Donor Power Blog

The no-receipt scandal

Here's some really terrible news that I'd like to see a lot more of: A lot of nonprofits are not doing their jobs.

That's how I'm looking at an experiment at Kivi's Nonprofit Communications Blog: The Dismal Results of My Online Giving Experiment.

Kivi converted some credit card miles into $25 donations for charities through Network for Good and only got thank-you messages from 33% of them.

Shame. But not surprising.

We at Merkle occasionally do this experiment too. We get slightly better results (we give "real money," and do it through the mail), but our rate of acknowledgement usually doesn't go much above 50%.

There's no excuse for ignoring a donor's gift. It's impolite -- something along the lines of spitting on the donor's shoes. You may think the gift is small, or donated in a way that's less convenient to you, or at a bad time of year. But you have to assume it's a real good-faith gift, a heart-felt vote of confidence and support of your mission.

And ignoring gifts can catastrophically damage your fundraising results.

A $25 donor, if properly cultivated, is worth somewhere around $250 over the long haul. Not acknowledging that first gift is not how you properly cultivate a donor. Your chance of getting the rest of that $250 shrinks to Lilliputian size.

Now I have a hunch that most readers of this blog (and of Kivi's blog) are among the responsible organizations that correctly and promptly acknowledge their donors. So my little lecture is a bit misplaced. The apathetic, poorly run donor-spitting organizations that don't bother to receipt are not taking part in the conversation about treating donors right.

And that's why I hope to see more reports like Kivi's and that they will name names, publicly shaming this shameful behavior. I'd like it to be that nonprofits that chronically have this problem become generally known for having it.

Maybe that will help shame some otherwise decent organizations into getting their act together. Or (and I'm going to sound like a heartless capitalist here), maybe it'll help hasten the demise of organizations that need to get out of the way of those who can and will get it right.

I think it's only a matter of time before donors do routinely rat out those organizations. We should behave as if that time is already here.

Technorati Tags: fundraising, receipts

How some nonprofits are surviving the recession

Another survey. This time of the fundraising results of a group of nonprofits in the Pacific Northwest (mainly Oregon): Nonprofit Fundraising Trends 2009 (PDF, from Retriever Development Counsel).

In this one, 46% of the groups surveyed said they got higher fundraising results in 2008, while 39% did worse. Not bad. But here are some findings from the study I find noteworthy:

• Nonprofits with diverse revenue streams, good management, and what could be labeled "learning cultures" appear to be coping markedly better than others.
• Organizations that are faring better appear to be putting more focus on development activities, especially individual donor relations including major donor development.
• Regardless of the size of the organization, the primary reason for fundraising success? "We asked more."

Cross-stitch that last one and hang it on your wall. That's how to thrive in a recession. And every other time, for that matter.

Thanks to About Nonprofit Charitable Orgs for the tip.

Technorati Tags: fundraising, surveys

Is your brand real or ideal?

According to Plato, the world as we perceive it is only a shadow of a higher ideal reality. Our world is just "shadows on the wall" -- vague, inferior echoes of the Real Thing.

It seems some fundraisers agree. Tell me if you've heard this statement: Effective fundraising might raise us a lot of revenue, but it damages our brand.

Apparently, it means something like this: Some of the things we do to motivate people to give seem to be less than the platonic ideal of who we are. Or, even more bluntly: Our brand standards are so cool -- why can't our fundraising be like that?

You can agree or disagree with Plato's belief about the nature of reality, but if you have a platonic view of your nonprofit brand, you're choosing image over mission, or abstraction over reality. Here's why:

• Effective fundraising tends to be simple, urgent, emotional, often old-fashioned. It's seldom pretty (sometimes it's flat-out ugly), and it's almost never cool.
• Brand standards tend to be smart, stylish, happy -- things of beauty and purity.
• The more you do of one, the less you do of the other.

If you're separating your brand ideal from your ability to raise money, you're living in a solipsistic bubble. What you do is what you are. If that includes raising a meaningful amount of funds from the public, that means fundraising.

Fundraising is the way it is for a number of reasons.

• Fundraising targets older (that is, unfashionable) people. That's who gives, and if you want to reach them, like anyone else, you have to speak their language.
• Fundraising targets the heart more than the mind. The motivation to give is an emotional one.
• Fundraising is (and should be) accountable for measurable, real-world monetary outcomes. That gives it a no-nonsense attitude and a healthy ability to avoid BS.

