

You should attempt to innovate after you have stabilized your fundraising, optimized your fundraising, and expanded your fundraising.

Stabilize, Optimize, Expand, Innovate

Most small- to medium-sized nonprofits need to stabilize their fundraising.

That means getting your systems locked in so you know exactly what to do, when to start, how long it takes, and you get it done on time. (Most small nonprofits have work to do on this stage, in my experience.)

Then they need to optimize their fundraising.

That’s making each appeal or e-appeal work as well as possible. That’s using segmentation and talking to different groups of people with different messaging. That’s analyzing the results of each fundraising campaign and making the next one better.

Then organizations need to expand their fundraising. That’s trying a new channel, like radio or Facebook. Or beginning a scalable donor acquisition program. Or sending 6 appeals instead of 4.

Then, and only then in my opinion, should organizations be trying to innovate.

The three things above are hard. But our industry knows how to do them.

Don’t Skip a Stage!

Too many nonprofits skip over the steps above.

They skip things that we know will work to raise them more money. Instead, they try things that might work.

They waste tons of time and money. And they pay the opportunity cost of the money they could have raised – and the donor relationships they could have made deeper.

Because remember, innovation doesn’t always work. In fact it rarely works.

(Side note: this is why I’ve been saying “attempting to innovate.” Because when organizations attempt to innovate, they often come up with a) things other organizations have tried before that didn’t work, and b) new strategies and/or tactics that don’t work.)

To all you small nonprofits out there: let the big organizations, who have optimized their fundraising, spend the money to innovate. There will be some successes and some failures.

Then copy their successes.

The Real Trick

The real trick is knowing when to innovate.

In my experience, too many smaller nonprofits like the idea of innovating – of working on something exciting – more than they like the hard work of following best practices.

So they attempt to innovate when they should be following surer paths to success.

If a nonprofit follows best practices, it will raise more money.
If a nonprofit tries to innovate, it might raise more money.

And you want to know what’s really exciting? Raising more money with less work. That’s what happens when you follow best practices!

Why attempting to innovate is rarely the smart choice

Why attempting to innovate is rarely the smart choice

The vast majority of nonprofits should not spend time and money attempting to innovate.

Let’s keep this super brief.

The fastest, cheapest way to raise more money is almost always to follow fundraising best practices.

Especially when most small nonprofits can see growth of 15% to 20% per year when they start following best practices.

“But wait,” I can already hear people thinking, “we’re small, we have to innovate. And regular fundraising is boring.”

Please hear me out: that line of thinking is what keeps many small nonprofits small.

First of all, you do not have to innovate. Your organization was started to do one thing: make an impact for a cause or group of people who need help. Not to make an impact AND create innovative fundraising.

Having the impact your organization was started for and creating innovative fundraising are two completely different things that require completely different skillsets. It’s highly unlikely that a small nonprofit will be good at both.

Attempting to Innovate is a Bet

Organizations that attempt to innovate are betting time and money that the results will be better than the results they could get from best practices.

Sometimes you win. Most of the time you lose. Best practices are best practices for a reason: they are proven.

In my experience, attempting to innovate is a bad bet for most small nonprofits.

Let the “big guys” innovate. Let the big guys absorb the costs of all the testing and failures that lead to breakthroughs. Small nonprofits should be following the known paths to success.

Try Proven Tactics that are New to You

Most small nonprofits confuse “trying new things” with “attempting to innovate.”

Should small nonprofits should try new things? Of course.

For instance, you could try to acquire new donors using radio. That might be new for your organization, but it isn’t innovation. It’s a proven tactic. There are known Cost Per New Donor amounts (around $100). There are known ROIs (around 1.1 to 1.3). There are known ways to make it succeed (have a great offer, tell stories, long form is more effective than short form).

The thing I want smaller nonprofits to know is that the Fundraisers Who Came Before You have tried almost everything. If you look around, they’ve figured out what tends to work well and what doesn’t. Lean into that set of knowledge!

