June 2009

Now in its fourth year, this annual Washington DC conference has emerged as one of the largest—and surely among the best—of the many fundraising conferences held around the United States each year.

This year’s Bridge Conference—formally, the Bridge to Integrated Marketing & Fundraising Conference—will be held July 21-23. I’ll be busy there, delivering two workshops and a pre-conference master class. Check it out.

1. Using the Internet to connect with major donors

By Conor Byrne

One of the many fascinating sessions in the three-day IFC Online eConference—“the world’s first fully Web-based international fundraising conference”—was a Webinar with Convio founder Vinay Bhagat billed as “The Wired Wealthy: Using the Internet to Connect with your Middle and Major Donors.”

Vinay’s presentation was based on research with donors who had contributed $1000+ to a single nonprofit in the previous 18 months. The project—carried out in collaboration with Mark Rovner, Principal at Sea Change Strategies; Colleen McCulloch-Learch, Senior Research Analyst at Edge Research; and Beth Wallace, Vice President for Digital Marketing, Conservation International—involved 23 major nonprofits and 40,000 donors. The Web-based survey in which findings were grounded had about 3,500 responses.

Last week I had the chance to get in touch with Vinay and find out a bit more about his thoughts on the Web and major gifts—and, most important, what you should be doing to make the most of it.

1. Let’s start with you! Tell me a bit about Vinay and Convio.

I spent the first three years of my career in management consulting in Europe and Asia and then attended business school at Harvard University. After that I joined a software company where I was responsible for helping Fortune 500 companies implement their e-commerce strategies.

While answering the phone at a pledge (fundraising) drive at our local public TV station, I was struck by how inefficient the whole process was, and how the Web and technology could really be leveraged to help this organization. They were not managing relationships strategically, e.g. collecting information about people’s interests and aligning appeals to them. They were certainly not leveraging the Web effectively. So, the idea for Convio was spawned.

I left my job and spent six months conducting several hundred interviews with nonprofits, and in November 1999, I raised venture capital and started to build the company. I served as the company’s CEO until July 2003. I then recruited a seasoned operating executive to join us to help us scale and transitioned to serve as Chief Strategy Officer,

Today, Convio is a leading provider of online solutions for nonprofits. We have about 1,300 clients and helped our clients raise $780 million online last year.

2. Why did you decide to engage in this piece of research?

About two years ago, I started to dig into the topic of major gifts. Most people previously believed that the Internet didn’t play a meaningful role in securing major gifts outside of providing a venue to do donor research. I believed that the Internet was actually already playing a role with major donors, and could be leveraged much more strategically by nonprofits.

In April 2006, I wrote an article on the topic to provoke. Mark Rovner of Sea Change Strategies wrote to me saying that he agreed and wanted to collaborate on a formal research effort. He brought an audience research firm called Edge Research in to work with us, and the three of our firms collaborated together on the research.

3. What was the finding that surprised you the most?

That there was a clear “psychographic” segmentation among donors ranging from “relationship seekers” who want a highly communicative, engaged relationship with their nonprofits to “all-business” donors who prefer far less communication. This was a particularly important insight as it told us that organizations cannot take a one-size-fits-all approach.

Our key hypothesis that major donors are active online, and influenced by their online interactions with nonprofits, was affirmed very strongly.

4. Would it be fair to say that a lot of fundraisers wouldn’t think Online = Major Gifts?

Absolutely. Mainly because they think of online as online donations and email solicitation, versus strategic engagement and communications.

5. What can we or should we do to change that mindset?

I’ve actually found that major gift officers/leaders have been pretty receptive to the message. I think the more people we can get to read the research, and start to embrace the recommendations, the better. Online marketers need to include major gift/development people in their Internet strategy development, and major gift officers need to ask for a seat at the table.

6. You speak about the Wired Wealthy’s online expectations not being met. What do organizations need to do to meet expectations?