A strong, well-defined brand is a huge asset. It's worth putting real effort into. But if the brand gets in the way of real-world fundraising -- it's going to hurt you. Define your brand carefully.

Technorati Tags: fundraising, marketing, Plato

How to fake authenticity

A recent email from a small and well-run nonprofit (which will remain anonymous) opens like this:

There is a saying in Central America: "If you impact a man you have transformed an individual. If you impact a woman, you have transformed generations to come."

C'mon! Does anybody in Central America (or anywhere else) walk around uttering anything as clunky as that? What on earth would cause you to claim that they do?

I doubt it's an outright lie. It sounds more like a bad translation: PC-speak, combined with nonprofit-speak and bureaucratese, rendered something people actually say into a mouthful of jargon.

Real sayings as uttered by real people are short, easy to remember, and punchy. Like Waste not, want not or Measure twice, cut once.

When you write something, you have to do a "gut check." Does that sound real? Because when it doesn't, you've all but put a big sign around your neck that says FAKE.

These days, people are so over-assailed by marketing messages, they're learning to tune out and ignore the stuff that's not real. If you don't seem real, you get the same penalty as those who aren't real: You get ignored.

I was thinking I'd paraphrase that saying like this: Teach a man to fish, and he'll hang out in the woods every weekend. Teach a woman to fish, and it's seafood for everyone.

Technorati Tags: fundraising, copywriting

Five things you can learn from infomercials

I've seen more than one fundraiser object to a fundraising message because it's "like an infomercial." If you're of that mindset, you're not going to like this slideshow from the Influential Marketing Blog: 5 Marketing Secrets From Infomercials.

But if you're smart and open-minded, there's a lot you can learn here:

5 Marketing Lessons From Infomercials

Write it down, because these things can work wonders in your fundraising:

1. Have a backstory.
2. Show the product in action.
3. Use real testimonials.
4. Make a specific offer.
5. Give a reason to act NOW.

Technorati Tags: marketing, infomercials

Fascinating information you can't use

People try so hard to learn deep new truths about fundraising. Here's an effort to see if nonprofits can use nostalgia to motivate donors to give, reported at Third Sector a UK publication for nonprofits: Nostalgia as a fundraising tool (registration required).

But here's how the research happened:

... asked more than 500 US donors who had given to charity in the previous 12 months about what made them feel happy, sad, lonely or angry. They were encouraged to remember significant events in their lives and write down how these made them feel. They were also asked if they were more likely to donate if the events were linked with a cause.

Wow. That's a lot of heavy lifting to learn something you can't really use in real life.

Problem is, there's no relationship whatsoever between what people tell you in an artificial, clinical setting and what they'd actually do when looking at the stuff in their mailbox. Folks can tell you they'd be likely to give after you've got them thinking about their past, but that doesn't mean if you evoke nostalgia in direct mail you're going to get a higher response rate.

That's not to say you won't find nostalgia a useful tool in your motivational toolbox. It might help.

But this study doesn't tell you that.

The only research into how people respond that you can take to the bank is disciplined direct-response testing. That's how you find out what people really do in the fundraising situation that matters. Not what they feel comfortable telling a researcher in an artificial setting.

(Same goes for focus groups: they can kill you.)

Technorati Tags: fundraising, research

Stupid Nonprofit Ad: Pain avoidance

Here's a Stupid Nonprofit Ad that, amazingly enough, has no apparent participation by ad agencies. It's home-made Stupid, frankly a refreshing thing to see.

This one is from JBooks.com, an online Jewish book community. They created the following video, called "The Spiel, or Send Money":

(See it on YouTube.)

Now it's pretty cool to have Robert Pinsky as your spokesperson, especially if your cause is literary. But that's about all this video has going for it. Pinsky sings a little song that tells us two things:

• The people at JBooks.com are "businesspeople, not idealistic schnooks."
• "Jews buy books."

Neither of these is a reason to donate to JBooks.com. In fact, both are pretty good reasons not to give. It seems they don't particularly need donors. They have superb staff and a bullet-proof business model. Where do donors come in?

