Posts tagged ‘The Agitator’

April 20, 2018

Do Not Make this Big Error with Your Next Challenge Grant

I’ve seen it frequently. Fundraising professionals often make a big error when using a challenge grant. And they compound that error unethically by misleading prospective donors. It’s a common issue that is costing the nonprofit sector a fortune.

What’s the huge mistake? Fabrication of a bogus challenge grant.

True challenge grants are great. When a fundraising professional inspires a donor to provide a challenge grant, the nonprofit has a powerful tool to encourage greater contributions when making an appeal.

Typically, a challenge grant will match new and increased support to a charity. Oftentimes, the match will be dollar-for-dollar, though other multiples can also be arranged. In the case of a dollar-for-dollar challenge, if a new donor gives $100, the challenge-grant donor will give the charity $100. If a $50 donor from last year gives $75 this year, the challenge-grant donor will give $25. Typical challenge grants are not unlimited; the donor will set a maximum total amount.

Using a challenge grant can be an excellent fundraising tool for four reasons:

1.  It encourages donor support by increasing the value of donations. For example, with a one-to-one match, new donors have their contributions effectively doubled, thereby significantly magnifying the impact donors can have.

2. It encourages donor support because donors do not want the organization to lose money. If a donor makes a new or increased gift, the charity will receive additional money from the challenge-grant donor. However, the converse is also potentially true.

If a donor does not give, the charity could lose out on some of the challenge grant. Therefore, while a challenge grant can increase the value of a donor’s gift, it can also create the impression of a cost to the organization if the donor does not give. Some donors are motivated by the concern, “If I don’t give my $125, the organization could miss out on another $125 from the challenge-grant donor. I don’t want to cost the organization $125.”

3.  It creates a sense of urgency to give now. Typically, challenge grants must be fulfilled within a narrow time-frame. So, prospective donors are encouraged to act now rather than delay their philanthropic decision. The sooner someone gives in response to an appeal, the more likely they are to give. People who set an appeal aside thinking they’ll get to it later, often do not.

The urgency created by a challenge grant is also useful for planned giving campaigns encouraging donors to include the charity in their Will (Charitable Bequest). People do not like to think about end-of-life planning, so it’s easy for them to keep delaying until it’s too late. A challenge grant creates a sense of urgency that can overcome what social scientists call personal mortality salience.

You can read about a fantastic challenge-grant campaign for planned giving in my book, Donor-Centered Planned Gift Marketing, beginning on page 188.

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April 16, 2018

Are Donors the Hidden Enemies of Charities?

Donors are not usually the enemies of nonprofit organizations. Instead, they are the friends who provide much needed resources allowing charities to save lives and enhance the quality of those lives.

However, some donors at some times do become the enemy of the good. They behave in ways that humiliate and, at times, even endanger those with less power. That’s one of the disturbing findings of a new survey report sponsored by the Association of Fundraising Professionals and The Chronicle of Philanthropy and produced by Harris Polling.

Among nonprofit professionals surveyed, 25 percent of women and 7 percent of men say they have been sexually harassed. Of the harassment incidents cited, 65 percent of the perpetrators were donors with the balance being colleagues, work supervisors, and organization executives. Harassers are most often men (96 percent). The median number of sexual harassment occurrences personally experienced by survey respondents is three (which is why some of the statistics in the report add up the way they do).

“Harassment is always about power, so the results here might indicate that the real power in these organizations rests with the donors,” Jerry Carbo, a professor at Shippensburg University who served on a federal committee studying harassment in the workplace in 2015 and 2016, told The Chronicle. “I would normally expect to see a much higher response rate for supervisors.”

The most common types of sexual harassment experienced in the fundraising profession include: inappropriate comments of a sexual nature (80 percent), unwelcome sexual advances and requests for sexual favors (62 percent), and unwanted touching or physical contact (55 percent).

Mike Geiger, MBA, CPA, President and CEO of AFP, commented on the alarming findings:

The number of cases involving donors is eye-opening and points to a unique and very troubling situation within the profession. As we look at how to proceed with the data from the survey and begin developing anti-harassment education and training for fundraisers and others in the charitable sector, we will have a special focus on the all-important donor-fundraiser relationship. We know most donors have only the best interest of the cause at heart, but our message will be clear: no donation and no donor is worth taking away an individual’s respect and self-worth and turning a blind eye to harassment.”

Sadly, many nonprofit organizations fail to take appropriate action when they receive reports of sexual harassment, regardless of whether the perpetrators were donors or fellow staff. Consider the following:

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April 13, 2018

Why are Fundraising Results Missing the Mark?

The nonprofit sector has an unfortunate secret. While not a well-kept secret, it is nevertheless something that receives too little attention. So, let’s take a moment to shine a spotlight on the issue.

