April 2009

You are invited to the world’s first online fundraising conference

For just a fraction of the cost of sending one person to a traditional fundraising conference, you and all your colleagues can take part in three days of live sessions with many of the world’s most successful online fundraisers. You’ll join Scott Goodstein of Obama for America, Premal Shah of Kiva, Ramya Raghavan of YouTube, and other headliners May 12-14 in the IFC Online eConference—the world’s first online fundraising conference. Unlike its parent, the International Fundraising Congress, held annually in The Netherlands for 28 years, the IFC Online will focus exclusively on online fundraising. This will be truly a global affair, with live sessions across 12 time zones and a special Spanish-language track. Check it out!

1. In a recession, stay close to your donors

By Mal Warwick

You’ve heard it a thousand times: Fundraising isn’t really about money—it’s about relationships with donors. But does your organization have programs in place that truly reflect this perspective? If your approach is like hundreds of others I’ve observed firsthand, probably not.

In your major gift program, for example, the byword is bonding. Yet how many hours per week do your major gift officers spend meeting face-to-face with donors and prospects? How many of your board members or senior managers are personally acquainted with your top donors? In what ways do you keep your biggest donors up to date on the principal programs and issues that affect your work? If you have good answers to these questions, go to the head of the class. You’re not alone—but the space up there isn’t crowded.

Now, when money is tight, you can’t worry just about your major givers. It’s doubly important that you operate as though all your donors are your best friends in the world. (In more ways than one, they are.) To survive tough times and thrive when the economic storm clouds lighten, you need to devote a great deal of attention to thinking about how you can make your donors’ experience with your organization more meaningful.

In recent years, there has been an increasing amount of research into donor motivation both by practitioners and by academics. As a profession, we fundraisers have begun to learn a lot about what moves donors, and what doesn’t. Researchers have plumbed the depths of a hundred questions or more. But one fact does seem to emerge clearly from almost all of what I’ve read: Donors crave appreciation for their gifts—and they’re liable to become downright cranky if they’re not thanked promptly and warmly.

No doubt you’re attentive to the need for acknowledging major gifts. But how about gifts in smaller denominations?

In direct mail circles, many fundraisers lament the low rates of conversion from one-time to multiple givers, and the higher but still sobering rates of renewal of multi-year donors. Yet so many direct mail fundraising programs skimp on—or entirely avoid—donor acknowledgments. I know this is the case, because for a great many years I conducted an annual test of thank-you practices by major American mailers (what’s called “mystery shopping” in other countries). I was truly appalled by how many sent gift acknowledgments only weeks, or even months, after the fact—or failed to send any at all. I’m certain, without any doubt whatsoever, that the poor renewal rates that plague so many direct mail fundraising programs are partly the result of this cavalier treatment.

What do donors want the most? They want to be treated as human beings, not statistics! Yet is this the message you deliver when you mail generic thank-you notes by bulk mail . . . when donors receive them weeks after sending their gifts . . . when all you get after giving online is an instant email acknowledgment with no follow-up . . . when your gift acknowledgments include not a hint of the appeal that gave rise to the donors’ gifts . . . or when (to make matters even worse) your thank-you is a postcard rather than a letter?

Sure, times are tough. Your budget has been cut, and cut some more. Yet this is not the time to economize on gift acknowledgments. In fact, to gain a sorely needed competitive advantage in this era of tight money, you would be well advised to spend more, not less, on expressing appreciation to your donors.

If you’re laughing now—or groaning; the difference is immaterial—I suggest you consider taking another look at the preceding chapter on segmentation. Spending more on gift acknowledgments to a smaller number of donors can still save you money. Think about it!

Give your donors that warm and fuzzy feeling

Prompt, personalized thank-you notes won’t do the trick alone. It’s important that your donors—especially your most generous and responsive donors—get the feeling that you care about them more than just as sources of cold, hard cash. This is the impression they’re likely to get if you:

• Never communicate with your donors except to ask for money.

• Ask for an additional gift as soon as you receive the last one.

• Include a postage-paid reply envelope with every gift acknowledgment.

I’m well aware that many direct marketing specialists heartily recommend such practices. I think they’re wrong.

Three decades ago, when I began my career in fundraising, it made perfectly good sense to undertake a consistently aggressive solicitation program. Competition, at least by today’s standards, was slight. Most direct marketing donors were less sophisticated and less demanding. But times have changed, and so have donor attitudes.

Today, donors demand heartfelt appreciation, considerate and responsive treatment, and information that inspires their trust. It’s not enough to ask them for money. You’ll need to keep them well informed about your organization’s work in general—and about the specific projects and programs they’ve supported.

