F&P Magazine

Four tips for acquiring supporters online

James Herlihy breaks down the top insights he gained from helping enlist 1,500 new cash donors for Australia for Dolphins in its ‘Action for Angel’ campaign.

In May, the advocacy-based non-government organisation Australia for Dolphins (AFD) developed and launched a digital campaign around the captive albino dolphin calf, Angel, with help from Pareto Fundraising. The ultimate aims: to help save dolphins in Taiji , and to convert petition signers  to regular giving.

Activities for regular giving conversion have not yet begun, but already the ‘Action for Angel’ campaign has multiplied AFD’s capacity for future effective action by boosting its donor base and active, engaged online community. So far, the campaign has:

  • Enlisted over 1,500 new cash donors
  • Grown the e-mail list from 1,700 to 40,000
  • Expanded an engaged Facebook fanbase from 4,000 to over 10,000
  • Achieved a project return on investment (ROI) of 1:2

Here are my four top insights from the Action for Angel campaign.

1.       Non-financial engagement can bring rewards… if the proposition is right

The Action for Angel campaign sprang out of discussions with AFD’s chief executive officer Sarah Lucas in April. She revealed that the organisation was planning fundraising to pay for an upcoming legal appeal against the Taiji Whale Museum. The museum was keeping an albino dolphin calf named ‘Angel’ in a tiny aquarium tank, after dolphin numbers slaughtered her mother and pod. Global outrage about the hunts created an opportunity for non-financial mobilisation that could deliver far more than a straight-out fundraising appeal – both in terms of impact and financially.

Not every organisation has a story with such mass appeal. But online action can be inspired by many less controversial causes – even those not usually involved in campaigning. Whether it’s a petition, a pledge, a quirky poll, message of solidarity, a simple ‘share’ or backend premium, think of what interaction might help you grow an engage your online base.

As with all supporter engagement, the proposition is key. Is there something that’s really of interest to your audience? Is it emotionally engaging, shocking, beautiful, awe-inspiring, hilarious or personally beneficial? There are lots of possibilities, if you are realistic about what’s going to stick.

2.       Properly map out the donor journey

You never want to get the stage of asking yourself, “Okay, we’ve engaged tens of thousands of people, now what?” No organisation should invest time and money in acquiring new supporters without having a clear path for them – ideally one that fulfils their strong fundraising potential.

With the Action for Angel campaign, we mapped out the full journey of communications. Cold audiences were driven to a petition from acquisition channels – targeted Facebook ads and promoted posts, Google display ads, etc. There was a strong share strategy. Petition signers were then funnelled through an automated e-mail journey after signature – with e-mails building the relationship with AFD – before they were solicited through a fundraising campaign for AFD’s legal appeal.

Signers who didn’t donate after one ask received a chaser email, and the fundraising campaign was also strongly promoted through acquisition channels – including Google display, Facebook and AdRoll retargeting.

3.       Spend time on audience research and targeting – the online way

The digital landscape provides unique, powerful tools for reaching audiences. Facebook alone has an unprecedentedly rich bank of data on the interests (psychographics) and demographics of a huge segment of Australians. It lets nonprofits target people with very specific interests – in AFD’s case, it was people interested in marine wildlife and advocacy – as well as the fanbases of other aligned organisations.

‘Custom audiences’ can be created matching your organisational e-mail list, plus further ‘lookalike’ audiences with a similar profile to that donor custom audience. Facebook also enables ‘retargeting’ of people who visit your website, and includes a powerful social dimension to promoted posts and advertising that other advertising channels lack.

With almost 60,000 petition signatures and 100,000 site visits in the first two weeks of the Action for Angel campaign, some great audience ‘capital’ was built that could be retargeted with the fundraising appeal when that launched. This couldn’t have happened without setting up the requirements at an early stage.

4.       Optimise your marketing tactics regularly and be flexible

When your digital campaign launches, you can’t sit around waiting for the results to come in. You have to work every day to optimise and make the campaign go further, take advantage of external events and respond to the community.

After launching the Angel petition, daily we scrutinised all responses to optimise the campaign and get the best results.

What next?

Hopefully these insights will help in your efforts to build an engaged online community and donor base. But  Of course, acquiring a regular or first cash donor online isn’t the end-game. It’s the start of a retention journey that should continually strengthen the donor’s relationship and commitment. But that’s a topic for another day!

AFD 1

Caption: The Action for Angel campaign petition achieved almost 60,000 signatures and 100,000 website visits in its first two weeks.

