September 2009

The world’s best fundraising conference

Since 1981, the London-based Resource Alliance has been presenting the International Fundraising Congress every year at a comfortable conference center near Amsterdam in The Netherlands. The event, now attracting close to 1,000 people, seems to get better with every passing year. If you’re jaded by the usual run of fundraising conferences where you don’t seem to learn anything new, this is the event for you. You’ll find senior fundraisers from more than 50 countries at the IFC—an unparalleled opportunity to network and to pick up ideas and insights you’ll never hear about anywhere else. Check it out.

1. Is integrated fundraising for real?

By Nick Allen

Integration of online and direct mail fundraising has been a staple topic of development conferences for at least five years now. So it’s time to separate the results from the hype.

Yes, of course you should seek to integrate your mail and online programs, and the larger the programs, the more upside for integration. Of course, you want to enable your supporters to donate by whatever channel they choose for a given gift—the BRE, the donation page on your site, or plain unmarked bills delivered to your door.

While online giving has grown significantly over the last five years, most donors still give by mail. Just 9% of donors came in online in the most recent evaluation of 12 national organizations, but they account for 21% of new-donor revenue because of much higher gift levels. The online donors are younger and have higher household income (because they’re working, not retired).

Over the last three years, the donorCentrics ™ Internet Benchmarking program that my firm, Donordigital, has worked on with Target Analytics has shown that up to 25% of online-acquired donors make at least one gift online, but that few mail-acquired donors give online. When mail donors do migrate to online giving, their gifts are larger. And when online donors give in the mail, they give smaller gifts.

Some of the giving difference is certainly age—most online donors are over 60, many over 70, and these folks are less likely to give on. Habit also seems to be a factor: The longer a mail-acquired donor is on your file, the less likely she will make an online gift. However, these numbers are averages, and your file may differ, especially if you have a younger mail file (such as a group like Human Rights Campaign) or if earthquakes, hurricanes, or other high-profile emergencies motivate your mail donors to go online to give.

As you probably know by now, online donors have higher lifetime value than mail donors, mainly because their average gifts are so much higher. Multi-channel donors are even more valuable. But even mail donors with email addressees on file who have not given online are more valuable, either because the email messages they receive motivate them to give more in the mail or because the donors who offer you their email addresses care more about you. (What about donors whose e-mail addresses you have appended? We don’t have the data, but it could be they’re more affluent and/or younger than those for whom you can’t find an email address.)

So what should you do?

• Add your online activists and subscribers to your direct mail acquisition program. They’ll often perform as well as or better than any non-house list—and they’re free.

• Ask direct mail donors for their email addresses, and send your 0-24 month direct mail donorfile to an appending house such as FreshAddress or Tower Data for appending. That will cost 15 to 35 cents per matched name, depending on quantities.

• Send email newsletters and/or advocacy action bulletins to your mail donors to give them additional touch points.

• Send email appeals to your direct mail donors, either to repeat the message they’re getting in the mail or to fundraise during late-breaking opportunities when there’s no time to mail. Sending email to arrive just after the postal mail seems to increase response the most, but test it if your file is big enough.

• Integrate your membership renewal efforts to make sure that supporters get the renewal message in the mail, in email, on the Web site, on your Facebook page, even in your tweets.

• Don’t expect fundraising miracles from integration. The two donor groups are still separate, though there’s increasing convergence.

• Ask your donors what they want—in surveys, focus groups, on the phone, and when you meet with them.

Nick Allen is Co-founder and Chief Strategy Officer of Donordigital, the online fundraising, marketing, and advertising company. Contact nick@donordigital.com, phone (510) 473-0366.

2. Where's Mal?

September 2, 2009 – Phoenix AZ
AFP Greater Arizona Chapter
Luncheon Address: Fundraising When Money Is Tight
Workshop: Fundraising in a Global Context
Workshop: Technology and the Future of Direct Response
Site: Sheraton Hotel

September 7-9, 2009 – San Francisco CA
Momentum Leadership Conference 2009
Site: W Hotel San Francisco

October 2, 2009 – Los Angeles CA
ArtsReach National Arts Marketing & Fundraising Conference
Keynote: The New Frontier in Fundraising and Marketing
Workshop: The copywriter's clinic: Crafting brilliant appeals for breakthrough fundraising results
Site: Biltmore Hotel

