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Yesterday’s Successes, Today’s Truths, Tomorrow’s Hopeful Futures

Steven | January 16, 2024January 9, 2024Ask

I just noticed that almost all of the fundraising our team helped create last year can be divided into three groups:

Yesterday’s Success. These are stories of people who have already been helped, and of things the organization has already accomplished.
Today’s Uncomfortable Truth. These are stories of what’s happening today, right now, that causes the work of the organization to be needed.
Tomorrow’s Hopeful Future. These are stories of what will happen if a donor gives a gift. For instance, “If you give a gift today, 1 square meter of wetland will be preserved from development” is a story about the positive future that will be created if a donor gives a gift.

Organizational insiders tend to think that sharing Yesterday’s Successes will motivate donors to give today. And it will, to a limited extent.

But consistently telling donors about things that happened yesterday means you’re not telling donors what’s happening today. And in our experience, the best way to motivate donors to give today is to talk about what’s happening today.

The fundraising programs that we see succeed wildly are programs that intentionally share what happened yesterday, and what’s happening today, and what could happen tomorrow with the donor’s support.

When you give your donors the full picture, they’re more likely to give you their full support.

Four Reasons to Have a Direct Response Fundraising Program

Steven | January 4, 2024January 3, 2024Repeat

Do you ever wonder why your organization is doing all the dirty work of direct response fundraising – the briar patch that is direct mail letters and emails and landing pages and coding and tracking response rates?

You might especially be wondering this if you’ve done the math and seen that 80% to 90% of your revenue from individual donors comes in from a tiny percentage of your major donors.

If that’s you, here are four reasons smart nonprofits of all sizes still do this type of fundraising today…

Major Donor Identification System

Sending mail and email – and watching the results carefully – is one of the main ways organizations reliably identify new potential major donors.

That’s because many major donors will begin their relationship with you by making a small gift.

Organizations then use their direct response fundraising program to identify those potential major donors. They set up systems to:

Notice when gifts above a certain size come in
Use wealth-screening software (and occasionally good old-fashioned Google research) to determine which of their smaller donors has the capacity to give larger gifts

There are “hidden major donors” on your file right now, today. Are you using the mail and email to find them?

Anti-Fragile

One of the goals of mature nonprofits is to have multiple revenue streams. In other words, they don’t want their lifeblood coming from just events, or just grants, or just major donors, or just earned-revenue.

Because if you have just one main revenue stream, the organization is fragile.

A few months into the pandemic I talked to a national organization that was $15,000,000 (!!) behind their budget for the year. Their fundraising was overwhelmingly based on regular, small events with wealthy donors.

Because they had not developed a direct response fundraising program (they told me they thought fundraising through the mail was “icky”), they did not have a way to stay in relationship with their donors when they couldn’t meet in-person. Unfortunately, they and their beneficiaries suffered because of it.

The more income streams you have, the less fragile you are, and the more prepared you are to fundraise in uncertain times.

Stay In Touch

Most people reading this blog will have major donors that you’re not in relationship with. They make a gift or two every year, but they’ve resisted your attemps to build a personal relationship with them.

And you have people who receive your mail and email… but you’ve never met them.

Your direct response fundraising program is how you build relationship with those donors.

This becomes more important as you grow. If you have 500 donors, you likely know 30%-50% of them. But if you have 5,000 donors, you likely only know 10%-15% of them. That means your direct response fundraising IS the relationship for a large percentage of your donors.

Unless you’re an organization that has a natural source of publicity and a cause that people regularly think about, it’s extremely difficult to grow your donor file without a direct response fundraising program.

And Hey, You Can Raise Real Money!

Many of Better Fundraising’s clients raise the majority of their revenue through the mail and email. Maybe they haven’t spun up a grants department yet, or their major donor program is just getting off the ground.

But they are raising between $4 and $10 for every $1 they spend in the mail.

In addition to the three reasons above, they are raising serious revenue to power their nonprofit or ministry.

The Goal

The goal with your direct response fundraising program is to establish a system where your organization stays in relationship with donors as you grow… and identifies & cultivates more major donors… and becomes less fragile… and raises money while doing it.

That right there is why savvy organizations are investing in their direct response fundraising programs. And it’s why Better Fundraising loves helping organizations build the systems and repeatable processes that help them be successful in the mail and email.

An Appeal is a Promise

Steven | December 28, 2023December 19, 2023Ask

An appeal letter is a promise.

The organization promises that if a donor gives a gift, something will happen.

As all the gifts are coming in this week, you’re seeing a lot of donors take you up on your organization’s promise.

The first half of fulfilling the promise is to do the work your organization does: feed the child, put on the play, add new books for the library, you get it.

The second half of fulfilling the promise is to show and tell donors that the appeal’s promise was kept. Show and tell your donors the child that was fed, the play that was performed, the new books snug in their shelves.

After all, if your organization doesn’t “report back” to donors, how will donors know that their gift made a difference?

