Make “The Leap” to Acquire a LOT of new donors

Make “The Leap” to Acquire a LOT of new donors

This post is about acquiring new donors.

But it’s for nonprofits at a very specific stage in their development.

Keep reading if the following three things are true for your organization:

  • You’re actively trying to grow
  • You realize that to achieve that growth you need more new donors each year than you’ve been acquiring
  • You know that your current ways of acquiring new donors won’t achieve your new goals

I’ll give you an example. We work with a handful of organizations that have between 500 and 4,000 donors. These organizations want to grow… but the ways they acquire new donors are labor-intensive and are hard to expand:

  • Tours of their facility
  • An event or two a year
  • Word of mouth
  • A major donor connects them to another major donor
  • Vision Meetings

All good things – but small nonprofits can only do so many of them each year.

So the organization is stuck: they want to grow, know they need more donors, but don’t have the staff to do more.

If That’s You, What Do You Do?

If that’s you, please know that you’re in good company. A LOT of organizations are in your shoes.

But your question remains: how do you begin to acquire significantly more new donors than you have in the past?

It starts with thinking differently about acquiring donors. The Big Idea is that there is a cost associated with acquiring new donors. You’re going to need to pay for the attention of potential donors via media like radio, the mail, Facebook ads, etc.

In my experience, most smaller nonprofits never make the leap from homegrown, labor-intensive methods of acquiring donors. These smaller nonprofits don’t want to pay (or don’t think they can’t afford) the costs needed to do this.

But if they really want to grow, they need to.

Making the Leap

Below are my tips for “making the leap” to a new way of acquiring new donors.

And I need to say right away that I’m not providing the solution to your donor acquisition problem. This is not “7 easy tricks to more donors than you can count!” (That post would probably get a lot of readers, but it wouldn’t hold water because there is no silver bullet.)

The Current Situation

Most small nonprofits have no line item in the budget for donor acquisition. They also really don’t know their current cost for every donor acquired, because those costs are buried in other expenses.

For example, they might spend $50,000 on an event that acquires 100 new donors. But the expenses are only looked at in relation to how much revenue came in, not how many new donors were acquired.

What’s needed is a dedicated budget for donor acquisition.

How to Grow

Smaller nonprofits basically have two options for growth. You can pursue either one, or both:

  1. Start a scalable Donor Acquisition program. This means doing specific activities like buying radio spots and/or mailing lists, upping your online donor acquisition game, etc.
    • For example: doing a radio share-a-thon for $15,000, getting 500 new donors, then doing that every year moving forward. And this is scalable because you could do two radio share-a-thons for $30,000 and acquire 1,000 new donors. Or 3 radio share-a-thons for $45,000 and acquire 1,500 new donors.
  2. Do more of what you’re currently doing. (For clarity’s sake, I would define what most smaller orgs are doing in donor acquisition as not scalable. Could you expand your event and get 250 more donors? Maybe. Could you add three more events and get 750 new donors? Probably not.)

In my experience, “doing more of what you’re currently doing” almost never results in the type of growth a motivated organization is looking for.

So they have to bite the bullet. They have to pay the costs to start up a donor acquisition program.

Ask a Good Question

The most successful organization leaders, when they want to grow, are asking one of these questions:

  • “I have $XX,XXX to spend on getting new donors in 2018. How many new donors could we get for that?”
  • “I need X,XXX new donors in 2018. How much is it going to cost me?”
  • “By 2020 I need to have our income be 50% higher than 2017. How many new donors do we need to reach that level, and how much will it cost?”

If you know how much you have to spend, we can estimate how many new donors you can acquire.

If you know how many new donors you want to acquire, we can estimate how much it will cost you.

If you know how much you want to be raising 5 years from now, based on how your current donors are performing, we can tell you how many new donors you’ll need, to reach your goals.

