Donor Power Blog

How to reach donors who demand a return on their investment

What do donors want? Some of them want to be treated as investors. A recent post at onPhilanthropy looks at reaching these donors in an interview with Tom Ralser, author of ROI For Nonprofits: The New Key to Sustainability (available at Amazon and at Powell's): Can Nonprofits Deliver Value to "Investors"?

All too often, nonprofits think that by describing the outcomes they produce, potential funders will automatically appreciate what they do and therefore give them money. With all of the nonprofits out there asking for money, this is just unrealistic. What many funders are demanding these days is the value of the outcomes produced.... This allows them to make a much more informed decision.

If you want to reach these donors, you need to them of them as investors, and their gifts as investments. It comes down to two things:

1 How you frame the offer. Emphasize effectiveness, efficiency, and impact. That doesn't mean you forget the old-fashioned emotional appeal, but you also need to prove that their gift will cause something good to happen.

2 How you report back. If you ever want to hear from the investor-like donor more than once, you need to tell them what their gift accomplished. So many organizations just blow off that part, and those are the organizations that are going to struggle in the coming years. Receipt promptly. Don't change the subject from the fundraising offer. Publish a newsletter that's about them, not just you.

Technorati Tags: philanthropy, ROI

More donors are growing hard noses

An article in the Financial Times talks about a new breed of wealthy donors who insist that their giving make a difference: Doing good the hardnosed way.

... new philanthropists are practical, hands-on, and tend to have a hardnosed investment mentality. In many ways, the donors act as business consultants and the return on their investments is judged by measurable performance results rather than profits.

Some of these people have self-made wealth. They know how to make things work; they're just bringing their successful traits to their charitable giving. At the same time, nonprofit scandals have made many donor suspicious and untrusting of the nonprofit sector, and they aren't willing to leave their giving to chance.

The easy old days of trusting, duty-driven donors are fading away. Every day elderly old-style donors are passing away and being replaced by new donors who want proof that their giving makes a difference, and simply aren't going to give without it.

My advice: Get used to it.

In fact, you'd do well in the coming years to treat all your donors like exacting, hardnosed philanthropists. Not just wealthy philanthropists, but everyday donors.

Here's how you're going to succeed in the increasingly tough fundraising market:

• All donors need beyond-the-ordinary organizational transparency.
  
• All donors need up-front proof that their gift will accomplish its purpose -- not just a statement of the problem.
  
• All donors need to hear back what their giving accomplished.
  
• All donors need flawless service, error-free data, and quick receipting.
  

If your organization is not doing these things, make it a priority to start. If it's not possible, do it for as many donors as you can, starting from the top.

This is going to be part of the cost of doing business in fundraising soon. Get used to it.

Technorati Tags: fundraising, philanthropy

Be open, or else!

An editorial in The Wall Street Journal takes a stern look at the way nonprofits operate in How Charities Can Make Themselves More Open. The proposed recipe for openness:

1. Provide more information online.
   
2. Adopt higher standards.
   
3. Adhere to those standards.
   

To which I say both hear, hear and duh.

It's only distressing that this is necessary advice to anyone in the nonprofit world.

The days of nonprofit secrecy will soon be over. The old sense that some stuff was "too complicated" for donors to need to know is anachronistic.

So open your books, open your mind. Getting donors on board will get harder and harder to do without that.

Technorati Tag: openness

The Better Newsletter

Here's my column in this month's FundRaising Success magazine, The Better Newsletter. Teaser: The pages of a truly motivating newsletter are packed with “mission accomplished” stories — always clearly tied back to the donor’s involvement. Nearly every word and every image should be proof that the donor’s giving matters. If it’s not about the donor, leave it out!

How nonprofit CEOs kill fundraising

Here's an interesting question, asked over at the Nonprofit Leadership, Innovation, and Change Blog: "How much does the leadership of an Executive Director or C.E.O. affect fundraising?"

Like it or not, the leader of an organization makes a huge difference. Nonprofit CEOs are not often hired for their fundraising prowess. That in itself isn't a problem; a good leader knows how to delegate to others who know what they're doing. And that's what some do: They foster very good fundraising programs.

Sadly, there are a number of common nonprofit leadership styles that are distinctly harmful to fundraising -- because they value things that hurt fundraising. Here they are:

The Technocrat
This type of leader is an expert in the organization's mission, adept at rallying resources to get the best outcomes for the organization. Almost always, though, the Technocrat is uninterested in fundraising. Under his regime, fundraising tends to be a neglected stepchild in the organization, a languishing afterthought. Fundraisers tend to be underpaid, and seldom challenged to rise to greater heights.

