Pareto Talk

Some quick tips on fundraising landing pages

There are lots of good tips on landing pages when you search the web but it seems not enough. Lots of people are wanting specific tips on fundraising landing pages.

So here is a six minute short video for you…

The landing page is not the end of the journey for a potential supporter, it is part of the journey.  And it needs to work really hard to ‘close the deal’.

In the end, the most important thing is the brilliant proposition or offer.

After that, you can improve conversion rates with some simple techniques featured in the video.

If you want to know more, and are based in Europe, Africa, the Americas or New Zealand I hope you are coming to one of the webinars below.

People in Australia and Asia are welcome, but it is an early morning or late night for you!

 

Upcoming Webinars: 

I will be presenting a webinar (actually three, for different timezones) in early September about how to acquire donors on Facebook.  I hope you can come! 

These ones are aimed at people in Europe and Americas (don’t worry, people in Asian, Australia, I’ll repeat the webinar later – though nighthawks are welcome!). You can register here by clicking on the date that suits you: 7th Sept –  6am Sydney, 4pm New York, 9pm London. 10th Sept – 9am New York, 2pm London, 11pm Sydney. 17th Sept – 7am Sydney, 9am Auckland, 2pm LA, 6pm Rio, 5pm New York, 10pm London.

 

Writing Your Call To Action

So I read a pretty good call to action written by one of my favourite clients the other day. It said:

“If we act now, we can save them.” 

The strengths of the line include its brevity, the use of short powerful words, the urgency and the fact that it is a call to action. (There is still a lot of direct response writing where calls to action are apologetically buried so deep it’s hard to find them – despite the clear evidence this has a negative impact on response.)

BUT, for mine there are three points of weakness in that line:

“If”, “we” and “can”.

“If” suggests that not acting is a reasonable option.

“We” is impersonal. It’s not specifically and uniquely about the reader. It also presumes that others might be doing the acting, so therefore the reader doesn’t have to. This approach weakens the responsibility and power of the individual.

“Can” is a monumental pain in the collective neck of fundraisers and there are times we just have to use it. In this instance there is no (real life) guarantee of saving, so it’s misleading to say “will save”. However, in a line like this, you can dispense with the “can/will” problem altogether.

A stronger line would be:  Take action now to save them.   

Personal and direct. And active. If your not-for-profit direct response writing doesn’t have these vital characteristics, you’re probably missing out on opportunities to fix the world.

It’s so easy to fall into the trap of weakening language. Scan your copy for these OK-but-not-that-powerful examples:

“Let’s all act now …”

“But if we do …”

“Why not donate today and …”

Use these softer asks occasionally in some circumstances. But most of the time – I’ll take a stab and say at least 75% – go for personal, direct and active.

Especially in short form copy on facebook posts or banner ads or reminder emails.

Especially in activism work. When I read half-hearted copy, it makes me think the organization is half-hearted about the work it does. “We really wouldn’t mind if you could take the time to consider fixing the planet a little bit” doesn’t exactly flag passion and drive.

And especially in emergencies. Think about it. In real life you don’t say “Oh! The child is on fire. Shall we get together and do something to help?”

So how do you fix impersonal, wishy-washy and/or flaccid writing? You find ways to make it more personal, direct and active. Or at least two of those three things.

Instead of saying “But if we act now…”

Write “Please act now…”

Or

Will you act now… Personalised?

Or

“Take action now to …”

Or

“The child/planet/animals will continue to suffer/die/be slaughtered by narcissistic dentists if you don’t act now.”

Finally, a quick word on collective action. There is undoubtedly something powerful in the idea of joining a group of other people who care about the same stuff as you, and have a good chance of forcing change through collective action. It’s a good thing to remind donors/supporters/prospects of this fact.

But again, write it so it is personal and direct and active. Let’s have another crack at “But if we act now” “We can do it” etc. etc.

Try these more personal, direct, active options instead:

Add your name now, Personalised, and become part of a powerful lobbying force.”

Or

By taking action now, you will build an influential …”

Or

Sign the petition today to join other outraged activists from around the world and put an end to this …”

Sometimes weak writing comes from a place of squeamishness about asking others to do something.

It shouldn’t.

The work our sector does is positive and powerful. If you’re writing to get support so you can do more of it, you’re giving your readers a magnificent opportunity to make a personal, direct and active impact on their world.

Cheers

Mary Anne Plummer Creative Director Pareto Fundraising

Data, Belief & Vision

freedman

Data, data, data. It seems like the world is going mad for data. Data emerges when we gather together facts or statistics, then classify them into meaningful subsets, with a view to better understanding a particular phenomena. It’s a useful business tool, particularly as a fundraiser, because the more you understand your donors, the easier it becomes to target the ones who will help you further your cause.

