Does High Inflation Make You Fear for Your Fundraising Efforts?

There’s no doubt. Nonprofit organizations face fundraising challenges that they have not seen for decades. Nevertheless, opportunities remain even as the latest economic news has not been good:

Consumer Sentiment: The University of Michigan Consumer Sentiment Index for March 2022 reveals that consumer confidence has plummeted 25.5 percentage points compared with March 2021. At 59.4 percent, the consumer sentiment index now stands at the lowest point in two decades. This is not surprising given economic conditions. Unfortunately, it means people will now be especially careful with their personal finances.

Uncomfortable Inflation: Treasury Secretary Janet Yellen predicts another year of “very uncomfortably high” inflation. In March 2022, the annualized inflation rate stands at 7.9 percent, a 40-year high. What’s even more troubling is that by calculating the Consumer Price Index now, using the same formula used in 1980, the inflation rate would stand at over 15 percent! The following chart from Shadow Stats illustrates this point:

Consumers Face Increased Expenses: The average American household is facing nearly $300 in higher monthly expenses due to inflation, according to Moody Analytics. Households in rural areas may face even greater monthly costs as fuel prices rise. This will likely negatively affect current philanthropic giving. While individual charitable giving usually comes in around two percent of disposable income, according to Giving USA, we’re now seeing the erosion of household disposable income.

Inflation May Not be Our Only Problem: Inflation is not our only reason for economic concern. Former US Treasury Secretary Lawrence Summers has not just expressed concern about inflation, he’s worried that US Federal Reserve policies dealing with inflation could lead the economy into a recession.

Despite all of the bad economic news lately, we’re fortunate that not all of the news is bad:

3 Reasons Why Your Year-End Fundraising Will Fail

Most charities raise more money during the last quarter of the calendar year than any other quarter. However, your year-end fundraising effort will fail to reach its potential unless you avoid the following three mistakes:

1. Failure to Tell Supporters What Their Previous Donations Have Achieved

Donors have choices about where they can give their money. Not surprisingly, they want to know that their giving is having a positive impact. If it’s not, or if they don’t know whether it is, they’ll take their support elsewhere. Chances are that your charity’s mission is not entirely unique. In other words, donors can fulfill their philanthropic aspirations by giving to another organization.

A few years ago, the Charities Aid Foundation conducted a survey that found that 68 percent of respondents said that they feel it is important for them to have evidence about how a charity is having an impact. Unfortunately, many donors still complain that the only time they hear from charities is when they want money. Make sure your charity doesn’t make that mistake.

Make sure supporters and potential supporters know how your nonprofit organization is putting donations to work. Let them know what supporters are achieving. Share impact stories in your organization’s print and electronic newsletters, annual reports, special events, website, and special gratitude mailings.

You should even highlight donor impact in your appeals. Consider this: I tested a straightforward appeal against an appeal that highlighted donor impact before asking for a gift. The impact appeal generated 68 percent more revenue! So, make sure people know that their contribution will make a difference by showing them the positive effect past donations have had and by telling them how their donation will be put to work.

 2. Failure to Ask for Planned Gifts

As the end of the year approaches, your organization is facing fierce competition for an individual’s checkbook. Over the next few months, people will be deluged with charitable-giving requests. Furthermore, people will be spending large sums on holiday gift giving, entertaining, and vacationing.

However, a donor’s checkbook is just one potential resource. Many donors can donate appreciated stock, contribute from a Donor-Advised Fund, and give from their IRA. Virtually anyone can include your charity in their Will or designate your charity as a beneficiary.

Make sure you don’t assume that supporters automatically know all of the various ways they can give. Instead, make sure they know by promoting such giving opportunities. Tell stories of other donors who have given in those ways, and not just the mega-donors. Ask prospective donors to consider such gifts. And make it easy for your donors to engage in planned giving. Provide them with clear instructions on your website and in appeals that highlight a given planned gift opportunity.

To read what the experts, including myself, say about planned giving, checkout Jeff Jowdy’s article in Nonprofit Pro magazine.

Fantastic News and Opportunity for the Nonprofit Sector!

