“If you serve one audience, you’ve let another down.” – Seth Godin

Choices

That quote explains why some organizations have trouble “making the leap” to their next level of fundraising success.

Too many nonprofits create fundraising that serves an internal audience.  And their fundraising lets another audience down: their donors.

Here’s how this happens.  An organization’s fundraising is often written and designed to make internal audiences happy.  Members of that “audience” tend to be Executive Directors, the program team, the Board, or a Major Donor who is super-involved.

We can’t ever forget that their intentions are good.  They’re trying to help.

They prefer fundraising to be a certain way.  And they hold sway.  So fundraising is created to serve that internal audience.

But… “If you serve one audience, you’ve let another down.” 

The audience that gets let down is their donors. 

Want to Make the Leap?

Create fundraising that serves donors and “lets down” internal audiences.

Creating fundraising that serves donors instead of internal audiences is often a seismic shift for organizations.  Seth calls this “the difficult choice of disappointment.” 

It’s hard to choose who to disappoint.  It creates conflict.  I’ve seen people lose jobs and leave jobs. 

I’ve seen organizations become aware of the choice, yet continue to let their donors down.  Even despite testing data that shows that donor-serving fundraising would raise more money and allow the organization to do more good! 

And I’ve seen organizations who shift their fundraising to serve donors and very quickly make the leap to their next level of fundraising success. 

What to Do?

For the “internal audiences” reading this, I hope you’ll make the difficult choice to create fundraising that serves your donors.  Set aside what you like and what you think will work.  Then research what donor-serving fundraising looks like.  Follow this blog.  Sign up for Free Review Fridays.  Make the Big Shift.  Be willing to try things that will make you uncomfortable.

I often encourage Fundraisers to do the “hard, other-centered” work of creating fundraising that generously “crosses the gap” to meet your donors where they are. 

Because fundraising is supposed to be for donors.  Not for internal audiences.

My 25+ years of experience tells me that if you choose to disappoint the internal audience by choosing to serve donors, you’ll raise more money and do more good. 

How you can use the 80/20 rule to raise more money

80/20 rule

At Better Fundraising we see a LOT of examples of the 80/20 principle in fundraising. 

Shoot, they even use an example from fundraising as the graphic on the Wikipedia page!  (A great summary of the 80/20 principle is to say that 80% of the effects come from 20% of the causes.)

A couple of common examples:

  • 80% of a company’s sales usually come from 20% of its customers
  • 80% of a country’s land is often owned by 20% of its people

What follows are three examples of this principle in fundraising, along with how you can use them to raise more money for your organization.

The 80/20 Rule in Major Donor Fundraising

About 80% of your individual donor revenue will come from 20% of those donors.  (And in recent years it’s been closer to 90% of revenue coming from 10% of donors).

The organizations that make the most of this reality (especially this year) are the ones who intentionally prioritize those donors with how they spend their fundraising time and budget. 

The 80/20 Rule in Direct Mail

If you look at eye-tracking studies, you’ll notice donors only read about 20% of appeals or newsletters. 

To be great at raising money through the mail, you need to know what portions of your letters or newsletters are most likely to be read.  Then you put the content that’s most likely to drive action in those locations.

The 80/20 Rule for Small Shops

For organizations that only send out a couple of fundraising pieces a year, 20% of their communications typically raise 80% of their individual donations.

In our experience, those organizations can always raise more money immediately.  All they must do is isolate the types of communications that raise the most money, send out more of those, and send out fewer of the type that raise less money.

That’s such a radically simple idea that most small shops believe it can’t be true.  But it IS true.  We’ve done it so many times I can give three examples off the top of my head:

  • Annual reports
  • Most e-news
  • Appeals that are general calls for support

We cancelled those by the bushel and never – not once – saw a drop in revenue. 

The Double Benefit

Here’s the great thing about applying the 80/20 rule: you get a double benefit.  You save the time and money from not doing an inefficient activity.  And you get that time and money to do more of an efficient activity.

