Posts tagged ‘nonprofit’

February 27, 2015

Tom Ahern: 3 Questions Your Case for Support Must Answer

Nonprofit organizations spend hundreds of hours and thousands of dollars to produce their Case for Support, the document that outlines the organization’s activities and explains the need for philanthropic support.

ConnectionBut, are those hours and dollars well spent? If your organization is typical, the answer is: probably not.

That’s why communications expert and author Tom Ahern, of Ahern Communications, will be sharing his wisdom at the upcoming Association of Fundraising Professionals International Fundraising Conference (Baltimore, March 29-31, 2015). His session, “Fabulous Case! Building One,” will reveal the secrets for creating a powerful document that can actually help you raise more money.

Ahern recently shared with me some of the tips he’ll be presenting in greater detail at the Conference.

Did you know that every Case for Support should answer three fundamental questions? Ahern identifies those questions:

1. Why us? You need to answer this question by explaining what your organization does that is so uniquely wonderful that the world should want more of it and support its new plans.

If you need help answering the question, just imagine that your organization, project, program, idea, mission or vision has gone away. What difference would that make?

2. Why now? You need to explain why your campaign needs to happen immediately, perhaps showing people what has changed or the reason for sudden urgency.

In other words, your answer to this question must demonstrate why your project(s) is relevant to the person whose support you seek.

3. Why should the prospective donor care? Donors have many options for directing their philanthropic support. Often, there are even many organizations focused on similar missions. You need to help prospective donors understand why they should care about your organization and your project(s).

The key to answering this question is thinking about the impact your organization will have once it’s project(s) is fully funded. Remember, your campaign is not just about funding your organization; it’s about what your organization will accomplish.

When working to develop a fabulous Case for Support, Ahern says we must remember:

February 20, 2015

Building Donor Loyalty: What’s New?

Among first-time donors to nonprofit organizations, the median rate of attrition is 77 percent! In other words, more than three-quarters of all new donors to a charity walk in the front door and promptly exit out the back door. That’s the appalling finding of the Association of Fundraising Professionals Fundraising Effectiveness Project.

First Time Donor RetentionOver the past few months, the issue of high nonprofit Donor Attrition rates has received increasing attention. I’ve even put a spotlight on the issue with the following posts:

As I worked on those articles, I couldn’t help but wonder: What’s new and effective that can help us build donor loyalty? Well, we’ll soon find out.

Adrian Sargeant, PhD, Director of the Centre for Sustainable Philanthropy at Plymouth University, will be presenting “Building Donor Loyalty: What’s New?” at the AFP International Fundraising Conference (Baltimore, March 29-31, 2015).

Sargeant has been passionately conducting donor loyalty research for two decades. Sargeant and his colleague Elaine Jay wrote Building Donor Loyalty: The Fundraiser’s Guide to Increasing Lifetime Value.  Tom Ahern, the internationally recognized communications expert at the helm of Ahern Donor Communications, has described the text as: “Transformational.” I cited this informative book in my post: “Avoid Making Faulty Assumptions about Donor Loyalty.”

In his upcoming session at the AFP International Conference, Sargeant will demonstrate how even small improvements in loyalty, in the here and now, translate to whopping improvements in the lifetime value of a fundraising database.

Cover- Building Donor Loyalty -- click to see book at AmazonFor example, he has found that a 10-percentage point improvement in retention can lead to a 200 percent improvement in the lifetime value of the fundraising database!

Sargeant will also look at what drives loyalty, drawing on lessons from both the commercial and the voluntary sectors, including work on the big three drivers of loyalty: satisfaction, commitment and trust. He will also explore new work on loyalty that looks at the role of donor identity and the extent to which donors identify themselves in part through their support of a nonprofit.

Sargeant will show how the concept of identity interacts with the other three big drivers of loyalty and which of all these factors offers the greatest potential to the sector to bolster giving and grow long-term support.

Sargeant told me recently:

February 17, 2015

The Greatest Idea for Retaining and Upgrading Donors

Every charity wants more money from donors. If only existing donors would write larger checks, become monthly supporters, make a major gift, and/or commit to a planned gift, there would be less pressure on the fundraising staff and the organization would be able to do more to fulfill its mission.

But, how can you raise more from your donors if they do not stick around?

Nationally, the median nonprofit organization finds that its donor retention rate is just 43 percent! Among first-time donors, the retention rate is an obscenely low 23 percent! (The stats come from the AFP Fundraising Effectiveness Project.)

Donor Retention 20013-14The good news is that if you can increase your nonprofit organization’s donor retention rate by just ten percentage points, you could see an increase of up to 200 percent in donor lifetime value, according to researcher Dr. Adrian Sargeant. In other words, if you retain more donors, they will increase their giving and some will even encourage others to support your organization as well.

