Last year if you followed me, I gave you 5 priorities for success in 2016. I called them “Dive the Five.” This year, I’ve expanded my thinking a bit.
‘SEVEN IS HEAVEN.’
- Create Compelling Annual Giving Offers
- Master Integrated Online Social Fundraising
- Master Major & Legacy Giving
- Master Donor Retention
- Master Donor-Centered Content Marketing
- Embrace Sustainable Business Leadership
- Shift to an Organization-wide Culture of Philanthropy
These are the fundamental areas your nonprofit must focus on in the year ahead. And I mean focus.
- Prioritize these areas.
- Create written plans for these areas.
- Include goals, measurable objectives, strategies and timelines.
- Assign staff and volunteer responsibility.
- Monitor, measure and evaluate what’s working/not working.
- And don’t get distracted from your mission. Persist.
Some of these areas will seem familiar, but the way you employ them may need to be tweaked in order for you to survive and thrive in our digitally revolutionized society.
Other skills may be things you’ve thought about or dabbled in, but haven’t really committed to with serious intent and dedicated resources.
We’ll delve into each of these seven areas, multiple times, in depth throughout the year.
For now, a brief explanation as to why these should be your core strategic “buckets” for 2017. [Today we cover the first four, and you’ll have some time to digest them. Next week we cover the final three.]
1. Create Compelling Annual Giving Offers
First, this is the heart of effective, sustainable fundraising.
It’s why I begin here. It’s the first among seven, because it’s the foremost. So if your focus over the last several years has drifted towards keeping pace with new technologies (aka digital), new audiences on various social platforms (aka Pinterest, Instagram, Reddit, Snapchat) and an increasing variety of screens and resolutions (aka mobile), I understand. And you’re forgiven. Growth is important. If you don’t grow, you die. So keep up the good work!
And… this may be the year to dial it back (a bit) and be sure to renew your focus on the heart of the matter: the right ask, at the right time, to the right audience.
Now, let me ‘clairify’ what I consider annual giving.
It’s all the money you must raise in order to meet your annual fundraising goal.
Mostly we think about it in terms of the “annual campaign,” where we focus largely on individual donors. But the majority of nonprofits include money raised from events, tribute gifts, car donations and so forth.
Some nonprofits consider ‘memberships’ as a different income stream, but I find this nonsense. Most donors don’t distinguish between money they pay you to become a ‘donor’ or a ‘member.’ So think this year from your donor’s perspective, and endeavor to integrate your ‘membership’ and ‘annual giving’ staff teams so you can talk to your supporters with one voice.
Then there are grants and sponsorships. To me, these are part of the annual money you must raise. So, for purposes of creating compelling annual fundraising offers, I’ll be talking about all audiences to whom you’ll present your case for annual support – individuals, foundations and businesses.
Stop worshipping at the altar of unrestricted giving.
Your annual giving comprises both unrestricted and restricted gifts – as long as they’re the functional equivalent of annual operating money. Donors should be given the option of designating their giving for particular programs that fall within your annual budget. Capital projects, of course, are different.
I’ve never really understood the penchant in so many nonprofits to eschew restricted annual gifts. Some do this to the extent that major gift officers are penalized for bringing in too few unrestricted gifts.
Essentially, this means these fundraisers are not allowed to talk to donors about what the donor really cares about. Their task is to steer the donor away from their passions and towards a middle-of-the-road strategy that simply doesn’t excite them. This is absurd, and blatantly non-donor-centered.
Make your compelling offers in donor-friendly ways.
This year I’m going to be talking about two underutilized annual giving strategies: (1) monthly giving and (2) DIY peer-to-peer fundraising. Both of these are ways to generated upgraded gifts and re-engage donors who’ve become tired of same-old, generic annual appeal messages. They also enable you to focus on lower-dollar donors in a way that makes them feel more important and heroic, negating the “drop in the bucket” (maybe my donation doesn’t really matter) syndrome that leads donors to be one night stands.
In the digital age, these strategies are much more user-friendly than in the past, and much easier for nonprofits to administer as well. And if you don’t create opportunities for your donors to participate in these ‘feel good’ ways, some other nonprofit will. So… makes sense, right? As a plus, these empowered and engaged donors and fundraisers tend to give more and stay loyal longer.
2. Master Integrated Online Social Fundraising
Embrace the trend towards consumerization.
Think of this as the “Occupy Internet” movement. Whoever you are and whatever you do, your constituents are likely to be online. We’re all now a part of “Generation Connected” (GenC) — requiring you to develop and master a robust online engagement strategy (email, the Internet and social media).
You’re no longer in charge of the way folks find you and learn about you.
Folks are zipping in and out and all around the digital space (as opposed to being neatly shepherded by you up the donor pyramid or ladder or down through the marketing funnel). These hierarchical structures simply are not realistic models for donor behavior in our always-connected digital world. Why? They’re organization-centric rather than consumer-centric. Though it might be tidy, we can’t expect people to enter at the bottom, upgrade their way to a major gift, and then leave a bequest.
You can no longer “force” people into pre-assigned places on the fundraising pyramid or in the marketing funnel.
Today’s consumers don’t march in formation. It doesn’t work to treat people at “the bottom” as less than those at “the top.”
That’s why I’ve advocated for a vortex model as a template for constituent engagement – a swirling circle of energy and activity, largely fueled by social media. Everyone is equal in a circle; just at times some folks have more energy than others. People move in and out, giving and getting, as the time and spirit move them.
You want energized fans, ambassadors, and volunteers everywhere.
This is good! People are more than the size of their bank accounts. In a digital world, peer-to-peer fundraisers can be worth as much or more to your organization than a major gift donor.
The vortex model also means reimagining the concept of “lifetime value.”