Treat the Internet as a strategic channel and assess investments not just in terms of online revenue potential, but the potential of the Web to influence offline giving, and source new donors and prospects. Make sure your Web presence represents your organization effectively. Make it navigable, easy to find key financial and mission impact related information. Make sure it’s adequately inspiring. Let donors control their e-relationship with the organization—managing their email subscriptions in terms of frequency and content. Make sure that email communications are well written, impactful, and resonate. Invite major donor feedback.

7. After the online gift, are donors being contacted in other ways, for example is the major gifts office contacting them over the phone?

Candidates are identified due to either making a large online gift ($1,000+) or a series of moderate gifts over a sustained period of time, followed by wealth screening to indicate capacity.

8. If this is happening, is it OK with the donor?

Yes, in a vast majority of cases. Usually, the call is a thank-you followed up by an invitation to an event.

9. Did you come across any examples of donors who had been moved further up the donor pyramid?

I don’t have many great examples to share yet, as this is an emerging strategy. A Red Cross chapter we work with received over 100 $1,000+ online gifts in response to Hurricane Katrina. It followed up with those donors in an integrated multi-channel fashion, encompassing tailored email outreach, phone contact, and an invitation to tour their facility. I don’t know what the strategy yielded in terms of subsequent larger gifts, though.

10. Can this happen online?

Online marketing can play a significant role in major donor cultivation and stewardship. Human contact will always be important, but a lot of donor engagement and intelligence gathering (learning what’s interesting to donors) can be done via the Web. Doing so leads to large efficiencies gains.

11. Who is doing the best job online, in your opinion?

In terms of supporting their major gift operations via the Web, Conservation International is doing the best job I’ve seen. I will be featuring a case study about them in my presentation. Defenders of Wildlife is doing a great job of sourcing new major gift prospects online, and reports that one-third of all new major donor prospects are being sourced by their online marketing efforts.

12. Do you think organizations can achieve their online objectives just as effectively with a blog instead of a Web site?

No. A blog can be a good part of an online communications strategy that engages people in a cause and helps create a more personal connection, but donors expect a well structured, compelling Web site, coupled with well-written email updates.

13. If you had three top tips to give to a charity, what would they be?

1. Upgrade your Web presence. Eighty-six percent of Wired Wealthy donors will visit a nonprofit to donate prior to making a gift to a new organization. Make sure your Web site adequately reflects your organization—clarity around your mission, your impact/return on donor dollars invested. Make sure it is easy to find key information in particular financials; to donate; to manage email subscriptions.

2. Focus on quality vs. quantity for email communications. Don’t communicate for the sake of schedule. Make sure what you send out is compelling, inspirational.

3. Provide more control to donors. For example, let them manage the frequency and type of content they receive via email.

Useful Links

• IFC Online: Vinay’s presentation as well as almost all 16 others are available on the site.

• Convio

• Press release about the Research Convio carried out

Reprinted with permission from Conor's Fundraising Blog.

2. Where's Mal?

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
Workshop: Applying Web 2.0 principles to a non-profit organisation
Site: InfoSys Campus

July 14, 2009 – Webinar
The Foundation Center
Workshop: Fundraising When Money Is Tight

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

September 16, 2009 – San Diego CA
Fundraising Outside the Box Conference
Luncheon Address: Fundraising When Money Is Tight
Workshop: Fundraising When Money Is Tight
Site: Hilton Hotel Downtown

3. The A, B, Cs of testing (Part 2)

By Peter Schoewe

In our previous issue, Peter laid out Steps A and B, the first two of four steps in devising and executing a direct marketing test. Step A is to develop a hypothesis worthy of testing. Step B is to make sure that the test you design is actually calculated to test that hypothesis and not something else. In this article, Peter concludes with Steps C and D.

C. Create test and control segments.

Once you’ve created a hypothesis and made sure you understand how to test it, you need to create the control and test segments. The control is the version of your effort without the change suggested by your hypothesis—and the test is the version that contains the change. Make sure the only difference between the control and the test is what you’ve hypothesized, not any other factor, such as the timing of when they were mailed, emailed, or phoned.