October 16, 2009 – Concord NH
CONFR: Council on Fundraising
Keynote:Six Ways to Turn the Recession Into an Opportunity
Workshop: Bringing it Local: Q & A with Mal
Site: Grappone Conference Center

October 22-25, 2009 – La Jolla CA
Social Venture Network Fall Conference
Site: Estancia La Jolla

November 11-12, 2009 – Parsippany NJ
New Jersey AFP Conference on Philanthropy
Reception: Fundraising When Money Is Tight
Featured Presentation: How to Write Successful Fundraising Appeals
Site: Hilton Parsippany

February 26-27, 2010 – Albuquerque NM
Association of Lutheran Development Executives National Conference
Master Class: The Copy Clinic for Advanced Practitioners: Producing Brilliant Direct Mail Fundraising Appeals for Breakthrough Fundraising Results
Workshop: Crafting a Message to Win More Support for Your Cause

May 11-13, 2010 – Online
Second Annual International Fundraising Congress Online

3. An involvement device that does double duty

By Managing Editor Deborah Block and Paul Karps

Elsewhere in this issue, Jeff Brooks comments quite thoughtfully about the ACLU being a “laughable wolf-crier” through its seemingly never-ending renewal program. However, here’s another aspect of the organization’s direct mail work we recently received that does deserve kudos.

It’s an intriguing take on one of the most prolific forms of acquisition mail used by advocacy-style nonprofits: the survey package. In the ACLU’s version, the group successfully plays off—in different ways—its mission to protect an individual’s privacy, freedom, and free speech.

First off, the white outer’s teaser announces that there’s a “Sealed Survey Enclosed for Addressee.” Additional copy asks, “Do you think the government should tell you what to believe, how to live, and whom to love?”

But this is where the package really shines: Through the outer’s window a second window envelope, printed on yellow stock, is clearly visible. (Interestingly enough, this represents the only color in the whole package—as all the components are printed in black only.) The teaser declares, “REGISTERED MATERIALS. TO BE OPENED BY ADDRESSEE ONLY.”

Once inside the outer, there is indeed a sealed survey—which serves to reinforce the privacy/confidentiality theme. The recipient’s name and address block shows through both windows and drives the mailing.

The survey itself is pretty standard. The first part of the four-page questionnaire (with the personalized first page devoted to instructions) emphasizes the ACLU’s tenets and is entitled “WHAT YOU BELIEVE.” The second part asks recipients to rate the group’s “STRATEGIES FOR ADVANCING FREEDOM.”

The back page then employs the traditional fundraising survey tactic of asking the prospect to send a contribution—with the reply portion following.

The 8-1/2 x 14” two-sided generic letter reiterates the survey—to the extent that it rephrases a number of the questions. Copy also fills the reader in on the major areas in which the ACLU is working “to protect personal freedom.” Basically, what you’d expect from a survey package.

All in all, though, a nice take on a venerable direct mail device that seems to perform well, especially for advocacy-oriented groups. Not only does the second sealed envelope complement the package’s Marketing Concept, but just opening this envelope adds another level of involvement for the recipient. Clever, no?

But finally, here’s one question from us to the ACLU: What’s with having no P.S. in the letter?

To see this entire package, click here.

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.

4. Attention NGO fundraisers in Asia, Africa, and Latin America

The North American market is flooded with books about fundraising—so much so that I recently told a publisher who invited me to write a quickie book that I thought there were already too many titles on the market and I didn’t want to add to the glut unless I had a really good reason to do so.

Things are different in the Global South: Asia, Africa, Latin America, and Eastern Europe. A whole lot different. There, books published in Europe or North America are almost always prohibitively expensive, and in many cases they’re simply not relevant. They also tend to be too specialized.

Principles are transferable, for the most part. Examples aren’t.

That’s why Michael Norton’s The Worldwide Fundraiser’s Handbook will be such a treasure for you if you’re even dreaming of raising funds in the South. The book does a superb job of doing justice to its subtitle: A Resource Mobilisation Guide for NGOs and Community Organisations.

The Handbook offers guidance on establishing effective local fundraising programs that may tap into a wide range of sources of funding (including government, companies, and charitable foundations).

In the book’s long-awaited Third Edition, Norton and his collaborators in the Resource Alliance have brought this essential resource up to the minute with practical, down-to-earth advice about securing the resources necessary for community-based social change efforts. The new edition incorporates changes in fundraising practice in recent years, new case studies, a completely updated and rewritten section on Internet fundraising, and an expanded “Useful Organisations” section.