Planning is a key to success

So you’ve written your e-mails, you’ve got punchy copy and a great design for your landing pages. You’re ready to go, right? Wrong. Lots of extras are involved in a digital campaign. Don’t underestimate how much time these details take. Plan them in – realistically – from the start or you won’t hit that launch deadline.:

  • Generate code snippets for Google Analytics and Google, Facebook and AdRoll retargeting early and deploy them in the right places across web pages.
  • Update your privacy policy to include reference to cookies and retargeting – Google and AdRoll will block your campaigns otherwise.
  • Under the Australian Privacy Amendment Act 2012 (in effect from March 2014), all Australian donate forms now need a consent statement linking to a privacy policy and notification statement online. Got those?
  • If you want to accurately measure ROI for different channels, you must configure Google Analytics Ecommerce and embed your Facebook conversion pixel in web pages.
  • Cover share copy and image elements early. A Facebook share alone has five important properties with specific requirements. You need to get them right!
  • Plan for testing and bug fixing. Estimate how long this will take. Then double it.

 

AFD2

Caption: So engaged were AFD supporters that they sent in artworks, like this drawing by Caroline Proctor which was posted on Facebook to further build the online community.

 

James Herlihy

James Herlihy is a digital strategist at Pareto Fundraising. He has a decade of experience at Australian government departments and nonprofits including Amnesty International Australia, where he led production of record-breaking online fundraising campaigns.

This article was first published in the December 2014/January 2015 edition of Fundraising & Philanthropy Magazine www.fpmagazine.com.au

 

Major Donors

By Sean Triner

The barriers for asking for large gifts from individuals are numerous:

“I need to do more research”

“The timing is not right”

“I don’t know how much to ask for”

“The chairman should ask this one”

and lots more.

Many of these are valid, but ultimately not asking is a failing strategy.  If you want to get $1m from someone then  you almost certainly need to build a relationship with them, and going straight in with an ask will not get you that $1m.  But done well, a smaller ask is unlikely to put them off their bigger one.  In fact, it is part of building a relationship.

If that person was already a donor, then there is some form of relationship already in place.

For example, to lift a donor from $500 – which they donate in response to your annual Christmas appeal – to $5,000 is much easier than following the full seven steps to developing major donors; and it helps bring them along the journey too, if you follow it up properly.

If you have a lot of higher value donors who donate to your appeals, but you don’t really do anything else with them, try ringing them up and having a chat.  Ask them why they support you, if they have friends that do too.  Try and set up a meeting.  Maybe 1 in 3 or 4 will catch up with you.  There you can look to ask them for a more substantial donation.

It isn’t that hard, and I have worked with many organisations to formalise this approach as a process, and with all but one it has led to significant extra income at little cost – and bringing those donors closer to a really big gift.  I call this ‘Major Donors: Next Week” because you need to do it next week, or it doesn’t work.

Lucky Australians can find out more about major donor fundraising from an excellent bunch of practitioners at the Fundraising and Philanthropy “Art and Science of Major Gift Fundraising” event at the end of the month.  A bargain at $600.  Check it out here.

Frankie Airey helped raise around $500m in one campaign.  Gulp.

Charlotte Grimshaw will also be speaking at the event.  She can help identify potential major donors from any list of donors.

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.

Tom Ahern at F and P Forum

By Sean Triner

Short lesson from from F and P Australasian fundraising forum…

Tom Ahern on newsletters. The purpose of the newsletter is kind of like the lessons from ‘How to Win Friends and Influence People’. Tell your donors how good they are.

For example, the Gillette children’s charity, instead of saying how good your work is ‘At Gillette, medical pioneers set the standards for spine care’ tell the donor how good they are. ‘Zawadi says “Thank you” you helped Tanzanian girl stand tall on her own two feet’.

This lesson should of course apply to all donor communications.

It is not about you, it is about the donor.

Getting this right will increase your income, period.

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.

Pulling No Punches

By Jeremy Bradshaw, Editor and Publisher of Fundraising and Philanthropy Magazine This article was first published in the June/July 2011 edition of F&P Magazine

The US-based Tom Ahern is widely regarded as one of the world’s authorities on donor communications. In the lead up to the Australasian Fundraising Forum where he will be a presenter, Ahern pulls no punches in his views on the practice of donor communications. Jeremy Bradshaw sat at the feet of the guru for this interview.

F&P: What particular changes or trends have you noticed in the last few years in the way nonprofits are approaching their donor communications?

TA: I see two rising tides. On one hand, obviously, we have new media: Facebook, Twitter, YouTube jump to mind, even Google ads. And these can be important new media for speaking with donors, from time to time.

On the other hand, I see a dawning awareness among fundraisers that they do not understand some basic and lucrative concepts like ‘donor-centricity’ or the critical distinction between ‘corporate’ communications and ‘donor’ communications.