The Poet
This self-expressive leader really believes in her ability to communicate; every word is unchangeable, like some kind of scripture. The clarity, simplicity, and donor focus that fundraising requires often doesn't sit well with the Poet, who blithely believes her genius will create a superior form of fundraising. It doesn't.

The Consensus-Builder
Not really a leader, the Consensus-Builder becomes captive to the majority opinion and/or those who yell the loudest. Since that's not usually the people who do fundraising, fundraising tends to degrade over time, and is generally eviscerated by committees. (For more about the malignant power of committees, see Death by Committee.)

The Entrepreneur
Often the organization's founder, the Entrepreneur is a passionate exponent of the organization's mission. Sometimes the Entrepreneur works in favor of fundraising, if he happens to have fundraising in his vision. If not, fundraising will be incidental to what really matters, and will not be done well.

If your organization has one of these types of leaders (and you're a fundraising professional), my sympathy to you. But let me remind you that patience is a great virtue, and that many things change over time.

Technorati Tag: CEOs

Carnival of Nonprofit Consultants

With the Holidays setting in, there weren't many submissions to the Carnival this week, though a surprising number of deposed Nigerian princes and former banking magnates wrote to the Carnival this week. The good news: Several newcomers to the conversation that you'll find worth checking out:

• At Ted Grigg's Reflections about Direct Marketing, a look at direct-marketing basics: Leveraging the 4 Human Behavior Characteristics for More Powerful DM Creative.
  
• From Sox First, Six keys for more effective charities.
  
• Marketing & Fundraising Ideas tells fundraisers Why You Need to Ask.
  
• American Consumer News offers Creative Fundraising Ideas for Your Non-Profit (for very small nonprofits, it seems).
  
• And finally, as host, I get to slide in with a post of my own: Take the good fundraising copy test.
  

And just so you don't go away all under-blogged, here are 5 blogs I enjoy that have nothing to do with fundraising:

• The "Blog" of "Unnecessary" Quotation Marks
  
• Strange Maps
  
• Presentation Zen
  
• The Comics Curmudgeon
  
• AdVerbatims
  

The Carnival now takes three weeks off. It starts up again January 7, 2008 (deadline January 4) at RedBoots Digital Rodeo.

When your message depends on the meaning of one word

What does the teaser on this envelope from the Save Darfur Coalition mean?

It hinges on the meaning of the word Fidelity.

Is it "faithfulness," as the dictionary would have it?

Or is it shorthand for Fidelity Investments, the financial services company?

If it's the first, it sounds like a complicated morality tale. If it's the second, it's perhaps an outraged "stick-it-to-the-man story.

You just plain can't tell, unless you already know about the situation. (And I'm not going to tell you; you have to go find out. Maybe you'll also give a gift to help with the Darfur crisis while you're at it.)

I understood it. But I'm kind of a "famine wonk" -- I read AlertNet and ReliefWeb. I know when the long and short rains can be expected in the Horn of Africa. I pay attention to that stuff. I'd heard about this specific story before I got the mail.

But seriously, how many people are as wonky and detailed as I am? Outside those at the Save Darfur Coalition, I mean.

Lesson: Don't make your message hinge on your audience having some specific detailed knowledge. Chances are, almost none of them do. Your own sense of what ought to be common knowledge is not a good indication -- you're an expert, and insider.

Technorati Tags: direct mail, Darfur

Donors are even questioning tithing

Okay, a few people think so, and they told The Wall Street Journal that there's a Backlash Against Tithing. Frankly, I suspect this "backlash" isn't a new thing at all; that it's as old as the scriptures that call for tithing.

Tithing, the religious observance of giving away 10% of your income, can be a hard calling, and most people don't actually do it, even if they intend to.

If there's anything new about the current backlash, it's that some people are going beyond simply not doing it and defending their choice:

Resistance to tithing has been increasing steadily in recent years, as more churchgoers have questioned the way their churches spend money. Like other philanthropists today, religious givers want to see exactly how their donations are being used. In some cases, the growth of megachurches, some with expensive worship centers equipped with coffee bars and widescreen TVs, have turned people off of tithing.

This is part of a profound shift in the way donors think. To older generations, tithing -- like any other form of giving -- was a matter of duty. Now, even churches are having to "earn" the giving of their people by a visibly using the money wisely, valuing the givers, and staying scandal-free. Good behavior and open communication.