Helpful Big Ideas

For organizations who want to begin scalable donor acquisition, there’s a set of ideas that more-or-less must be present in your organization for it to work:

  • If your organization is serious about acquiring new donors, you’ll have a line item in your budget for Donor Acquisition.
  • Measuring the Cost Per New Donor is a sign of maturity for an organization. It means you’re running the thing like a business, with known (and measured) inputs and known (and predictable) outcomes.
  • Scalable methods of donor acquisition require an investment mindset. Usually in donor acquisition you lose money in the short term, but you make money in the long term. For example, you might spend $1,000 and get 10 donors who each give you $50. So you spent $1,000 to raise $500. BUT, if you do a good job retaining those 10 donors they’ll give you $3,000 over the course of their time with you. So you actually spent $1,000 to raise $3,000.
  • There’s no way to know exactly how much a new donor will cost for an organization without testing. But there are industry standards and deep experience for every media channel – even Instagram, believe it or not. Find somebody or some organization who is doing a lot of donor acquisition, and ask them. In my experience, people will help you.
  • The Cost Per New Donor is always higher when you first start scalable acquisition methods. That’s because you do not know what will work best. Over time, you figure out which messages and mediums work best, and the cost per new donor comes down over time. (This is another reason it’s so important to have an investment mindset when you start to scale your acquisition.)
  • There is a “minimum level of investment” to start a donor acquisition program. For instance, if a radio share-a-thon costs $20k and gets you 200 donors, you can’t buy half a share-a-thon for $10,000 and get 100 donors. And by the way, Dear Reader, I don’t think you need to hear this. But I share it because there’s always someone on a Board that says, “Could we just buy seven commercials and see if that works?” What you want to do is figure out what the “minimum effective test” is, and do that. Not half of that.

Moving to this type of donor acquisition is a great sign of growth and maturity for an organization. It’s almost always a sign of a nonprofit being run like a business – and I mean that in the best way possible. It’s being a great steward of the resources given to us by donors to maximize their impact.

Good luck out there – and get in touch if you’d like to talk about donor acquisition!

Six Helpful Ideas for Smaller Nonprofits

Some non-profits want to grow!

Recently I spent the day working with a bunch of smaller nonprofits who wanted to grow.

On my bike ride home that day – which is when I do most of my best fundraising thinking – I thought, “There should be a simple list of things smaller nonprofits need to know if they are serious about growth.”

When I got home I dictated the following list into my phone. It’s a little rough, but it’s my attempt to summarize what small nonprofits tend not to know – and the “upgraded” ideas that in my experience help them break through.

#1 – Small nonprofits don’t know what they don’t know

There’s a whole set of “best practices” out there that small nonprofits should make an organizational priority to discover and put into practice. Things like donor segmentation, a systematic approach to major donor fundraising, having a great fundraising Offer, to name a few.

My advice is to actively seek out best practices and to rely less on making decisions by finding out what the staff likes or doesn’t like. Case-in-point: nobody likes telemarketing, so small nonprofits rarely use it. But it works like crazy and is a fantastic investment.

#2 – Small nonprofits usually don’t know that their donors are not paying close attention

Small nonprofits tend to think that every donor reads every word of every piece of donor communication. That’s just not the case. What does this mean? You need to communicate to your donors more than you think you need to. And know that most donors won’t read every word of what you send them. They might scan it though, so make sure your message comes through even if they scan it!

#3 – Small nonprofits don’t know that they are going to have to talk differently about their organization if they want to grow

In a word, small nonprofits need to simplify their message if they want to grow.

Most small nonprofits assume that a person needs to understand the depth and complexity of the organization’s work before they will become a donor. In my experience, a potential donor is most likely to give when presented with a simple, emotional, powerful current need the organization (or its beneficiaries) is facing. Then, over time, the donor may come to understand your depth and complexity. But start with simple – you’ll get more people in the door.

#4 – Small nonprofits don’t know that repetition is a strength

They try to describe their organization in new ways each time – and as a consequence their message to donors is all over the place. Or they communicate to donors as if donors ‘read every word of everything’ so they only say important things once. (Remember #2 above.)

Instead, find out what message most of your donors are most interested in, then repeat that message to drive it home.

Take this lesson from the world of advertising: it’s a general truth that people need to hear a message three times in a short amount of time before they take action. So if you have two appeals a year, one in the spring and one at year-end, your message isn’t getting through to whole swaths of people.