So right now, while you’re on the emotional high from all the gifts coming in, make sure you have a plan to “report back” early next year: a print newsletter, a donor-reporting letter, or perhaps an email that shares one story of change.

If you do, your donors will be more likely to donate the next time you ask.

Why?

Because they’ll know that your organization keeps its promises.

A Procrastinator’s Guide to Year-End Fundraising

Steven | December 7, 2023December 6, 2023Year-End

Just getting started with your year-end fundraising?

Here’s a quick list – my best tips – for what to do with your remaining weeks before the end of the year.

Make a Plan to Start Earlier Next year

First, the hard news: if you’re just starting now, you’ve left money on the table. You could have raised more.

That is a harsh truth. Many people won’t like to hear it. But it’s true. And for the moment, don’t worry about it. But right now, go set a calendar reminder to start earlier next year.

Seriously, set a reminder.

I’ll wait.

It’s that important.

The organizations that start their year-end fundraising earlier tend to raise more money.

What to Do Now

Do as many of the following things if you can. And here’s the order I’d prioritize them in:

Identify and contact your major donors who have not yet given a gift this year.

Don’t do what most nonprofits do, which is hope that their majors give a gift before the end of the year.

If you haven’t already, identify exactly which of your major donors have not given gifts. Then reach out to each of them to ask for a special year-end gift to help your beneficiaries (not to help your organization). Do it in person if you can; phone is the next best way. Tell them their gift is needed now, and tell them their gift will make a difference!

Write and send your year-end letter.

Send out a direct letter that powerfully asks donors to give a special gift before the end of the year. Tell them their gift is needed now, and tell them their gift will make a difference!

If you use a mail house and it’s going to take too long to get a letter produced, here’s what to do:

Figure out how many letters you could print and send using your in-house process.
Start sending those letters to your top donors, starting at the top of your file and working down.

Write and prep your year-end emails.

Be sure to have at least three emails prepped for the last three days of the year. Remember that you do not have to reinvent the wheel: the emails should be VERY similar to your letter, and the emails should be very similar to each other. Repetition is the most effective tool you didn’t know you have!

Tell them their gift is needed now, and tell them their gift will make a difference!

Update your website to ask for a year-end gift.

Make an update so that the first thing users see on your home page is a clear call-to-action and a large “donate” button.

And… wait for it… tell them their gift is needed now, and tell them their gift will make a difference. You will raise more money than you expect.

That’s it! Do as many of those as you can, starting from the top of the list.

Do a great job on each one before doing anything else.

And if you can only do three things, do the top three. If you can only do two, do the top two. You get it.

Remember: year-end is the easiest time of the year to raise more money than you expect!

Why I’m Bullish About Year-End Fundraising This Year

Steven | November 28, 2023November 30, 2023Ask

My mentor once said to me,

“I wish I would have noticed earlier in my career how closely overall fundraising results tend to mirror the economy.”

It’s such a simple idea. But knowing it helped me be a more effective Fundraiser.

There are four main lessons I took from his remark, and I hope they are helpful to you, too.

Takeaway #1 – When the Economy Is Good, Be Bullish

This is applicable right now, today. (As I write this, the S&P is up 19% since the beginning of October.)

“Being bullish” means adding another letter or email in your campaign, or even adding another campaign. It means expecting slightly higher results. It means asking Majors for a little more.

Because the economy seems to be rebounding, I am bullish on year-end fundraising this year.

Takeaway #2 – When the Economy Slows, Reset Your Expectations

When the economy slows, campaigns won’t perform quite as well. Response rates drop a bit, as do average gift sizes. Majors tend to give smaller gifts.

So when the economy slows, savvy organizations reset their expectations. If the goal and plan for the year was 5% growth, they think about reducing that to 3%. They let their Board know the revised expectations, and why.

Takeaway #3 – The World Affects Your Fundraising

If there’s a major natural disaster the week your appeal lands in homes, that appeal most likely isn’t going to do as well.

When Hurricane Katrina hit New Orleans in 2005, we knew two major campaigns that we’d just launched were going to underperform. A significant portion of Americans’ attention turned to New Orleans… which meant less mail was opened… which meant less money was raised by our campaigns.

You obviously can’t plan for natural disasters. But you can plan for times when you know in advance that the world is going to affect your fundraising. For instance, this coming fall is the 2024 Presidential election in the U.S. We recommend most organizations not launch an important campaign the week before or after the election.

Takeaway #4 – Always Keep Noticing

My Mentor was in his 70’s when he shared this observation with me. I love that, even in retirement, he was still noticing things about fundraising. It’s a good goal for all of us Fundraisers: keep noticing things about fundraising, keep trying to get a little bit better at this craft. It makes us a little bit more effective helping our beneficiaries, the organizations we serve, and our donors.

Hey, about your envelope…

Steven | November 14, 2023November 13, 2023Ask

This blog post from Five Maples shares the results of a head-to-head test of the envelope on a direct mail appeal for a nonprofit.