Unfortunately, increasing your donor retention rate won’t happen all by itself. You need to make it happen. So, what is the simplest, most effective tactic for accomplishing this?

Telephone by laerpel via FlickrDo you see that shiny box on your desk? It’s probably black with some flashing lights, and it’s plugged into the wall. It’s a telephone. Pick it up and call your donors to thank them for their support. While you’re at it, find out why they support your organization.

Yes, it really is that simple. CALL YOUR DONORS!

Multiple research studies have proven that thank-you calls are a powerful donor retention tactic. For example, Penelope Burk, in her book Donor Centered Fundraising, reports:

•  95 percent of study donors stated they would appreciate a thank-you call within a day or two of the organization receiving their donation.

•  85 percent said such a thank-you call would influence them to give again.

•  84 percent said they would definitely or probably give a larger gift.

Burk went on to report, when donors were tracked after 14 months, the group that received a thank-you call gave 42 percent more on average compared to similar donors who did not receive a thank-you call. During the renewal cycle, those who received a thank-you call were 39 percent more likely to renew their support.

Here are some tips to make your thank-you calls effective:

February 13, 2015

Special Report: House of Representatives Approves IRA Rollover…Again

[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 usually not widely promoted. To be notified of all new posts, including “Special Reports,” please take a moment to subscribe in the right-hand column.]

 

The US House of Representatives has passed a bill to renew and make permanent the IRA Rollover, a measure long-supported by the nonprofit sector. Congress approved the bill by a vote of 279-137. Of note, 39 Democrats joined with the Republican majority to ensure passage by a wide margin. The bill now moves to the Senate.

Like a similar measure passed last year, H.R. 644 — Fighting Hunger Incentive Act of 2015 includes the following components:

  • The IRA Rollover provision,
  • Extension and expansion of the charitable deduction for contributions of food inventory,
  • Enhanced deduction for gifts of qualified conservation easements,
  • Modification of the excise tax on the investment income of private foundations.

Unfortunately, President Barack Obama has once again vowed to veto the bill if it reaches his desk in its present form. The House would need 290 votes to override a veto.

Making Sausages 4 by Erich Ferdinand via FlickrThe White House opposition to the bill might be because the bill does not contain any provision that would pay for the tax breaks it would provide. The Congressional Budget Office has concluded that the bill would add to the Federal deficit.

Last year, the Democrat-controlled Senate failed to take any action on the comprehensive charitable giving incentive measure passed by the House. Now that Republicans control the Senate, there is a greater expectation of action this year. However, it remains to be seen if the bill can be modified to garner presidential support.

February 10, 2015

5 Fundraising Tips Inspired by Taylor Swift

It’s that time of year once again: It’s Grammy Awards time!

Okay, I really don’t care. However, it got me thinking about the sustained success of mega-star Taylor Swift, one of the 2015 nominees. Leading into this Grammy season, Swift has already earned 7 Grammy Awards, 12 Billboard Music Awards, 11 Country Music Association Awards, and 7 Academy of Country Music Awards, among others. She has sold over 30 million albums and 80 million digital single downloads.

Taylor Swift

Taylor Swift

Despite the fact that Swift is a hugely successful music star, I’m not really a fan. Don’t get me wrong. It’s not that I dislike her music. It’s just that I’m not her target demographic. Nevertheless, I have enormous respect for her talent, work ethic, and philanthropic spirit.

A number of things have led to Swift’s success. We can model some of these behaviors to be even more effective fundraising professionals. Here are just five tips for you that are inspired by Taylor Swift:

1. Treat everyone well. Swift has a reputation for being nice. Unlike some stars, she doesn’t have to employ a public relations firm to try to convince the public she’s a good person. She genuinely is. The 25-year-old is a generous supporter of arts education, children’s literacy, the American Red Cross, and other charitable endeavors.

Swift is also a friendly neighbor. When neighbor and actress Hayden Panettiere needed to borrow a guitar, Swift loaned her one of her special instruments.

Swift is also good to service people, and does not take them for granted as so many other celebrities do. For example, during a tour stop in Philadelphia, she treated her entourage to a late-night, traditional southern Italian dinner at Ralph’s Restaurant. Swift tipped $500 on an $800 check, posed for photos with fans, and gave the chef a pair of tickets to the following night’s show so he could attend with his autistic 11-year-old son.

I’m sure Swift has her bad days. However, she seems to consistently strive to be kind to people, whether fellow celebrities or common folk.

As a development professional, you need to build solid relationships in order to achieve fundraising success. Being nice to everyone you encounter is a good place to start.