The nonprofit sector received a major piece of good news at the end of July. American Gross Domestic Product in the second quarter of 2018 grew at the annualized rate of 4.1 percent. This represents the economy’s fastest growth rate since 2014. GDP growth in the first-quarter was a healthy, though unremarkable, 2.2 percent.

I don’t really care if you love or hate President Donald Trump. I’m not making a political statement. I’m simply reporting on an economic fact that has profound implications for nonprofit organizations.

The news is fantastic for charities because overall-philanthropy correlates with GDP. For more than four decades, philanthropy has been between 1.6 and 2.2 percent of GDP. In 2017, philanthropy was once again at 2.1 percent (Giving USA). This means that when the economy grows, we can expect growth in charitable giving.

Think of it this way: For more than 40 years, the nonprofit sector has received about a two percent slice of the economic pie. It’s safe to say that that approximate proportion will continue. So, if the economic pie becomes larger, that two percent slice becomes larger as well.

While I’m oversimplifying, my fundamental point is sound: When the economy grows, so does philanthropy.

Some economists and commentators believe the robust GDP growth rate is not sustainable. However, if the impressive economic growth continues, or even if growth continues at a more moderate pace, we can still expect 2018 to be a good year for charitable fundraising.

Given the positive economic environment, you have an opportunity to successfully raise money for your organization. But, it’s up to you to seize that opportunity while the positive economic environment lasts.

Here are 10 things you can do to raise more money while the economy is good:

1. Hug your donors. Ok, maybe not literally. However, you do need to let your donors know you love and appreciate them. Do you quickly acknowledge gifts? You should do so within 48 hours. Do you effectively thank donors? You should do so in at least seven different ways. You should review your thank-you letters to ensure they are heartfelt, meaningful, and effective. Have board members call donors to thank them in addition to your standard thank-you letter.

2. Tell donors about the impact of their gifts. Donors want to know that their giving is making a difference. If their giving isn’t making a difference or they aren’t sure, they’re more likely to give elsewhere. So, report to your donors. Tell them what their giving is achieving and that their support is being used efficiently.

3. Start a new recognition program. One small nonprofit organization I know started a new, special corporate giving club. CEOs of the corporate members are placed on an advisory board, receive special recognition, and are provided with networking opportunities. This new recognition program generated over $50,000 in just a few months. While enhancing existing recognition efforts is beneficial, starting a new recognition program can yield significant results.

4. Ask. Your organization is providing important services. It needs money. Give people the opportunity to support your worthy mission. When you ask for support, just be certain not to limit the ask to cash gifts. Research shows that organizations that receive non-monetary donations (e.g., stocks, bonds, personal property, real estate, etc.) grow significantly more than organizations that receive only cash contributions. Partly as a result of the new income tax code, the number of Donor-Advised Funds has grown significantly. So, make it easy for your supporters to give from their DAFs.

3 Powerful Ways to Get Your Monthly Donors to Give More

A few weeks ago, I published the post “How to Get Last Year’s Donors to Give More this Year.” Guest blogger Joe Garecht shared some great advice for increasing giving. However, the post did not specifically address the issue of monthly giving. That led to a reader comment.

Larry Little, President of Guardian Angel Basset Rescue, raised some important questions:

Our revenues are in the $300k range but approximately 30% of that comes through our monthly giving program. My question is about asking monthly donors to increase their amounts. How often should that be done? And should you segment your list and ask that segment every 18 months?”

First, I want to congratulate Little for having a robust monthly-giving program. Well done!

Second, I thank Little for inspiring this week’s post. While I could have given him a quick, brief response, I realized the topic deserves more attention and that it would likely be of interest to many of my readers. So, I invited expert Erica Waasdorp, President of A Direct Solution and author of the best-selling book Monthly Giving: The Sleeping Giant, to share her wisdom to help us better understand how to inspire greater giving from monthly supporters. I thank her for her insights:

 

It’s wonderful to see how much the focus is shifting to monthly giving, and it’s starting to really pay off for nonprofit organizations. Here are just two recent statistics from the most recent Blackbaud Luminate Online Benchmark Report:

Expanding relationships with existing supporters was the name of the game this year as we saw a 20.4% growth in sustainer revenue.”

Viewing online revenue as one great big pie, we saw a larger slice of the pie—8.4% more—coming from sustainer gifts in 2017.”