For a moment, let’s take a more expanded perspective on data, by bringing time into the equation. Time, according to the dictionary definition on my apple is “the indefinite continued progress of existence and events in the past, present and future regarded as a whole”. The keywords being the past, present and future.

Data, as a tool, is only ever going to provide information about the past. When we pause and reflect on that for a moment, we can see that despite all the rich stories we can derive from data, it is only offering 33% of our narrative. So where does the other 66% come from?

What the mind chooses to do with the data is based on how it is presently perceiving it. And at this point, we need to understand how the next 33%, belief, plays it’s role in the creation of strategy. A belief is something which the mind holds to be true. Our beliefs, which are largely subconscious, help create meaning about the world around us, by placing information into ‘true’ and ‘false’ boxes.

The challenge here, in relation to your fundraising strategy, is simple. If the data presents new information that is contradictory to the current beliefs about the right/best/quickest way to raise funds, then the mind will often reject it. Unless we are willing to stop and consciously challenge our beliefs, then often we end up seeing today, as though it were yesterday. And in a rapidly evolving and competitive marketplace, this can be destructive. If you’ve ever had a water-tight, evidence based business case rejected by your CEO/CFO, because they didn’t agree with the fundraising strategy, you’ll understand this dynamic first hand.

Making any kind of make progress, requires us to develop an innovative strategy. And the inner work that underpins all innovative strategic plans is having the courage and openness to challenge our existing beliefs. Only when we do this, can we consciously see and leverage the insights that new data presents to us. To get your innovative thinking hat on, try out these questions:

What did we used to believe was true about (data set)? How does this new data change our existing story about (data set)? How does this affect things for us now? What do we believe we can achieve by using this new data to change our future? What do we believe we still cannot achieve? What new beliefs must we develop to boldly leverage the insights in this (data set)?

And now onto the final 33% of our story which is how we create new futures. All great leaders have a grand and noble vision of a better future. No-one ever changed the world by playing it safe. And no-one ever changed the world without having a clear image about the type of world they wanted to be a part of.

And here’s how the 33%, holistically grows into 100%. As a fundraising leader, it’s not enough to gather data about your donors. It’s also not enough to simply think about the data insights. Equally it wouldn’t be enough to have an exciting vision, without data about your past and awareness of the present market conditions. You need all three. Data, to inform you about the past. Vision to channel your passion towards a future you want to create. And belief in the insights, yourself and your team to turn your ideas into a strategic roadmap. With these elements you can build bridges from the past, through the present and into the future.

To help you construct a powerful fundraising vision of the future, connect with Nick at Linked In and then download the PDF exercise entitled Fundraising Vision Builder, which is in the summary of his linked in profile. By attending the upcoming benchmarking day, you’ll gain data about the past. And the middle bit? Well, that one is up to you.

Nick Freedman is a not for profit leadership teacher, who has helped 1000s of people lead their teams more consciously. For more information about his upcoming NFP leadership program visit www.notforprofitleadership.com.au

Data Segmentation need not send you to sleep

At the FIA Conference session next week I will run a session with the title – Practical ways to use data to drive up results. In it, I will be unashamedly sharing some ideas from overseas fundraisers with those of our own, for those who dare attend a session with the word data in the title.

I had the privilege of attending the IFC conference in The Netherlands last October.  If you don’t know about this conference or have never been I encourage you to check out the Resource Alliances website to learn more (http://www.resource-alliance.org/ ) – it really is a motivating and information rich conference and the opportunity to meet fundraisers from around the world and hear their stories is inspiring to say the least.

I’m not sure if it was by chance, but the majority of the sessions I attended had two underlying themes.

The first being the integral part emotions play in how and why people respond.  If you want to keep ahead of the game I encourage you to take a look at the research in the areas of neuromarketing and neuroeconomics. A great introduction is a free course via the Coursera program (Massive Open Online Courses deliverd by some of the bets Universities around the world) https://www.coursera.org/course/neuromarketing , or check out Roger Dolley’s neuromarketing blog http://www.neurosciencemarketing.com/blog/ .

The second was the opportunity we now have to take a look beyond our conventional wisdom and explore innovation in our fundraising approaches. In one particular session I listened as a well-known ‘guru’ of the industry stood up and initially broke my heart by saying “RFV segmentation is not the way”. His comment was meant to shock people into listening.