If that's the case for churches, how much more is it for charities that aren't churches?

Technorati Tag: tithing

"404" pages that should be found more often

Those annoying "404" error pages -- who the heck thought giving them a number was in any way helpful?

They're inevitable. Somebody's going to mistype something, landing on a page that tells them there's been an error. So why not make these errors work for you rather than against you?

The Squareoak blog took a look at a whole bunch of them at 404 Pages - Funny, Geeky, Disturbing.

Take a look. The takeaway is this: You can do something with those pages that gives them meaning, that makes them helpful or interesting. Have a personality. Say something about your cause. Give them some likely links back to what they might have been looking for.

Thanks to the WOMMA Blog for the tip.

Technorati Tags: nptech, fundraising, 404

Take the good fundraising copy test

Everyone's always looking for a simple diagnostic that will tell you if your fundraising copy is any good.

Here's as near to a comprehensive one as you'll ever find, by fundraising expert Tom Ahern, as it appears in FundRaising Success magazine: Does Your Messaging Pass the 'You' Test?

With a red pen in hand, circle each time the word 'you' appears in your material -- any form of 'you': you'd, you'll, your, you're, yours, you've.... Gaze at the results. If you see red circles all over the place, you've passed the 'you' test. If you see few red circles and there are large spaces without any circles, you've failed. Passing the 'you' test means you could raise lots of money.

I have my own version of Ahern's You Test. The first step is just like his: circle all the yous. Then you underline all first-person pronouns (I, me, my, we, us, ours, etc.). If you see I a lot more than you, you're in trouble. You're too busy talking about yourself to be of any interest.

Get this right, and you're 80% of the way to good fundraising copy. Of course, you're still sunk if you don't have a great fundraising offer. And you can get the You Test right but everything else wrong and end up with failure. But it's a start. A very good one.

Technorati Tags: copywriting, marketing

How to know your audience

Want to know one simple truth that will make all your fundraising better? Here it is: Know your audience.

Failure to understand the audience is the number-one reason for bad fundraising. Too much fundraising is created to please and persuade the fundraisers, not the potential donors.

For some techniques for knowing your audience, check out the Church Marketing Sucks blog: Lessons In Not Sucking: Know Your Audience. Here are a few of the recommended techniques:

• Create people playing cards. (Figure out who your audience is, then create pictures and profiles to remind yourself.)
  
• The audience is always right. (If they don't understand what you're saying, that's your fault, not theirs.)
  
• Immerse yourself in what they're doing. (Consume the media they consume, even if you don't like it.)
  
• The middle, not the masses. (You can't please everybody; aim for your psychographic sweet spot.)
  

Technorati Tags: audience, marketing

The phony world of advertising

Have you noticed that almost all advertising is a lie? Not so much a deliberate attempt to deceive -- more like a wacked-out delusion.

Example: What's more like your experience at McDonalds:

• Someone leaping in the air and crying I'm lovin' it! (TM)
  
• An over-lit, plasticized space where grim, zombie-like employees have trouble taking your order and returning the right change?
  

The credibility of advertising is so low, nobody even thinks twice about how unreal it is.

That's because so much branding and marketing is done in a vacuum -- a hollow exercise in serving up consumers' felt needs with little connection to reality. That's the subject of a recent strategy+business article: Keeping Marketing's Promises:

... the fundamental problem with advertising: It's a phoniness-generating machine....

Stop saying what your offerings are through advertising, and start creating places -- permanent or temporary, physical or virtual, fee-based or free -- where people can experience what those offerings, as well as your enterprise, actually are.

Most nonprofits can't afford the expensive services of the phoniness generating machine. And that's a good thing. But we do need to take another step: We need to create something real for our donors.

So make sure your brand is reality, not a marketing construct.

Then work to build honest-to-goodness real-life connections between your cause and your donors.

And don't worry about the advertising.

Technorati Tags: advertising, fundraising, branding

What boomers need as they age

What's happening with boomers as they age? Some good things, according to a post at The Boomer Blog, Boomer Wanted. Among the life needs of aging boomers:

• the urge to legacy
  
• the drive to find meaning
  
• the desire to make a difference and be recognized
  
• the wish to mentor and to have its value monetized
  

I'd say someone with life needs like those looks like someone primed to become a serious donor to the right causes.