The Questions for You

Look at your organization’s fundraising activities.  What activities don’t produce measurable results, and you should cancel them?

What activities drive the most revenue, so you should do more of those with your freed-up time and budget?

In your mailed communications, are you putting the most important content in the 20% of your letter your donors are likely to read?  

Savvy organizations are constantly measuring their fundraising results, so they know what should be jettisoned and what should be done more often.  Because there’s always a way to raise more by doing less.

Poor Name, Great Lesson

toxic

My mentors always warned me to avoid a particular type of story.

Here’s why…

They noticed that some appeals for children’s charities would raise a lot more money than other appeals. 

Yet all of the appeals had a story about a child in need – and the appeals all featured the same offer.  What was the difference?

They dug into the appeals and noticed one big difference:

  • In the appeals that raised the most, the stories were focused on the situation the child was in today.  They barely mentioned the parents of the child, or what caused the child to be in the situation they were in. 
  • In the appeals that raised less, the stories spent significant time and energy talking about the parents and their role in the child’s situation.  The stories spent less time talking about the situation the child was in today. 

These Fundraisers came up with a theory to explain why this happens:

  • When the focus of the story is on the child and their current situation of need, readers would therefore focus on the child and want to help the child.  This would cause the appeal to raise a lot of money.
  • When too much of the story is focused on the parent and/or the parent’s actions, some readers would focus on the parent.  This means that fewer readers would focus on the child, and fewer people would give.  So these appeals raised less money.

To describe stories where the parent or the actions of the parent overshadowed the situation the child was in, my mentors used the term “toxic mom.” 

I’ve taken the liberty to rename this the “toxic parent” problem.  This was taught to me in a more chauvinistic time.  Pinning this problem only on mothers is ridiculous.

Example Time

I’m sure you’ve seen this yourself.

The well-meaning nonprofit tells a story like this…

  • “Patrick has been in and out of rehab several times.  Because when he drinks, he occasionally gets violent.  His two young daughters need a safe place to stay, and your gift today will help them.”

Opening that story by talking about Patrick is a great way to raise less money.  Why?  Because some readers will think the story is about Patrick.  And other readers will think Patrick caused these problems for himself, that he’s an addict, and addicts are weak-willed people who can’t keep their act together. 

I’m not saying any of those reactions are correct.  But they are all reactions that take the focus off helping the girls, which is the reason the letter exists and was sent to the reader.  And they all happened because of the way the story was told.

The story would have been more effective if it had been told like this…

  • “Katy and Emma are two young girls in a tough situation.  One of their parents is occasionally violent after drinking.  The girls are too young to be on their own.  They need a safe place to stay, and your gift today will help them.”

All of my experience indicates that the second approach to telling the story would result in more money raised.

Poor Name, But Great Lesson

I was warned to edit the stories so that the “toxic parent” never overshadowed the child in need.  That was a good lesson. 

But the Big Lesson is to keep your reader’s attention in the place that is most likely to cause them to give a gift.

And that place is the problem that your beneficiary is facing today.

The “toxic parent” is not necessarily “toxic” because he or she is evil.  The parent is “toxic” because any time spent in a letter/email/story on the person who caused the problem means time your reader is not focused on the person in need, the problem they are facing, and how the donor can help today.   

Watch out for anything in your fundraising that takes the reader’s focus off of what’s happening today and what the donor can do about it!

Is Your Spotlight on Your Stars?

Spotlight.

No one at a Broadway play complains when the spotlight shines only on the stars of the play.

The stars are who the audience came to see.

Similarly, no mass donor ever complains that they only hear about some of your programs. You never hear a mass donor say, “I wish I knew everything that organization did.”

Because some of your programs are interesting to mass donors – and some are not.

The Lesson for Fundraisers

The people who put on plays have learned this lesson: they shine the spotlight on the stars. In the marketing. On the stage. In the interviews afterwards.