#5 – Small nonprofits don’t realize they should be spending more time and money on their Major Donors

To be clearer, most small nonprofits do understand this – they just don’t do much about it.

And that’s too bad. Because major donors are more important to small orgs than to large orgs!

What a small nonprofit should do is identify and rank their major donors, then devote real time and energy to getting to know those donors, learning about their passions (why they give) and actively looking for ways the donor can exercise their passions through the organization. Asking, Thanking, Reporting on an individual basis to all Majors is a good idea, too.

#6 – Small nonprofits don’t know that what they say to donors matters more than what their materials look like

Another way of putting this is to say that an organization’s visual brand (colors, logo, typeface, website design) matters far less to donors than things like being donor-centered, having a good offer or Reporting back to your donors on what their gift accomplished.

Wrapping Up

If you’re a smaller nonprofit, I hope this is helpful.

If you know a small nonprofit that would benefit, please pass this along to them.

Jim and I firmly believe that helping small nonprofits raise more money is the biggest area of opportunity in fundraising today. There are just so many of them! More than a million of them in the U.S. alone.

So if we – you, Jim and me – can help the small nonprofit ecosystem get better at fundraising, we can make a meaningful impact on our culture and society. That’s the goal. Let’s get to it!

PS – And if you’d like to work on it together, drop us a line!

​Top 5 Blog Posts of 2017 + more

In a hurry? Want the best of the best – fast?

Here are the top five Better Fundraising blog posts of 2017, as voted on by savvy internet viewers like you:

  1. Five Tips For The First Sentence of Your Next Appeal Letter
  2. How (and Why) to Tell Unfinished Stories
  3. Remind, Don’t Persuade
  4. The False Assumption That Does Massive Damage To Your Fundraising
  5. Simple Outline For Appeals That Raise Money

Plus the most-listened to podcast of the year, an interview with Scott Harrison of Charity Water. I was a better fundraiser, immediately, for having listened to Scott

There are also three other posts that we personally loved and think everyone should read:

That’s it. A little curated reading for you over the holidays. THANK YOU for being a fundraiser and making the world a better place – enjoy your holidays!

SuperPost of proven Year-End Fundraising Fundamentals, Tactics and Tips

Short, powerful post for today.

You have one more week to make your online year-end fundraising great. And we’ve written a recent series of posts designed to help you.

I think these posts answer all the main questions that nonprofit fundraisers still working on their year-end emails, web and social would have:

There’s probably some repetition of core ideas in there. But you know that repetition is a fundraiser’s best friend, right?

It’s our hope that this is set of information is helpful to you. Or that it’s helpful in convincing your boss that the approach you want to take is tested and proven, not just something you made up or some yahoo on the internet said.

If you don’t have time to read all the posts, and just need what’s basically a template you can follow, check out our Year-End Digital Fundraising Toolkit.

As you make the most of your last few days, go boldly. YOU are the sacred connector between your donors and your beneficiaries or your cause. Because of you and your work, your donors get to experience the joy of giving. Because of you and your work, more people are helped and the world is a better place!

And stay tuned to the blog, we’re about to publish a sort of Benediction For Fundraisers for 2017. You’re going to love it!

Thanks for Standing Up Like My Neighbor

Growing up, my next-door neighbor was an old guy named Mr. Barnett. He was kind, avuncular attorney. Great neighbor.

It wasn’t until later that I learned he was a hero. And it wasn’t until a long time after that I learned that you are, too.

But I’m getting ahead of myself. I grew up on an island outside of Seattle. It has the unfortunate distinction of being the very first place during World War II that Japanese Americans were forcibly rounded up and relocated to internment camps.

Not the brightest moment in our history.

I learned later that Mr. Barnett was the attorney for the only Japanese American to challenge, through the legal system, the forced removal of Japanese Americans from their homes. Mr. Barnett took the course all the way to the Supreme Court, and was not a popular guy for doing so.

But he stood up for the men, women and children who were interred. And for the Bill of Rights and the Constitution.

Why am I telling you all this? Because I was thinking about how I had no idea my next-door neighbor had done something so incredible. And my next thought was that most fundraisers have no idea they do something so incredible.

The deeper into my career I get (25 years!) the more I see that most fundraisers — and maybe even you — only barely grasp the important role you play.

