‘The Agitator’ Articles

Tell better stories

By Sean Triner

Thankfully, many organisations are getting the idea that they should be telling individual stories, not using statistics and mind-bogglingly technical jargon if they are going to really engage with donors.

This message appears to be getting through with direct mail appeals, but before a recent Fundraising Institute of Australia breakfast session in Brisbane on the topic of storytelling, I went to the websites of the 30 or so nonprofits that were attending. Only one had a story on its homepage. All of the others had information about the organisation, not beneficiaries.

Storytelling needs to be in your soul, and should be the driver of all communications. If you are a fundraiser, the only thing you have to sell is stories.

The best storytelling communications I have ever seen are by Cancer Research UK. It takes the stories developed from its television ads and makes much more in-depth versions available online.

Another organisation that gets this right on its homepage is Vision Australia. There is always a story slap bang in the middle of its homepage. The fundraising and communications people there are very switched on. They know that telling stories is much more powerful than using stats.

Of course, these stories need to be interesting, motivating and emotional. They also need to really bring the donor and the beneficiary together. One tactic for this is ‘witnessing’.

I went back to Vision Australia’s website and had a look at some of its copy. Could it be improved by witnessing a story?

I did a quick rewrite. For the purpose of this exercise, I have made up a couple of things – like the name of the therapist.


Vision Australia’s Children’s Services provide teams of specialists to assist families with children who are blind or have low vision from birth to 18 years of age. Your donation means we can ensure more children like Chelsea (pictured) benefit from these specialised services.

Seven-year-old Chelsea Nagle, was born with no vision at all due to a rare genetic condition known as Leber’s Congenital Amaurosis. Her parents were totally shocked and distraught after finding out that their daughter was completely blind.

Vision Australia provides free specialist help and support to children who are blind or have low vision, which is critical for families who are faced with the shocking knowledge that their child has little or no sight. Your donation today can help ensure our services are available when Australians need help the most.

When the occupational therapist started, Chelsea couldn’t even hold a toothbrush well enough to clean her teeth – with children who have no sight, there’s no impetus to reach for things or pick them up as a sighted child will and there’s no learning by observation. Everything has to be encouraged and taught. The therapist helped Chelsea to explore things by using her sense of touch and to develop more self-help skills such as eating with a spoon and fork, brushing her hair, all to build up her independence.

Learning to use a cane was something else that required physiotherapy – Chelsea had to work on her wrist, arm and shoulders so that she could learn to hold out the cane properly and be able to walk confidently.

Every single one of her achievements has taken a lot of effort. Vision Australia’s support has been a vitally important part of getting Chelsea ready and able to attend school. To prepare Chelsea for school we provided counselling, physiotherapy and occupational therapy.

“Vision Australia’s support has been extremely valuable and I don’t think we could have survived without it, and I don’t think Chelsea would have developed into the independent, active and adventurous child she is today.” Lynda Nagel (Chelsea’s mum).


“It is so hard to describe the change in our lives. From teaching Chelsea everyday things like brushing her teeth to using the cane to get around safely, Melissa has been a godsend,” she told me.

Part of my role at Vision Australia is to speak with children like Chelsea and their parents. I have just got off the phone after assuring her mum, Linda Nagle, that I will do my utmost to ensure that the service that has helped her child so much will continue.

Linda reiterated the huge impact services funded by caring and loving Australians has had.

Melissa is our trained occupational therapist – completely funded by donations.

“Every day that I wake up I wonder what it would be like without the help of Vision Australia – not just Melissa – but also the enormous support from the whole team. It also gives me a great lift to know that this is all funded by wonderful people.

“These are strangers, people across Australia that I have never even met.”

“To have so much love and generosity from strangers is truly wonderful. If I have time to sit and think about it, I can’t help myself from crying.”

“I hope that you can tell them what a huge impact they are having on the life of my little child and our whole family,”  Linda said, as she watched Chelsea cross the room to get a doll.

You can see that Linda wanted me to share her thanks, and tell you about the impact you are having. I could think of no better way to fulfil this wish than to share her words with you. Please, help me fulfil my promise to Chelsea and Linda by making a gift today.

I do hope that you can see the differences in the stories, but more importantly, I hope that you can see how to apply ‘witnessing’ to your copy.

Check out Cancer Research UK‘s brilliant TV ads and stories and, of course, Vision Australia’s homepage.

Fundraising needs you! Help get a fair review

By Sean Triner

First published by Fundraising and Philanthropy Magazine in September 2011

Fundraising transparency is to be put under the microscope by the Not-for-Profit Sector Reform Council. Sean Triner urges all fundraisers and nonprofit leaders to take action to ensure the council is well informed about the areas it is reviewing.

This is the most important agitator I have ever written. Our ability to fundraise using the most effective techniques available to us could be under threat. A group of 12 people have been appointed by the federal government to review the nonprofit sector and make far-reaching recommendations.

They are the Not-for-Profit Sector Reform Council. I assumed that fundraisers knew about this group, but at a recent meeting of fundraisers I realised how many people simply didn’t know about them.

Why do we fundraise? To help the poor, the disadvantaged, the environment, and the abused. We fundraise to make the world a better place. We fundraisers are facilitators. We give people who care the opportunity to create change.

I am sure that the members of the reform council believe in the same things. But we all need to act together to help make sure they know what is important in the world of fundraising, and to ensure that any changes to legislation do not hamper our ability to serve our beneficiaries.

Transparency on the agenda

Part of the group’s remit is “improved transparency and accountability of the sector.” Few would oppose improved transparency and accountability. But experience shows that when politicians or the media start talking about transparency and accountability, their own lack of understanding can lead to rules which can grind some highly effective fundraising methods to a halt.

Even many professional fundraisers still don’t grasp the complexity of fundraising from all techniques – it is nigh on impossible to understand them all. But the Not-for-Profit Sector Reform Council will have the power to recommend changes to legislation which could damage some of the most effective, but least understood, fundraising techniques such as face-to-face and telemarketing.