Many nonprofits could raise more money if they learned this same lesson – figure out which of your programs donors are most interested in, then talk exclusively about those programs.

Unfortunately, there’s a value at many nonprofits that “we need to talk about all of our programs roughly equally.”

That “value” is based in fairness, which is a good thing.

But it turns out that donors aren’t interested in all your programs getting equal time in the spotlight. Appeals that give equal time to all the programs (or even just list all the things an organization does) tend to raise less money.

Donors are simply more interested in some programs than in others.

As fundraisers, our job is to raise money, more than it is to be “fair” to internal stakeholders. Maybe better put, it’s a higher value to raise more money and help more people, than it is to be fair to internal stakeholders. After all, your organization was founded to do as much good as possible – not to ensure everybody at the organization receives equal airtime.

Focus your fundraising – your spotlight – on the programs that most people are interested in. Because that will raise you the most money.

How to Thank Your Donor So She Actually Feels Thanked

Thank You.

The goal of your Thank You and/or Receipt package is not just to acknowledge your donor’s donation.

Any organization can do that.

Any autoreply or receipt letter can do that.

Your goal should be to make your donor feel thanked, appreciated and important.

How?

I have already shared this before, but it’s worth sharing again…

thank a donor graphic email.

When you thank her for helping your organization do its work, you’ve make it about you, about your organization.

What you want to do is make it about her. So, thank her for her generosity. Tell her what her gift is going to do (instead of saying what your organization is going to do). Tell her how important she is to your organization.

When you do that, you’ll find that most of your Thank You/Receipt copy is about her. And less of it is about your organization.

Less about You, More about Her

Donors are inundated with requests for support. In the United States, there’s one nonprofit for every 200 people. And almost all of those organizations talk about themselves. Endlessly.

But a very few of them have learned the secret: your donors are more interested in themselves – their lives, their values, their impact – than they are in your organization.

So if you talk to donors about their lives, their values and their impact, they will finally feel like a nonprofit “gets” them. They’ll feel that there’s a nonprofit that’s working on their behalf – trying to help them do what they want to do – instead of just another nonprofit trying to sound great to get their next donation.

Do you feel the fundamental difference? The posture of gratitude for what the donor did, not for what she helped your organization do?

If you can embrace that fundamental difference, and start communicating to your donors that way, you’ll begin to build a tribe of loyal donors who will give you more gifts, larger gifts, and will give to you for longer.

How to Thank Your Donor So She Actually Feels Thanked

Thank You.

The goal of your Thank You and/or Receipt package is not just to acknowledge your donor’s donation.

Any organization can do that.

Any autoreply or receipt letter can do that.

Your goal should be to make your donor feel thanked, appreciated and important.

How?

I shared this last Friday, but it’s worth sharing again…

thank a donor graphic email.

When you thank her for helping your organization do its work, you’ve make it about you, about your organization.

What you want to do is make it about her. So, thank her for her generosity. Tell her what her gift is going to do (instead of saying what your organization is going to do). Tell her how important she is to your organization.

When you do that, you’ll find that most of your Thank You/Receipt copy is about her. And less of it is about your organization.

Less about You, More about Her

Donors are inundated with requests for support. In the United States, there’s one nonprofit for every 200 people. And almost all of those organizations talk about themselves. Endlessly.

But a very few of them have learned the secret: your donors are more interested in themselves – their lives, their values, their impact – than they are in your organization.

So if you talk to donors about their lives, their values and their impact, they will finally feel like a nonprofit “gets” them. They’ll feel that there’s a nonprofit that’s working on their behalf – trying to help them do what they want to do – instead of just another nonprofit trying to sound great to get their next donation.

Do you feel the fundamental difference? The posture of gratitude for what the donor did, not for what she helped your organization do?

If you can embrace that fundamental difference, and start communicating to your donors that way, you’ll begin to build a tribe of loyal donors who will give you more gifts, larger gifts, and will give to you for longer.

