Posts filed under Fundraising

Does Donor Wealth Rating Really Work for Fundraisers?

While working with a highly experienced fundraising analytics firm, I am beginning to wonder if the premise that a donor’s potential to give actually predicts major gift contributions. It appears this is not always the case.

Many fundraising organizations and suppliers have invested a lot of resources such as software programs based on this commonly held belief. Yet donor analyses findings coming out of large, well known nonprofits reveal that giving potential does not equal giving behavior.

Nonprofits have large donor databases and not all of these donors are worthy of the resource allocation required to attract major gifts. So donor driven behavior must approach this issue with an open mind. Accurate selection processes must reflect what works rather than what appears to make sense on the surface.

Perhaps some of you can confirm this for us one way or the other. We would appreciate your comments.

Posted on March 17, 2011 and filed under Fundraising.

The Direct Marketing Fundraisers' Ultimate Challenge -- The Start Up

Over the years, direct marketing professionals have worked with all kinds of clients in every industry. Some clients The start up struggleget the help they need and many more never do. Why is that?

Here are some of the reasons they don't get help.

1. The client believes he already has the best people available in-house to solve his problems. Slowly emerging negative trends in their marketing programs are not uncovered until the damage is done. Such clients tend to hire people who work in a single industry and look just like him. So new ideas and objectivity never survive the culture.

2. Some clients know they need help. But they fear spending more for help because it is less risky to save money than it is to spend money to make money.

3. Others don't believe they have a problem and are afraid to address the problem for fear of loosing face with their bosses. What's more, they may actually have to go out and risk failure on a new approach.

4. A few clients get bogged down in the details and can't seem to stand up for air in the strategy zone. They see activity or movement itself as progress and never make time to address the significant issues.

5. Then there are those who want help, know they need it, but they can't seem to reach the critical mass they need to fund their business growth.

This last point is the one that baffles many of us who live to solve marketing problems.

No matter how you look at it, marketers make money for clients by spending money. And marketers know It really takes money to make more for those businesses we serve.

So how do we help the start ups? I am referring especially to those hundreds of humanitarian nonprofits who linger on from year to year without ever reaching that critical mass.

After 20 years or more serving people for causes with wide appeals, some nonprofit organizations never seem to have the money available for mass direct mail to grow their donor basses from a few hundred to 20,000 or more to really get their programs in high gear.

The agony for any business in the early years is grueling and filled with failure. And nonprofits must build without the benefit of seed money or a second round of financing.

Volunteers help. But the costs for mailing lists, postage, lettershop, printing, paper and so on lie beyond volunteers' ability to help. The organization still needs money to grow.

So how do these nonprofits get big in today's world?

I suspect it takes a charismatic leader, a great cause plus one or more individuals (like Bill Gates) who have very deep pockets. Without this combination, nonprofits have a tough row to hoe.

How would you envision the growth of a nonprofit start up ? As a marketer or fundraiser, what would you advise these organizations to focus on?

Posted on May 8, 2009 and filed under Fundraising.

Fundraising Startup List for Nonprofits

It never fails to happen. Once a group of businessmen sit around the table for the first time together and find out that I am a direct marketer, they pull me aside asking for that favor.

"Ted, could you help us raise funds for our small nonprofit? We have 300 names, and we need about $250,000 a year in donations to do what we need to do to accomplish our mission. What should we do?"

So here is a small list that I give all of them now so they know that fundraising is not something you do on the fly. And it also takes money to make money.

Volunteers can do a lot. But they can't accomplish much without financial support. That is just reality.

So hopefully this list will help you when you encounter the same request.

Get with the board and make the sure you have a clear and marketable mission.

    1. Develop your fundraising goals describing how you will use the money with great detail. Make certain your board is involved in the goal setting and the broad strokes of how they will be involved in the effort.
    2. Sit down and write the action plan listing what you intend to do for the year and how you will do it.
    3. Write a brief situation analysis of your past activities and what you need to shore up to improve your fundraising results.
    4. All fundraising efforts take volunteers and money to complete. So develop the resource estimates of the costs and people you need for each fundraising activity. Incorporate this information in your plan.
    5. Describe the funding sources in your plan. Detail your present donor list and existing fund sources that renew from year to year.
    6. Finally, within the plan, develop a time line for each fundraising activity such as direct mail, foundation applications, major gifts and so forth.