Some in the room have been as intimately involved in the use of RFV as a basis for our fundraising segmentation approach as I, and we almost keeled over. Others eyes glazed over and they prepared to take a nap. But what came next was some very sensible yet inspiring chat about how simply doing as we have before and not looking to innovate and test means we will be missing opportunities – and in this instance the discussion was around how we segment and target our donors for our range of fundraising activity.

One of the key messages was the idea we look at transactions not relationships – we analyse campaigns or mailing without looking at the big picture of the ongoing relationship individual communications are part of.

This got me thinking about how I review the fundraising programs I help design and support and review with my clients.   And its true simpley looking at a single communincation, campaign, appeal (call them what you like) in isolation will give you the numbers you want for your budget, comparing that campaign to last year will give you the props for a job well done or a job not so well done. And many appraoch the development and analysis of these campaigns with the trusty RFV segmentation in hand ready to decide who is in and who is out based on the performance of each segment.

But what I know to be true is making decisions about your program looking at campaigns in isolation is the wrong thing to do. Looking at the donor base as a series of transactions takes away critical inisght that is likely to influence your decision making in other ways. The response to a single campaign does not tell us if your donor base is engaged, listening and motivated to keep on supporting. And no doubt some of thise judgment is subjective but can we take our use of segmentation approaches a step further and look beyond just the transactional only view?

All of this has inspired my upcoming session at the FIA conference. With the word data in its title I know many will be running for the hills (or the coffee bar). But for those of you keen to look at the things we should be using segmentation (and scoring models) for and ideas for how to take them further, to start looking at relationships, not just transactions and how the journey we are leading our donors on could be measured beyond just ‘did that appeal get a better response than last year’, I’ll see you in Brisbane.

Fiona

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

 

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.

 

 

 

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.

 

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. Here are some important steps to plan in early :

  • 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.

 

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

State of the Donation

When a 90% Cost of Fundraising is a good thing

By Clarke Vincent

Perhaps a 90% Cost of Fundraising ratio is a good thing when your fundraising provides a better ROI than your charity’s investment portfolio receives as a return on your financial reserves.

In the last issue of Pareto Talk, Sean Triner wrote an article called “How to convince your board it’s raining on a bright sunny day“. Sean outlined some of the arguments he uses to help some charity Boards recognise that significant financial reserves can occasionally be spent, and not indefinitely left for the future. Sean suggests that a strong fundraising program can offer as much stability and  growth as classic investment strategies, property or shares. This led me to question – how much should a charity invest in growing their fundraising program? Here’s one approach to answering that question that is designed to help Fundraisers who take the question to their Board.

In my role at Pareto Fundraising I talk to quite a few senior fundraisers and charity Board members with one thing in common – they all want to raise more money. Most understand the concept that you need to invest money to make money and so enjoy a conversation about investment options and likely ROI. But, many then falter or even become paralysed by what that investment will do to their Cost of Fundraising (CoF) ratio. The media enjoy headlines berating charities for spending money to make money, and Australia regulates against it too, so it is a sensitive area. But it needs to be tackled head on by fundraisers, because in the wrong hands, managing by the CoF ratio will stop a charity from achieving its vision.

I think there is a lot to be gained from adopting a polar opposite approach to the concern expressed around CoF ratios, to help shake up conventional conservative caution. Doing so is a strong negotiation tactic, referred to by psychologists as anchoring, and just might help to set the tone for some future defining Board investment decisions.

How much money should charities invest in fundraising in order to grow? Tempered by a concern to keep CoF low, the typical response to that question is “as little as possible”. But perhaps the answer should be “as much as possible”.

Perhaps the answer is simply – Every dollar that offers a better return in a fundraising strategy than in a classic investment portfolio. What have typical Australian long term investments returned per year over the last 10-20yrs? About 10% it seems.

Perhaps the CoF should be pushed from the typical 15 – 25% up as high as this formula:

100% – (minus) your best investment return rate

In other words:

If $100 invested on the ASX returns 10% pa you have $110 after a year. If you accept a CoF of 90% then for every $110 you get at the end of the year, you needed to invest $99 in fundraising. So that’s a 1% better return than the ASX. So why wouldn’t a charity (and legislators) let charities be more like business (that’s the typical capitalist, paternalist criticism fired at charities within publications as eminent as The Economist) and make a decision to push UP the cost of fundraising as far as basic economics allows? To 90%.

Perhaps risk is all that is standing in their way. Or perceived risk, inertia and safety in numbers. Most people tell you that they invest in property and shares because everyone else does, or because the long term returns are good. But thanks to recent and ongoing global financial crises, we’re all starting to question this incumbent attitude. So, build in a buffer that reflects your perception of the variance in risk between your current investment portfolio and investing in a sustainable fundraising strategy.