Who – exactly – makes or breaks your fundraising goals?

We’re going to spend this month blogging about major donor fundraising, and teaching you to get better at it quickly.

And I’ll start with an educated guess about your organization: a majority of your fundraising revenue (from individuals) comes from a small percentage of your donors.

Most of our clients have at least 80% of their fundraising revenue coming from about 20% of their donors. For a couple of organizations it’s as high as 95% of the fundraising revenue coming from 5% of their donors.

Most organizations we start working with would say they ‘pretty much know that our top donors bring in most of our revenue.’ But it’s the organizations who ‘know exactly which donors bring in most of the revenue and have a plan to help them give even more’ who raise a LOT more money.

If you don’t know your ‘major donor revenue ratio,’ stop what you are doing right now and figure it out!

Once you know your ratio, you’ll instantly have a game-changing realization: you need to focus more of your efforts on cultivating those relationships.

I am constantly amazed at how many organizations don’t know their ratio. One look at your ratio is all it’ll take to know how important it is to build relationships with your top donors, and to do all you can to retain them.

And listen – I am the first one to say that major donor fundraising is not easy work. It takes time and real effort. But in my opinion it’s the most important work you can do to sustain and increase your fundraising revenue.

Consider this: if a majority of your fundraising revenue comes from a small number of donors, then you should spend a majority of your time working to keep those donors actively giving and (if possible) giving more.

Let me hit this point home for you with a short story.

Recently I was asked by our local fundraising association to talk to a group of fundraising directors. After my talk, I was approached by one of the directors in attendance. She asked me how I expected fundraising directors like her, from small organizations, to do all that I was teaching them to do. She felt overwhelmed with all of her fundraising responsibilities, and it was common for her to feel paralyzed by her workload.

My response to her question was simple and direct.

I encouraged her to figure out which fundraising activities produced the most revenue for her organization, and spend her time maximizing those activities. I also told her it was okay not to do some of the fundraising tasks on her list, especially those tasks that produce very little revenue.

She looked so relieved to know that she didn’t need to do it all!

This story illustrates two things:

  1. You are one person, and you can’t do it all. So it’s important for you to focus on the fundraising activities that produce the most revenue.
  2. In order to focus on the fundraising activities that raise the most money, you must say no to some of the tasks on your fundraising list that don’t produce revenue.

Over my 20 years of fundraising, I have seen this kind of thinking and prioritization turn overwhelmed fundraising staff into focused, energized and driven fundraising professionals. And they start raising more money immediately!

So here are your next steps:

  • Figure out what percentage of your income is coming from your major donors
  • Identify exactly who those donors are
  • Shift your thinking to prioritize everything to you do to retain and upgrade those donors
  • Make a plan for each one of those donors for the rest of the year. After all – if you make a plan for the donors who provide 20% of your income, isn’t it more important to make customized plans for your donors who provide 80% of your income?

As this month goes on, we’ll talk more about how to make your plan for each donor, how to ask them, and how to increase their giving!

Focus on Just a Small Slice of What You Do

Focus on a small slice.

I keep a list of the ideas that are most helpful to the small nonprofits we coach and consult. Here’s one of the most important:

Be comfortable focusing a fundraising impact (letter, newsletter, event, etc.) on only a small slice of what your organization does.

Here’s why . . .

Don’t Accidentally Create a Barrier

Smaller organizations (and even some big ones) often accidentally put a barrier between donors and their gift. The barrier: they try to make the donor understand all of the things that the organization does (and even how the organization does them) before asking the donor for a gift.

You’ve seen this before. Really long appeal letters that describe everything the organization does. Or Events where the organization makes sure that all the organization’s programs get air time.

Fundraising like that is created when organizations have a mistaken impression that “if only donors understood all that we do, and how good we are at doing it, then they would give more gifts.”

I can’t begin to count how many meetings I’ve been in where I’ve heard some version of that sentence.