Then you need to decide who gets the control and who gets the test. The most important thing about creating a test segment is not determining how big it’s going to be—but making sure it’s been randomly created. A random split ensures that any difference you observe is due to your hypothesis, not because of some underlying bias in the data. Before you even embark on creating a test, you should make sure you know how to manipulate a database or spreadsheet to randomly move a certain proportion of records into the test segment.

Many people believe that the control and test segments need to be the same size. While this can make analysis of the test easier, it’s not a requirement, so long as the test segment has been created through a random process. For example, if you have a pool of 30,000 donors, you could randomly choose 10,000 donors for the test and use the remaining 20,000 as the control.

In addition, I often hear worries about not having a big enough quantity in a test segment. If you have a very precise hypothesis—one that estimates how much of a difference you expect to see between the control and the test—there are statistical formulas you can use to determine how large your random test segment needs to be in order to ensure a significant result. But, especially when you’re testing through the mail, it’s more worthwhile to pay attention to practical considerations—such as how much you can afford to test or how large a quantity you need to have in the segment to keep printing costs low. As long as you measure the statistical significance of your results (see Step D below), you don’t need to worry too much about the size of your test segment.

D. Evaluate the results.

The fun part of testing is watching the results—and seeing if you were right about your hypothesis. But you can’t just look at a higher response rate or average gift and declare a winner. In order to properly analyze the test’s results, you need to determine whether the difference you’re seeing is because of your test—or if it was simply due to chance. You can determine this by using a test of statistical significance. Determining whether there’s a statistically significant difference between response rates is relatively straightforward—there’s even a page on my company’s Web site that will do it for you, if you plug in the outgoing quantity and the number of responses.

The calculation for average gift is more complex. However, it can easily be handled by most spreadsheet or database software with a little help from a statistician.

Even after you’ve tallied all the results and measured their significance, you still need to take one more step before declaring a winner. You should go back and reread your original hypothesis—and make sure the results you’ve observed validate that hypothesis. For example, if you tested a change to your email Subject line that you thought was going to increase the number of click-throughs—and the click-through rate increased by a significant amount—you have a winner! But if, instead, you received a significantly higher average gift, you haven’t really proven anything. A statistically significant result doesn’t necessarily mean a real result—it only means there’s a much greater chance the result is real. To have the greatest confidence in your test results, you must have an understanding of why you believe the change in performance occurred.

If you follow the four steps I’ve outlined, you can begin creating tests that will be reliable and help to improve your results. And, in time, you’ll find that setting up and evaluating a test is the easy part. The true challenge lies not it creating a test, but in deciding what that test will be in the first place. There are a million things you can test in any fundraising program, but only a few of those tests will result in improved results. When you begin to get a feel for what you should be testing, that’s when you can say you truly understand direct marketing.

If you’re looking for a fuller exploration of testing, check out Mal Warwick’s book, Testing, Testing, 1, 2, 3: Raise More Money with Direct Mail Tests.

Peter Schoewe is Senior Account Executive, Mal Warwick Associates, 2550 Ninth Street, Suite 103, Berkeley CA 94710-2516, phone (510) 843-8888, fax (510) 843-0142, Web www.malwarwick.com, email peter@malwarwick.com.

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: I am trying to determine high Ask amounts for donors in previous years of $1,000 and above. I need to pick out the first, second, and third Ask amount for the reply card. How do I figure this out?

Mal answers:There are no rules about calculating Ask amounts—only styles and approaches that vary considerably. In fact, I follow a variety of approaches, mixing and matching them as the circumstances demand.

One way is to suggest only a single amount and give the donor the option of sending any other amount. This requires focusing your copy strongly on that single Ask, thoroughly justifying it.

Another is to develop an algorithm—a formula—along the lines you’re suggesting. This might be to suggest, say, $X, $X+10%, $X+20%. Or you could propose $1X, $2X, $3X. X is usually the Highest Previous Contribution (or at least the HPC within a given period of time, perhaps the last two years).