So how risky is fundraising? Sure it has its risks – when you invest $250k in a single mail campaign, you risk a poorer than projected response rate. But professional fundraisers manage programs with a scientific test and learn ethos that gives them much steadier track records of investment return than many financial organisations. And some fundraising investment opportunities are phenomenally low risk. Many face to face fundraising agencies only charge for the new donors they acquire. So whilst the cost to a charity to start up face to face fundraising is significant, the risk is minimal because you don’t pay for donors who attrite early. Breakeven eventuates within approximately 10-15 months and then decades of donor growth (and much higher ROI on an individual donor basis) follow if donor stewardship communications are managed with common fundraising integrity.

So, next time your Board sets the goal of increasing income, I’d suggest asking if a 90% Cost of Fundraising ratio is acceptable (as a temporary measure, during donor acquisition) and see if that helps shift the conversation in your favour. I seriously doubt that many charities will make a radical shift to pushing their CoF to 90% (especially where legislation forbids it – so be sure to check on legislation and any exemptions that might be granted to you). But perhaps a few fundraising early adopters (the game changers) will question if CoF is not something to be minimised but to be managed somewhere in the middle ground as part of a sustainable, organisation-wide investment strategy.

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

How to convince your board it’s raining on a bright sunny day

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

According to Givewell of those charities that declare their assets, 65 have more than $500,000 in their bank account, with a total of $3,722,530,136 between them.

Why do charities have these assets? $3.75bn is a lot of money. Much of it is tied up in property.

There is no doubt that owning a building outright is going to save money on an annual basis. Basically, no mortgage or rent.

Several reasons are given for why charities have large assets other than property. According to a recent article in the Age, the McGrath Foundation banks all three years salary for each nurse it takes on, ensuring that the service will be provided independent of the charities’ performance.

But often the reason many charities keep large reserves are for a ‘rainy day’. Reserves give a charity security.

What many boards don’t understand is that good fundraising can also offer stability. Of the top 50 charities by fundraised income, 26 have assets less than one year’s worth of fundraising income. These low asset charities are unsurprisingly dominated by INGOs (international non government organisations) – charities like Oxfam and World Vision whose work is carried out predominantly abroad.

Boards are usually populated by great volunteers with diverse backgrounds, but very rarely are they from a strategic fundraising background. Some may have been involved in fundraisers – balls, events or making donations themselves – but they are rarely acquainted with fundraising mathematics.

The bottom line is that the most stable, ongoing growth driver that outstrips property values, rent savings and classic investment strategies is a well managed individual fundraising strategy with classic direct mail and phone donors, regular givers (recruited by face to face and other means – don’t rely just on face to face donors) and bequest management.

Your classic donors, as well as providing income, are more important to you as a pool for bequests, major donations and regular givers. Your regular givers should be recruited using multiple techniques – at least face to face and mail/ phone conversion of classic donors.

Here is an index based on benchmarking data plus estimated returns over the past five years. It is easy for you to adjust the returns to reflect your own investments.

Your job as a fundraiser is not just to fundraise, it is also to give your bosses the tools they need to help your do your job. That main tool is data.

Seven steps to convince your board that releasing assets for fundraising investment – before a rainy day – is usually a good idea

1. Make sure that you know and understand what you want funds for – do you really want to have an income two or three times your current income in five years. What would you spend it on?

2. Think long term. More non-emergency money has been donated to charities in Australia through bequests than regular giving or appeals in the past. But the best bequest prospects come from your giving database.

3. Make a choice. Either fundraise, or don’t. But don’t meddle in the middle it is pointless.

4. Get the data. Look at Pareto benchmarking and research on asset bases and fundraising income from Givewell. Every time they have a query or barrier, answer it with data, not opinion. Demonstrate that solid, stable income growth comes from solid, stable investment in fundraising.

5. Show that during times of stress such as an economic crisis, corporate and events fundraising are very vulnerable, normal donor approaches are stable but regular giving keeps on growing.

6. Model your potential. Build proper models, based on real data and factored by how ‘sexy’ your organisation is; what is it’s appeal to the public?

7. Get someone from outside to speak with your board, someone from a charity that has taken the leap and gone for big investment or someone with access to the data – or both. I have spent a serious part of my life this year presenting alongside CEOs, CFOs and fundraising bosses to boards and finance committees. They really need to be informed with the truth.

Keep plugging away. It could take a year or two to convince them.

If you do want me to have a chat with your board, CEO or finance committee then of course I would love to, though it does need arranging well in advance – I am doing a lot of it at the moment.

Sean Triner