Today, I’m not going to write about how to convert your donors to give monthly. Today, I’m going to focus on how to generate more money from your existing monthly donors.

Just because they’re now giving more money than as single-gift givers doesn’t mean it ends there. Oh no! There are three ways you can actually ask your monthly donors to give more money:

1.      Ask for a monthly upgrade.

2.      Ask for an additional gift.

3.      Ask for a legacy gift.

Ask for a monthly upgrade.

People typically ask me two questions: A) How soon after a donor starts giving monthly can I ask for an upgrade? B) How often can I ask for an upgrade?

Before I address the timing questions, let me just point out that donors upgrade because they have been stewarded effectively. Totally true. And this also pertains to monthly donors. That’s why I always “hammer” on the importance of sending a hard-copy thank-you recognition letter even if the monthly donor came in online.

So let’s assume that you’ve done this part right. And let’s assume that your donor gives monthly through his or her credit card. And let’s assume that you send the donor a quarterly newsletter with some great stories and updates on how the donor’s giving makes a difference.

I’ve seen organizations that started to upgrade right away. I’ve seen organizations that started to upgrade three months after a monthly donor joined. Frankly, I think that’s just too soon. Yes, you may get some donors to upgrade when you ask, but I think you’d also come across as much greedier than you may wish to. That could alienate some supporters.

Your donor has just started to get used to giving monthly. They’re just getting acquainted with your stewardship efforts. They have just started to realize the convenience of giving this way.

You pay taxes typically once a year; you update your budget once a year, so I suggest asking for an upgraded amount once a year, ideally between 10 to 12 months after the donor gave monthly for the first time. That’s when you can make a legitimate case for the increase in cost for xyz service, and ask the donor if he can “give just a few dollars more a month” to help the children/client/animals.

And, as Joe Garecht mentioned in his earlier post, the four elements of asking monthly donors to increase their monthly gift are indeed:

Happy Days are Here Again … for Now

Charitable giving in the USA reached a record high for the second year in a row, according to the newly released Giving USA 2016: The Annual Report on Philanthropy for the Year 2015, a publication of Giving USA Foundation, researched and written by the Indiana University Lilly Family School of Philanthropy.

While the news is good, storm clouds are gathering on the horizon. You need to hear both the good and the troubling news. I’ve tried to distill the most relevant, overarching information for you and provide you with some tips to help you be more successful moving forward. While I would normally advise against sharing lots of statistics, I nevertheless think you’ll appreciate these numbers.

Researchers estimate that giving totaled $373.25 billion in 2015.

That new peak in contributions represents a record level whether measured in current or inflation-adjusted dollars. In 2015, total giving grew 4.1 percent in current dollars (4.0 percent when adjusted for inflation) over 2014.

The revised inflation-adjusted estimate for total giving in 2014 was $359.04 billion, with current-dollar growth of 7.8 percent, and an inflation-adjusted increase of 6.1 percent.

Charitable contributions from all four sources — individuals, charitable bequests, corporations, foundations — went up in 2015, with those from individuals once again leading the way in terms of total dollar amount, at $264.58 billion. This follows the historical pattern seen over more than six decades.

Giving to eight of the nine nonprofit categories studied grew with only giving to foundations declining (down 3.8 percent in current dollars, down 4.0 percent adjusted for inflation).

Giving to the category of International Affairs — $15.75 billion — grew the most (up 17.5 percent in current dollars, up 17.4 percent adjusted for inflation).

Giving to the category Arts/Culture/Humanities — $17.07 billion — grew the second most (up 7.0 percent in current dollars, up 6.8 percent adjusted for inflation).

While the numbers are terrific, the story is really about more than that. Giving USA Foundation Chair W. Keith Curtis, president of the nonprofit consulting firm The Curtis Group, says:

If you look at total giving by two-year time spans, the combined growth for 2014 and 2015 hit double digits, reaching 10.1 percent when calculated using inflation-adjusted dollars. But, these findings embody more than numbers — they also are a symbol of the American spirit. It’s heartening that people really do want to make a difference, and they’re supporting the causes that matter to them. Americans are embracing philanthropy at a higher level than ever before.”