2. Develop your skills. Swift did not arrive on the planet a fully formed musician. She may have some natural talent. However, that natural talent would have gone to waste if it were not developed. From age 11, she took vocal and acting lessons. She seized performing opportunities at fairs, coffee houses, karaoke contests, and other less-than-glamorous venues to develop her skills.

As a development professional, you need to continue your education and look for opportunities to practice your skills. You should strive to become a stronger and stronger fundraiser. You’ll be of greater value to your organization, and you’ll enjoy greater career satisfaction. The upcoming AFP International Fundraising Conference is just one great educational opportunity.

January 30, 2015

Donor Retention: Time for a Change

[Publisher’s Note: From time-to-time, I will invite an outstanding, published book author to write a guest post. If you’d like to learn about how to be a guest blogger, click on the “Authors” tab above.]

This week, I have invited international fundraising superstar Roger M. Craver, a direct-response fundraising pioneer, Editor at The Agitator, and author of Retention Fundraising: The New Art and Science of Keeping Your Donors for Life to share his wisdom with us.

However, do we really need a book about something as fundamental as donor retention? I believe we do. And so does Ken Burnett, Managing Trustee at SOFII and author of Relationship Fundraising. Here’s what Burnett says in the Foreword to Craver’s book:

Our nonprofit sector is bleeding to death. We’re hemorrhaging donors, losing support as fast as we find it, seemingly condemned forever to pay a fortune just to stand still.

It’s time we stemmed the flow.”

While the latest Fundraising Effectiveness Project report, developed by the Association of Fundraising Professionals and the Urban Institute, shows that the nonprofit sector’s donor retention rate has improved for the first time in years, the number is still wretched. The nonprofit sector’s donor retention rate now sits at a shameful 43 percent! For every 100 new and renewed donors, 102 donors are lost through attrition.

As a sector, we must stop this donor churn. It’s expensive. It prevents organizations from building long-term relationships that lead to large current donations and significant planned gifts.

Sadly, doing business as usual is not working. It’s time to change the way we do things.

Retention Fundraising by Roger CraverFortunately, the solution to the donor retention problem faced by the sector is not overly complicated or pricey. It simply requires a commitment to change. Once you’re committed to enhancing your organization’s donor retention rate, Craver’s mercifully brief and easy to read text will show you the way. Based on science and decades of practice, Craver’s book will explore what measurements are important to track, what tactics you need to adopt, and what messaging secrets you need to learn.

Noted philanthropy researcher and author Adrian Sargeant finds that “even small improvements in the level of attrition can generate significantly larger improvements in the lifetime value of the fundraising database. A 10 percent improvement in attrition can yield up to a 200 percent increase in projected value.”

By following the advice found in Craver’s book and its companion website, you will be able to improve your organization’s donor retention rate. With increased fundraising effectiveness, your organization will be far better positioned to fulfill its mission today and well into the future.

Here’s an excerpt from Retention Fundraising that further reveals the problem faced by nonprofit sector:

January 23, 2015

Breaking News: Big Planned Giving Myth Busted!

Many nonprofit professionals have long believed that those who make charitable bequest commitments will be less likely to make an annual fund gift. The fear, held by CEOs and CFOs in particular, is that legacy gift donors will feel they have already done their part and, therefore, will no longer be receptive to annual appeals.

Now, new evidence busts that planned giving myth once and for all!

As researcher Russell James, JD, PhD, CFP will explain in an upcoming  free webinar hosted by MarketSmart, not only will legacy donors continue to support their favorite charities on an annual basis, their support will actually increase once they have made their planned gift commitment, as indicated in the following graph:

Current Giving Before and After Adding Charitable Estate Beneficiary

Among those who have added a charitable beneficiary to their estate plan, the average annual charitable giving before making the estate gift commitment was $4,210. After making the estate gift commitment, the average annual charitable giving jumped to $7,381! On the graph, the label “Mixed” means we do not know how much of the giving was before or after the addition of the charitable estate plan given the timing of the survey.

While making a planned gift commitment does not necessarily cause one to increase his or her annual giving to charities, the longitudinal evidence now reveals that it most definitely does not cause donors to decrease their annual charitable support.

Recognizing that the average annual giving amounts for this group are quite large, James notes:

January 16, 2015

Dying to Know How Much Bequest Income Your Charity will Receive?