Overall, American philanthropy has remained at approximately two percent of Gross Domestic Product for over six decades, with the percentage bouncing between 1.6 and 2.3 percent, according to Giving USA. Every year when the amount of money donated to charities goes up, the nonprofit sector pats itself on the back even though it is merely keeping pace with GDP.

Despite the massive growth in the number of nonprofit organizations, the significant increase in availability of educational materials, the production of helpful research, the professionalization of the fundraising field, and the rise of new technologies, the nonprofit sector has failed to budge philanthropy relative to GDP.

Now, as a committee convened by The Giving Institute begins to consider ways to grow philanthropy beyond the two-percent-of-GDP mark, I’ve written an article for the Association of Fundraising Professionals magazine, Advancing Philanthropy, that explores the challenge: “What Will It Take to Dramatically Increase Philanthropy?”

To answer that question, we need to understand how and why past attempts to do so have come up short, such as the insightful work of the Commission on Private Philanthropy and Public Needs in the 1970s.

We also need to understand the broad societal cultural factors that are affecting philanthropy so that we can develop strategies for inspiring cultural change and/or adapt to factors beyond our control (e.g., decline in religious affiliation, erosion of social capital, drop in volunteerism, etc.). Furthermore, we need to understand the cultural issues within the nonprofit sector that block change and, ultimately, greater success.

We also must set a realistic, consensus goal for moving the philanthropic needle. While that goal should be bold, it should also be based on something other than a dream. A credible target mark will give us all something to shoot for.

As Henry David Thoreau once wrote:

In the long-run, [people] hit only what they aim at.”

While it will likely take at least a couple of years for The Giving Institute’s commission to do its work, you and I do not need to wait. There are things we can do now to begin to move closer to a more vital philanthropic mark, something greater than two percent of GDP:

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September 27, 2016

Are You Doing Something Wrong Without Even Knowing It?

Most fundraising professionals are good people trying to do good things. Most fundraising professionals believe they are ethical and, therefore, will routinely choose right over wrong.

However, what do you do when confronted with a situation where there is no clear right or wrong option? What do you do when you encounter a dilemma beyond your experience? What do you say when a donor or board member questions your actions?

That’s where fundraising ethics comes in. Ethical standards help us be the kind of people we want to be. Ethical standards guide us as we navigate fundraising challenges so that we can achieve the best results for our donors, beneficiaries, and organizations.

rights-stuff-cover-from-rogare(Toward the end of this post, I’ll tell you how you can get two FREE white papers that explore the ethics issue in greater detail.)

Unfortunately, many find that the existing fundraising ethics codes in use around the world are inadequate. That’s why Rogare, the fundraising think tank at the Plymouth University Hartsook Centre for Sustainable Philanthropy,  has undertaken a major, new ethics project.

Rogare seeks to develop a new normative ethics theory that balances the interests of donors and charity beneficiaries. This will empower us to more consistently make good decisions and take the right actions. That’s good for donors, charity beneficiaries, and nonprofit organizations.

Ian MacQuillin, Director of Rogare, explained it this way on The Agitator blog:

Ethical theories are intended to help us think through how to make better decisions in doing the right thing, and this is what our work at Rogare, with the help of people such as Heather McGinness, is trying to do, particularly to ensure that we do the right thing by our beneficiaries as well as our donors. We need ethical theories to help us make better decisions every day in our lives, precisely because knowing ‘right’ from ‘wrong’ is often such a morally grey area. Fundraising is really no different.”

For example, we can probably agree that we should not tell lies. However, imagine the following scenario: You’re scheduled to meet a wealthy donor for a noon lunch. You arrive at the restaurant early to make sure everything is perfect. At 12:05 PM, the donor has yet to arrive. At 12:10 PM, the donor has not shown up, and you have not received any messages. At 12:15 PM, you begin to wonder if you have the wrong day and begin to get annoyed. Finally, arriving 20 minutes late, the donor comes through the door. After greeting you, the donor says, “I’m sorry I was running late. I hope it’s okay.”

In response to the donor in the scenario I’ve described, you could say, “Well, as a matter of fact, I was becoming annoyed. You know, you could have sent me a text message to let me know you were running late.” Or, to put the donor at ease, you might choose to lie and say with a warm smile, “Oh, don’t worry about it. It’s no big deal. I’m fine.” Hmmm, maybe lies are not always bad.

My example is admittedly a bit silly, even simplistic. My point is that things we think are black-and-white don’t always remain such. That’s why ethical frameworks and decision-making models are so important.

Okay, now it’s time for the FREE stuff.

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August 17, 2015

Urgent Alert: Immediate Action Needed to Defend Nonprofits

There is an alarming issue you need to be aware of.