While the 2015 giving news is certainly positive, there are four points that indicate that the good news might be short lived:

How Can Nana Murphy Make You a Better #Fundraising Professional?

[Publisher’s Note: This post is part of a series kindly contributed by guest authors who attended the 2016 Association of Fundraising Professionals International Fundraising Conference. These posts share valuable insights from the Conference. This week, I thank Erica Waasdorp, President of A Direct Solution, for highlighting the seminar “From Ireland with Love: A Five-Year Case Study on Donor-Centric Fundraising for Retention, Revenue, and Results.”]

 

What does Nana Murphy have to do with great fundraising results?

The answer: ABSOLUTELY EVERYTHING!

Who is Nana Murphy?

So, who is Nana Murphy? Is she a successful fundraising professional? Is she a leading fundraising consultant? Is she a donor advisor? Is she a fundraising or nonprofit management professor? Is she a philanthropy researcher? Do you give up?

Nana Murphy is your typical donor.

You need to get to know your organization’s Nana Murphys. You need to understand why she supports your organization. You need to give her what she needs from your organization. In short, you need to be donor centered. But how?

The AFP International Fundraising Conference session “From Ireland with Love” not only stressed the need to be donor centric, the presenters shared dozens of practical tips to show you exactly how you can be more donor centered and, therefore, more successful.

The speakers know what they’re talking about; together, they increased the amount of money that one prominent Irish charity raised by 1100 percent in just five years!

Erica Waasdorp, President of A Direct Solution and author of Monthly Giving: The Sleeping Giant, attended the session and shares some of the tips she thinks you’ll find particularly valuable. At the end of the post, I provide links for you to download two free handouts from the session that are full of dozens of additional tips and real-world examples that you must checkout.

Here are the highlights Erica wants to share with you:

 

I attended “From Ireland with Love,” presented by Denisa Casement, CFRE, Head of Fundraising, Merchants Quay Ireland, Dublin;  Lisa Sargent, Lisa Sargent Communications, Safford Spring, CT; and Sandra Collette, S. Collette Design, Stafford Spring, CT.

Denisa is American, originally from Arizona, and she moved to Ireland in 2008. Boy, did she make an impact on this Irish homeless charity since then, taking the revenue from 250,000 Euros to 3 Million Euros just five years later.

For me, as a traditional “old school” direct-marketing fundraiser, this was a fabulous session!

It really honed in on those fundamentals we should all know and use in our fundraising every day. Especially now, where we all get so distracted by the next new electronic approach — the next new shiny thing as Tom Ahern calls it — let’s not forget that it’s not about us, it’s all about the donors.

So, the speakers presented a life size Nana Murphy, the typical average donor in your donor base. She still reads direct mail and writes checks. She needs reading glasses and she loves honesty, emotion and authenticity. So, the first thing you need to do when you think of how best to approach donors like her, is forgot about what you think and feel. Instead, consider Nana in everything you do, and you’ll be successful. I promise!

I don’t have space here to provide you with all of the tremendous practical tips and guidelines from the session (see the handout links at the end of this post), but here are 11 that stand out. If you follow these rules, you’ll absolutely be able to raise more money!

Know your metrics. So many fundraisers don’t know their own numbers: response rate, average gift, cost to raise a dollar, lifetime value, and retention rate, to name a few. Managing your fundraising program is considerably more difficult if you don’t know the key metrics.

Use the Casement Quotient^tm. I love this. Denisa introduced the Quotient: Annual fundraising income divided by 52 weeks in a year divided by the number of hours in your work week. For example, in 2015, her fundraising team raised $1,627 per hour. So, if someone comes to you to ask you to do something, that’s not going to at least raise that amount of money, you probably shouldn’t be doing it! What a clever way to say no to the next “sit in a booth at a fair for a two day event and you’ll reach 100 people.” Consider finding some volunteers instead and divvy up the time. The Casement Quotient^tm is a helpful tool when it comes to setting priorities.

Get rid of silos, both in how you organize your departments and your donors. It all works better if you and your colleagues know what’s going on. There’s no need to “hide” results or think that someone does not need to know about how your fundraising is doing. Remember, the objective is not for one person to do well; instead, the objective is for the organization to do well.