F&P: What do you think is driving these changes?

TA: The ongoing GEC – the Global Economic Crisis – has been something of a wake-up call. Giving to charity has declined generally – and sometimes precipitously. Donors have nailed their wallets and cheque books shut. And not just the average person; the rich have, too. I know one award-winning hospital in the US where income from major gifts plunged 40% in 2010, even as policymakers were flogging the idea of an economic recovery.

F&P: Have you noticed any particular changes or trends in the way donors are responding to or consuming communications from nonprofits?

TA: Here’s the only change that matters: donors give more when they are loved. This simple, psychological, hard-wired fact eludes many fundraisers when they create their communications.

I have seen respected nonprofits increase their giving 1,000% (not a misprint) when they switched from doing ‘corporate’ communications to doing true ‘donor’ communications, bursting with donor love.

One of the most important unreported stories in the fundraising industry, I feel, is that fundraisers might raise five times as much as they currently do, even more, if they were superbly good at donor communications. What they are is superbly bad.

F&P: How has donor communications changed since you first got into this field many years ago?

TA: It’s matured a lot. And I feel its golden years are ahead, not behind; thanks to a cadre of well-trained practitioners working internationally, mentored by the likes of Ken Burnett and Mal Warwick.

The practitioners I’m talking about are people like Sean Triner in Australia and Mark Phillips in the UK, who get incredible results for their clients. Alas, only the better resourced charities can afford talent like this. Still, I frequently meet at conferences these days, young fundraisers who are determined to be exquisite at the art and science of donor communications.

F&P: Can you name a couple of organisations that you think do a great job with their donor communications? What makes them standouts?

TA: I strongly believe in stealing, at least in the marketing profession. And fundraisers are just marketers by another name. Here’s what I recommend. Find a nonprofit organisation similar to yours, an organisation that is growing. Examine everything they do. The key – send them a small gift, so you can see how their “donor welcome” and “donor cultivation” programs function. Hang out on their website; visit at least once a week. Subscribe to their free e-newsletter. Spend six months with them, as a donor. Write up your report. Steal whatever applies.

F&P: Different nonprofits attract donors from different demographic groups. Are there any donor characteristics that are perhaps universal to all donors (or common to many donors)? If so, what are they and how can nonprofits leverage these characteristics?

TA: Universal? Absolutely: they all have brains. This is not a facetious comment. Donor communications are no more complicated than two cans on a taut string. It’s just my brain trying to influence your brain.

F&P: How do you see the field of donor communications changing over the next few years? Will nonprofits need to change the way they communicate with donors to ensure their communications remain relevant and engaging?

TA: Some of the smartest people working in marketing today are in donor communications. They are the people who write direct mail appeals for major charities: Jeff Brooks (US), Alan Sharpe (Canada), Sean Triner (Australia). Every word they place on a page exists for a persuasive reason.

The problem is: so few fundraisers reach this level or even know this level exists; maybe one in 20, tops? Right now, the untrained and the inexperienced swamp the fundraising industry; in part because the salaries aren’t very good outside institutions like higher education, hospitals, and foundations.

F&P: How do you see technology changing the way nonprofits communicate with donors? For example, mobile/smart phones have massive market penetration, and iPads and tablet devices are gaining in popularity.

TA: Charities own some of the most compelling stories on earth. Charities change lives. They save lives. If you can firmly link a donor to those life-changing, life-saving accomplishments, you will have those donors for years, maybe forever.

Gadgets do not matter at all, however. Only the storytelling matters. Ask yourself: How do the gadgets improve the storytelling? Bottom line: it’s about putting the right story in front of the right person at the right time via the right medium.

F&P: What are some of the common mistakes or poor practices you see nonprofits doing on a regular basis in their donor communications?

TA: Most so-called ‘donor’ communications talk about how great the organisation is. That’s a profound yet common mistake. Effective (profitable) ‘donor’ communications talk about how great the donor is.

F&P: As you work across a number of different countries, have you observed any marked similarities or differences in the way supporters from different countries respond to donor communications?

TA: What I have noticed, country to country, is a marked difference in the way senior management looks at donor communications. Most senior management have zero communications training. They have zero exposure to the relevant research on persuasion. They are often old and ready for nothing but the golf course.

The old guard in institutions like hospitals and universities almost never gets ‘donor communications.’ Their mistaken supposition is that institutions should promote themselves to donors: “We are great for the following 10 reasons.” That supposition makes perfect sense – but is utterly wrong. This is what happens when you ask people with Ph.D.s to give you their opinions on stuff they know nothing about.

F&P: Is there an ideal number of appeals that nonprofits should mail out each year?