This article is excerpted from Mal Warwick’s newest book, Fundraising When Money Is Tight: A Strategic and Practical Guide to Surviving Tough Times and Thriving in the Future (Jossey-Bass, April 2009). Copyright © 2009 by Mal Warwick. All rights reserved.

2. Where's Mal?

March 31, 2009 – Teleconference
Network for Good
Fundraising When Money is Tight

April 14, 2009 – San Francisco CA
Foundation Center
Workshop: Fundraising When Money Is Tight

April 21, 2009 – Washington DC
George Washington University
Guest Lecture: Fundraising When Money Is Tight

April 22-23, 2009 – Washington DC
Global Philanthropy Forum
Site: Mayflower Hotel

April 23-26, 2009 – Itasca IL
Social Venture Network Spring Gathering
Moderator: Fundraising When Money Is Tight
Site: Eaglewood Resort

April 30, 2009 – Webinar
Resource Alliance and Forum for Fundraising
Fundraising When Money Is Tight

May 4, 2009 – San Francisco CA
Fundraising Day in San Francisco
Luncheon Keynote: Fundraising When Money Is Tight
Site: Marriott Hotel

May 12-14, 2009 – Online
IFC Online eConference
Workshop: Using online tools to combat the recession

May 19, 2009 – Teleconference
NTEN (Nonprofit Technology Network)
Fundraising When Money Is Tight

May 21, 2009 – Webinar
EcoScribe Communications
How to Write Successful Fundraising Letters

June 24-27, 2009 – Bangalore India
International Workshop on Resource Mobilisation
Master Class: How to Build a Fundraising Portfolio
Workshop: Recruiting Donors Through Smart Direct Marketing
Site: InfoSys Campus

July 21-23, 2009 – Washington DC
2009 Bridge to Integrated Fundraising Conference
Master Class: The Copy Clinic: Crafting Brilliant Fundraising Letters, Emails, and Telephone Scripts for Breakthrough Fundraising Results
Workshop: The Nitty Gritty of Direct Marketing: Analyzing Direct Mail, Online, and Telephone Fundraising Results
Workshop: Getting Inside the Mind of the Donor
Site: Gaylord Hotel, Resort and Conference Center, National Harbor MD

September 2, 2009 – Phoenix AZ
AFP Greater Arizona Chapter
Luncheon address
Workshops

3. Online giving in a down economy

By Michael Stein

This year presents nonprofits with unique challenges in raising money, both online and offline, and we’re seeing a tightening of charitable donations as a result of the declining economy. For several clients at Donordigital, average gifts were down 20% to 35% in December 2008 compared to December 2007, even though the number of donations was about the same.

The good news is that most donors continue to believe in the organizations they support. They continue to give, but—no surprise—they’re not giving as much as they did last year, especially at higher giving levels. The growth of many nonprofit institutions will depend more than ever on creative, carefully targeted online campaigns to smaller donors, and ongoing Web-based marketing to a wide array of potential new supporters in an effort to grow their lists.

As Mal Warwick states eloquently in his new book, Fundraising When Money Is Tight, a key part of recession fundraising is getting back to basics and “making the case for giving.” Your challenge in crafting a case for giving is to establish a link between your donors and your clients or beneficiaries or the issue you address. It’s that connection you need to emphasize, not the connection between the donor and your organization itself.

One effective way to “make the case for giving” during a down economy—and to emphasize the connection between your donors and the issues you address—is through the use of urgent online appeals. It’s a truism that the online medium—especially email messaging—has revolutionized the way that organizations raise money for timely issues, notably natural disasters, human rights emergencies, and industrial accidents. Whether you’re raising money to help tsunami victims, clean up an oil spill, or speak out against a military dictatorship, the case you’re making for financial support can be strengthened by the timing of your appeal in terms of the news cycle and the urgency of the need. This is particularly important during a down economy when donors are moving towards more “essential giving” and donating in more modest amounts.

Recently at Donordigital, we’ve seen several clients make very effective cases for giving with urgent email appeals. Following the recent crisis in Gaza, CARE was able to send an extremely successful urgent appeal to its supporters in January 2009, despite having sent several match and year-end emails in November and December 2008. The organization also paid for AlterNet and Mother Jones to send out chaperoned appeals, resulting in CARE’s most successful donor acquisition campaign ever and netting more than $30 per donor. This success can be tied directly to strong urgent messaging that’s linked to the current news cycle.

Urgent online appeals should take advantage of active media coverage of the issue. This might include updating your Web site, sending out an email update, and updating your Facebook pages. Urgent online messaging should focus on what your supporters can do to help solve the problem and thus make the strongest possible case for giving.

Michael Stein is Senior Online Strategist at Mal Warwick Associates, 2550 Ninth Street, Suite 103, Berkeley CA 94710, phone (510) 843-8888, fax (510) 843-0142, email Michaels@malwarwick.com. Emily Campbell contributed to this article.

