Uncategorized

Why would a donor give to your charity?

People don’t give to the most urgent needs, according to the Centre for Charitable Giving and Philanthropy in the UK.

The ‘How Donors Choose Charities’ survey reveals four key influencing criteria:

  1.        1. A donor’s personal tastes and preferences
  2.        2. The impact of their background
  3.        3. Their view of charities’ competence
  4.        4. Their assessment of how they can achieve the greatest personal impact.

Donors’ personal tastes and preferences

It’s easy to assume that people donate because they’re moved by the needs of others and want to help.

But as the study discovered, choices are largely driven by the donor’s own inclinations and preferences, a desire to help people they feel some affinity with, and a partiality for certain causes as a result of personal experiences.

In short, much charitable giving is taste-driven, rather than needs-driven:

“I would support deserving dogs but I wouldn’t support cats because I just happen to not like cats. It’s as silly and as simple as that.”

“I donate to the RSPB (Royal Society for the Protection of Birds) because bird-watching is one of my great obsessions. It’s my, kind of, my treat to myself, if you like.”

The impact of donors’ backgrounds

Our present-day choices are also shaped by earlier life experiences, which can be reflected in future giving patterns. For example, one survey respondent said that he supports a butterfly conservation charity because:

“When I was a boy I collected butterflies and I’m trying to give back, if you like, the damage that I did, so to speak. In those days you were encouraged to kill butterflies and collect them, so that’s an important one.”

People also draw on their own life experiences to create what have been called ‘philanthropic autobiographies’. Donors give to causes they feel some connection to, or affinity with, as a result of experience and incidents in their own lives.

“I grew up by the sea so I support the RNLI (Royal National Lifeboat Association).”

“I have a child and very first thing I started off doing was child sponsorship.”

Donors views of charities’ competence

There is general consensus that charity competence, as demonstrated in the efficient use of money, is highly attractive and likely to prompt greater donations:

“Where we’re more confident that the money is genuinely going in full to the right place, we’re more inclined to give more money.”

“If I’m going to be giving away some money, it’s like buying things in a shop, I want to be sure I’m getting good value for it, as it were.”

However, respondents also noted that given the difficulty in obtaining and understanding information on charities general competence, common proxies for assessing competence include the frequency and estimated cost of charity mailings.

Donors’ desire to have a personal impact

A concern for personal impact is a key factor behind making a donation. And donors care about impact for different reasons based on their passions, preferences and personal experiences.

Security:

“I probably have gone for major charities because I feel they have more clout.”

Impact:

“I gave to a very small charity because it means a huge lot to give them even $100.”

Future-proofing:

‘I sail quite a lot. I’ve never had to be rescued but I give the Lifeboats some money every year, being like an insurance policy.’

Gratitude:

“My dad died unexpectedly, and mountain rescue was involved in him being brought down from the mountain, so I’ve given quite often to mountain rescue.’

So, how do you encourage a donor to give to you?

If we truly embrace the fact that:

  • donors will support what they like, what they know and what they care about, and that
  • it’s more important in the donor’s eyes than what a charity does, who it helps and how urgent it is …

… then it could help fundraisers to be more upfront in matching donors’ tastes with causes that need their support.

Click here to read the full report ‘How Donors Choose Charities’.

Understanding Donor Motivation is also the key to creating Donor Journeys that reduce donor attrition. Contact Pareto if you want help in understanding your donor motivations and using emotional insights to map your donor journeys for improved donor retention.

Are you asking “why” enough?

We’d all love to think that there will always be enough fundraising income to go around. But we know the number of donors is finite and they only have so many dollars to spend and so many gifts they can make.

And as Pareto Benchmarking 2018 shows, your donors aren’t just yours anymore – they’re giving to multiple charities:

Cash donors give to, on average, four charities

Regular givers give to, on average, two charities.

Your biggest asset is your database. But because your donors give to other organisations, your database insight is shared by other charities.

If you want to take your fundraising to the next level and gain an advantage over other charities who are also chasing your donor’s dollar, it’s good to ask your donors ‘why?’:

Why do your donors support you and what do they need from you?

By knowing who your donor is and why they are connected to your organisation, you’ll have the unique data insight you need to offer more personalised, relevant and useful communications – giving your donors greater value and a stronger connection to your charity.

Real fundraising gold is in donor-revealed content

Research is an essential part of thoughtful fundraising and good asking. And today it’s no longer just about the traditional RFM modelling (recency, frequency, monetary).