And here’s the amazing thing; those Fundraisers Who Came Before You will share their knowledge! They’ll tell you what they did and how they did it. They’ll share the results. You can apply what they learned to your organization, to grow faster.

You just have to take the initiative.

The Good News for Small Nonprofits

There are things you don’t have to do. Things you can take off your plate.

And one of them is attempting to innovate.

There’s an incredible body of knowledge that’s been built up over the last 70 years for how to raise money effectively. Lean into that body of knowledge – it’s what I do every day.

Every once in a great while, attempting to innovate is the right course. It’s fun (and usually expensive).

But the majority of the time there are huge gains to be made not from attempting to innovate, but from taking what’s worked for other organizations and applying it to your organization.

You’ll save yourself a lot of time and heartache. And you’ll do more good faster.

PS — Get some of our best practices from our free e-book, “Asks that Make Your Donors Take Action.”

How to Raise 15%-20% More This Year

How to Raise 15%-20% More This Year

We’re doing a series of short posts called Mastermind Lessons.

The Fundraising Mastermind is transformational consulting for nonprofits that we do with Chris Davenport of Movie Mondays and The Nonprofit Storytelling Conference.

Today’s post is the fourth top-level lesson we’ve found that every organization in the Mastermind needs to learn…

It’s simple… but it’s not easy.

The Three Things You Should Focus On

I realized that every organization we worked with needs to get better at these three things. And all of them saw immediate gains from doing so.

Over my career, I’ve noticed that the organizations who focus on doing these well see a lift of 15% to 20% in net revenue over the first year they focus here.

So read on if you’d like to see that kind of growth…

#1 – Communicate to Your Donors More – About What Donors Care About

It’s a fact: most nonprofits under-communicate to their donors. (To be more nuanced, most nonprofits under-communicate to their donors about what their donors care about.)

Just one example: most small nonprofits who send four appeals per year are scared to death that they will drive their donors away if they send another appeal or two. What those small nonprofits don’t know is that their donors also give to other organizations who are mailing twelve, sixteen or even twenty-four times a year.

If you literally don’t have the human resource capacity to be communicating more, that’s a good reason. But if the fear of bothering/offending your donors is causing you to contact them less, you need to stop fearing and trust in a) best-practices and b) your donors’ willingness to help.

And of course, you have to communicate with donors about what they care about. Most smaller nonprofits have a hard time with this, which is why they should…

#2 – Use Specific Offers

To smaller organizations, it’s counter-intuitive that highlighting a specific part of one program will work better than Asking donors to fund your mission or all of your programs.

But it works almost every time.

Most of your donors, most of the time, don’t want to know the whole picture. They want an easy way to do something meaningful that they understand.

A great offer gives donors what they want: it highlights a specific part or step of one of your programs (so it’s easy to understand), and it shows your donors how meaningful and important that step is.

#3 – Manage Your Major Donor Relationships

About nine out of ten organizations we work with openly acknowledge that they could do a better job with their major donors.

And for the organizations where we can spend a year or two helping them improve their major donor systems – their revenue growth is remarkable.

Investing in your major donor systems is an easy win. It doesn’t happen overnight, but it will sure feel like it.

15% Growth is Simple, But It’s Not Easy

To the smaller nonprofits out there: if you do the three things above, and do them well, you’ll see significant revenue growth.

Because there is no magic bullet. Here’s how John Lepp of Agents Of Good said it on Twitter:

“Charities are looking for a magic (technologic and demographic) bullet to solve all of their problems, and I’m sorry… it doesn’t exist. It’s the 1000+ small boring things you need to do that make the big difference.”

The three things above are the three most important “1000+ small boring things you need to do.”

We’re helping several organizations do them right now. And we’ll continue to post about what they do as they grow and grow. If you want personalized, experienced help, visit this page to learn more and fill out an application.

Every* Client Raised More

Allow me to share some news we’re proud of: every client we worked with raised more money at year-end than they had the previous year.

The fundraising industry is reporting that a lot of organizations saw decreases at the end of the year. “Overall the shortfall may be as much as 25% for some organizations” said The Agitator.