To order a copy directly from the publisher, The Directory of Social Change, click here. Or visit the Resource Alliance. The book is priced at £24.95—pricey, but worth every penny. If you follow the advice in this book, you’ll raise many, many times the price you pay!

—M.W.

5. 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 not long ago.

Question: How can I validate if my sample calling size is large enough to be statistically valid? We are thinking of calling 504 donors (28 per segment), divided among 18 segments out of a database of 45,000. Is this valid statistically? Where can I validate this? Is there a Web site that would be helpful?

Mal answers: My experience with large sample sizes may not be useful for you in working with smaller numbers. I've been told there are statistically valid methods that would enable you to extract useful information from samples as small as the ones you're talking about. But I'm not familiar with those methods.

In direct mail, we predict the statistical validity of a test by estimating the number of responses rather than the number of names tested. For instance, knowing that a mailer normally receives a response rate of 2% in donor-acquisition mailings, we would require (if we're purists) that each list or segment consist of at least 10,000 names, because that number could be expected to yield about 200 responses. People who know far more about statistics than I do tell me that 200 is a useful threshold. As a practical matter, we frequently test list samples of 5,000 rather than 10,000 names, with expected response rates half that high or less. In other words, we often project 50 or fewer responses per panel. This leads us to re-test much of the time, since 50 responses doesn't really give us anything close to a big enough base to work from.

However, you're calling donors rather than mailing them. In my experience in telefundraising, small test samples can be useful regardless of their statistical validity. Like a focus group, a round of calling to, say, 50 donors can help fine-tune or even reject a script, because practiced operators can learn a lot from such intangible elements as tone of voice or the speed of rejection. As a general matter, however, I'd say that if you're really hoping for statistically valid responses from 28-name segments, you'll have to observe a very big difference (say, 19 to 9) to have any trust at all in the results. The contrast would likely have to be large even with 504 names, though not quite so great.

One big caveat: I work with direct marketing rules of thumb, which almost always allow me and my colleagues to get to the right answer even if my methods aren’t strictly correct from a statistical point of view. If you want to be a purist, check with a statistician. And good luck if you do: be prepared for lectures on standard deviation, chi-squares, and other matters that seem entirely peripheral to me in the field of fundraising.

6. Is your nonprofit un-deserving?

By Tom Ahern

Dianna Huff recently wrote me a note about her experiences with two local charities.

Dianna is a gifted, results-driven sales copywriter, a specialist in “getting you noticed on the Web,” and a terrific mom.

Today, though, meet her as (1) delighted donor and (2) disgusted donor.

Her note (reproduced below and only slightly tweaked to disguise the guilty) is a tale of two charities: one thriving, one dying.

The thriving charity thinks carefully about warming its donors’ hearts. The dying charity takes donations utterly for granted.

Takeaway

Donors owe us nothing, not even a hearing. We owe them something, though: as many moments of joy as we can cram into a year.

Making a contribution, being a benefactor, feels good, neuroscience tells us. There's a pleasure center in your brain that fires up when you make a gift. When a charity enhances that joy by celebrating the contribution, one-time donors tend to become many-time donors.

When a charity ignores the joy, donors find someone else to play with. Charities that think they “deserve” support (as Dianna's school did) are deeply ignorant of the basic emotional underpinnings behind lasting philanthropy.

Reprinted with permission from the Ahern E-Newsletter: About Donor Communications. Copyright © 2008 by Tom Ahern.

7. What good nonprofit e-newsletters look like

By Kivi Leroux Miller

Twisted in knots about how to design your email newsletter? Biting your nails over HTML code, color schemes, and layout?

Relax. (Deep breaths . . . In and out . . .) It turns out you don't need to be a graphic designer.

Here's the good news: Your readers are expecting to read email, which means your words are way more important than your design.

Here's the even better news: You can use a template. You don't have to design the thing yourself. Don't get me wrong: How your newsletter looks is important. But, you can achieve that interesting visual punch while keeping it clean and simple.

Here’s how:

• Make the words easy to read. People don’t expect the same visual stimulation that they do when they visit a Web page.

• Use a custom template. Use generic templates and your emails will look like every other nonprofit that uses them. Custom templates are created just for you, to match your Web site, colors, logo, and style. Network for Good’s EmailNow subscribers can purchase custom templates for only $99.

• Give text top billing. You can still use a stylish design and photos. Just make sure that the text is a priority and wraps cleanly around any graphics.