But that's not why I'm classing this as a Stupid Nonprofit Ad. Anybody can stumble in their fundraising, and we all do. There's nothing Stupid about that.

No, what puts this video in the Stupid category is the organization's reason for doing the video in the first place.

As reported at Prospecting, the editor of JBooks.com found writing a fundraising letter "excruciating," "humiliating," "horrible," and "painful."

So rather than face the pain of asking people to join the cause, they created a semi-funny video that doesn't quite ask people to join the cause.

I can understand the agony of writing a fundraising letter. It's tough work. Well, I say agony, schmagony. If you have a good cause and you need donors to make it happen, get over it! You've got a job to do. Face it like the man or woman that you are.

Thing is, once you get past the discomfort of humbling yourself, once you figure out the mechanics of motivation, once you learn not to associate asking with being a pest and realize it's an important part of every community's and individual's life -- you'll see that fundraising is a transcendent, life-changing activity.

And then you can leave the sophomoric videos behind and start speaking clearly and directly to people who want to support your good cause.

(More Stupid Nonprofit Ads.)

Technorati Tags: fundraising, Robert Pinsky

The best marketing isn't all positive

Here's a fun unauthorized commercial for Trader Joe's. It's cool, catchy, and filmed on a cell phone.

(Watch it at YouTube.)

Most people would say this is a superb piece of marketing for Trader Joe's; it's memorable, endearing, and communicates the spirit of the place. Most people would also agree that no ad agency or marketing department would ever create it.

Why? Because among all the happy stuff, it includes complaints about some of the annoying things about Trader Joe's. I'm pretty sure the Trader Joe's messaging guidelines don't include complaints about the parking lots or the stuff you want that's not in stock.

But that's precisely why this is such a great video.

It's not marketing. It's relationship.

Relationships are multi-dimensional. They include positives and negatives. In a good relationship, the positives outweigh the negatives.

The only places where no negatives exist are the fake worlds of advertising, marketing, and branding.

And nobody believes them any more.

I'm not sure this all leads us toward creating fundraising messages that include a copy point about the downside of supporting our organization. But it might tell us not to be afraid of what donors and supporters say about us in public, even if they complain.

See Logic+Emotion, The Best Little Ad Trader Joe's Never Made for more on the video.

Technorati Tags: fundraising, marketing, Trader Joe's

Mad Men can teach us a thing or two about fundraising

Here's how you raise funds:

(Or watch it here on YouTube.)

If you think this isn't about fundraising, you haven't been involved in fundraising yet.

The guys from Kodak are all concerned with the technology of the new device, worried that people won't understand or appreciate the features. The ad get sees through the technology to the emotional content of the device. Technology, schmechnology, he basically says. This thing hooks up to your heart.

Too many fundraisers don't get around to the real core of what they're trying to "sell" their donors. They need money, so they ask for money. Fortunately, a lot of donors have the imagination and life experience to do the fundraisers' jobs for them and find the heart themselves.

But you raise a lot more when you lead the donors to the heart of the offer.

Technorati Tags: fundraising, advertising, Mad Men

Mr. Fundraiser, tear down those walls!

One of the reasons its hard to connect with donors is we build walls between ourselves and our donors. The commercial world has the same problem, as noted in the Logic+Emotion blog at Walls of Separation.

There are nonprofit versions of every one of these walls. And each of these walls diminishes the fundraising effectiveness of those nonprofits.

I can think of a couple more walls that many nonprofits put up:

1. Unrestricted funds. Many are so hell-bent on raising only unrestricted funds from their donors that they can't even think clearly about connecting with donors about how donors can and should and want to make the world a better place. Fundraising becomes an exercise in evasion.
2. Silo mentality. Too many organizations can't align their direct mail, their online marketing, their public relations campaigns, their events -- because those all happen in different (often mutually suspicious or even hostile) departments. That guarantees a confusing experience for the many donors you have that cross your departmental lines.

Tear 'em down!

Technorati Tag: fundraising

Stupid nonprofit ads: Leo Burnett edition

Leo Burnett was a legend in the advertising industry. He founded a venerable ad agency now called Leo Burnett Worldwide (warning: excessively conceptual website). I'm afraid Mr. Burnett is resting unquietly, given the stupidity of the work some of the shops bearing his name have done lately for nonprofits.