So we’re thrilled that our clients did so well.

The organizations with the best performance applied our Ask, Thank, Report, Repeat system throughout the year.

But even the clients who hired us just for year-end raised more than they did the year before. (Even the ones who were worried they wouldn’t get invited to parties!)

The EASY System

The year-end system we’ve developed really works. We leaned on it more heavily this year, for more clients than we’ve ever worked with before, and it worked better than ever.

What I enjoy the most is how EASY the system makes it for most of our clients. It’s not color-by-numbers . . . but it’s close.

It’s all part of our efforts to help nonprofits work less while raising more. Because there’s more good you could be doing if only you had time to do it.

The Reason for the *

There was one client that raised less. Sort of.

Our one client who raised less at year’s end is the one client that did not ask us to help with their year-end fundraising.

As you can imagine, when they asked us how our other clients did, it was a little awkward.

2019

If you’d like to see exceptional growth in 2019 (or if you just want to make sure your organization is prepared in case the economy turns), get in touch.

And if you’re not ready to hire us, No problem. Keep reading the blog. Download our free eBook on Storytelling. And our free eBook on Asking. Get on our mailing list for the free resources.

In case you’ve never heard me say it before: Better Fundraising’s mission is to increase the fundraising capacity of small- to medium-sized nonprofits. So we give away as much of our field-tested experience and knowledge as possible.

There’s no secret special sauce we keep just for our clients. We try to put every approach, every piece of testing knowledge we can on the blog and into our resources.

And for the organizations that want to go deeper, we relish the chance to work with you on your fundraising.

Regardless, our hope is to be helpful. And our clients’ results at year-end prove that our approach is working.

We’re bullish on fundraising in 2019. Follow-best practices, stay centered on your donors, and you can raise a lot of money to do a lot of good!

Guest Post Commentary

Guest Post Commentary.

Tuesday we featured a guest post from @BradyJosephson with two proven tactics for how to raise more money using “vertical Integration.”

On the surface, Brady’s advice appears to go counter to my normal advice. Because when I’m asked, “How many times a year should I mail our donors?” I usually respond, “Two more times than you did last year.”

I know that sounds glib – but in my experience, it’s true for about 90% of nonprofits.

But go read the post if you haven’t, and here are my takeaways…

“Vertical Integration” is really, really smart

This is especially important for smaller nonprofits without big communications departments.

It’s the idea that you can communicate the same thing to your donors in multiple channels to take advantage of the power of each channel.

And I’ll add “take advantage of the different portions of your audience” that each channel reaches.

But the key here is to be repeating the same message across all the channels – just executing it differently depending on the channel.

Note to astute readers: vertical integration is the proven idea of repetition (repeating the same powerful message multiple times) updated for the modern era. In the past, not every org could use the mail, radio and TV. And that’s still true today. But every org can use the mail, the web, email and social. And they need to be integrated!

“Direct mail isn’t dead, and it won’t be for a while, but its upside is limited.”

This is both true and not true.

It’s true that, for all nonprofits across north America, direct mail response rates and donor acquisition is down.

But for smaller orgs who aren’t experts at direct mail, there is a massive opportunity for you. The organizations we work with are all seeing very large gains in revenue and donor retention from our work in the mail. It’s why we developed “Instant Appeals & Reports.”

Maybe I’ll put it this way: for most smaller nonprofits, direct mail is still the best investment for communicating with your current donors. You just have to do it well – which is something that’s generally not taught.

Facebook is a Thing

Facebook is becoming a big deal for many organizations.

The most effective way we’re seeing it used, without going into the data-nerd details, is to present your most powerful message to your existing donors again, about the same time they are seeing that message in the mail and in your email.

That’s the “repetition” thing again. That’s the “vertical integration” Brady is talking about.

Thanks, Brady

Brady and Next After, thanks for sharing your knowledge. I love how you’re constantly testing, looking at the results, and making all of us better at online fundraising.

It’s both the present and the future of fundraising. Just don’t forget the entire generation of donors that are plugged in online!