• Stick with basic fonts. Online readers skim more than read, so legibility is even more important. The fonts Verdana and Georgia were both designed for the screen. Arial and Trebuchet work well online, too.

• Give your campaign the five-second test. Once you've got your draft ready, send it to yourself. When it arrives, pop it open for five seconds and then close it. Then ask yourself: What was this email about?

Your supporters are more interested in what you are saying than in how cool your email looks. And your really cool supporters are reading it on their phones and won’t see your design anyway!

Kivi Leroux Miller is President of Nonprofit Marketing Guide.com. Reprinted with permission.

8. 14 trends in foundation giving (Part 2)

By Rob Blizard

Editor’s note: In Part 1 last month, Rob discussed six standout trends: a drive toward simplicity, continuing reliance on personal relationships, little support for operating funds, a focus on outcomes and results, process changes due to technology, and reduced giving from corporate sources.

7. Pressure for more payout

Foundations in general have come under fire for not dispensing enough of their wealth, though few experts predict they will venture much beyond the required 5% limit.

“Another trend that seems likely to continue is the push for foundations to spend down their endowments during the lives of their donors rather than foundations seeking to exist in perpetuity,” says Bill Warren, Vice President of Foundation Relations and Grants for the Washington DC-based National Geographic Society. But there seems little chance of that taking place.

“Most foundations still give no more than the legally required 5% of net investment returns,” intones Pablo Eisenberg, Senior Fellow at the Georgetown University Public Policy Institute, and a 40-year veteran of nonprofit management.

“They should be paying out much more, at least 6% in grants. The 5% in payout has become the 11th commandment.”

However, a number of interviewees for this article defended the 5% payout limit in light of the huge declines in portfolios in the nonprofit world—both at charities and foundations—that manifested last fall with the precipitous drops in securities markets.

“When foundation asset values decline 30% or more,” notes Penny Friedman, Vice President and Chief Operating Officer for Cincinnati-based InterAct for Change, “trustees think twice before further diminishing foundation assets by increasing the percent granted.”

8. Pushing for nonprofit partnerships

Another trend affecting foundation giving is the growing propensity for foundations to encourage joint ventures between charitable institutions to solve particular problems. The goal: to ensure the merging of the best minds and resources tackling one issue and to minimize duplication of programs offered by similar organizations.

“Programs that bring organizations together and encourage community will continue to grow in popularity,” claims Keith Dewey, Ph.D., Director of Corporate, Foundation, and Government Support at The College of New Jersey.

Warren has observed evidence of the same trend: “Foundations also seem much more interested to know that applicants are collaborating with others in the nonprofit community on their projects; the leveraging aspect is growing in emphasis.”

In a similar but apparently much less prevalent trend, even foundations are joining forces. “In Ohio, one thing I have observed is the increasing number of instances where foundations are working together to project one voice on important issues facing our state, like education and economic development,” Cynthia Bailie, Director of The Foundation Center’s Cleveland office, says. “I expect this trend to continue.”

9. Size matters

The size of both charities and foundations looks like they will also continue to play a role in foundation funding during the next 10 years.

“I detect trends among foundations, usually based more on size . . . [rather] than on type of foundation, as to what they wish to support. Rockefeller, Ford and the [other] large national foundations, for example, seem to want to make big, national, or even international, news. It would make sense for larger foundations to focus on large policies and topics that smaller foundations don’t have the resources to combat in the same systemic ways. Likewise, smaller foundations can sometimes focus on the projects and issues between the cracks of the more mammoth, cross-national challenges,” says Dewey.

“Community-based foundations and other funders and that have a stake in our success are more likely to give,” states Mark DeWitt, Director of Corporate and Foundation Relations at Hope College in Holland MI. “It is difficult to get an audience with some national foundations that don't give merit to research or outcomes at Hope College on the same level as research universities.”

10. Hot funding issues

Like the kids always picked first for teams at recess, some issues are perennially popular with foundations and tend to be some of the easiest for which to find donations. It appears that similar selections will continue along with gifts for newly popular issues that capture much media attention.

“I predict continued, if not increased, concern with U.S. and international security issues, whether food or military or social security. Terrorism, hunger, and K-12 education continue their popularity, as does the teaching of leadership skills at all levels. I expect we will see increased foundation interest in, and support for, studies on aging and the elderly and healthcare, as our Baby Boomers age,” professes Dewey.