I always enjoy hearing from my readers. Sometimes, they give voice to questions that I suspect many others have as well. For example, I heard recently from the Development Associate of a small nonprofit organization:

Hi, Michael. I enjoy your posts and blogs very much. Do you know of any statistics which tell how long it takes to see any benefit from a planned giving program? I work at a small organization and they want to put a dollar amount to be raised in the annual fund raising plan. Doesn’t common sense say you cannot expect a definite planned giving amount EVERY year? We are very small and really only capable of pursuing bequests. Are there statistics to support this in writing that I could use to share with my Board and CEO? Many thanks for all your informative and helpful posts!”

Regarding the first question about how long it will take a new planned giving program to become effective, I’ll provide the standard consultant’s answer: It depends. I’m actually not being flippant. The answer depends on a great number of variables including, but not limited to:

  • How many planned giving prospects are there?
  • How educated are they about planned giving?
  • What is the quality of the relationship that the organization has with prospective planned gift donors?
  • How old are the prospects?
  • How healthy are the prospects?
  • Do your prospects tend to have children and grandchildren?

The good news is that while we cannot easily predict when an organization will begin to benefit from a bequest giving program or how much money the program will produce by a particular date, we do know that the organization will benefit sooner as well as later. Even with deferred commitments such bequest gifts, charities will often begin to see a return within three to five years.

The Wizard by SeanMcGrath via FlickrThe second question also does not lend itself to an easy answer. However, as the Development Associate suspects, it is “common sense” to say that most organizations “cannot expect a definite planned giving amount EVERY year.”

Nevertheless, I know that this issue is not limited to this particular charity. I also know that it’s not limited to small charities. Not long ago, I learned of a much larger nonprofit organization that always budgets to receive $1 million of bequest revenue annually despite the objections of the group’s planned giving specialist.

So, what is the answer? How much, if anything, should organizations budget for planned giving support?

While large organizations with mature development programs might be able to forecast planned giving revenue with some degree of accuracy and safety, there is no way a small organization with no significant prior planned giving experience can do that. Budgeting on bequest revenue is generally problematic for the following reasons:

  • You don’t know how many individuals have already made a bequest commitment but simply have not told you.
  • You don’t know how many people would be willing to make a bequest commitment.
  • You don’t know how many people who have made a bequest commitment have changed their will to remove the charity.
  • You don’t know when people who have made a bequest commitment will die. While actuarial tables can provide some hint at this, the reality is that such tables are more reliable with larger groups rather than single individuals.
  • Many people who are willing to make a bequest commitment will not tell you the amount of that commitment. If the commitment is a percentage of estate, the donor will likely not even know how much will end up in the charity’s hands.

In short, with bequests in particular, there are too many unknowns. For a new planned giving program, regardless the size of the charity, projecting bequest revenue figures would simply be guesswork. Even for larger organizations with an established gift planning program, budgeting for planned giving revenue can be risky. For example, I know of one organization that budgeted for planned giving revenue but came up short resulting in an operating deficit. Ouch!

January 9, 2015

Are You Ready for the Coming Storm?

A storm is coming. It will affect the entire US economy. It will likely affect the global economy.

The nonprofit sector will not escape the impact. You need to prepare now.

Koyasan Umbrellas 3 by Andrea Williams via FlickrAs 2014 began to wind down, the US National Debt surpassed the $18 trillion mark! That’s over $154,000 of Federal government debt per taxpayer or more than $56,000 per citizen. During the six years of the Obama Administration, the US National Debt increased by nearly $7 trillion, representing 67 percent growth. And it’s still growing.

As if that’s not bad enough, the US Unfunded Liabilities total more than $92.5 trillion dollars, or more than $789,000 per taxpayer! It, too, continues to grow.

President Barack Obama, former-President George W. Bush, and the US Congress are all responsible for the rapid growth in the US National Debt since 2009 as well as the growth in the Unfunded Liabilities. So, I’m not going to engage in specific finger pointing, policy debates, or politics.

Instead, I want to focus on what this means for the charity sector looking forward.

The rapid growth of national debt is not sustainable. We should no longer ignore it. Here are some of the reasons why:

• While our enormous national debt is not significantly affecting the nonprofit sector at the moment, the day is coming when it will. Prudent organizations will prepare for the storm before it hits.

• At some point, failure to address the massive debt issue will lead to a downgrade in America’s credit rating. Think it can’t happen? It already has. In 2011, Standard and Poor’s cut the US credit rating to AA+ because the government “fell short” of taming the nation’s debt. In 2012, Egan-Jones cut America’s credit rating to AA for the same reason. While these downgrades have had a mostly symbolic effect, they foreshadow what is likely to happen unless the government brings the national debt under control.

• Eventually, future credit rating downgrades will make it more expensive for the government to borrow money. Interest rates will rise. That will take more money out of the economy.