First let's look at a monstrosity created by the Burnett office in London for the UK housing charity Shelter:

(See it at YouTube.

As we pan across an urban landscape, we see that some of the buildings are constructed out of huge playing cards -- and they're collapsing like, well, houses of cards. This goes on for 41 seconds (it's a 60-second spot) before the voiceover begins telling us about the housing crisis in the UK. It ends with this stirring and highly specific call to action: Please help us provide urgent advice and support.

As we so often see when ad agencies work with nonprofits, this message wanders away from the actual cause and chooses instead to broadcast an abstract conceptualization of the cause.

Listen: The literal facts about the housing crisis are shocking and painful. It's not like houses of cards. It's much, much worse than that! Real people are suffering. Why create a fake visual of an imaginary situation to symbolize the crisis?

Music by Radiohead! Voiceover by a famous actress! Filming and post-production by some other famous guys! But in case you were worried, they assure us: "Everyone donated their services and time for free in support of this very worthwhile charity." Once again we learn that the value of free is often less than what it costs you.

Now we go to the opposite side of the world, where another Burnett office, Sydney, perpetrated this piece of goofiness for WWF Australia:

(See it at Vimeo.)

Let's cut to the chase: They're trying to make the point that your insignificant little action makes a difference, because a gazillion other people do the same insignificant action. Boy, that sure feels nice.

They do this by showing people making check marks in boxes that make statements about helping the environment (and, in a nice little ad agency design coup de grace, they're in ALL CAPS, just to add that little lagniappe of unreadability).

I AM CONCERNED FOR THE FUTURE OF THE ENVIRONMENT.
I AM PREPARED TO HELP.
I WILL PLAY A KEY ROLE IN CONSERVATION.
I WILL TAKE ACTION.
I WILL SUPPORT WWF.

As people check these boxes, they fly off the page and somehow create lush landscapes, where happy animals frolic. It's rather pretty animation.

Finally, at the end, there's something that almost passes for a call to action: GIVE YOUR GIFT OF $25 NOW AT WWF.ORG.AU. Oddly, yet unsurprisingly, if you go to that URL, there's nothing evident for collecting that $25.

Like the house of cards spot, this one chooses symbolism over reality.

I've covered stupid nonprofit ads done by Burnett before. Same story. So here's a thought: Could we put out some kind of all-points bulletin to the nonprofit world to warn them about Burnett? Something like:

If a representative from any office of Leo Burnett Worldwide approaches you, do not engage them in conversation. They are armed with abstract ideas, and they are very skilled at making you think these ideas are good. Carefully leave their presence and make your escape before they draw you into the making of a Stupid Nonprofit Ad.

Thanks to Osocio for both tips. Many more Stupid Nonprofit Ads here.

Technorati Tags: fundraising, advertising

Survey: Not too bad, but take it seriously

Not every look at the recession is equally horrifying. A recent survey by the Evangelical Council for Financial Accountability shows a that fundraising is impacted but not all that much. Survey results here.

Seems among these evangelical nonprofits in 2008:

• 44% met fundraising goals
• 28% were within 10% of goals
• 28% were more than 10% below goals

That's not radically different from the way things are in "normal" times.

Fortunately, the surveyed organizations are not ignoring the recession. Here's what they report doing differently:

• 53% employed more one-on-one contact with key donors
• 34% changed the style of the message in communications with donors
• 34% developed communication materials on how the ministry is responding to the changing economy

Lessons learned:

1. The sky is not falling, at least not for everyone.
2. It's smart to respond to conditions with relevant action.

Thanks to Prospecting for the tip.

Technorati Tag: fundraising

What Goes On in the Mailbox?

Here's my column in this month's FundRaising Success magazine, What Goes On in the Mailbox?.

Teaser: So many things can go wrong between the time a donor decides to give and when she actually gets a gift mailed. Maybe she can’t find the checkbook. Or a pen. Maybe the phone rings. Or a giant meteor hits her house.

E-newletters don't work, says expert

If you have an e-newsletter, pay attention to this article in Third Sector Online, a UK publication for charities: Charity email newsletters 'a waste of time', says Obama strategist.