4. Ask Mal

Since 1994, when the Mal Warwick Associates Web site went online, Editor Mal Warwick has answered fundraising questions posed by visitors to the site. Hundreds of those Q&As are available here. Here’s one Mal answered last month

Question: We're going to see about a 20% drop in fundraising from what we projected (projected $534K but expect $440K to $490K). This tracks with at least one other organization with a similar mission that's based in another city. I'm not sure how to create reasonable projections for next year given the economic environment. I feel like we could raise $460K, but there's pressure to project for more.

Do you have any advice you're giving to groups (especially non-mainstream groups) about the best approach to projecting future fundraising goals? What are reasonable assumptions about future donor behavior right now?

Mal answers: When the President tells us that things are going to get worse before they get better—after taking steps to pour trillions of dollars into the economy—I think it’s prudent to assume that 2010 will be no better than 2009. I think projecting a rise in contributions from the level you’re able to sustain now, while certainly possible, would not represent wise budgeting.

5. The short and long of it

By Managing Editor Deborah Block and Paul Karps

You want to keep mailing, even in this terrible economy. (And, yes, you absolutely must keep mailing.) So how can you mail more efficiently to keep your costs as low as possible?

One strategy—which resourceful organizations and direct mail fundraising agencies are increasingly exploring—is to test longer versus shorter letters (which are usually less expensive to produce).

Now, we know that, historically, longer letters have pulled better than shorter ones, even taking the lower cost into account. But re-testing this premise can make good sense in today’s challenging financial climate.

Of course, in terms of copy, there’s something to be said on behalf of both lengthy letters and the more succinct variety. Longer letters, by which we typically mean four pages as opposed to two, give you added space to create a tone that can be beneficial to making the case for giving.

The signer can provide a certain amount of her own background, experience, and philosophy to make the letter warmer, more emotional, and more personal—goals of every fundraising letter.

There’s also room for more background information on the organization’s mission and programs—in particular, the specific efforts that relate to what you’re focusing on in the appeal.

If you’re using one story—or especially more than one—you’ll have the space to flesh out the details. You can also go into more detail on the work you’ll be able to accomplish with the recipient’s gift. In addition, you’ll have more opportunities to ask for the donor’s support—and to thank her for her ongoing generosity.

Meanwhile, what makes a shorter letter compelling?

First and foremost, you’re required to write as clearly and concisely as you can. You really can’t afford to pad your copy. This means you’re less likely to bury the lead a few paragraphs into the letter—or even worse, wait until the second page to make your first Ask.

And you won’t get bogged down in the finer points of your organization’s history, work, and finances—which can, in some cases, remove the emotional spark from your copy.

Yet, at the same time, you’ll have to lose some of the nuances of a longer letter that can keep the recipient engaged, informed, and, most important, on target to make a gift.

With these positives and negatives to consider, here are six tips for going about writing both a longer and shorter appeal letter for your head-to-head test:

1. Take into account both letters when deciding what information to highlight and include in your copy. Some topics might not work with each format—particularly if you have too much or too little to say.

   For example, stretching what’s basically two pages worth of content into four can come out as a meandering, rambling letter that people will lose interest in (and rightfully so).

2. Start with the longer letter, if possible. At least, that’s what we do. We find it significantly easier to cut copy, rather than add it.

   You might, for instance, use three stories of clients helped by your charity in the four-page letter, but choose just one to spotlight in the two-pager. Or you can feature all three, but cut them down to small vignettes.

3. Get to the point quicker when you revise to a shorter length—by deleting any non-essential words or even entire paragraphs. Remember, though, to keep your lead lively and intriguing.

4. Reformat your paragraphs, underlining, and bold-facing, whenever necessary, to maintain easy, quick reading. Don’t create fat, unreadable paragraphs in order to jam in more copy. Also, adjust the margins—top and bottom, left and right—to add or delete white space.

5. Don’t skimp on Asks when it comes to shortening your copy. Most typically, you should directly ask for a gift three times in a two-pager—once on the first page, once on the second, and once in the P.S.

6. Try to maintain the same wording in the Asks of both versions. Otherwise, you’ll find your long vs. short letter test compromised by phrasing the Asks in different ways. Think of it this way: Both versions should be able to use the same reply form with the same call-to-action copy—which will also keep your costs down in the test.

Copywriters Deborah Block and Paul Karps are partners in BK Kreative, 1010 Varsity Court, Mountain View CA 94040, phone (650) 962-9562, fax (650) 962-1499, email bkkreative@aol.com.

6. Who’s using the Internet?

With pressure to reduce costs, direct response fundraisers will likely turn up the volume on their online solicitation efforts.