While I do not use this blogsite to engage in partisan politics, that does not mean that I avoid politics and government relations altogether. I consider myself a bi-partisan, vigorous defender of the nonprofit sector.

CA State House by David Grant via Flickr

California State House

Over the years, I’ve worked with both Democrats and Republicans in my capacity as Chairman of the Association of Fundraising Professionals Political Action Committee, Chairman of the AFP Greater Philadelphia Chapter Government Relations Committee, and a member of the AFP US Government Relations Committee. I’ve even represented AFP in testimony before the Federal Trade Commission.

As a passionate defender to the nonprofit sector and a cheerleader for voluntary philanthropy, I took notice of a recent post on The Agitator blog. Fundraising legend Roger Craver sounded an alert and issued a call to action over a dangerous move by the California Attorney General.

Never before have I reprinted a blog post. However, this issue is so important that, with Roger’s permission, I am sharing his post with you now:

 

If you’re willing to turn over the list of your top donors to the government then you need read no further.

However, if you’re not sure, or you’re absolutely certain you’d be unwilling to give up the donor list, then take this post to your CEO and General Counsel. Immediately.

Why? Because right now the Attorney General of California is set on requiring that any nonprofit seeking a license to solicit funds in the nation’s largest state first turn over their lists of top donors that are filed with the IRS on a supposedly “confidential” schedule of your tax return.

This dangerous and unconstitutional power grab in the name of ‘fundraising regulation’ and ‘consumer protection’ must be stopped.

And it’s up to all of us—nonprofits and the companies that serve them to stand up now and take action.

Whether or not your organization or one you serve solicits funds in California the battle ahead will affect the freedom of speech and privacy rights of every nonprofit in the U.S. and their donors.

In a moment I’ll outline the steps you can take immediately to head off this threat. But first some background.

A year ago this week The Agitator warned about a sinister move by the Oklahoma Attorney General and his special interest contributors to silence the Humane Society of United States (HSUS) using that state’s fundraising regulations.

HSUS has boldly and, so far, successfully fought back.

As I pointed out last August there have been relatively few occasions in modern history where politicians have blatantly sought to use the power of their office to silence nonprofits that opposed them or whose views and ideology they disagreed with.

At the end of the day, Americans and the U.S. Supreme Court have shown little tolerance for political zealots and bullies who abuse U.S. Constitution’s guarantees of free speech and due process.

NOW …The Intimidators At It Again. And We Must Make Sure They Lose. Again.

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April 17, 2015

Is It Better or Worse to Send More Appeals?

Part of me is definitely a fan of conventional wisdom. Come on. What’s not to like about wisdom?

On the other hand, part of me hates the notion that we should continue doing things because that’s the way they’ve always been done. All too often, conventional is code for mediocre.

In other words, I think it’s wise to regularly challenge conventional wisdom, so long as we do so thoughtfully and preferably with good data.

So, being a good fundraising nerd, I enjoyed reading a number of articles this week that explore how often charities should send appeals to donors.

Let’s start with the conventional wisdom:

The more appeals you send, the more money you will raise.

Change in Hands by Randy Willis via FlickrAndrew Olsen, CFRE, Vice President of Client Services at the Russ Reid Agency, tested the conventional wisdom. In his blog post “Fundraising Myth Busters: Solicitation Frequency,” Olsen concludes, “Don’t be afraid to add a solicitation or two to your annual line up. As this case shows, you stand to make a lot more money for your cause if you do!”

In his post, Olsen shared testing that was done for two nonprofit organizations:

  • In the first case, the organization went from five to 10 solicitations, and year-over-year revenue increased 123 percent.
  • The second organization increased from three to six solicitations, and year-over-year revenue increased 110 percent.

Given that the highly respected Russ Reid Agency conducted the tests, I had to take notice. However, Olsen’s post raised more questions for me than it answered:

  • While gross revenue increased in both test cases, did net revenue increase significantly?
  • What impact does increasing the number of appeals have on long-term donor retention?
  • How does increasing the number of appeals impact donor Lifetime Value (LTV).
  • If revenue went up, why stop at six or even 10 appeals? Why not send an appeal out monthly, weekly, daily, hourly? When should we stop?

With these questions nagging at me, I was relieved to see that direct-response guru Roger Craver wrote a four-part series on the subject for The Agitator blog (Note: The Agitator is now a paid subscription site.).

Craver looked at solicitation frequency a bit more closely than Olsen did. For example, he reported that the net income from successive appeals goes down after a point. He also showed evidence that some donors on a file are more receptive than others to multiple appeals. While not surprising, it is nice to see the data on this and have a chance to reflect on how screening for solicitation-frequency preference can affect net revenue. Craver shows that sending fewer appeals, particularly to certain individuals, can lead to greater net income.

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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:

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