TA: To past donors, appeal six times a year. But remember: appeals are just one element in a virtuous circle. You appeal. You thank. You report on how you made the world a better place, thanks to donor gifts. Then repeat: Appeal. Thank. Report.

F&P: What was the most successful mail appeal you worked on and why did it do so well

TA: My direct mail appeals commonly bring in twice as much money or more as the previous attempt. These results are hugely satisfying. But it’s no accident: I’ve based my consulting practice on science and emotional risk-taking for at least a decade. Let me repeat: donors give more when they are loved. If you can write a powerful, unashamedly donor-loving appeal, you WILL make good money.

Tom Ahern is a leading light and author on the art and science of donor communications. He has helped many charities raise millions of dollars through his tried and tested techniques.

Tom will be a presenter at the Australasian Fundraising Forum in Sydney on September 1 & 2. For more information on the Forum go to: www.fpmagazine.com.au

Test, test and test again!

By Clarke Vincent This article was first published by F&P Magazine in April 2011

Any strategy or tactic of your appeal program that causes contention or argument amongst your fundraising team is a great thing to test. “Ok, let’s test it” is the best way to move beyond many a heated debate!

Test results can offer significant insight into the best possible path forward, but to the chagrin of every veteran marketer, testing cannot claim to offer eternal marketing truths. What tests give us are measured snapshots in time that act as an indication of likely future outcomes. Previous test results should be viewed as a helpful guide rather than marketing lore, and be re-tested fairly regularly.

Ground strategy in science

Fundraising strategy is best grounded in the science of what has been observed previously, mutated with a creative flair to challenge assumptions and introduce new ideas. The more test results you have access to, the more confident you can be about the likely outcome of your chosen strategy and tactics, as well as the directions in which you push innovation. Here are five relatively simple tactical tests for any charity with an appetite for running more tests and building their pool of donor insight.

1. Calculated vs default ask amounts Should you ask each donor for amounts that are directly calculated from their previous gift(s)? Or should you simply prompt donors with the same default level of suggested gift (probably a low, medium and high gift amount)? Often, though not always, the effort of calculating gift amounts for each donor can help to uplift average gift and overall income significantly. You should test to see if it is worth the effort to you (note – we recommend excluding major donors from this test).

2. Include regular givers in cash appeal targeting Should you ask your regular givers for an extra cash gift? Probably, for more important appeals (e.g. emergency, tax). If you do, set it up as a test to ensure it is financially viable (increases net income) to include them; but also measure over a longer time period to see if it has an impact on longer term value by measuring retention and upgrading along with additional contributions. Our testing suggests retention is normally unaffected, overall value is increased and additional cash giving from regular givers is also a good indicator of bequest potential.

3. Push online Should you promote gift payment online in your mail appeals? One day the answer to that question will be an emphatic yes. But right now, for reasons such as habit, perceived safety and ease of online donation process, it is better tested on a regular basis to see if it is the right thing to offer your donors yet.

4. Repeating specific ask amounts through an appeal letter Should you ask for a specific gift on the first page of a letter and repeat that ask through to your response device? It works well as a tactic more often than not, but be sure to choose the right amount and the right context for making the ask. (A complaint from one donor about a specific ask does not represent the feelings of your whole base; consider the overall impact on donor value.)

5. Provide a separate response device Should you use a tear-off, or separate response device? We generally recommend a separate response device because we have never seen them perform worse than a tear-off device, making it the safe option. This is based on the donor insight that direct mail donors are generally older and using a separate response device aids the ease with which someone can respond – no tearing of paper is required, and more space means you can use larger font. If your budgets are tight, test it to see if it is financially worthwhile for you.

Test incremental improvements

These tests are designed for warm donor cash appeals. The absolute best place to test direct marketing tactics is in communications that are improved incrementally over time by only a small amount. Most warm donor appeals quite rightly change the focus of their appeal (often case study or need) greatly with each appeal, whereas an acquisition communication can use a ‘banker’ pack that has proven over time to provide the most effective returns.

Testing an acquisition banker pack is a purer science since less elements of the execution change over time – so you can be more confident in relying on the consistency of banker pack tests. But, since most organisations conduct more warm appeals than acquisition communications, any testing is better than none. Testing should be a part of all direct marketing appeals.

Re-test what you believe to be true

Many tests deliver apparently inconclusive results (essentially – the same result). This in itself can be a useful conclusion, because it’s an indication that it doesn’t really matter too much. Your focus can move onto testing more pressing strategic decisions. But do be sure to occasionally repeat tests, to revalidate what you believe to be true – as our Greek scientific forbears observed; the only constant is change.