Can you imagine the impact on your organisation – now and into the future – if face-to-face, direct mail, telemarketing, lotteries and even online fundraising were restricted?

Within the group, only one, Anne Robinson, directly represents a nonprofit listed in the top 50 fundraising organisations (according to Givewell’s Top 50 report). Robinson is the chair of World Vision, which is great, but she is not a professional fundraiser and will need our help.

The reform council’s remit goes well beyond fundraising, but if these good people are about to review the sector, then we need to make sure that they have all the evidence and knowledge about fundraising that we can give them.

Problem with cost of fundraising ratios

The problem with transparency is in the complexity of fundraising, and in the end it always boils down to ‘cost of fundraising’ ratios, as this is the easiest thing for the layperson to understand. But even that is really difficult to explain, and it is hard to compare different nonprofits and different types of fundraising using this method.

Take face-to-face. It is constantly attacked by the media and politicians, yet is difficult to comprehend.

Ironically, face-to-face’s increased transparency makes it an easy target. Most programs work on a ‘pay per donor’ basis. This reduces risk to nonprofits and makes any face-to-face campaign incredibly transparent. With other forms of acquisition, this ‘cost per donor’ is hidden.

For example, with a direct mail acquisition campaign organisations must produce creative, buy print and lists, then pay for postage. One nonprofit may produce the creative in house, paying for the service within its salary and office overheads budget. Another may outsource to get professional copywriters to do the work. These two organisations’ costs are impossible to compare before they have even mailed the pack.

Once mailed, the nonprofit waits for results. It may then follow up all new, non-regular donors with a phone call or additional mailing to ask for a regular gift. It may use internal resources (again, paid by salary and overhead) or outsource to a specialist phone agency.

At the end of this process, the organisation will have some new regular givers. But trying to compare the performance of these two different processes is next to impossible. Usually, over five years, the direct mail and phone method will get a better return on investment.

But the face-to-face method will get more donors and therefore more net income. Of course, you should be able to do both.

It is not appropriate to judge a nonprofit raising $5 million at a cost of $2 million (delivering $3 million on services) as ‘worse’ than one raising $1 million at a cost of $100,000 ($900,000 on services). Yet, using cost of fundraising as a measure would do just that.

The next problem with measuring cost of fundraising is the unfairness of the measure. Large organisations have a natural advantage, and if they have an established bequest program, already have lots of donors or a nice endowment, then their cost of fundraising will look much better than many smaller organisations that have less resources and no economy of scale.

Finally, even nonprofits with similar resources are impossible to compare. It really is cheaper, for example, to acquire new donors for an animal or kids cause than an organisation dealing with a less ‘palatable’ mission like the rehabilitation of young offenders.

We need to make sure that the Not-for-Profit Sector Reform Council know about these complex issues.

So, what can we do about it?

A group of fundraisers from organisations that engage in face-to-face fundraising have a regular meeting every couple of months. They call themselves the F2F Working Group.

Nonprofits represented in this group include the Heart Foundation, Médecins Sans Frontières, Greenpeace, ACF, Amnesty International, Mission Australia, Childfund and dozens more. They are especially worried about potential legislation regarding face-to-face, but appreciate that the reform council will be looking at many other factors.

At the moment, we don’t even know what is or isn’t on the table as the purpose and remit of the council is very wide. That is why we fundraisers need to pull together.

Please, will you help?

The Fundraising Institute of Australia (FIA) is helping. FIA staff told us at a recent F2F Working Group that they are in touch with the council’s chair. As chairman of the FIA, Leo Orland is leading that liaison and met with the council in early September.

But the FIA can’t do this alone. It doesn’t have access to phone and face-to-face data, FIA staff are not in day-to-day contact with donors and measuring ROIs and CPAs. It has different pressures and needs our help. We are lucky that the FIA chairman is an accomplished fundraiser, but he will need our support.

Please keep abreast of FIA emails and updates and subscribe to updates from the F2F Working Group by emailing Paul Tavatgis (paul@cornucopia.com.au). Paul is currently coordinating the group’s communications and will add you to the circulation list.

Maybe there will be no new legislation. Maybe they will just harmonise the regulations – taking a national set of rules from what already exists across our states and territories. We all want harmonisation, so that is something we have in common. But if they pick the toughest rules on each area from the toughest legislation already in existence, then our ability to help our beneficiaries will be stunted.

We fundraisers need to make sure that the council has the facts. We need your help. We need to make sure that we are in dialogue with this influential group, whose recommendations will have such a dramatic effect on our lives.

As well as a potential threat to your organisation, your action or inaction could be the single most important career move you ever make. Please, help now.

What can you do?

There are six actions you can take right now:

  • Don’t leave it to someone else. These legislative things tend to be boring for fundraisers, so we are often guilty of leaving it all to people within our organisation who are not fundraisers. Don’t.
  • Make sure your boss, your chief executive officer, chief financial officer, chair and board understand the importance of the Not-for-Profit Sector Reform Council. It could be a brilliant government run initiative, but without action and understanding it will not produce what you need for the future of your beneficiaries. You, and your bosses, cannot ignore this.
  • Ask your suppliers if they know about this. What are they doing about it?
  • When submissions are requested make sure that you get them in.
  • Email Paul@cornucopia.com.au to make sure that you are on the mailing list. Although it was originally convened around face-to-face, the implications of inaction go much further.
  • Check out more information on the Not-for-Profit Sector Reform Council here:http://www.dpmc.gov.au/nonprofit_reform_council.cfm

Fundraisers’ great balancing act

By Sean Triner

We all want to have our cake and eat it. High average donations, great response rates, excellent long-term value. But in the end, it all comes down to balance. Doing better in one area may mean another doesn’t do so well. Below I explore some of those balancing acts.

Fundraising doesn’t get easier as you grow

Any nonprofit that wants to grow needs to get new donors at some point. When fundraising from individuals, the first few hundred donors you acquire are likely to be your best donors – possibly your best donors ever. They are also relatively cheap and easy to obtain. This is the tactical phase of growth for a charity.