That’s not to say that transactional data is out-of-date. It’s predictive and it’s valuable. There’s no doubt that a donor who has given before is most likely to give again.

But what RFM alone doesn’t tell you is why that donor gave and the different reasons why two other donors gave.

That’s why, in today’s competitive environment, every aspect of your donor identity should also be considered:

What are your donors’ likes, dislikes, preferences, expectations, passions, motivations, characteristics, demographics and history?

Effective fundraising is about exploring segmentation based on both predictive modelling and donor identity /preference data. It’s a balance between quantitative and qualitative data points.

And just as RFM modelling is an ongoing program, good donor identity research isn’t limited to what you find out in the beginning of the donor relationship.

In life every moment passes … a medical crisis is forgotten, children leave school, retirement happens … and every day newer, more exciting charitable causes come to the fore.

So, as donors and their circumstances change … so research can continue throughout your donor stewardship process.

It’s a research investment

Setting up a donor identity/preference data capture program requires a modest amount of database preparation and an infrastructure to securely capture and transmit the data provided.

While research can be undertaken in many ways, the programs you use and the information you gather will depend on the size and budget of your charity. And your ability to use that information in your donor communications.

The set-up and ongoing maintenance is an investment. But it’s worth it. Knowing who you donors are and why they give to you helps to bind them to their favourite charity – yours – and your investment should pay off time and time again.

Find out how you can use your donor preference data to make your fundraising programs fly. Contact canyouhelp@paretofundraising.com

The numbers behind great storytelling

We all love a good story. We’re wired that way. We think in narratives all day long, whether we’re buying groceries or making a presentation at work.

That’s why it’s so important for your charity to think in stories. At its simplest, non-profit storytelling is about making your donors feel connected to something bigger than themselves.

In the commercial world, modern-day storytelling is often associated with the popular TED conference series and its slogan of ‘Ideas Worth Spreading’.

Analysis of the most popular 500 TED Talk presentations found that stories made up at least 65% of their content. TED Talks have proven to be a powerful delivery mechanism for sharing insights and ideas in a way that is memorable, persuasive, and engaging:

No matter how far technology platforms for delivering content progress in the next few years, people will still be drawn to the same fundamental things. We’re drawn to narratives and stories that make us feel fundamentally human.

And no matter what fundraising or marketing methods that may come and go, thousands of years of recorded history indicate that stories are here to stay.

This month we’re reading

A love letter to Warren Buffet from Melinda Gates

Every year, Bill and Melinda Gates write an annual letter to update everyone involved on the work of The Gates Foundation.

Their 2017 Annual Letter – released on Valentine’s Day – is a love letter to Warren Buffet, who in 2006, donated the bulk of his fortune to their foundation to fight disease and reduce inequity.

The 2017 Annual Gates Foundation Letter contains several important statistics, but it’s the story behind the statistics that makes it a compelling read.

The letter opens with their favourite number – 122 million:

“If we could show you only one number that proves how life has changed for the poorest, it would be 122 million – the number of children’s lives saved since 1990.

“Every September, the UN announces the number of children under five who died the previous year. Every year, this number breaks my heart and gives me hope.

It’s tragic that so many children are dying, but every year more children live.”

The letter ends with the most magical number they know – zero:

“This is the number we’re striving for every day at the foundation.

Zero malaria. Zero TB. Zero HIV. Zero malnutrition. Zero preventable deaths.

Zero difference between the health of a poor kid and every other kid.

“Polio is closest to reaching this number. Polio will soon be history. In our lifetimes, malaria will end. No one will die from AIDS. Few people will get TB.

Children everywhere will be well nourished.

“We can’t put a date on these events, and we don’t’ know the sequence,

but we’re confident of one thing: the future will surprise the pessimists.”

Throughout the letter are the stories of programs and individual people that have been helped – shared via the written story, photos and videos. And the inclusion of Melinda and Bill’s handwritten notes in the margins of the letter give this report a real authenticity.

From the foundation’s mission to vaccinate all children, reduce newborn mortality, end malnutrition and provide family planning, the letter cleverly translates big numbers to the stories of people and places.

This is data storytelling at its absolute finest. It’s from Melinda Gates, who as Bill says, “is a great storyteller” and who truly knows how to bring you the story behind the numbers. Click here to read the letter.