You stand up for your beneficiaries. Who often have no voice.

You are their voice to people who have the resources to help.

Without fundraisers like you, how would they get help?

Like Mr. Barnett, you stand up for a person who needs justice.

And maybe the cause you work on isn’t one of the sexy ones, like “social justice.” Maybe it’s foundational like “supplemental math skills for elementary school kids.” Maybe you’re one of the few standing up for your cause. Maybe you’re the only one – like Mr. Barnett.

But you stand up.

Thank you.

As a fundraiser, you do fight for justice. Whether it’s for food or math skills. For immigrant rights or for a museum that preserves Quilting Arts. Over these next couple busy months, in the middle of this crazy year-end, remember this . . .

You are standing up for your beneficiaries or cause. Who often have no voice.

You are their voice to people who have the resources to help.

Thank you!

You Are More Important Than You Think

You already know that fundraising is so much more than writing your next appeal, or prepping for your next event, or talking to your Board.

But let me put words to how much more you do.

I think fundraising is creating a sacred connection between people who have resources and people who need help.

And that sacred connection is made by you and your fellow fundraisers. Which is amazing because less than 1 in 10 fundraisers actually likes asking for money. (That stat is based on my impromptu polls at conferences.)

I mention this today because it’s the busiest time of year. “Fundraising” seems like a series of tasks. Each day feels like a long list of things to do but not enough time to do all of them.

The difference between a fundraiser and a Fundraiser

I wish there was a difference in our field between “fundraiser” and “Fundraiser.” I think a person should only get the capital “F” if they know that fundraising isn’t ultimately about the money.

With training, it’s not that hard to be an effective fundraiser. Right? You can learn to be donor-centric. You can learn segmentation, and how you should spend more time (and money) on your Major donors than your Mass donors. You can learn to speak and write effectively. You can learn the difference between marketing and fundraising.

None of this is rocket science. There’s a set of accumulated wisdom our sector has created over the past 60 years, and it’s available to anyone with the drive to learn it.

But a person who knows all that AND knows — in their bones — that it’s not about the money? That’s a Fundraiser. That’s a person who is aware of, and loving, creating connections between donors and beneficiaries.

Notice I didn’t say ‘between donors and organizations.’ But that’s a post for another day.

But again, why take the time to write about and then send this to you today?

Because this is a call, to you, to be a Fundraiser

To know, in the midst of the year-end crazy, that you’re creating sacred connections. To know that your job is SO MUCH MORE than sending emails and pulling mailing lists. To feel — in your bones — the joy your donors have when they make a gift through your organization.

Do you feel that joy? Will you choose to feel it for the next few weeks? For every donor who gives a gift between now and midnight on the 31st? That’s a lot of joy!

Because if you do that, you’re going to LOVE the next few weeks. You’re going to write differently. You’re going to talk to donors differently.

And you’re going to raise a lot more money!

So please, when it gets hectic next week (or later today), remember the joy your work gives to donors. Remember the joy your beneficiaries get when they receive help. You’re doing that. That’s you. You’re a Fundraiser.

The “S” Word That Is Good, Not Naughty

The letter "S" for "Segmentation"

The “S” word that I’m talking about is “Segmentation.”

It’s the art and science of not treating all of the people in your database the same. Instead, you want to break them into smaller “segments.”

Here’s why this is important: good segmentation will let you save money on what you’re currently doing while raising more money. Segmentation is a 2-for-1 improvement to your organization.

Here’s what I want to provide:

A super-simple guide to segmentation for smaller nonprofits.

And here’s why I want to do it: most of the small nonprofits I get to work with don’t do enough segmentation. They tend to treat every person in their database the same. They waste money and miss opportunities.

Here’s a simple summary. It’s not perfect for everyone, but it’s a good start:

  • Send your appeal letters to all donors who have given a gift in the last 18 months. (Don’t send them to non-donors, or to volunteers, or to in-kind donors, or to donors who last gave years ago – it’s not worth the money.)
  • Send your newsletters to all donors who have given a gift in the last 18 months. (Same as above — as a rule, you will spend more money on printing and postage than you will receive in gifts.)
  • However, send your Christmas/Holiday/Year-end letters to all donors who have given a gift in the last 36 months. This is the time to include your non-donors and your volunteers.
  • Send your e-appeals to everyone on your email list.
  • Send your e-newsletters or e-updates to everyone on your email list.