So, who’s using the Internet these days?

Here’s the latest Internet user profile from Gallup, using as the key barometer the percentage of Americans who use the Internet more than one hour per day (though additional usage data is available).

Overall, 48% of American adults use the Internet more than one hour a day. Here are the segments where at least half use the Internet at that level:

• Post-grads - 68%

• Earning $75K or more - 63%

• Ages 18-29 and 30-49 - 62% & 54%, respectively

• Employed - 53%

• Men - 53%

• Some college - 52%

• College grads - 51%

If some combination of these characteristics corresponds to your core donor, then you’ll be fishing in the right pond. For others, the good news is that virtually every other segment is closing the gap.

—Tom Belford in The Agitator

7. Boosting direct mail revenue by phone: a case study

By Corey Gordon

What influence, if any, does telephone fundraising have on the results of concurrent direct mail appeals?

Do direct mail results vary depending on the outcome of the telephone call (i.e. pledge vs. refusal)?

Are results relatively consistent across the entire file, or are there segments that defy the overall trends?

Does the interval of time between the telefundraising call and the estimated in-home arrival date of the mail appeal have a material impact on either channel?

These were the questions we set out to answer in a test of integrated fundraising, adding telephone contact to ongoing direct mail programs.

Our client was a large, national organization. Its donorfile had been built almost entirely by direct mail using labels and other modest upfront premiums. Donors on the file had been exposed to little-to-no prior telefundraising, and they were largely an older audience averaging 72 years of age. The segment carved out for the test consisted of 13-36 month lapsed donors, with highest previous gifts in the range of $15.00 to $49.99.

All in all, as you may be well aware, this was not an optimal file for telefundraising.

The test was undertaken during the first half of 2008, during which six mailings were sent out and over 200,000 contacts made by phone.

Donors in the control group received the same mailings, but were not contacted by phone. There were no premiums associated with the phone appeals, while the direct mail appeals had the normal offerings.

The gross revenue per piece mailed (GPPM) was the standard by which results were measured.

In the following chart you can see the overall picture:

As you can see, the telefundraising program appears to have had no negative impact on any of the direct mail results. Gross Revenue Per Piece Mailed was actually higher among the households contacted by telephone than those where no contact was made. These findings were consistent across nearly all key sub-groups as defined by Recency, Frequency, and Monetary Level (RFM).

For another perspective on this test, take a look at the following chart:

Interestingly, donors who made pledges when contacted by telephone generally responded significantly higher to the direct mail appeals than those who refused. And even the donors who refused when contacted by phone demonstrated a higher level of response to the mail than those where no telephone conversation took place.

Once again, the positive lift created by the addition of the phone channel was consistent across nearly all RFM segments of the file.

The direct mail results were highest when a phone call was completed plus or minus one week of the maildate, as you can see here:

Summary

1. The direct mail results were positively influenced by the concurrent telefundraising effort, erasing the fears of cannibalization or overlap.

2. The phone and mail channels were clearly complementary, strongly supporting a multi-channel approach to fundraising.

3. The client actually resulted in a better overall positive net revenue position, even with the addition of a second channel of fundraising expenses.

4. A substantial number of lapsed donors were reactivated, helping to offset the overall decline in direct mail response in 2008.

Corey Gordon is Chief Marketing Officer, Strategic Fundraising, 7591 9th Street North, St. Paul MN 55128, phone (651) 233-5009, Web www.strategicfundraising.com, email cgordon@strategicfundraising.com.

8. Fundraising from introverts

By Jeff Brooks

Have you thought about the people you fundraise from? Most marketers don't, says Roy Williams, in his MondayMorningMemo, “Introverts and Extraverts.”

The population is split almost evenly between introverts and extraverts, but you wouldn't know that by the way marketing and communication is done.

Focus groups measure the opinions of extraverts. Churches plan social events for extraverts. Companies hand out promotions to extraverts and sales trainers teach us how to sell to extraverts.

Too much marketing and fundraising is aimed at the extraverts. That means it misses the other half of potential buyers and givers. It's fine to aim squarely at one group. But if you forget the other one exists, you're writing off a lot of support.

The error can go both ways: As a certified introvert, I'm always dumbfounded that telemarketing works. If I paid attention to my instincts, I'd never have anything to do with telemarketing. And that would be a mistake because telemarketing works. It works because extraverts are perfectly comfortable with it.

Some people (introverts) figure stuff out in their minds before they talk or take action. Other people (extraverts) figure it out by talking about it. Each of us acts one way or the other. The best fundraising allows both types to function.

Your own way of thinking is not the only way. If you think it is, you're missing the other half of the human race.

Jeff Brooks writes the Donor Power Blog for Merkle Domain.