This month we’re also reading

The Philanthropic Mind: Surprising discoveries from Canada’s Top Philanthropists

by Chuck English and Mo Lidsky

We’ve all seen it. The news item about someone who has just made a very large donation to a zoo or a hospital. There’s the picture and the pre-requisite quote about the gift’s impact and how meaningful it is to support the cause.

But what’s the real story? How did that donation really come to be? What is the essence of the philanthropic mind?

That is what is at the heart of this book. The authors wanted to know more about philanthropists’ passions, motivations, defining experiences, like, dislikes, joys and challenges.

The Philanthropic Mind is based on dozens of candid interviews with Canada’s top philanthropists who share their personal stories and surprising insights. As a result, this book is written from the view of major donors/philanthropists – rather than the fundraiser’s experience.

For readers in Australia, most of the donors interviewed talk about gifts to universities, hospitals and large art institutions – prime recipients of private giving in Canada.  But the interviews are still an excellent basis for observations of major donor characteristics in general.

The lesson learned from all the examples in this book is that you can’t judge a philanthropist’s playbook by its cover. The effectiveness of research based on giving history is limited because the reasons behind the gift are infinitely more important than the fact that it was given.

That philanthropists are as subject to whim and fancy as any of us has significant implications for major gift officers and manager.

The Philanthropic mind is a rare opportunity to learn from and be inspired by Canada’s most generous individuals – and to glean the real reasons behind some of their largest donations. Their interviews and examples of their giving are motivational and inspiring.

Direct Mail (Still) Matters

 

Direct mail continues to be the backbone of most charity’s fundraising programs. And it refuses to go away because it works.

Rising production and postage costs are affecting ROI, but it’s important not to judge direct mail only by its short-term revenue.

Direct mail works best when it’s used to build longer-term relationships with your donors. That’s where the big money is because it’s by far the best source for mid, high and major donor giving and bequests.

And it also works best when direct mail is part of an integrated appeal across multiple channels. In today’s complex fundraising world, success is rarely about a single giving channel.

What we know …

Pareto’s 2018 Benchmarking Report shows us that:

  • Next to face-to-face, direct mail is the second most valuable stream for generating donor income. It delivered 53% of overall cash income to charities analysed.
  • Direct mail still delivers the largest volume of new donors (48% in 2017).
  • Direct mail is still the number one method used to target middle donors (those giving $1,000 – $5,000) and still critical for generating bequest leads.
  • Direct mail donors, when converted to monthly donors, are the most valuable monthly donors by far with the lowest attrition rates.

Pareto Benchmarking also shows that cash income declined between 2016 and 2017, the second year of decline – predominantly the result of decreased direct mail acquisition by a number of charities. Income from retained donors was stable.

Is cutting back acquisition DM the answer?

Under pressure to bring in as much money as possible, as quickly as possible – and to reduce costs –  some charities have cut back on their direct mail programs, particularly acquisition.

But cutting a program is rarely the answer because often there’s no other option to replace the lost revenue.

And, by cutting acquisition DM, there may be little damage to be seen in year one, or maybe even in year two. But trust us, by year three that charity could be facing significant income challenges.

Between January 2013 and June 2014, the American Cancer Society (ACS) decided to pause their direct mail donor acquisition program amidst an organisational restructuring.

The program represented almost 41 million pieces of mail being sent each year.

Some of the outcomes:

  • New donors dropped by 11%
  • New donor revenue dropped by $11.3 million in the first year
  • The five-year impact on income: $29.5 million
  • The ACS Relay for Life raised $25 million less than the previous year.

That’s not all. The ACS gets more than $51 million in planned gifts from direct-mail donors. It will take years for the future loss of planned gifts to run its course.

As ACS found, direct mail is a crucial source of longer-term income and can seriously affect – in good and bad ways – the overall sustainability of your fundraising program.

So rather than reducing direct mail programs because they are no longer raising enough money, the challenge for fundraisers going forward is to reduce the costs of direct mail to generate the highest net revenue.

Today, the future of direct mail campaigns is niche fundraising at volume. We’ll send fewer pieces, to better qualified prospects, to get better results.

And the charities that will continue to succeed will continue to plan, validate, test and manage retention strategies. And they’ll have effective middle and high donor stewardship programs in place.

You can find our top 4 ways to help you make your direct mail work hard by clicking here.

Treat Your Donors Well (Because That’s How You’ll Raise More Money)

What are great fundraisers doing in 2018 to rise above the crowd in today’s complex and crowded marketplace? They’re making donor retention a priority. Pareto Fundraising CEO, Dearne Cameron, talks about how Pareto can help you build the relationships that matter.