Mail enough! I still see so many organizations leave lots of money on the table. They simply do not ask for gifts often enough. As long as your next mailing generates more money than it costs, you can mail more. MQI mails four appeals a year and four newsletters. Absence does not make donors’ hearts grow fonder!

#Fundraising Moneyball: Track 3 Numbers that will Make You a Champ

[Publisher’s Note: This post is part of a series kindly contributed by guest authors who attended the 2016 Association of Fundraising Professionals International Fundraising Conference. These posts share valuable insights from the Conference. This week, I thank Carrie Horton, Director of Content and Education at Kindful, for highlighting the seminar “Fundraising Moneyball: The Only Metrics that Matter in Digital Fundraising.”]

 

While freezing temperatures continue to chill many in the USA, the boys of summer have nevertheless returned for the start of the 2016 baseball season. What better way to mark the occasion than drawing a parallel between the baseball book and movie Moneyball and fundraising?

Okay, enjoying a hotdog and beer at a ballpark would be a better way to celebrate the start of the new baseball season. But, the second best way is to explore some of the highlights from Jeff Stanger’s session at the AFP International Fundraising Conference: “Fundraising Moneyball: The Only Metrics that Matter in Digital Fundraising.”

The book and movie Moneyball presented the true story of a revolutionary approach to baseball introduced by Billy Beane, the General Manager of the Oakland A’s. With a lean budget, he relied heavily on statistics, rather than personalities, to build a winning baseball team.

The Moneyball lesson for your nonprofit organization is that by leveraging statistical data, you can build a winning development program.

So, what statistics should you track? What goals should you set?

Carrie Horton, Director of Content and Education at Kindful, has identified three key points from the seminar that you need to know. Kindful is a nonprofit CRM software that offers powerful online fundraising tools, intuitive donor management, and comprehensive reporting analytics in one centralized data hub. Here’s what Carrie found most valuable from Stanger’s presentation:

 

If you’re anything like us at Kindful, when you hear the word “moneyball,” you think of Michael Lewis’s bestselling book and Brad Pitt’s killer acting. But thanks to the AFP International Fundraising Conference and Jeff Stanger’s impeccable session, we’ve got a new definition. Stanger’s session – “Fundraising Moneyball: The Only Metrics that Matter in Digital Fundraising” – sets forth a simple and straightforward digital strategy for nonprofit fundraising success. According to this renowned speaker and fundraising consultant from Cause Geek, it’s not rocket science, it’s statistics.

Stanger showed us that a successful digital fundraising strategy isn’t about trending on Twitter or gaining the most “likes” on Facebook. Instead, he urges nonprofits to focus on small steps taken with the insight of data and metrics behind them. Sustainable growth, Stanger says, comes through clear and simple goals that are easy to measure, quick to show return, and effectively reveal what works and what doesn’t.

What are the three goals that Stanger suggests you focus on? Again, Stanger’s recommendations are straightforward:

1. Increase the number of subscribers to email
2. Increase the number of volunteers
3. Increase the number of monthly givers

Seems simple enough, right? These aren’t principles that are overly complex or hard to define. They’re straightforward and easy to measure. Even smaller nonprofits with limited funds and limited resources can achieve great success through a series of small victories.

But, where do you start? Well, if Stanger’s argument is that these goals are important because they are measurable metrics, then it only makes sense to start with metrics as well. We might be a bit biased (being the donor management provider that we are), but Kindful thinks that clean data and insightful metrics are at the heart of every successful digital fundraising strategy. However, don’t take our word for it. Here’s a quick breakdown of Stanger’s three goals and how an integrated CRM can help make you a fundraising champ:

Goal #1: Increase the number of subscribers to email

In a world where 95 percent of consumers use email and 91 percent check it at least once a day, the importance of growing your email marketing and distribution list is a no-brainer. In fact, Stanger mentioned that 75 percent of social media users still say that they prefer email communication! Email addresses provide you with a direct link to your audience and, when used wisely, help you cultivate donors who will be invested in your organization for years to come.

Want to build your email distribution list?

Pull a report to find out how many email addresses you have in your donor database. Integrate with your email-marketing provider to pull in stats related to how many people open your emails and click through them. Use data to understand what’s working (and what isn’t) and refine your strategy to send better emails and increase engagement. In other words, make sure your emails deliver value to recipients.