Their donors were split into two equal groups. One group received a letter in an envelope that included the organization’s tagline. The other group received the exact same letter, but the envelope did not have the tagline on it.

The tagline on the envelope was the only difference.

The test showed that including the tagline on the envelope reduced the number of people who responded by 65%. Put another way, putting their tagline on the envelope reduced the number of people who sent in a gift by over half.

Let’s notice that this test isn’t about all taglines. It’s about that organization’s tagline, on that piece of direct mail.

But still, that is a massive impact.

You can take three lessons from this simple test that will make you a more effective fundraiser.

Lesson #1

If your organization is putting its tagline on your outer envelope, do you know if it’s helping or hurting?

If you don’t know, it’s time to ask questions instead of making assumptions.

(By the way, there is ZERO judgement here if you’ve been making assumptions. We all do it at the beginning of our fundraising journey.)

Lesson #2

A bigger lesson this data teaches is that what you put on your envelope matters. A lot.

There are very smart people who argue that what you put on the envelope matters more than what you put in the envelope. How’s that for a brain-breaker? Because if your recipient doesn’t open your envelope, what good does the incredible message inside do?

I don’t spend much time on that argument because I think it’s a chicken-or-egg situation – but it is fun to talk about with other Fundraising nerds over a drink.

Moving forward, you want your organization to be thoughtful about what’s on your envelopes and in your email subject lines (which are more-or-less equivalent). And if you want to know more about this right now, the blog post mentioned above is a great place to start.

Lesson #3

Data about fundraising will help you know what’s important and where to spend your time.

For instance, I spend a ton of time on outer envelopes, and on the description of what a donor’s gift will accomplish. I spend almost no time trying to make sure an appeal matches a nonprofit’s “voice.” I make those decisions because data shows how much envelopes and descriptions matter, and how using an organization’s voice in the mail usually causes them to raise less money, not more.

For what it’s worth, in my career I’ve tried to develop what I think of as an “evidence-based worldview” for how to be successful in fundraising. That worldview is made up of as many test results (like this one!) and facts that I can get my hands on.

If you can build a worldview like that, you’ll have a good idea of what path/tactic/approach will have the best chance of success, regardless of the situation.

And if you’re just beginning to build your worldview, this little test about a tagline on an envelope is a great place to start!

Response Rate Goals

Steven | November 9, 2023November 8, 2023Ask

At last week’s Storytelling Conference, I was asked a really good question:

“My organization is new to direct mail. What kind of response rates should I be getting?”

In case it’s helpful to you, here’s my answer:

For printed appeals my goal is a 4% response rate

For printed newsletters my goal is a 3% response rate

Those are helpful benchmarks, and I hope they help you judge how your mail is performing.

But I have to mention, things start to get interesting right away. Take a look at these variables:

The more donors you have, the lower your response rates tend to be. For an organization with 40,000 donors, achieving 3% for an appeal and 2% or 2.2% for a newsletter might be success.
The fewer donors you have, the higher your response rates tend to be. If you have 500 donors, you might be getting a 6% response rate on appeals, and a 4% response rate on newsletters.
Finally, who you include on the mailing list is another big variable. If you include your monthly donors, your response rates tend to go up. If you include lapsed donors who haven’t made a gift in 36 months, your response rate will go down.

I hope this helps you or your team have benchmarks and goals to aim for. And that there are variables that need to be taken into account. What “success” looks like varies quite a bit from organization to organization – even from mailing to mailing.

The important thing is to measure your results so you know what works best for your organization, and then do more of that!

‘Pre-Existing Condition’

Steven | November 2, 2023October 31, 2023Ask

Your donors have what’s called a “pre-existing condition”…

They cared about your beneficiaries or cause before your organization came into their life.

Three examples:

Say your organization is a library. Your donors cared about books, literacy and your community before they had even heard of your library.
Say your organization helps a tiny village in Ethiopia. Your donors cared about kids, and people having enough food & an education before they had even heard of your organization or the village.
Say your organization provides access to activities for people with disabilities in the Tri-state area. Your donors cared about people with disabilities, and about everyone being able to participate, before they heard about your organization.

Knowing this, what should your fundraising to individual donors primarily be about?

Should it primarily be about your organization? Should it focus on your programs? Should it be about what the organization has accomplished in the past?

No! Your fundraising should focus on the values and interests that caused your individual donors to pay attention to your organization in the first place. (Note that I’m not talking about your comms to Foundations and other donors for whom your programs and your effectiveness are core necessities for them to donate.)

If you look at your appeals and e-appeals and find that they talk primarily about your organization… for instance, if you’re sharing the names of your programs and how they work… you could be raising more money from individual donors.

When we help organizations see their donors’ pre-existing conditions – and then change the organization’s fundraising to talk about what the donors cared about before they met the organization – the organization raises more money.

When you create your fundraising, don’t think, “We need to inspire our donors to give to our organization.”

Instead, think, “Let’s talk about what our donors already care about, and the difference their gift will make.”