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.

Our top 4 ways to help you make your direct mail work

Success is in the data

Pareto’s recommendation is to better leverage data analysis and its insights to shift budget resources away from volume-based fundraising into strategies that sustain and grow more generous support from a smaller number of donors.

In the short-term, lower mailing volumes may affect fundraising income (although improve fundraising efficiency).

But direct mail, when used strategically to target mid and high-level donors and potential bequestors, will provide a lifetime giving value that will more than compensate for the short-term financial hit.

The take out: It’s critical to keep your donor database clean, manageable, up to date – and useable.

Have a donor journey program in place

With Pareto Benchmarking showing that second gift rates for new cash donors across all channels is just 17%, improving second gift rates is critical.

Donors need a compelling case and evidence of measurable results after giving in order to want to stay loyal longer and give more generously.

So, if charities make the case for ‘extraordinary need’, provide information on the impact, invite donors to see their work first-hand and where possible, engage in designated or restricted giving, they will deliver the strategies to donors that will, effectively, reduce expense and increase revenue.

The take out: Use direct mail to nurture interest, and keep your donors engaged and delighted.

Do lots and lots of testing

The charities that will continue to make direct mail work will test constantly to determine the strongest and most tangible fundraising propositions. And then use those insights to target the right donor audience.

By testing things like alternative lists, offers, packages, or other techniques, you can make incremental improvements in results over time. And measure the long-term impact of any changes that you make on retention and gift value.

The take-out: Testing is the only way to drive value from one of direct mail’s biggest advantages. You can measure its results.

Remember it’s a multi-channel world out there

We know today that there’s no one silver bullet. It’s not direct mail OR email, it’s not email OR social and it’s not social OR mobile.  Communication with donors is the most effective when you integrate channels.

Your donors are now moving seamlessly between the direct mail and digital worlds. And that’s why you can’t rely only on traditional direct mail fundraising techniques alone – like the traditional RM (response mechanism) in your mail pack.

Donors now expect to be offered a variety of choices for gift transaction every time they consider making a donation. And you need to expect that they will not be consistent from one transaction to the next.

The take-out: With direct mail driving the initial engagement, your donors should have the ability to seamlessly link to all communication channels. Are your messages clear and consistent across all of them?

2018 Pareto Benchmarking – key findings

The Pareto Fundraising 2018 Benchmarking program has charted the changes in donor giving year-to-year over the past 10 years.

It’s designed to help fundraising professionals and their leaders make better-informed decisions.

These are the key findings from the 2018 analysis.

Individual giving continues to grow

2017 saw an overall 4.5% decline in income for the 80-member charities, but when we exclude bequests (which have seen three large and fluctuating years of income) individual giving continues to grow.

60% of large charities’ individual giving income grew over the last two years, 50% of medium and small charities’ income grew.

One in two charities’ cash programs grew over the last two years (regardless of income size). And three in four charities’ regular giving programs grew over the last two years (regardless of income size).

Retained donors are critical to your one-off / single gift programs

Charities retained about 44% of their cash donors from 2016 to 2017. Second gift rates, for new cash donors, continued to decline with the average second gift rate (across channels) just 17% for 2017 recruits. Within this we saw direct mail second gift rates stabilise (as you recruited fewer new donors but a better quality level) and online second gift rates continue to be low (with the higher value of these recruits, and higher volumes of new recruits coming through online addressing this opportunity has seen several organisations deliver greater value from their online activity last year).

Retention has been steadily decreasing and poses one of the greatest risks to future income stability. But not all donors are worth the expenditure to keep so retention, in isolation, does not show us the overall health of one-off giving programs.

Income from one-off donations declined for the second year – down by -2.49% between 2016 and 2017. This decline was driven by reduced acquisition investment, primarily in direct mail, but we saw retained and reactivated cash giving grow overall (the donors you already had grew their giving).

One-off gifts accounted for 15% of total giving last year – 7% coming from gifts of $1,000 or more (high value givers, your middle donors and major donors). This small group of high value givers are critical to income stability and growth.

The average new cash donor was worth $76 in 2017. The average retained cash donor in 2017 was worth $109.

Regular giving growth sustaining

Contributing the largest component of individual giving, regular giving income continued to grow, increasing 4.3% between 2016 and 2017. Regular giving continues to sustain growth in the market with cash giving flat and event income showing a small decline.

Charities retained about 60% of their brand new regular givers donors recruited in 2016.

11% of regular giving income came from donors giving a monthly gift of $83.33 or more (your middle donors and major donors). Again a small group of donors giving substantial income.

The average new regular giver was worth $223 in 2017. The average regular giver in 2017 was worth $347.

Bequests – the variable bedrock

Delivering 18.3% of total individual giving income in 2017, bequest income was down on 2016. This came after two very large years of bequest income – with several charities receiving some exceptionally large windfalls through 2015 and 2016.

Events still a mixed bag

Nowadays ‘Event’ income is primarily that generated by Community Fundraising and Peer-to-Peer events. Just 2.6% of overall income was delivered by events in 2017 and this was a decrease of -2.5% on 2016 income.