To put this in context, imagine that you are doing a sponsored challenge, let’s say running a marathon. The first people that you ask to sponsor you all say yes. This first bit of fundraising is easy – of course your mum, best mate and husband are going to sponsor you.

You ask 20 people and get 20 people to sponsor you; a 100% response rate! But to meet your target, you need more people to donate. So you ask your mum, best mate and husband and the others to ask their friends. The hit rate comes down quite a lot, to maybe 30%. Then you go to those people on Facebook or LinkedIn who you haven’t really interacted with for ages … it just keeps getting harder, so much so that raising the last 20% of your target takes more than 80% of your time.

It is just like that for a nonprofit. The few hundred donors are friends, friends of friends or people with a great personal connection with the cause. The next ones are other ‘low hanging fruit’ – cheap and easy to get to, but as soon as you start to widen the net, it gets harder and harder.

The first phase, getting those start-up donors is the ‘tactical’ stage of growth.

After that initial effort obtaining donors becomes more and more expensive. To increase the database from 4,800 to 5,000 could cost as much as it did going from 0 to 1,000 donors. To acquire each new donor you have to work a little harder than you did acquiring the last one. This means more time, stronger asking, more frequent asks and more expense is required.

We need to balance growth against constantly increasing costs.

Economies of scale

Economies of scale take a frustratingly long time to kick in. You would expect it to be cheaper per donor to recruit 10,000 donors than say 500. It is possible, but unlikely. For example, in direct mail acquisition, the savings in reducing the print costs will probably be negated by the fact that you have to go to cold lists that don’t perform as well to find the volume. From the sponsorship example above, this is like going to your friends’ friends’ friends.

The higher the volume that you go to, the lower the average response rate is going to be.

When you are planning growth, you may want to set some benchmarks to help you with your budgeting. So, you ask people how they have done with their donor acquisition.

This is great, but make sure that you get the right context. Someone who tells you that they ‘got 8% response rate’ to their acquisition mailing, it sounds like a great response rate. But if it was just 1,000 people that they mailed this is not such a useful benchmark.

You need to know other factors: What was the size of the mailing? Where did the names come from? What was the average donation?

One of my clients achieved 8% on a volume of 50,000 recently. Sounds good, but let’s ask those questions.

Size of mailing

As mentioned above, the larger the volume, the lower the response rate is likely to be. The very best lists will get the best response rates, but they’re likely to be small. There are simply not that many great lists.

For example, imagine a list of bought names, List A. This is a list of 65-year-old and over women, paid off their mortgage, have filled in a survey, said they would give to your nonprofit, have used a credit card and donated to other nonprofits – it’s likely to be a great list for most nonprofits. But there are maybe only 10,000 of them.

That is why bigger mailings get lower average donations. The nonprofit client I mentioned above mailed 50,000 entries from bought lists, and got 8% response rate. As they rollout and mail more, they study the cold lists and see how many they can replicate, how many similar lists they can find, and how they can increase the volume by changing the criteria.

List A had only 10,000 people, but List B has 20,000 – this is a list of 55-year-old and over women, who otherwise have the same attributes. More potential people, but we know younger people are not as good prospects; so we may only get, say, 5.5% from this list.

Improving response rate … will reduce average donation

If you ask for higher donations, you will get higher donations. But the higher the ask, the lower the response rate, while average donations are higher. It is absolutely essential that you test, test and test again on ask amounts.

The nonprofit client above got 8% on a 50,000 cold mailing. But if its average donation had been $5, then this would be not that good a mailing after all. It received about $35 as its (mean) average donation – which helps with your contextual budgeting.

For example, which is better? A pack realising a response rate of 1.5% at $80 average or one achieving 3% at $40? It will, of course, depend on second gift rates and upgrades, but I think in a growth phase I would prefer the latter.

The same applies to warm mailings. Ask for larger amounts and you will suppress response rates. Ask for lower, and you increase them.

The more donors you have, the lower the average value

The more donors you have, the less valuable the ‘average’ donor is. By this, I mean their expected lifetime value is, on average, lower. This is the rule of diminishing average value.

As I mentioned above, it often costs more per donor as you acquire more donors. Yet those you are paying more for are rarely better than the ‘cheaper’ ones. As your volumes increase, the average second gift rates, average donations and average number of gifts per annum are likely to decrease.

But, if you need to grow, you can’t just do it from your current donor base. You need new donors.

Your balancing act here is usually knocked off kilter at the planning stage, when the rule above was not taken into account. The best recruitment channels (by volume) get you the worst regular givers (by implied lifetime value).

Face-to-face regular donors are not ‘as good’ as other sources. They are more likely to stop giving, very unlikely to give additional gifts and not likely to leave you a legacy. Yet face-to-face provides by far and away the majority of new regular givers to Australian nonprofits.

The fundraiser must balance value per donor against volume. The correct strategy is to recruit both types of donors.

What is good for the long term… is often good in the short term, too

Someone giving a donation today is one of your best prospects for becoming a monthly donor. Also, obtaining the longest-term gift – the bequest – is made much easier if someone has donated frequently. Getting donations now is great for a bequest program – provided there is a bequest program.

As a bonus, getting a donation right now is the best way to increase the chances of a donation in the future. The more times someone donates the more likely they are to donate again.

However, asking for all three (donation, regular gift and bequest) all at the same time is rarely a good idea. So, fundraisers needs to balance which communication goes out with which ask, and when.

As you plan for growth, make sure that you are on top of all of these balancing acts. Get the right context from others. It is likely that a board member heard something about a great response rate, and expects that from you. Be careful!

And stay safe on the high wire.

Can a killer curry improve your bequest program?

By Sean Triner First published by Fundraising and Philanthropy Magazine in July 2011

Lunch with the head of fundraising at a major Australian charity had to be an Indian curry. Like me, this fundraising boss is English-born and we exiles do love our curry. Fish and chips were usurped by curry as the British national dish a very long time ago.