• In addition to becoming increasingly costly to borrow, lending sources will be harder to find. Some of those lenders might also use the lender-debtor relationship to force US policy changes. We’ve already seen this with the China relationship. By the way, China, no longer the US, is the world’s largest economy in “real” terms of goods and services produced.

• To deal with the debt, the federal government has four possible courses of action (or some combination of these): 1) pay more to borrow more which will add to the debt and take more money out of the economy, 2) print more money which would be inflationary, 3) cut spending which would likely mean less money for the social safety net and nonprofit organizations, and 4) raise taxes which will reduce individual disposable income. So, even if the government does address the debt situation, it could have a short-term negative impact on the nonprofit sector before it has a positive effect.

• A massive, growing national debt will make it more difficult for the US economy to experience strong growth in Gross Domestic Product. Philanthropy correlates closely with GDP; it’s been about two percent of GDP for decades. If the economy doesn’t grow rapidly, philanthropy is not likely to do so. If the economy truly falters, we might even see a drop in year-to-year philanthropy as we did during the Great Recession.

We’re already beginning to see some of the effects I’ve described above. If nothing is done to tame the national debt, these effects will be magnified and could eventually become catastrophic.

There are some things that nonprofits can do to prepare:

January 2, 2015

Don’t Make New Year Resolutions You Can’t Keep

It happens every year at this time. People make New Year resolutions. Then, a short time later, they break those resolutions.

Breaking New Year resolutions is bad. Doing so can make you feel guilty. It can erode your self-esteem. If you told anyone about your resolutions, your failure to keep them could even be embarrassing.

Here’s a novel idea for 2015: Don’t make New Year resolutions you can’t keep.

Fireworks

Happy New Year from Philadelphia!

Instead of setting overly challenging goals, I encourage you to adopt the three following, easy-to-keep resolutions. While easy to adhere to, the following resolutions are nevertheless meaningful. You’ll notice that my three resolutions include something that will benefit you, something that will benefit others, and something that will benefit your organization:

 

  1. Indulge yourself. Yes, you need to take care of yourself by eating right, exercising, and getting an annual medical physical. However, you also need to let yourself be bad occasionally. You need to take care of your psyche. If that means having a slice of chocolate cake, then go for it! If it means watching old television episodes of Gilligan’s Island, so be it. If it means having your spouse watch the kids so you can enjoy a leisurely bubble bath, make it happen. By being good to yourself, you’ll be better able to be good to other people.

 

  1. Make sure those you love know you love and appreciate them. Don’t assume that those you love know it or know the extent to which you care about them. Tell them. Show them. Don’t just run for the door in the morning to rush off to work; instead, take the time to kiss your spouse good-bye. Don’t just nod when your child comes home with a good test score; instead, take the time to tell him how impressed you are. Make your partner a steaming cup of tea before she asks for it or goes to make it herself. In other words, make the most of the little moments.

 

  1. Grow professionally. One of the hallmarks of being a professional is ongoing education and sharing knowledge. So, commit to attending seminars and conferences. If time or money are obstacles, participate in a webinar; there are some excellent free webinar programs available throughout the year. Or, read a nonprofit management or fundraising book. There are some terrific books at The Nonprofit Bookstore (powered by Amazon) that will inspire and help you achieve greater results. You’ll find Reader Recommended titles, the complete AFP-Wiley Development Series, and other worthwhile items. If you have found a particular book helpful, consider sharing a copy with a friend, colleague, or your favorite charity. By the way, a portion of the sale of books through The Nonprofit Bookstore will be donated to charity.

 

(If there’s a nonprofit management or fundraising book that you read recently that you found particularly helpful, please let me know below so I can include the title in the Readers Recommended section.)

For additional reading, you might also consider looking at some of my posts that you might have missed. Here is a list of my top ten most read posts during the past year:

  1. Can a Nonprofit Return a Donor’s Gift?
  2. Delivering (My Own) Bad News
  3. 5 Things Never to Do in Your Phone Fundraising Calls
  4. One Word is Costing Your Fundraising Effort a Fortune
  5. Special Report: Top 40 Most Effective Fundraising Consultants Identified
  6. How NOT to Run a Capital Campaign
  7. Cheating Death
  8. #GivingTuesday Has NOT Made a “Huge Difference”
  9. 5 Lessons Moses Can Teach Us about Fundraising
  10. 20 Factoids about Planned Giving. Some May Surprise You.

I invite you to read any posts that might interest you by clicking on the title above. If you’ve read them all, thank you for being a committed reader.

I’m honored to know that I have readers from around the world. (I love the Internet!) While I appreciate all of my readers, I thought it would be interesting to look, beyond the United States, to see my top ten countries for readership:

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