It quotes Thomas Gensemer of Blue State Digital, the company behind the Obama campaign's jaw-dropping online fundraising last year. Gensemer says:

Newsletters don't get read, yet they take more effort to prepare than a 250-word email. Email is still a killer application, but only when used properly.

He prefers instead "short, personalised emails to supporters giving clear instructions for participation."

He's right. In my experience, enewsletters don't really work. They get far lower response rates than most other email impacts to donors and supporters. They also get lower open and click-through rates. They aren't good at motivating response. They also aren't good and sharing information.

E-newsletters simply don't function the way print newsletters do. (Print newsletters, by the way, still work very, very well for most organizations.) As far as I'm concerned, repeatedly sending out messages that get no response (or even opened) makes you a junkmailer. You deserve whatever scorn or badmouthing your donors and prospects dish out.

So trash that e-newsletter. Instead, have every email you send out have just one clear call to action. Nothing more.

Technorati Tags: fundraising, nptech, newsletters

Moving beyond "spreadsheet thinking" to "design thinking"

Posted by guest blogger Andrew Rogers

Marty Neumeier, author of Zag and The Brand Gap, has just released The Designful Company: How to Build a Culture of Nonstop Innovation. The idea is that design-aware thinking will help companies confront complex problems and do more innovative, inspired work ("We've been getting better and better at a management model that's getting wronger and wronger," Neumeier writes).

For purposes of Neumeier's discussion, a designer is "anyone who tries to change an existing situation to a better one." "For businesses to bottle the kind of experiences that focus minds and intoxicate hearts," he continues, "they'll need to do more than HIRE designers. They'll need to BE designers."

As nonprofit marketers working to "design" a better world, we already have a head start. Here are four of Neumeier's "levers of change" that have particular relevance to donor-powered fundraisers.

• Take on wicked problems. "A compelling core idea of what the company stands for can inspire a surprising amount of passion," Neumeier writes, citing Google with their stated vision to "organize the world's information and make it universally accessible and useful." Whether you're an international relief agency or a community food bank, are you out to change the world? Do your donors know that?
• Weave a rich story. "All the little stories you tell about your company and its products should add up to one big story," he says in a recommendation that should come as no surprise to readers of the Donor Power Blog. "Often, a leader need only act as a kind of managing editor, shaping the stories to align with a shared vision."
• Think big, spend small. Here Neumeier is talking mainly about "stage-gate investing," but I see a reminder of the importance of continual testing -- both "tweaks" to controls and new offers and techniques. "The biggest hurdle to innovation," he writes, "is the corporate longing for certainty about costs, market size, revenues, profits, and other quantities, all of which can't be known when an idea is new. Ironically, there seems to be no hurdle to investing in dying businesses, decaying strategies, and shrinking markets, all of which can be seen without a crystal ball."
• Design new metrics. In product development, Neumeier reports, there is often reluctance to let analytical rigor intrude on pure imagination. "In one study, over 90% of advertising creatives believed metrics to be 'unhelpful,' and nearly 65% believed them to be 'harmful' to the creative process." "Yet in reality," he continues, "the testing of communication prototypes can be a creative person's best friend -- it teaches valuable lessons about audience cognition, and frees creativity from the whimsical disapproval of uninformed decision-makers."

After all, "in the end, ALL innovations get measured -- by the marketplace. The trick is to get a preview of those results before you commit the bulk of your resources." You have to know how to measure what you're seeing, and how to learn from the measurements. That's one more advantage of working with an agency with a really solid handle on both testing and analysis (cough).

"As we move from the spreadsheet era to the creative era," Neumeier concludes, "economic value will come from human networks more than electronic ones." That's a conclusion any donor-powered marketer should be able to endorse.

Available at Amazon and at Powell's.

Technorati Tags: fundraising, design, marketing

Your donor is ticked off: Now what?

Charity Navigator Blog recently published a A Donor's Wish List, a well-reasoned and very typical complaint from a donor about direct-mail fundraising. The donor had two main issues:

1. It infuriates me to get labels, T-shirts, and other offers .... Particularly obnoxious are the ones that send nickels, to put those together must be very expensive.
2. I am inundated with charitable mailings.... This is ridiculous and a real waste of money. Charities should send no more than three, and if there's no response, then they should take you off the list.

You hear this all the time, right?