It’s no longer simply a combination of average gifts, future capacity and attrition rates. Now it must encompass factors like the size of a person’s network and their propensity to use that network. In other words, the “Connectors” and “Mavens” and “Salesmen” of whom Malcolm Gladwell wrote in The Tipping Point become very desirable constituents.
Digital communications have changed the way people connect with organizations.
You must find a way to truly connect with and meet your natural constituencies where they are.
Folks don’t want to work to find you. If you deliver content through multiple channels, you’re more likely to enable folks to find you serendipitously. Don’t choose these channels randomly, however. Do some research (e.g., a simple survey using Survey Monkey or Google Docs) to discover where your audiences hang out.
You’ve got to be in multiple spaces simultaneously, and your messaging better be consistent and integrated.
It’s important to understand that merely fundraising through multiple channels (mail, email, social platforms, TV, phone, website) does not mean you have an integrated program from your consumer’s perspective. Your fundraising is only integrated if you have coordinated images, messages and offers on various platforms – everything reinforcing everything else. People only know one you. This is the year to eliminate departmental siloes!
Your brand is either crystal clear and compelling, or muddled.
The consumer doesn’t care which department the message emanates from. They just don’t want to be confused. They also don’t want to be lectured at or educated.
Your constituents want to be leaders, or at least equals, in the engagement process.
Folks expect you to know them – rather than the other way around.
To raise more money next year, you’ve got to develop an online plan that includes getting to know your current and prospective donors better. Provide meaningful and rewarding engagement experiences that simultaneously help you learn more about your constituents. Get social. Interact. Ask for feedback. Learn what content your constituencies want. If you don’t know this, you can’t fulfill their wishes.
Ultimately, you’ll want to use the information you gather, powered by technology, to segment your online strategies in order to attract and retain donors and volunteers.
Create multi-channel strategies; then monitor and evaluate your results (clicks and opens; comments, shares, from what pages and platforms; around which content)? Today’s technology gives you the opportunity to build multi-dimensional views of your supporters, enabling you to communicate in ways that will mean the most to each individual. If you can communicate your mission impact in a way that is important to your constituent, you will stand out from your competition.
3. Master Major & Legacy Giving
One-to-one major gift fundraising is the most traditional, tried-and-true strategy, and it works like gangbusters!
Eighty percent of the money in the U.S., according to Giving USA, comes from individuals. And of these folks, roughly 10 to 20 percent will provide 80 to 90 percent of an average nonprofit’s annual fundraising. So embracing major-gift fundraising shouldn’t be controversial. Yet many nonprofits still think major-gift fundraising isn’t for them.
A survey by Bloomerang, a donor software provider, showed that less than 20 percent of charities have even one person specifically designated to pursue and cultivate major donors. Instead, they stuff their calendars with special events and focus their fundraising primarily on grants. They’re losing money and/or building shaky foundations with these strategies.
Commit this year to getting your piece of the major gifts pie!
Did you know that of all U.S. donors, 12 percent account for the lion’s share of the money raised—88 percent!
Two-thirds of all household charity in the U.S. comes from the top 3 percent of U.S. households.
It simply makes sense to follow the money.
[You may wish to check out by upcoming Winning Major Gifts Strategies E-Course, designed for small and medium-size shops. I offer it only once/year.]
And don’t forget to promote legacy giving!
Many people want to leave something behind to perpetuate their values and make a mark. They simply don’t quite know the best way to do this. That’s where you come in! Something as simple as the message “Please consider a legacy gift so your values will live on” (on your website, e-news, remit envelope, outer envelopes, annual report honor roll listing, email signatures, etc.) can make a difference.
I used to ask new board members why they hadn’t made provision for our organization in their wills. The most common response, by far, was “no one ever asked me” followed by “I didn’t know [XYZ organization] did this.” If you’ve been around for 10 years or more, and you’re not yet promoting legacy giving, make this the year you begin.
4. Master Donor Retention
Prioritize retention over acquisition.
I say this hoping some of you (the ones who have very few donors right now), will take this with a shaker of salt. Others of you, maybe a grain. Of course you need to keep acquiring new donors. But not at the expense of donor retention.
Honestly, many nonprofits could raise a lot more money in the coming year simply by paying more attention to the donors you already have – and not acquiring a single new supporter.
Too many nonprofits have their priorities backwards.
Do you spend 80% of your time and resources courting the 80% of donors who will give you 20% of your funding? Does that make bottom line sense?
Per the Fundraising Effectiveness Project report, donor retention has been terrible for years. But nonprofits have largely been ignoring the data. It’s as if the sector is closing their eyes to the reality of climate change, choosing to charge forward looking for more sources of non-renewable energy. This is the year to say “no” to this senseless devastation!
With so much competition for donors today, and so much competition just for attention, it’s never been more important to make authentic connections with your supporters that will cement your relationships with them. It’s not smart to be doing a lot of expensive donor acquisition; then losing eight out of 10 new donors because you don’t steward them effectively
It’s more cost-effective to retain a donor than to acquire one.
Too many nonprofits are wasting their limited resources running on a treadmill.
Donors come in, at great cost to your charity, and then they go right back out again. It’s called “leaky bucket syndrome.”
Make this the year you plug up your bucket!
Know your retention rates (for first-time donors, ongoing donors, lapsed donors and overall donors), establish specific goals for improvement (by segment) and invest in personal, authentic, gratitude-filled cultivation and stewardship.
We’re all about the work ethic in this country; we need to shift to a “work smart” ethic.
What do you think? If you disagree, or think I’ve missed something critical, please weigh in with your COMMENTS, below. Make sure to check back next week for priorities 5, 6 and 7.
Photo courtesy of Master isolated images, freedigitalphotos.net