Yet another is to develop a giving club structure, with specified names and benefits at particular levels of giving. Anyone whose gift falls short of the next higher level is then asked to rise to that level and join a new category in the giving club.

With all this said, it’s important to keep in mind that these are not arbitrary choices. For example, in these difficult times, I hesitate to recommend asking donors to double or triple their gifts. I might even ask a donor to match her last gift rather than her HPC.

The bottom line is this: Use your judgment to develop an approach that’s best suited for your organization’s circumstances.

5. Holding the reader’s interest

By Managing Editor Deborah Block and Paul Karps

We’re often asked to write a donor appeal where our job is to describe a number of the organization’s projects and programs. Sometimes, these efforts are related to each other by a specific theme—which would then be the overall theme of the package.

For example, we might write about an array of services that bring both emergency aid and longer-term assistance to the needy. Or we might need to discuss various attempts to protect a certain type of ecosystem. Regardless, these are really individual case studies (aka success stories) of the group’s work.

The trick is to organize and describe the projects in such a way as to maintain the flow of the letter, hold the reader’s attention, and keep her reading to the end of what usually turns out to be a lengthier letter (typically four pages).

So if you ever find yourself in this situation, here are a few tips that should help you in this process:

Use indented paragraphs as segues

Once you complete the description of the first project, write a short introductory paragraph before each of the subsequent projects . . . and indent to set it off. This will serve as a physical cue that you’re making a transition from one case study to another.

Then, after you’ve described your last example, include a wrap-up paragraph that, once again, is indented. In effect, you’re telling the reader you’re done with the case studies and about to move on to the next phase of the letter—which is generally the buildup to the final-page Ask.

Use subheads

One alternative to the indented-paragraph segue is to use subheads to move from one project to the next. To make the subheads really stand out, they’re usually centered and boldfaced. Sometimes they’re also underlined.

In terms of copy, try to include an action-oriented verb (or verb form) in all of the subheads, which emphasizes the organization’s role as a “doer.” Remember, though, to use a different verb each time—even if they’re just synonyms. As in, “protecting,” “preserving,” “conserving,” “safeguarding,” “defending,” “championing,” or “saving.”

Use bullets

Bulleted copy in many ways combines the elements of the indented segue with the subhead. Copy can be one line or an entire paragraph. It can also be indented, boldfaced, or underlined.

The main thing is that these sections serve to transition physically from one example to the next.

The main caveat about the use of bullets, however, is not to go overboard. One set of bullets within a letter is fine, even if the bullets themselves are spread out over a couple of pages. Two sets of bullets are probably one too many.

Involve the reader

One key way to hold the reader’s interest throughout is to involve her directly in each of the various examples. “Through your generosity, we were able to feed X hungry community members during the past year.” Or “Thanks to your support, in Georgia we were able to . . .” or “With you by our side, we launched a path-breaking project in Montana to . . .” That sort of thing.

The idea is to place the donor in the middle of the action and make her feel as though she’s playing a vital role in all these successes (which, of course, she is).

Ask questions

Another way to involve the donor in the copy—and keep her reading through programmatic detail—is to ask questions. Does this actually work? You betcha! Short, snappy questions can reel in a reader whose mind may be wandering a bit. Sort of like throwing water on your face to wake up. Just not as wet.

And, as always, the more “yous” in the copy the better, don’t you agree?

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

6. 10 common mistakes nonprofits make in selecting a donor database

By Jeff Brooks

A Webinar recently presented by consultant Robert Weiner for FundRaising Success magazine, “Understanding and Maximizing Your Donor Database for Fundraising Success,” featured 10 common mistakes nonprofits make in selecting donor databases and how to avoid them. They are:

1. Letting techies make the decision.

2. Wishful budgeting.

3. Prioritizing price above everything.

4. Randomly looking at demos.

5. Falling in love with cool features.

6. Falling in love with the salesperson.

7. Buying more than you need.

8. Confusing highly functional software with highly trained staff.

9. Hoping the database will install itself.

10. Leaving the database to fend for itself.

Courtesy of Jeff Brooks at Donor Power Blog.