Of note: over 90% of this event income was delivered by just 16 of the 80 charities.

What is this ‘Other’ you speak of?

At 28.4% of income it looks like a good type of giving. In fact it’s many types of smaller giving including lottery (not small for a handful of causes but overall a small contributor), membership, merchandise, admin donations, offertories, schools, payroll (very small despite the many times we get asked if it’s growing or showing promise), disaster (which in some cases can be significant, but the 2009 Bush Fires were the biggest blip in this giving), In Memoriam, In Celebration and ‘Other’ (which is things we can’t define and usually this is older data). They add up to a lot but alone are small.

The 2018 Pareto Benchmarking Study includes 250 graphs and tables illustrating the statistical findings from the Analysis and recommendations as to how fundraisers can use this information to build better relationships with their donors and raise more money.

To find out more, please contact Damon Twight at Pareto Fundraising.


This month we’re reading …

A Second Chance: For You, For Me, And For The Rest Of Us

By Catherine Hoke


“What if you were only ever known for the worst things you’ve ever done?”

Catherine Hoke founded not-for-profit Defy Ventures, an organisation that transforms the lives of people in the US prison system.

The story is a fundraising call to action to do something about mass incarceration in the US. They have almost 25% of the world’s prisoners yet only 5% of the world’s population.

Imprisoned men and woman are some of the most marginalised people in our society. But Catherine’s ability to tell their stories and to build empathy and hope for their future is a storytelling triumph.

And that’s why we recommend this book to you. As a fundraiser you are tasked with the role of creating a storytelling culture within your charity – and telling the stories that raise money and awareness.

This book is a very good example of how to do just that.

It’s full of individual stories of Defy’s beneficiaries (current and ex-prisoners). In each story we see the problem, the need, and the change that happens to the beneficiary when the donor gives.

Catherine has a great ability to bring the donor/reader right into the story: “Imagine that you … why would you believe … maybe you can relate … I’m guessing that you too …my hope is that you …”

And she reminds us repetitively of just how her cause is closely connected with her donors’ values … “for everything you have done, don’t you deserve a second chance? Don’t we all?”

A Second Chance then ends with one of the most important ways that a donor can be part of the future of this amazing charity – make a $500 donation to provide a scholarship for a prisoner to undertake the Defy program.

Engaging storytelling!


The Zappos Experience: 5 Principles to Inspire, Engage, and Wow

By Joseph Michelli


It goes like this …

  • Pay brand-new employees $2,000 to quit.
  • Make customer service the responsibility of the entire company – not just a department.
  • Focus on company culture as the no.1 priority.
  • Apply research from the science of happiness to running a business.
  • Help employees grow-both personally and professionally.
  • Seek to change the world …

… Oh, and make money too.

Sound crazy? It’s all standard operating procedure at Zappos, the online retailer that’s doing over $1 billion in gross merchandise sales annually, driven primarily by 75% repeat customers and word of mouth. And almost no advertising.

So why is this relevant to fundraisers?

At Zappos, the tagline is “powered by service” and their different way of thinking is powering one of the strongest customer service engines in today’s global marketplace.

The Zappos lessons are applicable not just to the commercial sector, but to not-for-profits too – and to the personal and professional development of people at every level of any organisation.

As they say at Zappos … when you commit to the customer experience, increase employee engagement and create an energetic culture you can’t help but succeed.

The Zappos Experience outlines how they did it. And how they have become a model for other business leaders trying to move toward a culture of customer service.

It may not be the right path for every organisation, but if you’re looking for inspiration as to how to create a much-loved, trustworthy and customer-driven organisation, then this is the book for you.


It’s not always what you should do … sometimes it’s what you can do

As an industry, if we’re going to take retention and loyalty seriously, the way forward is to be innovative and invest in programs that will measure and improve the touchpoints that have the greatest impact on the donor experience.

But, just as we often hear the question … ‘what’s the next big thing?”… one of the next most asked questions is:

“What do I do when there’s no team or budget allocated to fundraising innovation?”

Innovation does not have to be big. Nor does it always have to be expensive if you are to transform your fundraising performance.

Simply, innovation is about removing the obstacles and investing in donor retention the right way.  And it comes in many forms.

It could be making sure that your donors can donate when they want, how they want … or, better leveraging your data to demonstrate the financial benefits of a retention-based strategy … there are always new ways of doing things and new paths to follow.

You don’t have to have an enormous budget or team to deliver a positive supporter experience.

Look for the small, manageable innovations that your charity can manage:

  • Execute the proven fundraising practices better than you have ever done.
  • Get your donor data clean, manageable – and useable. Focus on donor qualification and prioritisation first.
  • Work hard to retain those mid, high and major donors, and your bequestors.
  • Invest more of your existing budget on retention, not acquisition – because your data will show you it can result in higher rates of return.
  • Learn from the professionalism of the commercial sector, where customer service satisfaction rules.

Individually, these things may look small, even insignificant; but when integrated and delivered well, they have the capacity to transform the experience of your supporters.