What better way to spend a beautiful Sydney winter day than munching an eggplant madras, playing poppadom geography* and talking about … death.

This charity gets a lot of money from bequests. My friend told me that about two thirds of these bequests were unknown – people who didn’t seem to have any connection with the charity.

So, should it be spending more on marketing bequests to the ‘general public’? A good point and a good question. Initiatives like ‘Include a Charity’ and ‘Make a Will Week’ are certainly pushing that way, and it is good for the sector that they exist. But what about general marketing spend for bequests?

On a curry-spotted napkin, we ran through a little thought experiment.

Curry-fuelled fundraising conundrum

A large charity received 400 bequests last year. This was a normal year, and the bequests were worth an average of $50,000 each, meaning a bequest income of $20 million. Of these bequests, only 150 (just over a third) were ‘known’ to the charity, perhaps as donors or volunteers. So, about $12.5 million came in from unknown people.

At first glance, it would not be an unreasonable approach to divide spend – say one third – for targeting the organisation’s own database and two thirds onto the wider public.

But let’s think this through. We have a finite budget (never enough, of course) and need to spend that wisely. Wisdom in marketing manifests itself through targeting, so we need to target people more likely to write a will and, put crudely, realise that gift sooner or later.

Age is the obvious place to start. Older people are better bequest prospects. People tend to change their will just before they die.

And, of course, we should target people who are more likely to put us in their will.

Skip the next four points if your head hurts or it’s too early for maths:

1. In the example above, it seems at first glance that non-donors are more likely to leave a legacy, but let’s just think about that. The charity has 200,000 donor records on the database.

2. Around 138,000 Australians die every year, according to the Australian Bureau of Statistics. Of those, 400 mentioned this charity in their will. That means about one in every 345 that died put this charity in their will.

3. The average Australian is 37 years old. Looking at the charity donor records, people on that database are on average 50 years old, so they are more likely to die sooner. Let’s assume that they are twice as likely to die in the next decade.

4. That means of my 200,000 donors, I can assume that 2,752 died last year. Of those, 150 put my charity in their will. That is one in 18.

In other words, someone who has donated to my charity is about 20 times more likely to put that charity in their will.

With such a difference in expected success, and easier methods to communicate to them, it makes sense to target those in your database first.

If you are in a relationship with someone, you can also work with them to make sure they put a residuary or percentage of estate in their will for you. These types of bequest can be ten times more valuable.

Do the madras math

My conclusion is that when you see something really obvious and use it to make strategic or even tactical decisions, think it through first. Look at the data and do some maths. You could be making a mistake.

By the way, I used Australian Bureau of Statistics to do most of this work, but came across a great site where you can see how long you have left. All things being equal, I should now make it to 14 April, 2051.

I am just putting in an appointment in my diary – I hope the run up to that day is interesting, but not as deadly as Roy Batty’s (Rutger Hauer) “Time to Die” in Bladerunner.

*Rules for poppadom geography: Break the poppadom into bits and see if you can spot the outline of countries and states. France is always there, and usually Argentina and Tasmania, too.

Why you should stuff in more stuff

By Sean Triner This article was first published by F&P Magazine in May 2011

Kids who constantly ask questions can be tiring sometimes. Why is that man running? He’s exercising. Why are bananas yellow? I have no idea. Where do babies come from? Ask your mother. Most of us were like that but eventually got on adults’ nerves so much we inevitably stopped. Not me. Although I now know the answer to two of those three questions, I am still asking questions.

Last month I was across the Pacific Ocean at the AFP International Conference on Fundraising in Chicago. It was a great learning opportunity and I claimed to my mum that I was Bill Clinton’s warm up man since I presented just before him, but I learned lots at the mini conference held afterwards as well.

Some of the problems we have in Australia are the small volumes available to us for testing, our ridiculously high postage costs and high print costs. In the USA, they have much larger volumes, cheaper postage and low (very low) printing prices, partly because of the volumes. This is handy for us if we are lucky enough to get hold of their test results. It is my experience that the trends from testing in the US tend to apply in Australia too, something colleagues in Italy, Belgium, Spain and Canada have also found.

The mini conference concentrated on acquisition, and there were plenty of tips for improving responses on offer. Many were tactical, some really technical and some challenged creative. But tweaking these things had a lower impact than one fundamental change: putting more items in the pack.

Take it to the limit

Back when I was learning about direct mail, I was taught that adding more product testimonials increases response rates for commercial direct mail. I was taught to keep stuffing more testimonials in until the postal weight limit is reached – that is, when the post would otherwise go up in cost. Then, look to see if you can get away with a thinner, lighter paper stock so you can get even more in.

It would appear that this applies to charity mailings, too. Instead of testimonials, these items can be memos from the field, diagrams explaining how donations are used, children’s drawings and so on.

For example, last year I worked on a major overseas charity’s tax appeal, and their high-value donor pack contained at least nine items and performed fantastically. Other successful packages for other charities have been of a similar size.

Other than the main letter and response coupon, other items you could put in the mail pack include: memo from field, example ration card, diagram of a defective heart, explanation of how gene therapy works, map of where work is happening, diagram of a new building, photo of the equipment needed, testimonial from donor, testimonial from beneficiary and more. If in doubt, put them all in.

Better return on a bigger outlay

In these cases, the increased cost is enormously outweighed by the increased revenue and usually the return on investment (ROI) is better, too. This always seems to be the case with warm appeals – that is, appeals sent to people who have donated before. But does the logic apply to acquisition? The answer is – to quote fundraising expert Mal Warwick – it depends.

The more stuff you put in acquisition packs, the better the response and average donation. This is a clear trend which I saw illustrated on huge volumes in the USA, with only occasional exceptions. The most amazing example was a premium pack with 16 pieces packed into a C4 envelope – big enough for unfolded A4 paper. It was tested against a pack with seven pieces.

The results were extraordinary:

Pack Response Rate Average Gift
7 piece pack 4.84% $18.55
16 piece pack 7.05% $18.38

On American volumes and postage costs, the big pack provided a much better ROI. Please note, as per my previous Agitator column, ROI is a terrible measure for overall fundraising programs and not a good indicator of overall success. It is the best measure for acquisition, however.