7. Thank-you letters: Help is on the way!

By Lisa Sargent

Recently I worked with Ken Burnett to host an online thank-you letter clinic over at SOFII, the Showcase of Fundraising Innovation and Inspiration. Since thank-you letters are a great (but too often overlooked) way to forge a bond with donors, you may find it helpful to visit the clinic online.

This month we tackle the controversial issue of whether first-time thank-you letters should include an additional Ask, by posting pro and con editorials: I write in favor of No Ask and Sean Triner of Pareto Fundraising writes in favor of Ask.

And the most exciting part? You can get in on the action: After you read the editorials, you can cast your vote for Ask or No Ask!

In addition to this are five new before-and-after thank-you letters, from organizations in Maine, the UK, Toronto, and Bulgaria.

You can access Parts 1 and 2 of the clinic here. Please note, though, that to do so you’ll need to register for full access to SOFII, from the home page. (If you haven’t done that already, you’re missing a wonderful opportunity!)

The SOFII clinic features an article and checklist for writing better thank-you letters, along with 12-and-counting, actual before-and-after samples of donor thank-you letters from nonprofits all around the world.

Lisa Sargent, Sargent Communications, publishes The Loyalty Letter. She may be reached by phone at (860) 851-9755, Web www.lisasargent.com, email lisa@lisasargent.com, Skype lisa.sargent96.

8. How to find your missionaries

By Tom Belford

Editor’s note: Some people call them “evangelists.” Others may refer to committed activists. In his blog for The Agitator, Tom Belford calls them missionaries. Whatever you call them, they’re the folks who will go out of their way to promote your cause. They’ve made your cause their cause. Here’s how he suggests you identify these invaluable folks.

Were I starting from scratch, here’s what I’d do.

I’d start by combing through my current donorfiles, looking for individuals who had demonstrated either: a) some special loyalty or commitment in their actual giving and/or b) some engagement with my organization beyond giving. Examples:

• Long-tenure donors

• Sustainers

• Higher-dollar donors

• Donors who have purchased merchandise (e.g., our calendar or T-shirt or book)

• Donors who have participated in some real world event we sponsored (e.g., a forum or meeting, a fundraiser)

• Donors who had engaged online (e.g., responded to action alert, downloaded from Web site, responded to a survey, commented on our blog, registered for e-newsletter, forwarded a viral message, etc.)

• Donors who had communicated positively with us (e.g., complimenting a program or victory, or even updating their mailing address) via our 800# or by letter or email.

In each case, the operative hypothesis is that these behaviors suggest a commitment to my organization beyond the normal . . . I’m building a missionary prospect file.

But that commitment isn’t enough. Beyond commitment, a missionary is defined by their willingness to actually recommend my organization to others . . . some committed donors are comfortable in a proselytizing role, others are not.

How do I find out which of my missionary prospects has the “right stuff?” Until we have a scoring model that can pre-identify these folks in a donorfile, I guess there’s no substitute . . . I have to ask or “test” them!

So, I’d come up with a simple missionary request for my prospects (actually, a few requests over time to really probe my prospect pool) . . . something that involved outreach—such as passing along a message or sending in a prospect name.

The donors who responded would be my missionaries. I’d be thrilled if this group represented maybe 15% of my original donorbase.

I’d then attempt to “graduate” them to some explicit donor-to-friend fundraising promotion. I’d conduct as much of this program online as possible, using the latest viral marketing and social networking tools. And I’d create a recognition program to keep my missionaries motivated.

By the way, I’d also test my missionary request against the donors who did not yet meet the giving or engagement criteria I had devised. By doing so, I might pull some more missionaries out of the woodwork, plus I’d have a control group against which to evaluate the performance of my presumed missionaries. In effect, I’d be ascertaining the validity of my missionary prospect screening criteria.

So that’s what I’d do. It’s pretty straightforward. And I believe the searching and filtering process would be worth it.

Would you approach it differently?

Tom Belford writes The Agitator daily with partner Roger Craver.