Goal #2: Increase the number of volunteers

Did you know that nearly 80 percent of volunteers donate to charity, compared to only 40 percent of non-volunteers? (Visit VolunteeringInAmerica.gov for more information.) It makes sense – those who are the most engaged with your organization will be the most likely to give financial support as well. And it’s not just that volunteers are most likely to donate…they’re most likely to raise money for your organization as well! Especially with the rising popularity of crowdfunding platforms, volunteers who engage through peer-to-peer fundraising don’t just bring in more money, they expand your audience.

Furthermore, over time, many volunteers will choose to donate in significant ways including through planned giving.

Want to build your volunteer base?

Are You Smarter than a Fourth Grader?

A few weeks ago, I got to spend time with my niece Nicole and nephew Evan who were visiting Philadelphia before the start of the new school year in Florida. They’re wonderful kids, and it was great seeing them.

My nephew, Evan.

One evening when 9-year-old Evan and I were hanging out, I decided to ask him an odd question to see where it might go:

If you wanted someone to give you money, what would you do?”

Evan, who just entered the fourth grade and has no fundraising experience, replied:

I’d ask them.”

Bingo! Evan instinctively knows one of the fundamental rules of fundraising: If you want donations, you have to ask for them.

So, are you smarter than a fourth grader?

Since you’re reading this post, I’m going to assume you know the general importance of the ask in the fundraising process. However, knowing and doing are two different things. So, let me ask you a few more questions:

Do you ask for planned gifts?

While 88.7 percent of people surveyed say that it’s appropriate for a nonprofit organization to ask for a legacy gift, researchers found that only 22 percent of those over the age of 30 have been asked. In other words, there are a huge number of people who are willing to be asked for a planned gift but who are not.

Even among those charities that do ask people to make a planned gift, the ask is reserved for a very narrow group of prospects that might include major donors, board members, and people who have requested planned giving information. Those asks are most often made during face-to-face visits.

On the other hand, wise organizations also use direct mail and the telephone to reach out to a broad number of prospects to ask them to make a planned gift commitment.

One smart nonprofit organization that has successfully used direct mail to ask for legacy gifts is the Natural Resources Defense Council. They did two mailings involving a total of 50,000 pieces that generated $8.5 million in bequest commitments. You can see a sample of the mailing by clicking here.

A university in Texas targeted 7,000 alumni with a mail promotion for Charitable Gift Annuities, following up direct-mail-generated leads with phone calls that resulted in $730,000.

An orchestra in the Pacific Northwest implemented a coordinated mail/phone campaign involving 2,200 prospects in an effort that produced an estimated $2 million in bequest expectancies.

If your organization wants more planned gifts, you need to ask more people to give. While face-to-face asks will always be important, you can ask far more people by using direct mail and the phone as well, just like your organization does for the annual fund.

You can find more details about the examples I’ve cited, additional examples, and helpful tips in my award-winning book Donor-Centered Planned Gift Marketing.

Do you ask supporters to enroll in a monthly-giving program?

In 1989, I predicted that virtually every charity would have a monthly-giving program within five years. Sadly, I could not have been more wrong. I shouldn’t have been, but I was. Now, more than a quarter-century later, shockingly few charities ask supporters to give monthly.

A great way to enhance your organization’s donor-retention rate while upgrading the amount of support from donors is to ask donors to give monthly.

Some of my friends and I believe so strongly in the power of monthly giving that we participated in this short, light-hearted video on the subject:

If you’re not asking your supporters to give monthly, you’re organization is missing a great opportunity. For powerful advice on how to run a monthly-giving program, checkout Harvey McKinnon’s book Hidden Gold, and Erica Waasdorp’s book Monthly Giving: The Sleeping Giant.

Do you ask donors to upgrade their support?

Special Report: Watch This Fun Video about Monthly Giving

[Publisher’s Note: “Special Reports” are posted from time-to-time as a benefit for subscribers and frequent visitors to this blog. “Special Reports” are not widely promoted. To be notified of all new posts, including “Special Reports,” please take a moment to subscribe in the right-hand column.]

 

Experts have been telling nonprofit organizations for decades to start a monthly giving program.