Does it work Down Under?

With lower volumes and ridiculous postage rates in Australia, it could be that the ROI doesn’t work as well for 16 pieces but, then again, our average donations tend to be higher. The answer will only be found from testing.

In the meantime, I strongly suggest that for your acquisition you test putting more into your best performing pack. If it is a premium-based pack, just try more premiums. If it is not, then try adding more, relevant support material.

For your warm tax appeals, do the same. If your budget doesn’t allow for addition of extra pieces then simply mail fewer people. You will make more from mailing fewer people a better (read: more expensive) pack.

One question I still don’t know the answer to, and it’s not just the annoying child inside, is why does direct mail work better when you put more stuff in the package? Mum, do you know the answer?

If you do test this sort of thing, I’d love to hear your results.

Are you punching below your weight?

By Sean Triner First published by Fundraising and Philanthropy Magazine in June 2011

I have had a fascinating month which includes analysing the best acquisition direct mail results I have seen in Australia. One charity managed to average 7.5% response rate on cold, bought lists (no swaps or co-ops). This was on a mailing of 40,000, so is statistically valid for rolling out. The ‘worst’ list got over 5%, and the best over 10%. For context, 1% is what a charity may normally expect from a mailing.

When it comes to acquisition, return on investment (ROI) is the best measure. ROI is not at all a good measure of a charity’s overall fundraising performance (net is the best), but with acquisition having limited lists and higher costs, it makes sense to aim for the best ROI on your limited acquisition budget. This charity is making an ROI over 1.0 within a few months on acquisition. In other words, they are mailing brand new people on a large scale and making an instant profit.

This charity is a small organisation. If it rolls out to its full potential, it can go from a couple of thousand donors to 30,000 in just a few years. It will be a serious contender. To do that, it must invest a lot of money, but with results like this it is getting a quick return. This is unusual for acquisition, but it got me thinking.

A closer look at nonprofit investments

I had a look at Givewell’s record of investments by charities, which shows the total investment portfolio declared in charity annual reports. It makes for interesting reading. In the latest report the two Salvation Armies combined (Southern and Eastern) declared assets of $663 million and were number one when considered together. Not surprising, hospitals and other charities that own lots of buildings were up there in the top ten.

I then overlaid charities where I knew their investment portfolios and were in the Pareto Benchmarking project. I was then able to make relative estimates of how much they were spending on acquisition, based on the number of donors they were recruiting.

I found an amazing spread. It was clear that some charities were investing massive amounts on acquisition in proportion to their investment portfolio and income. Not surprisingly, they were also experiencing above-average growth over the last few years.

What was more amazing was that some charities were spending a tiny fraction of their investments in fundraising. For example, one charity with between $150 million and $200 million in investments appears to be spending at most $1 million per annum on acquisition.

As safe as houses

I understand that for many of these organisations with huge investments, a lot of that is tied up in property. Property has advantages, of course. Outright ownership means no mortgage interest payments (charities should be able to get 6-8% per annum at the moment), and potential capital gains. Of course, mortgaging a property still allows the charity to gain the same capital growth.

But since many of the properties owned by charities are used by them, they are unlikely to realise that capital to provide services in the next decade or so. The average capital growth from property from 1980 to 2010 was 8.4% and there is no doubt the market has slowed down. So, even if they did sell a property and not buy another, they could expect perhaps 5-10% per annum over the next five years. This provides an ROI of about 1.4.

Money in non-property investments might be increasing at between 7% and 11%, as large charity portfolios tend to do well.

Invest in fundraising

On the other hand, investing in a combination of cash donor recruitment, regular giving recruitment (including face-to-face) and a proper program using phone and mail to ask normal donors to make automatic regular gifts can provide an ROI of between 3.0 and 5.0 over five years.

With those numbers under our belt, let’s imagine our charity as a business. The business has to generate profit over the next five years. But, instead of shareholders, that ‘profit’ can be spent on essential services. So, the charity should do what it can to maximise that profit in the long term.

How does fundraising fare against property or investments? Let’s compile those numbers into a simple chart, using the same reference point – five year ROI

Of course, it takes a lot of work and skill to get the fundraising program up and running. I am not a financial advisor and my numbers are very general, so please consider investments carefully.

Also, the fundraising figure needs to consider the impact on staff and their space. You would need somewhere to put the staff, salaries to pay them and pay interest, if you mortgaged a property to raise the funds. Even so, you have to be pretty unlucky at fundraising to not beat the return you get from property over five years.

Know your investment portfolio

Fundraisers: check out your charity’s reserves. Do you actually know what is there? It’s important for nonprofits to have reserves to help with cash flow and ensure services are delivered and staff paid during financial downturns. You may be surprised to find out, however, that there is a lot of money there and the brilliant people on your board or finance department making decisions on investments have simply never looked at fundraising in this context.

If you have already conducted tests that demonstrate the power of fundraising, for example indicating an ROI of more than 2.0 over the next five years, then I really urge you to seriously consider fundraising as an element of your investment portfolio.

But, not all organisations are equal, and money makes money. The more you spend on fundraising, the better your ROI should be.

A charity with great public appeal such as kids with cancer or guide dogs is going to get a better ROI on public fundraising than a young offender rehabilitation program or an obscure disease research organisation. Even so, those two organisations – if they have reserves, an endowment or property – should seriously consider using the money to grow public fundraising.

For those charities with no money to invest, I suggest you consider funding your growth through one of these four sources of income:

1 – A board member who has the money and passion to set a long-term strategy in place. 2 – A major donor with the same means and motivation. 3 – Divert a windfall bequest. 4 – Stop doing events or anything else with a weaker ROI.

Spending Money to Make Money

By Sean Triner First published by Fundraising and Philanthropy Magazine in June 2011

I have just been assessing the latest benchmarking data, where 40-odd charities pool their data and have a look at what is really happening in their fundraising programs. A couple of really big things stand out.