While many foundations fund only specific issues as prescribed by their charter or some other guiding purpose, some “funding decision-makers, thankfully, dance to their own tune,” according to Dewey.

“Another trend that seems to be emerging is that the political and media environment seems to drive program innovation at foundations faster than it had been,” Warren says. “The rise in responsiveness to the issue of climate change, for example, has been rather swift at several large national foundations within the last two years.”

11. More foundations

Although foundation grants tend to be a relatively small piece of the aggregate fundraising pie—about 12% of philanthropy in the U.S. last year—and that payout percentage does’t appear to be growing anytime in the near future, one bit of good news could be that the overall number of foundations may increase, thus generating more revenue possibilities.

“In sheer dollar amounts, we believe the amounts that foundations give will grow, in part because there are more foundations today than in years past,” says Warren.

A parallel trend is an expected increase in the number of foundation-like donor-advised funds.

Public policy expert Eisenberg sees an even different trend as this century unfurls.

“If projections about the future transfer of vast wealth to foundations and charities are accurate,” he asserts, “we will see the rise of mega-foundations—perhaps 50 to 75 Gates [Foundation]-sized entities, run by two or three family members and largely unaccountable. This is a serious danger of our democratic institutions: two or three people deciding how to spend billions of dollars without public discussion or a political process.”

“Why should almost all foundations be run solely by society’s elites—the wealthiest citizens and most highly paid professionals? The challenge will be to start democratizing foundation structures,” notes Eisenberg, who advises the elimination of “self-dealing” and “excessive compensation” among foundations as we embark on the next decade.

12. More funding for advocacy

One of the other trends simmering about foundations is an incremental increase in their willingness to fund more controversial, advocacy-oriented programs.

“Foundations’ support for advocacy and their desire to catalyze action on issues beyond mere funding of programs are also on the rise,” says National Geographic’s Warren.

Eisenberg concurs: “A small but growing number [of foundations] are giving money to advocacy and activist activities.”

Unfortunately, he scolds, “foundations still are playing it safe, focusing on non-innovative and non-risk-taking programs and projects. Things are slowly changing for the better, but progress is slow.”

13. Operating foundations

Warren also points out that some foundations have begun pushing boundaries beyond their typical role of sponsoring financial projects. “Some foundations,” he says, “have become ‘operating foundations,’ running their own charitable programs and directing more of their resources to those programs and less to non-affiliated organizations.”

14. Major philanthropies in Asia

Finally, Warren is witnessing a rise in giving from non-U.S. foundations that differ in character from their American counterparts. As he says, “We are seeing now the emergence of major philanthropies in Asia that are and will have a significant influence on the landscape. Two things are remarkable about these new groups. First, they seem to have evolved directly past some of the staples of U.S. philanthropy, such as the major endowment and building campaigns and the premium placed on recognizing individuals by name. More importantly, what they are choosing to do is to tackle large-scale and systemic problems with major social change initiatives.”

Rob Blizard is Director, Gift Planning at George Washington’s Mount Vernon, P.O. Box 110, Mount Vernon VA 22121, phone (703) 799-8652, email roberteblizard@yahoo.com.

9. Too much mail?

By Jeff Brooks

I get variations of this piece of mail from the ACLU several times a year:

I've been getting these since I sent a donation during the Bush I administration. Bush Senior had tried to smear his election opponent by calling him a “card-carrying member” of the ACLU—which, as far as I was concerned, was a dynamite recommendation of the organization.

That was about 20 years ago. The ACLU has told me literally hundreds of times that this is my last chance to renew my membership. My kids have spent their entire lives seeing these urgent final messages in the mailbox.

Do you think anyone in my household remotely believes that my last chance to join the ACLU is now, or ever? And how might our collective cynicism affect our faith in the organization's truthfulness in general?

If you get right down to it, the ACLU has spent a fair amount of money to undermine its brand among members of the Brooks household.

I'm in the biz, so I understand what's really happening, as do others in my family. (The talk in our home is mainly about the ways of direct response fundraising.)

But what about normal people? How many see the ACLU as a laughable wolf-crier? Or unrepentant liar?

I don't know what the answer is. If the ACLU were to ask me what they should do, I would not tell them to abandon the control, which I assume this piece is. I'd tell them to test against it. Which I'm pretty sure they're already doing.

But are they accidentally trashing their brand and reputation? And maybe helping take down direct mail fundraising in general with it?

Jeff Brooks writes the daily Donor Power Blog for MerkleDomain.