What other steps would you add to this list?

Posted on April 3, 2009 and filed under Fundraising.

Online Taking over Direct Mail

Traditional media still rule in most companies’ budgets. But the day is coming when that may no longer be true.

For example, Jeff Brooks makes the point in his fundraising blog “Direct mail: news of its death may be premature” that direct mail is changing, but that it is far from dead. He says:

“Online is coming up behind it. Fast. Nearly every nonprofit fundraiser is now raising meaningful amounts of money online. Even if they aren't trying very hard.

So you need to be thinking ahead. As a response medium, direct mail is losing ground to online. That change is likely to accelerate in the coming years. If you aren't getting good at raising money online now, you may find yourself suddenly in a world of hurt in the not-too-distant future.”

I believe that most of us in the direct marketing field concede that online is here, it’s growing fast, and we need to inculcate our deep knowledge of what makes people respond into this emerging medium.

The rise and fall of various media normally causes no alarm to direct marketers. Direct marketing strategists are media agnostic. We routinely test in and out of media.

But here’s the rub. Do you think companies really care that you know how to make traditional media work? I contend that most companies do not see the intimate relationship between the direct marketing strategy and their desire to leverage the online medium.

Highly experienced direct marketing strategists, however, believe that online was made to order for direct marketers. Online represents the ultimate opportunity for CRM and one-to-one marketing. It embodies the ideal interactive medium direct marketers have dreamed about for years.

So what’s the problem? Here’s part of what I wrote to Jeff Brooks in response to his blog (with a few edits).

The productive copywriters in direct marketing and fundraising cut their teeth on direct mail and other traditional media.

Does their hard earned knowledge in traditional media make them obsolete now that online has become the media with tremendous expansion opportunity? Are these proven and experienced direct response copywriters really in the best position to help nonprofits or companies as a whole maximize the power of online marketing?

I think most organizations would say that they would prefer to hire someone with 3-5 years of pure online marketing experience rather than the proven direct response copywriter with 15+ years of experience who has little hands on experience with online marketing.

That seems to represent hiring managers’ typical mindset not only for copywriters, but at one degree or another, they also apply this philosophy to all direct marketing functional areas.

Your take on this?

Posted on January 25, 2008 and filed under Direct Marketing Strategy, Direct Response Creative, Fundraising.

Direct Mail Still Core Medium for Fundraisers

As one of its goals, this blog site explores trends in the direct marketing discipline. One such trend is the fast growing importance of the email media channel.

This phenomenon affects every industry, but at different speeds.MailBoxSmall.jpg

The growth of spam, unfortunately, has grown even more rapidly than email marketing. Spam has severely constrained the growth and effectiveness of the channel. In fact, email marketing has not delivered on its original promise as the low cost and most efficient acquisition channel for many marketers.

Opt in and double opt in as well as the growth of registration schemes reflect the industry’s effort to legitimize email marketing both as a an acquisition and retention tool.

Spammers will ultimately prompt more restrictive government regulation as a way to control the abuse. But it is unlikely that future regulations or even technology will control the spam curse.

In spite of these challenges, marketers have given email a significant role in their retention programs. Once a relationship is established, companies successfully build that relationship with ongoing email contact. No other medium offers better cost efficiencies, speed and personalization as the email medium for this specific application.

On the other hand, the low cost of entry into email marketing combined with the abuse of spam have increased the allure and pulling power of its older cousin --- direct mail.

In a November 1, 2007 FundRaising Magazine article entitled “What Does Your Board Need to Know About Direct Mail?” the writer, Willis Turner drew this conclusion.

“Even in this e-mail age, direct mail remains the foundation of a strong fundraising program. The surprising industry study shows Generation Y, the youngest generation of donors — those who theoretically are the most computer-savvy — actually is the fastest growing group of direct mail readers.

Direct mail is even the preferred choice of e-mail donors. A study by McPherson Associates showed that of people who first contributed online, 70 percent renewed. But of that 70 percent who renewed, 80 percent renewed by mail. And, according to an InfoTrends, Research Group study, nearly 70 percent of people prefer direct mail to e-mail or phone-based marketing.”

Traditional media continues to contribute significantly in the multichannel strategy. The wise marketer will remain media agnostic responding to the needs of his target audiences and drawing conclusions only after rigorous testing.

 

Posted on December 20, 2007 and filed under Fundraising.