Many years ago I worked for a charity that made the wise decision to invest in relationship fundraising and build a donor journey that would best help us meet the needs of our donors – rather than our organisational needs.

It was in the early years following the release of Ken Burnett’s ground-breaking book ‘Relationship Fundraising’ – its content had set the fundraising world on its ear.

At the time, Ken’s book drilled into the core of our value system to remind us that fundraising is more art than science. It’s not about a list of donors with unique IDs on a spreadsheet. It’s about people giving to people … the hope of a shared dream … the success of a worthy cause.

Armed with this book as our guide, we gathered all our key players and embarked on a donor journey mapping exercise. After spending several days together, we had created a beautiful map full of interesting insights about our donors and the key touchpoints they had with us.

It was all very impressive, but soon became overwhelming. Our journey was quite high level so it was difficult to actually define a tangible action plan. Just as it was a challenge to identify how we would keep track of the improvements and priorities.

The journey map went from sticky notes on the wall, to a spreadsheet and then eventually, into a database. None of these however, was ideal for creating a living, breathing donor experience that would constantly evolve.

Disappointingly, our donor journey map ended up collecting dust and it never benefited the donors it was meant to benefit. Back in those days, our concept to invest in relationship fundraising for better lifetime value was correct – but the reality of implementing it was far harder that we thought.

Where we stand today

In the 26 years since Ken’s book was published, research now proves that the most lucrative fundraising strategy for any charity is donor retention.

While acquisition will always be important, today’s smart fundraiser is armed with data that shows the impact of retention versus acquisition:

  • Finding new donors is difficult and expensive – 6 to 7 times more than to retain an existing donor.
  • Loyal donors, on average, are worth up to 10 times as much as a new donor.
  • a 10% increase in donor retention can increase lifetime value of the donor data base by up to 200%.
  • Loyal donors are the best prospects for bequests.

Yet, despite the research – and more coming – about relationship building to nurture donor loyalty, Pareto Benchmarking 2018 shows that for many charities, for every 100 donors that they gain, well over half are lost through attrition after the first gift.

Losing donors at such an astonishing rate is unsustainable. Can you imagine how unsuccessful some of our biggest commercial companies, or even the local bakery down the street would be with just a 25-30% customer retention rate?

It’s why building donor loyalty is one of the biggest, if not the single biggest, challenge facing fundraisers today.

So, what’s going wrong?

For many fundraisers, the ability to develop a donor-based approach to fundraising continues to stall and ultimately fail.

Why? Because just as it was for my charity 20+ years ago, the theories, tools and frameworks that need to be built to undertake the work is far more difficult than thought.

And two decades on, the relationship dimension of our work has become far more complex as multi-channel communication gives us many more bases of support.

Add to that the short-term approach of many charities that demand an immediate return on investment. How can relationship fundraising be successful when there is often little support and no budget to invest the time, people and resources necessary to build a long-term donor retention journey?

How do we change the donor experience for increased retention?

At Pareto, we’re dedicated to advancing innovation within the not-for-profit sector. We want to help all charities raise more money for their mission.

In 2018, we’re proud to support the sector with two ‘new to the Australian market’ products that will help fundraisers to effectively build donor retention programs that will boost lifetime value of donors.

Both products are based on internationally recognised software platforms that have been delivering outstanding results for both profit and non-profit organisations globally.

They also offer robust and consistent benchmarks and metrics by which to measure the success of a relationship fundraising model – something that has been largely missing to date in the Australian charitable sector.

Already, a small number of charity partners have come on board. They are the first charities in Australia to use these new products that will greatly benefit their donors and beneficiaries and build the skills and expertise of their fundraising teams.

Journey mapping can increase donor commitment

Touchpoint Dashboard is the world’s leading journey management toolkit. For the first time in the Australian charitable sector, you’ll be able to professionalise donor journey mapping in a way that has never been seen before.

Through a system of dashboards controlled from one command centre within your office, you’ll be able to see where your charity is failing to meet donor expectations, how that failure is affecting the bottom line, and what activities are costing you the most in terms of loyalty, retention and lifetime value of your donors.

Armed with that knowledge, you’ll be able to strategically plan, implement and optimise your donor journey to build better lifetime value. And you can share and collaborate easily and effectively with the different teams in your organisation.