One: The charities that grew the most in the last five to ten years did something enormously different to what they used to do.

Two: The growth of sustainer programs (regular giving/monthly giving) is the basis of most of their growth. But not all.

This article lays down a challenge to fundraisers and managers who don’t have enough money to provide all their services and need a lot more money in the future.

GFC fears lead to funding plateau

Comparing the benchmarked charities against the annual reports of other charities, growth overall has leveled out. It would appear that many organisations cut back on fundraising spend a few years ago because they feared the impact of the global recession. Their numbers now show the folly of that action.

Put simply, those that didn’t cut back have more money to spend on their services now than they would have if they cut back. It seems so obvious, yet logical arguments must have been presented at those charities’ board meetings to justify the cutback.

So, what does this mean for those of you in the midst of planning for next year and beyond?

My colleague Jonathon Grapsas recently wrote an article, Budgeting Beyond Spreadsheets, in which he suggested that you should plan for 10% of your budget to go on R&D – fundraising ideas that don’t have an income against them. Have an acceptance that you have to get some things wrong if you are to have radical growth. I want to push it even further.

I have a radical idea here, one that has been implemented with enormous success by two or three organisations who have had amazing growth. I shall call this Plan B. Plan A, of course, is doing what you did last year but a little bit better.

Plan A can possibly deliver an average of 5% growth per annum. Great for those who are nearly achieving all the needs their charity attempts to meet.

Capitalise on current capital

Plan B is genius, but will take enormous courage and leadership. It is best for a healthy organisation, with a few thousand donors, at least one employed fundraiser and a long-term vision which requires substantial increase in money spent on services. However, it will also work for a smaller organisation with a small injection of capital, like a large bequest. It goes like this:

To: Fundraising manager From: CEO Date: Four weeks before fundraising budget is due Subject: Fundraising budget

Hi Superstar Fundraiser,

Your brief for this year’s budget is simple. I want a five year plan and budget that allows the current level of net contribution from fundraising to increase at 2.5% (cost of living) per annum. Any money you raise beyond that can be used to acquire more donors, more legacies, more sustainers. The cost of fundraising must never exceed 80% in any one year.

In the fifth year there will be a minimal investment in acquisition and new ideas with cost of fundraising around 20%. That year will have a big net surplus, and money can be used for radical development of the organisation’s service delivery capability. From year six onwards, we will need a budget which generates steady growth but the cost of fundraising is kept at an average of 40%.

Thank you, Boss

How good would that brief be? It is like a proper business. Planning for growth, strategic long-term thinking, allowing proper budgets for bequests and also allowing for mistakes and learning. It gives fundraisers responsibility and control of their budgets. The better they do, the more they have to experiment with – an amazing feedback loop.

I have seen this in action. One charity that raised around $400,000 net for services in 2003, decided it would allocate little more than that for services every year for about four years. They spent all money above that on more acquisition. In the fifth year they had a net of over $2.5 million, and from year six have settled on a revenue stream achieving around $2 million per annum net for services. There is no way these increases would have been so significant if they had stuck with Plan A.

This plan takes true courage and leadership. If it is working well, imagine the pressure from service-providing staff and the board to start using some of the money now. But giving in would penalise the future.

This is how capitalists build businesses and is perfectly acceptable. And if the plan is presented correctly to the authorities, as the ones I know of were, there are no problems.

There are of course other options to Plans A and B. One such, less radical example, is a policy that any bequest money goes on fundraising unless the donor specified something else. This makes sense to turn one off large gifts into ongoing revenue streams.

So, as you are planning, do you go safe with Plan A or something radical like Plan B? One will be a lot more beneficial in the long term, and a lot more motivating for all, too.

Emergencies should not overwhelm

By Sean Triner

It always seems like there are more and more emergencies. This year fires, flood and earthquake have hammered Australia and New Zealand, as well as at least seven other countries. La Nina is not finished with us yet. The massive displacement of people in North Africa looks like it is just going to get worse, and the spectre of civil war raises its ugly head into the limelight again.

None of this takes away the needs caused by crippling diseases like arthritis, killer diseases like liver cancer, runaway species extinction and rainforest destruction. But let’s face it – it is the emergencies that get the news.

Colleagues and I have written about the perils of fundraisers holding off fundraising activities due to an emergency that doesn’t directly affect their charity. For example, a New Zealand cancer charity deciding to postpone its donor appeal due out the first week of March because of the earthquake. Few commentators disagree with our point that you should go ahead with your campaign.

But what if your organisation is directly affected? For example, if there is an earthquake, and your charity is a development agency tasked with helping out.

In this case, the emergency should affect your fundraising. If the event is gaining lots of media coverage, then it is likely that you are already affected by the phones ringing, and your website being overwhelmed.

Most emergency type charities are ready for this. Many have excellent emergency response plans with call centres on standby, mail files already selected, templates (electronic and mail) already in existence.

An emergency is a very exciting, exhausting and overwhelming time for fundraisers in such charities. People cancel leave, work 84 hour weeks, man phones, stuff envelopes; they may not have the skills for sorting through rubble but they put their soul into helping the rubble sorters’ funding.

But what next?

I tend to make gifts to emergencies. Caught up in the passion and the moment, appalled by what I see in the media, I want to do something. These gifts are usually on top of my usual gifts to my ‘regular’ charities.

Data analysis shows that I am not unusual. (Well, in that aspect anyway).

Often these donations are from people who have not ever donated to that charity before, or only during previous emergencies. I shall call these ‘emergency donors.’

Overall, charities tend to find that emergency donors are a tougher group to get motivated and become ‘normal’ donors – giving occasionally to tax or Christmas appeals, for example.

Data also shows that the best time to ask someone for a regular, monthly gift tends to be soon after a single gift.

We have seen from our own work within Pareto Phone and Pareto Fundraising that this tends to hold true for emergency donors too. For example, calling six months after an emergency will get better results than nine months later.

One theory, as yet untested, is that if that phone call is made even sooner – maybe within four days of a gift – the results would be even better.