These complaints are potent because they feed into fears many nonprofits already have: That their mailings are annoying, and that they mail too much. So an articulate complaint like this is sometimes taken as proof that your fears are real and that you should make some meaningful changes to your fundraising plan.

Before you do that, remember this: Donors matter more than complainers. Compare the number of people who wrote you checks to the number who complained: Unless you have a shockingly dysfunctional program, your donors outnumber your complainers by hundreds or thousands to one.

But don't ignore the complaint. It's real and significant. It voices something many donors feel. So here's what to do:

• Scrupulously obey the donor who complained. No, don't implement their proposed mailing plan for the file, but do what they want. If they want less mail, reduce their mail. If they don't want premiums, don't send any more premiums. Someone who cares enough to complain is a candidate to be a great donor.
• Make sure you're being relevant. If a donor perceives your mailings as a bunch of undifferentiated trash, that's a sign you aren't being relevant. Are fundraising offers vague and generic? Are you asking donors to supply unrestricted funds? Are you making a clear connection between their gifts and what happens as a result?
• Give all your donors power. Give your donors the option to opt out of anything. Give them total control over the terms of your relationship. Very few will take any action, but your donors as a whole will respond better after they've been offered control.
• Get smart with your data. Databases can be really smart these days. Predictive modeling and other cool tricks can help pinpoint what individual donors should be getting from you. (But get professional help! This is tricky stuff.)

Technorati Tags: fundraising, complaints

Direct mail fundraising: Longer is still better

One of the more common critiques you'll hear of direct mail fundraising letters:  It's too long.

Meaning:  I'd never read a letter that long.

Talking about how long a letter should be is rather like debating how long a piece of string should be; it depends on what you want to do with it.

But really, that long letter (however long it is) is probably not too long.

Longer letters usually work better than short ones.  That's a fact, not just my opinion.  I've tested different letters more times than I can count.  In the last five years, I can think of one time that a shorter letter motivated more giving than a longer one. 

Yeah, it's weird, but it's true. 

Direct mail is still a readers' medium.  And those most responsive to direct mail are those who actually intentionally get their information through reading.  So longer letters work better.  We don't know if people actually read longer letters -- it's entirely possible that they don't.  But we know the response is usually better.

This could change in the coming years as a new generation of busier, more cynical, less print-friendly donors become our audience.  But I'm not going to assume shorter letters are the better choice until donors prove it to me.

(It doesn't quite go without saying that relevance trumps the length question any time.  A short relevant letter will almost always beat a long irrelevant one.  But a long relevant one will generally out-pull both.)

Your donors may be different.  You may have tested into more success with shorter letters.  But if you're relying on short letters because you personally don't have time to read longer letters, you're probably making a mistake. 

(For more on the dangers of using your own taste and experience to judge marketing efforts, see The pathetic fallacy in fundraising)

Podcast: How to Work with a Fundraising Consultant

Working with the right fundraising consultant or agency can take your organization to undreamed-of heights. Having the wrong partner can be as rewarding as a long afternoon with a hungry, sleep-deprived two-year-old. In this podcast we share the three things you should think about when choosing the right fundraising partner.

To listen, click here to download the audio file or visit the Fundraising Is Beautiful page here, where you'll find several listening and subscription options.

Or subscribe with iTunes:

The truth: what a concept

To hear some branding experts talk, a "brand" is something you can cook up like a stew and bestow it on an organization. In fact, that's the assumption behind most branding agencies. They claim they can "create a brand" for you.

That's not how a brand works. In fact, that business model amounts to being paid to tell lies. Maybe they're just little white lies or exaggerations or spin. But they aren't the truth.

That's what Brands Create Customers says about certain branding efforts: Some brands are "all hat, no cattle":

The best brand strategy is not just to tell the truth; it's to be the truth. Being the truth means that you have a core connection with customers that can accelerate both of you forward, beyond the shallow half-truths that condemn too many companies and their customers to perpetual mediocrity.

Nobody cares about your great color palette. Nobody gives a rip about your spiffy font. Your logo? Meh. Those things make very little difference in your ability to motivate people to join your cause and give you money.

Furthermore, nobody is into your inspiring creation story. Or the amazing way you pulled through a crisis that almost put you under. Those things matter because they inspire staff and other insiders -- but to pretty much everybody else, it's just noise.