I'd also say someone with life needs like those isn't going to be very responsive to traditional low-involvement fundraising.

It's a good news/bad news situation. We have a huge generation of people aging into their donor years, and they're going to be good donors. But all our expertise at fundraising is aimed at a different type of donors.

The smart nonprofits that learn to focus on donors will get all the slices of this huge new pie.

Technorati Tags: boomers, fundraising

Fundraising takes one more step into the 20th century

A coveted Donor Power Award goes to GlobalGiving, an organization that connects donors with specific poverty-fighting projects around the world.

GlobalGiving is one of a growing group of nonprofits that are charting the future of fundraising by putting power in the hands of donors by using the Web (two others especially worth noting are Kiva and DonorsChoose.org).

But that's not why GlobalGiving gets this Deepy Award. No, they've gone beyond: They now offer a fundraising guarantee.

This milestone was announced by GlobalGiving CEO Dennis Whittle at PhilanTopic (among other places) at Guaranteed. Period.

Here's GlobalGiving's rationale for offering a guarantee:

We ... believe that donors deserve to be treated at least as well as consumers. After all, they are trying to help improve the world with their dollars. They have the right to know how their money is being used -- and to redirect that money to a different purpose if they are not satisfied.

It's not quite the iron-clad, unconditional money-back guarantee I'd hope for -- the donor can only redirect her giving to a different GlobalGiving project, and the guarantee is only good up to $10,000 per donor, per year -- but it's a step in the right direction. It's about time we started seeing donors as deserving respect they routinely command from common retailers. And the chance to hold charities directly accountable to use their gifts wisely.

Offering a guarantee doesn't just have marketing value. Whittle correctly identifies another benefit to the organization:

A guarantee could compel us to put front and center questions of how to amplify the impact of our work, hold ourselves accountable to our partners, and ensure donor trust. Each and every day.

What's the risk to GlobalGiving? It's negligible. In the retail world -- where elaborate, conditionless guarantees (even double your money back) are normal -- guarantees are found to increase sales, and are so seldom invoked by customers that they only improve the bottom line. The occasional abuser can be dealt with as an individual.

So the question is: Who else is brave and smart enough to offer a guarantee?

(See also Nonprofit guarantee: I dare ya!)

Technorati Tags: fundraising, GlobalGiving, guarantee

Create experiences for donors

A commodity is something that's the same, no matter where you get it. There's a good chance your fundraising is a commodity -- meaning there's little reason a donor should choose you over another organization in the same sector.

How do you get out of that situation? A blog called A Beautiful Experience has some thoughts in Go online and decommodify yourself.

The point is this: You can use the media-rich and interactive capabilities of the Internet to help customers find meaning and give them experiences:

The ONE thing you need to know about your online experience is that it is NOT about YOU -- it's about THEM. Have a conversation with your customers/prospects, don't talk at them.

Now if this is true about selling (and it is), how much more important is it in fundraising? Our "customers" walk away with nothing but a receipt -- and whatever meaning and experience they derive from making their gift.

They're going to supply much of the meaning themselves. But you can really enrich the experience. Here's how:

More choice about how their money goes to work.

More information about what happens when they give.

More connection with the cause.

It's that simple!

Technorati Tags: fundraising, nptech

Museum opens the books to anyone who cares

Can a nonprofit organization share too much information? Maybe. But I doubt it.

One organization that's trying to find out if there can be TMI is the Indianapolis Museum of Art, which has an online Dashboard of facts about the museum. Lots of facts, including these:

• The museum uses 41,614 kilowatt hours of electricity per day.
  
• The museum has 418 artworks with gaps in their WWII-Era Provenance.
  
• There have been 53,843 views of the museum's videos on YouTube.
  

That's just three pieces of the tons of information they offer. It would be easy to say it's too much, that it's too arcane, too detailed, to boring for donors to care about.

But remember, one person's boring factoid is another's hobby. Or hobbyhorse. By putting it all out there, the Indianapolis Museum is telling its public that anyone who cares is an insider. Is it possible someone will go ballistic about their electricity use, or their ownership of possibly plundered art? Sure. But it's not likely. And their openness defuses these things -- much more effectively than trying to keep secrets.

If the information is too much, nobody will look at it. Even so, the very fact that they're sharing it makes people respect the museum more. And who knows what info-sated donors might choose to do for an organization they feel trusts and respects them?

Thanks to The Artful Manager for the tip.

Technorati Tags: fundraising, Indianapolis Museum of Art