Touchpoint Dashboard is a flexible and powerful donor management platform. It’s easy to set up, its tools and methods are easy to understand so that users can focus on the benefits of journey management and not fall short of their execution goals.

And, to help you become a journey management professional, you’ll have training, education and ongoing support from one of Australia’s first Journey Mapping Academy certified Pareto team members.

See your charity through the eyes of your donor

Charities spend a large amount of time carefully constructing the journey through which they want their donors to go. But how does it feel from a donor’s point of view?

The Donor Stewardship Tracker is an internationally recognised mystery shopping platform which helps charities find out how their supporters feel.

It analyses the stages from enquiry through to donation across all channels and then helps charities find out how their communications work in practice over months and even years.

It can also provide benchmarking against other charities at the end of each 12-month cycle.

The Donor Stewardship Tracker provides an opportunity to assess your stewardship program from an objective and detailed perspective. It provides information to help you improve on a micro and macro scale.

Over time, you will also be able to track the impact of your changes which may have improved your donor care, retention and supporter satisfaction.

It’s one of the best ways to help you transform your levels of donor satisfaction and retention.

A donor retention strategy is no small commitment for any charity. It takes sustained focus and effort. But don’t let another year … another month … another day get away from you without committing to make the change that will help you boost donor loyalty and retention.

To find out more, call Clarke Vincent at Pareto Fundraising on +61 415 668 667 or email: clarke.vincent@paretofundraising.com

This month we’re reading

 

Nobody wants to read your sh*t: and other tough-love truths to

make you a better writer

By Steven Pressfield

As a writer you find yourself working in different disciplines throughout your career. 

But the one lesson you learn up front – usually on day one – is that nobody wants to read your sh*t.

The title of the book may sound discouraging but it’s not meant to be. It just states a simple, sometimes painful truth. But the good news is that once you understand that, you move into the realm of where what we offer is for the reader’s good and not for our own.

From Chapter Four:

“When you understand that nobody wants to read your sh*t, your mind becomes powerfully concentrated. You begin to understand that reading/writing is, above all, a transaction.

“The reader donates his time and attention, which are supremely valuable commodities. In return, you the writer, must give him something worthy of his gift to you.”

Steven Pressfield shares his experience in all forms of writing – advertising, screenwriting, advertisements, movie scripts, fiction and non-fiction. It’s not in any way about fundraising.  But smart fundraisers will see that this collection of keystone lessons can also be applied to every piece of writing that you do.

So, what’s the answer?

1. Reduce your message to its simplest, clearest, easiest-to-understand form

2. Make it fun. Or sexy or interesting or scary or informative. Make it so compelling that a person would have to be        CRAZY not to read it.

3. Apply that to all forms of writing or art or commerce.

If you’re tasked with being the writer at your non-profit then we highly recommend that you get this book.

This month we’re watching

SOFII’s new video series:  32 lightbulb moments

Last year in the UK, the Commission on the Donor Experience (CDE) delivered their 28 project reports and 526 recommendations supported by more than 250 case histories of donor centred fundraising.

Now SOFII presents an exclusive preview of the key, transformational content from that gargantuan body of work, in a series of lectures delivered in Amsterdam in late 2017 by CDE co-founder Ken Burnett.

The first film in the series is live on SOFII now, and you can check it out here.

And keep watching to see as this series builds into 44 films that collectively illustrate how great fundraising can be, what happens when it goes badly wrong and how, in ways large and small, fundraisers can work together to transform the culture of fundraising, for good.

This Month We’re Re-launching

The Pareto Business Intelligence Portal

Business Intelligence on the GO…anywhere, anytime

Your ability to see the metrics that matter to you, at a glance and on the go, is now available with Pareto’s new cloud-based business intelligence reporting.

Whether you use a desktop, tablet or mobile phone, the Pareto Business Intelligence Portal (now in UAT) is giving you the ability to interrogate your data like never before, and from anywhere.

Our Control Panels have been re-designed, rebuilt, re-organised, and revamped into dashboards and reports that make reporting simple and effective.

Visual appeal and mobility are not the only things on offer with the new Business Intelligence Portal. You also get access to more reports. Plus, you can set and monitor your KPIs in an interactive and easy to use Portal that lets you dice and slice seamlessly.

You can now see exactly what your donors look like, you can see the trends in your income and your attrition, and you can even now see which geographical locations are giving you the best donors and lowest attrition rates across both your normal fundraising and in your appeals.

Your data has just taken on a new look, more value and new capabilities.