Most of all, nobody -- and I really mean nobody -- wants to hear nor is likely to believe the made-up fakery that some branding consists of.

Your brand is what you really are. Not the cool story you can cook up.

Technorati Tags: fundraising, marketing

How to handle gifts through donor advised funds

I've recently become the proud owner of a donor-advised fund. It's a nifty "product," managed by a financial services company, that allows you to park your giving in one place (one check, one receipt), then parcel it out the to causes you support at your leisure.

Speaking as a donor, let me tell you: It's darn cool, and hugely satisfying.

Your organization should be taking this kind of giving seriously.

There's a lot of money flowing through donor-advised funds. The Fidelity Charitable Gift Fund is the third-largest US nonprofit, right behind United Way and The Salvation Army. The fund run by Schwab comes in at #9 and Vanguard is at #16, and others are sprinkled throughout the Philanthropy 400 list of the largest of the largest nonprofits. Community and other foundations are a nonprofit version; there are hundreds of these, the largest of which is the National Christian Foundation.

Point is, more and more donors are choosing to give this way. Here are some things you should do about it:

Make it easy to give

• Is your organization's "real" name the same as the name people know you by? I've been thoroughly surprised by how often an organization I know and support is registered by a different name. That makes the organization hard to find. It also makes you wonder what the heck is going on with it.
• Make sure your tax ID number is easy to find. The donor needs it in order to make the gift.
• I'd put a page on the website called something like How to donate through a donor-advised fund or community foundation and make it easy to find.

Acknowledge donors correctly

• Anonymous giving is an easy option with donor-advised funds, so when gifts aren't anonymous, the donor expects to be acknowledged.
• Don't send a receipt. The donor was receipted when they deposited their money in the fund.
• Do send a nice letter. If the gift was large enough, assign a rep, or do whatever you do for large gifts.
• Offer the donor some choices: Does she want to be on your mailing list (if she isn't already)? Give communications choices, like how much and what type of contact you'll have with her. Don't assume the donor wants no contact -- but don't assume she wants contact either.

Technorati Tag: donor advised funds

What to do with irrational donors

Donors can just drive you crazy. They don't see things the way we do, and that makes them seem "irrational" -- they don't care about the right things. The for-profit world struggles with this too, as outlined by Seth Godin at The rational marketer (and the irrational customer).

You know your product (or program) is truly excellent; they don't care. And try as you might to show them the facts, they still don't respond. You could just throttle them!

Not so fast. Seth says:

The opportunity ... is not to insist that your customers get more rational, but instead to embrace just how irrational they are. Give them what they need. Help them satisfy their needs at the same time they get the measurable, rational results your product can give them in the long run.

I've seen more than one nonprofit throw up their hands and basically decide to abandon their donors. To hell with our irrational donors, they said. We're going to go out and find a whole new set of (rational) donors who will listen to us!

Want to know how well that worked?

It didn't.

The new "rational" donors turned out to be either not donors at all, or, when they were donors, they were exactly like the old irrational donors.

Donor "irrationality" is a fact of life. They will never "get it" like you do. Get over it. Get on with life, and listen to Seth: Meet their annoying, irrational needs, and they will take care of you!

Technorati Tags: fundraising, marketing

Give donors more experience for their giving

Donors know that money can buy happiness -- when you give it away. They seem to know another truth that's only now being "discovered" by scientists -- that gathering life experiences is a much better path to fulfillment than gathering stuff.

It's reported in ScienceDaily at Buying Experiences, Not Possessions, Leads To Greater Happiness:

A new psychology study suggests that buying life experiences rather than material possessions leads to greater happiness for both the consumer and those around them.... because they satisfy higher order needs, specifically the need for social connectedness and vitality -- a feeling of being alive.

As fundraisers, we are in the business of creating life experiences. Even the lamest, most old-school, donor-unaware fundraiser does that, because giving is a meaningfully positive action. Even when it consists of little more than writing a check and getting little feedback. It makes donors more alive.

That's our advantage. Our strength. So press it!

Make donating to your organization a real experience. More than the positive but short-lived experience of writing a check.

Make it more memorable.

Make it cool and worth telling their friends about.

More experiential.

Create more connection to the cause, the people, and fellow donors.

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