Perhaps these results could be improved if the emergency donor had made a second gift? But we know they are not likely second gift prospects, except for emergencies.

It seems to me that the right second gift ask should be during the same emergency. I believe that most emergency donors give because of the media, but don’t really know how much to give. So they are ripe for asking.

I suggest testing email, phone and mail to solicit a second gift, within 72 hours of previous gift, whilst the emergency is still big news. The amount you ask for should be tested too. Perhaps test asking for the same amount v twice the amount v four times. Of course, the copy or script has to be brilliant to make this work, but that shouldn’t be hard. Just tell the truth.

You may not be able to get to them all, so target by size of gift, AMEX / diners card donors and credit cards ahead of cheques. This approach should be followed, within weeks by a regular giving ask.

In your explorations, I would also suggest testing straight to regular gift against trying to get a second gift. Whatever you do, please, make sure it is someone’s responsibility to follow up on donations. Ensure they are not dragged into the massive maelstrom of just trying to keep up during an emergency.

Here is my recommended five step plan – before an emergency. I think some charities are on top of the second part, but few are on top of the others.

Pareto Fundraising’s Five Step Plan…

If you’d like to discuss how we might help you with an emergency preparedness plan, please don’t hesitate to give Clarke Vincent a bell on 07 3015 4021 or drop him email.

There Are No Quiet Times

By Sean Triner This article was first published by F&P Magazine in February 2011

Time to rethink appeal frequency?

By focusing only on the traditional appeal times around tax and Christmas, Sean Triner says charities are missing out on seven months of the year.

We direct marketing fundraisers are kept busy – but we have the times, like after Christmas and tax where we seem to really lay off a little. Well, according to figures from Nielsen’s ‘Who Mails What’, anyway.

In some ways it makes sense – look at the giving patterns of major donors for example. Figure A shows when people gave specific donations of $1,000+ to 33 Australian and New Zealand charities. Tax-time clearly seems to be an important factor.

But considered in isolation, this doesn’t tell the whole picture. January is not generally considered a good fundraising month, yet $200 million was raised for the Queensland Flood Appeal. I wonder how this chart will look for 2011?

Figure A: Cash gifts $1,000+ by month, 2004 – 2009

It’s about more than the month

My point is that there are bigger influences over when people decide to give other than the month. And of course, when you ask them for money is one of those influences. So when should you be contacting donors?

The key is to think about direct marketing strategy in these terms: • Maximising life-time value • Net income over a year – not an appeal • Number of donations received

If you or your board use these terms, you must abandon return per appeal as a measure – it is destructive and unhelpful. There are lots of articles on this issue, and a couple of books too – ‘The Life You Can Save’ by Peter Singer and ‘Uncharitable’ by Dan Pallotta.

There are many arguments about why it is the wrong measure, but the one most relevant right now is that it is better to raise $1,000,000 at a cost of $400,000 than it is to raise $650,000 at a cost of $50,000. Even though the net is the same, and the ROI raising the $1 million was worse, the reason it is better is that there is likely a higher number of donors, which means long-term income is ‘safer’.

Put bluntly, the more often you get people to give, the more they will give.

Ask more often The basics of marketing teach us about RFV (recency, frequency, value) – and the example above – use the arguable fact that RFV targeting applies to charity donor bases as much as any other customer base.

Someone who gave six months ago is more likely to give than another otherwise identical donor who gave seven, eight, ten or twenty months ago.

The best way to reduce attrition is get a gift, and the best way to get a gift is to ask. So the best way – across a database – to reduce attrition is to ask closer to when someone last gave. In other words, ask more often.

This all makes sense for donors rather than prospects – but when is a donor a donor? Is it with their first gift, or their second? There will always be some people who only ever give one gift. But those that go on to give a second are much more likely to give a third, and so on. So it makes sense to try and get a second donation as quickly as possible.

All in the timing We usually time an appeal to maximise response rates. But really, we should measure the overall response rate over a year – i.e. the number of people (and the number of donations) that we retain every year. This is a more useful measure than the response rate to a single appeal. Few charities in Australia measure appeals like this, but it is standard practice for many American charities.

To maximise this overall response rate, we need to plan appeals around response rate and subsequent behaviour.

For example, only sending acquisition mailings at tax and Christmas – the time many charities run big appeals – may seem to make sense, but the medium-term impact is that the new donors may have to wait an average of six months for the next major appeal.

And, on the other hand – letterboxes are absolutely packed out with charity appeals in late October to mid-December, and late April to mid-June. That leaves about seven months with much less competition. And it gives you better test times. Yet another benefit is that you can go to smaller, more tightly selected prospects more often, rather than trying to make up the numbers with some mediocre lists.

Running acquisition campaigns across so many different charities, over so many years has not revealed any data to suggest that there is any long-term advantage from concentrating acquisition in the two big appeal times of Christmas and tax. But it puts workload and cash flow pressures on organisations. I think we do it because that is how we always did it. Let’s break the mould and test sending our acquisition out more evenly, and mailing warm donors more often.

Brand Building can divert you from fundraising

By Sean Triner This article was first published in Fundraising and Philanthropy E-bulletin in November 2010

I saw this great article from Jeff Brooks of Future Fundraising Now: ‘You’re Not Nike – Get Over It.’ Jeff is much more of an agitator than me, and he starts the article with this quote from the marketing director of a nonprofit:

“Our fundraising results have dropped since we put our new brand standards in place, but that’s OK because the new brand so brilliantly articulates who we are as an organisation.”

The moment ‘branding’ is mentioned I often get worried. Luckily it rarely turns out as badly as in the quote above, but branding exercises do need to be carefully managed and fully integrated with fundraising.

Clearly, brand awareness is not a bad thing: the higher your overall brand awareness (providing it is positive), the easier it is to fundraise. If two nonprofits went head to head that were doing identical work and promoting it in the same way using almost identical language – the one with more brand awareness will likely have a lower cost per acquisition.