The problem is, most donors are usually just scanning for who (or what) needs help and how the donor can help. Those are the Two Main Questions donors are asking. So all the information about all of the programs, and how your organization does its thing, are not answering the question that the donor is asking.

The ‘accidental barrier’ I mention above happens when donors have to wade through all the information about the organization to get to what they want: a simple answer to ‘who needs help right now’ and ‘how can I help them?’

There’s one very nice bright spot in this scenario: as soon as I hear an organization talking about their whole organization I know that they can immediately raise more money. Because here’s one of the secrets of Better Fundraising’s success over the years; we work with organizations to identify powerful parts of what they do, then focus our fundraising on those parts, and begin to raise more money immediately.

Focus on Easy-to-Understand and Powerful

Instead of trying to communicate about your whole organization, what you want to do is focus on some small slice of what you do that is a) easy to understand, and b) powerful.

Let me give you some examples:

  • Parent-Teacher-Student Associations that focus on how they pay the salary of the ‘math and reading specialist’ – and what a big impact that specialist makes – when they could be talking about the 20+ other ways the PTSA supports the school’s students.
  • The overseas adoption agency that does an appeal letter focused on the travel and legal fees needed to adopt a child from a place like China. Donors in this sector know that fees and travel costs are an incredible barrier for some families. “Fees and travel costs” are a small slice of a complex program – but an easy to understand problem.
  • Rescue missions that focus on meals. They may have multiple other programs, but they focus on the meal (cost: $1.92) which is often the beginning of their impact on a person’s life.

Side note: this is one of the reasons having a fundraising offer is so important and works so well.

Your Organization’s Barrier to this approach is called “Organizational IQ”

A few years ago we invented the term “Organizational IQ” to help nonprofits realize that not every person knows the same amount about their organization.

The people who have a high Organizational IQ for your organization are: your E.D. or CEO, your ‘program’ staff, your Board, and some (but only some) major donors.

People with high organizational IQs have what’s called ‘the curse of expertise.’ They know so much about your organization that they can’t imagine that just a small part of your organization could be compelling to a donor. For your internal experts, the whole is much greater than the parts.

To be clear, having a high organizational IQ is a good thing – it’s just not helpful for most fundraising.

Why? Because most of your donors don’t understand (and usually aren’t interested in) your approach or how all of your programs work together. Most donors just want to help someone, in a powerful way, and they don’t want to have to think too much about it!

Think about your own charitable giving for a moment. For most of your own donations, how much time to you spend thinking about them? Maybe several seconds?

But most organizations try to educate their donors about their programs and their organization. They assume that if donors had a higher Organizational IQ (just like the people creating the fundraising) then donors would give more. Problem is, when you try to educate most donors as to how it all works … they begin to get bored, their attention wanders, they are more likely to recycle your letter, and your revenue goes down.

Again – you’ve received letters like this. You’ve recycled letters like this!

Because remember: learning about your organization is not what the donor is in it for. Donors are more interested in helping someone than they are interested in how your organization does the helping.

As always, there are exceptions. If you’re talking to a major donor who loves your organization and knows quite a bit about it, then by all means talk about the whole. If you’re talking to a foundation for a grant, then by all means share the whole.

But most of the time, to most of your donors, you only want to be sharing the most attractive, understandable part.

Try It!

If you have an email list, you have the cheapest way ever to try something like this. Here’s what to do: go identify some small powerful slice or part of how you help people. Then write an email to your list, share about how there is a real need right now for that slice of your organization, and ask them to fund that one thing. If the cost of that ‘slice’ is less than $100 I predict you will be surprised by how many people write in with gifts!

My guess: you’ll raise more money than a normal e-appeal. And if it works, then try it in the mail. And try it again in email.

For small- to medium-sized nonprofits, the concept of focusing your fundraising on an easy-to-understand and powerful slice of what the organization does is the surest path to raising more money immediately.

And if you’d like help identifying the compelling parts of your organization, get in touch!