Have you listened? Does your nonprofit organization have a monthly giving program?

If you do run a monthly giving program, great! Please share a comment below about the effectiveness of your program or what advice you have for others.

If your organization does not have a monthly giving program, why not? Please use the comment section below to let me know.

The first time I recommended monthly giving programs was way back in 1989. In an article I wrote for The Donor Developer newsletter, I even predicted that virtually all charities would have a monthly giving program within five years. Well, I couldn’t have been more wrong. I shouldn’t have been wrong, but I was. Now, 26 years later, I’m still amazed at how many organizations have failed to adopt a monthly giving program.

As it turns out, I’m not alone in my frustration. A number of other fundraising experts share my consternation:

• Harvey McKinnon, author of Hidden Gold
• Gail Perry, author of Fired-Up Fundraising
• Erica Waasdorp, author of Monthly Giving: The Sleeping Giant

Recently, the team at Sumac, the nonprofit software company, invited the four us to share our thoughts about monthly giving in a special video. In this two-minute, light-hearted presentation, we come clean about how we feel when you ignore our advice to start a monthly giving program. We also tell you, one more time, why you must start one today. Watch it now:

More on the Art of Sending Appeals

In my last blog post, “Is It Better or Worse to Send More Appeals?,” I acknowledged that sending multiple appeals to donors can raise more money for your organization, if you do it right. However, I also recognized that determining the correct number of appeals, raises more questions than answers.

Some organizations are not appealing enough while others are sending too many solicitations. As you might imagine, the post inspired a lively conversation in the comments section and in a number of discussion groups on LinkedIn.

One of the last comments I received came from Erica Waasdorp, President of A Direct Solution and author of Monthly Giving: The Sleeping Giant. Her insights and recommendations were on target and excellent. Because I did not want readers to miss what Erica had to say, I decided to share her message with you as a guest blog post. In turn, she was kind enough to add some additional material from her own blog:

 

 

I love this discussion. Super!

Whenever I present a webinar, I ask the question: how many times do you appeal to your donors. The answer typically is once, twice, maybe four times a year, if you’re lucky. Very rarely is it more than that. Now, these are usually the smaller organizations.

When I ask those same nonprofits what their retention rates are, they’re usually around the median, 43 percent.

When I ask those same nonprofits what they do with donors who just gave, the answer typically is, we’ll take those out of the next mailing of course.

WRONG!

When I ask them how deep they mail into their lapsed donors, they typically cut that off at three years. In other words, if someone has not responded in three years, they’ll never receive mail again.

WRONG!

I have extensively tested the following over the years:

1.  Always include those donors who just gave to you in the next appeal. Many of them will give again, especially if you have a great appeal that hits on all cylinders, namely, you thank them, you show them the impact of their donation, you have a great story and a good call to action.

I’ve seen, time and time again, that this is the best responsive group. Recency, Frequency Monetary Value has not become the standard in segmentation for nothing.

2.  Always include your lapsed donors in your appeal at least once a year, preferably in the fall/holiday appeal time frame. With the National Change of Address required by the post office, you’ll know you’re mailing to mailable addresses.

I’ve seen time and time again that this group responds at higher levels than a prospecting/acquisition campaign.

Michael’s numbers are correct: for acquisition of new donors, in fact, in some cases they might even be a bit worse, like perhaps $2.00 to $3.00 to raise $1.00.

BUT, when you bring these new donors in and you mail them as donors, you’re typically looking at $0.20 to raise a dollar. That means, you’re investing $1,000 to get $5,000 back. Where do you find that in the stock market?

Not to mention the opportunity to convert these donors to give monthly and upgrade them (and certainly increase their retention rates further that way, leading up to the ultimate gift down the road since monthly donors are seven times more likely to leave you in their will).

What I typically see with small organization: if your appeals don’t work, you may not mail enough, or not mail to the right donors, or you may have spent too much money on your direct mail and it’s not looking like a letter any longer.

Direct mail letters still work, but it’s all about which donors you target.

And if you have the right stories and the right mix of gratefulness and love for your donor, you can send them as many appeals as you’d like and they’ll respond every time.

Speaking of monthly donors, a question fundraisers often ask me, is:

Can I send appeals to my monthly donors?”