This month, I am agitating that ‘brand awareness’ can damage your nonprofit. Here’s why: it’s not the brand awareness that causes the damage directly – it is what we do to ‘grow’ this awareness, such as misdirecting budget and effort from fundraising or services, reducing fundraising effectiveness and alienating donors.

Hope and solutions vs problems and need

Let’s say a nonprofit works with a brilliant branding agency to develop a new brand. New brand guidelines include a new font, look, feel and ‘voice’. The ‘voice’ reflects the fact that donors say in focus groups that they would be more likely to respond to positive images and stories of hope and solutions – not problems and need. Consequently, internet and direct mail appeals don’t work as well.

Donors really do say they prefer positive stuff, but test after test after test shows that donors respond better to need: how can I help!? And these tests show that this continues to work.

No nonprofit wants to ‘brand’ itself as negative or always needy. But … you are needy. Be honest; demonstrate why you need the money, and what will happen if you don’t get it. It might not be a pretty picture, but it is the truth.

Beware of abstractions

Another trap in brand development, particularly from agency people, is the introduction of abstractions and taglines.

Nonprofit work is really pretty simple to sell:

1. There is a problem. 2. Some good people want to solve it and set up a process to do so, but 3. they need money. So, 4. please give or the problem won’t be solved.

Taglines can be useful to underline points (provided they don’t become central to the campaign), but abstractions are never useful.

Budget distraction

Time for a bit of maths.

Effective, large-scale, public fundraising, such as face-to-face programs, direct mail, multimedia and phone programs, can raise money and awareness. Effective, large-scale public awareness programs (such as outdoor advertising, bus-backs, press launches and publicity events) only raise awareness. They don’t raise money.

But since awareness makes fundraising easier, and a public awareness campaign worked well – would it be best to do both?

The answer is “Yes, but …” and the ‘but’ is where the maths comes in.

There is a simple formula here: the cost of the awareness campaign needs to be less than the increase in income from the fundraising. It rarely is.

For example, take a fundraising acquisition campaign costing $100,000 which recruits 300 new regular donors. Then spend $50,000 on pure awareness. The effect is amazing, with donors now 10% more likely to respond. So the next $100,000 acquisition campaign will get 330 donors.

This would be an extremely fantastic result … until you think, ‘What would have happened if I spent $150,000 just on the acquisition campaign alone?’ In theory – you’d have got 450 donors.

Any spin about the long-term nature of brand awareness should not be ignored, but considered carefully. New donations also have a long-term nature, because a donation now is the best indicator of a future donation. Of course, I am simplifying this, but the theoretical formula still applies.

Full-on, integrated campaigns appear to work brilliantly – just look at The Smith Family’s integrated approach to their Christmas campaign, and World Vision with their 10,000 new sponsors campaign. But those campaigns are not awareness campaigns; they are clear fundraising-led campaigns with everything pointing towards transactions.

Hopefully, all media are being tracked against outcomes.

Too many cooks in the brand kitchen

Going through a rebranding process usually involves lots and lots of people. In my last job before setting up Pareto with Paul Roberts, I project managed the rebranding of UK mental health nonprofit, Mind. In that exercise I had to involve all stakeholders – which included national and regional staff, all regional Mind associations (Mind effectively franchised its brand to them), donors and more. As well as the direct costs, tens of thousands of pounds were effectively spent in staff time.

When it comes to branding, everyone wants a piece of it. Everyone gets especially worried about the logo – many confuse brand with logo. Consequently, everyone puts in a word, and the end product is a camel*.

Be well-known where it counts, not everywhere

Nonprofits often believe they have lots of target audiences, ultimately concluding with the ‘general public’. Let me tell you that short of having $20 million to invest in brand awareness, the general public is not your target audience. You really need to narrow it down. You may well have two key audiences: service users and donors.

Your service users should be easy to define (for example, deaf people or pet owners or your congregation). Your donors are older people. From there you can start breaking down by state, country v metro, suburbs, wealth indicators etc. Age is still by far and away the best indicator of a good donor, with only one exception – face-to-face (F2F) fundraising sign ups. F2F activities are also brilliant for brand awareness.

Back in 2005, managing director of Triumph Communications, Tim Matthews, wrote an article for Fundraising & Philanthropy Magazine entitled ‘Brand power – the hidden lever for fundraising success’. In it, he said that “… to develop a strong brand reputation, you don’t need to spend millions of dollars in television advertising. In fundraising, it is better to have a strong reputation amongst a few, than to have a weak reputation amongst many.”

Questions to ask before ‘the branding exercise’

In his article, Jeff Brooks says that “… nonprofits that have never been through the branding exercise often have stronger brands than those who have. They aren’t making high-flown, abstract statements about who they are – and promises they have no ability to fulfill. They just put out fundraising offers.”

I told you he is more of an agitator than me.

I do think that if you are going to go through that exercise, you should ask these questions:

1. Why? What would success look like?

2. Do I just need a new ‘look’? Maybe the logo is just tired?

3. How much am I willing to spend, and how can I justify that expenditure by increased income or better services?

4. Do I need external help? If so – you are better off paying for it. If someone is willing to do pro bono then ask them if you can pay them and they can donate the money back. This way you are still a customer, and shouldn’t slip down their priorities.

5. Who is our target audience? a) For services b) For fundraising

6. Could I achieve the same goal by stripping out all the fluff and just concentrating on what we do, why, and what you can do to help?

Making the right decision

The right decision for some organisations may be that you do need a re-brand exercise. You may well decide to use an agency. If you do, then all agencies will recommend qualitative and quantitative research including focus groups.

Make sure you sense check that research against actual donor behaviour. Ensure it is congruent with your own data analysis (if you have more than 3,000 donors). If research shows that donors say they like positive messages – check to see if your most successful campaigns were ‘needy’ or ‘positive’.

You need a level-headed project manager, someone who keeps it all real, avoids abstractions and doesn’t confuse awareness or brand voice with success. You only have one measure of success – helping your beneficiaries.

* A camel is a horse designed by committee.