That’s it. There are about 15 ways that it quickly becomes complex. But the main thing to remember is that the people most likely to give you gifts are your donors. And organizations that really analyze their results quickly figure out that it’s not worth their money to send mail to people who haven’t donated in a while.

And here’s how you can use segmentation to raise more money . . .

Identify your “segment” of major donors and send them special versions of your direct mail.

Because your major donors can give you such large gifts, it is worth spending extra money on your mailings to them. Here’s what to spend your money on:

  1. Larger envelopes
  2. Nicer paper
  3. Customized proposals in the mailing

The purpose of spending the extra money is pretty simple: it’s to increase the chance that a major donor will OPEN your mailing. And if you do that with your major donors, you will raise more money!

[FREE RESOURCE] Storytelling for ACTION ebook

We made a free ebook to help you raise more money!

Here’s what Tom Ahern said about it: “Get it. Read it. Implement it. Make way more money.”

If that’s not enough, here’s a sample of what you’ll get. This is our “Story Type Matrix” — it’s 20 years of hard-won storytelling advice about what types of stories to tell and when to tell them, condensed into a single powerful page.

And that’s just page 13. There are 40 other pages.

I mentioned this is free, right?

Why would we give away this level of information? Two reasons:

  1. There’s a lot of un-tested information about storytelling out there. Just “being good at storytelling” or “telling stories well” isn’t the magical fundraising tool it’s made out to be. What stories you tell, and when you tell them, matters a TON.
  2. We’re sharing this because our goal at Better Fundraising is to radically improve the fundraising capacity of small to medium-sized nonprofits. That’s why we’re here. We’re constantly looking for ways, for free or at very low cost, that we can share what we’ve found (through vigorous testing) works best in fundraising.

Download your free ebook today!

The 1 Thing to Know for Year-End Fundraising

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The reason your organization raises so much money at year-end has little to do with your organization.

But it has a LOT to do with your donors.

Please, let me tell you how you can use this information to help your donors give even more. This is a big idea.

People aren’t more generous in November and December because they suddenly wake up and want to help nonprofits. Your donors are more generous because this is time of year they celebrate thankfulness and generosity. This is when they celebrate the gifts they’ve been given (personally, financially, spiritually), and focus on the things that matter most to them.

A natural outcome of your donors’ celebrations — and of thinking more about what they care about — makes them more likely to give gifts. They put their money where their heart is.

Here’s why I’m telling you this . . .

Focus your message at year-end on what your donors care about and you’ll raise more money.

But most nonprofits don’t do this! Instead, they focus their messaging on the organization itself. They talk about what the organization did during the year. They talk about the programs of the organization.

Here’s a super-simple example of why focusing on what the donor cares about is so effective. Imagine you’re an arts organization. Here’s what your donors care about, in order of importance:

  1. The arts
  2. Promoting and/or preserving the arts
  3. Organizations that promote or preserve the arts

Remember, the organizations that raise the most money tend to focus on what donors care about most.

So, this arts organization would focus their messaging on the arts themselves, and how the donor’s gift will promote or preserve them.

But most organizations write about themselves. They are focusing their messaging on the least important of the three things their donor cares about! Their letter will be all about what their organization is doing to promote and preserve the arts. Then they’ll ask the donor to “support the organization” or to “help us continue this good work.”

Here’s what works far better: talking less about the organization, and asking the donor to ‘support the arts.’

In practice, this means making your year-end letters, emails and website features more about your cause and your beneficiaries than about your organization.

I know this works. Our clients usually see their biggest gains working with us at year-end, mostly because we help them communicate more about what their donors care more about! We even sell samples of year-end appeal letters that are proven to work – and if you look at the samples you’ll notice that they talk very little about the organization that sent the letter. They talk to the donor about the cause or the beneficiaries, and about how the donor can help.

So this year more than ever, make your donor communications about what your donors care about most!