Breaking down “our donor” barriers within nonprofits: a modest proposal

snakes_on_a_planePeople will generally do what they are given incentives to do.  Try to curtail the snake population by putting a bounty on the heads of snakes and soon people will start raising snakes for the purpose of collecting more bounties.  Then, eliminate the bounty and people will release the multitudes of snakes, leading to the classic Samuel L Jackson gosh-darn-snakes-on-my-mother-lovin’-flying-contraption scenario. This was a real thing

What we’ve talked about this week are examples of incentives at work.  Direct marketers who are measured against a net budget loathe to give up “their donors” to major donor prospecting or try to drive them to events.  Events folks want their walkers, bikers, gala goers, etc. to keep walking, biking, going to galas, and et cetering with no “interference” from those who might try to turn them into institutional donors.  And major gift officers would prefer to have a clean field to solicit “their donors,” turning off the direct marketing that a hundred people choose to give to raise money from the one or two that come out of that portfolio.

We didn’t even mention the digital/non-digital divide, except to say that if your organization has a head of marketing and a head of digital marketing, one of these two people should not have a job or should be reporting to the other.

So how do you create incentives to share your toys with the other children?  The answer lies in transfer pricing.

This is a concept in the for-profit world to allow for transactions between and among business units.  Think of a large oil company, for example, as two different companies: one that finds oil and one that sells oil.*  In order to see how each business unit is doing, the overall company has to figure out the price at which a good is transferred (hence the name transfer pricing) from the exploration folks to the marketing folks.

In essence, the company is buying a good from itself in order to determine its value.  This is the source, as you might guess, of much debate because business unit success or failure is hinged on this number that gets negotiated out.

So the modest proposal for nonprofits is to establish transfer pricing among our various business units and people.  If the major donor officer wants a lead from the direct marketing database, they run the numbers and determine how much they are willing to pay for a lead.  Because this “money” goes into the direct marketing coffers, proper incentives are built up for the direct marketing folks to acquire and nurture potential major donors.

Similarly, direct marketers know to the ha’penny how much they pay for a potential acquisition candidate from an outside list.  How much are they willing to pay for an event donor to the event organizer?  Likewise, how much is the event runner willing to pay for a group of direct marketing donors who model out as likely walkers?  We could see a much more orderly market in these donors, perhaps where 100 walkers are traded for 80 telemarketing donors plus a 7th round draft pick and a ream of copy paper.

And forget about doing e-appends simply because a multichannel donor does better for your organization than a single channel donor.  Why would you do this when you charge the digital marketing manager per lead?  After all, in this brave new world, they would now want to charge you per online donor you try to get to give their next gift offline.

The great thing about this is everyone gets to see either where market value truly is or who the truly great negotiators in your organization are.  The market sets the price for the lead and you either pay it or you don’t.  And if you don’t like the price, then you can try to acquire some other organization’s donors.  After all, they may not have a cause connection to your organization, but it may be worth it to not have to try to pry potential major donors out of the iron grip of the person that runs your Charlotte fashion show event.

It’s only when donors are a commodity with a chattel price that we will understand how important they are to our organization or, more importantly, our various business units.

Because the only alternative – working together with your co-workers, realizing that your cause is a common good to which everyone should strive, and focusing on the donors’ wishes and what optimizes their experience and giving – seems really hard.  Bring on the markets!

* My wife, who is brilliant and has a master’s in oil policy, would want me to say here that everything that I’m saying about the oil business here is vastly oversimplified.  It is and there’s a reason for that: I don’t entirely know what I’m talking about.  To the extent that I do, there are details like the multiple business units of an oil conglomerate and the different types of oil and such that don’t bear on telling a decent story.  These details have been taken out back and shot.

Breaking down “our donor” barriers within nonprofits: a modest proposal

Breaking down the “my donor” mentality between direct marketing and major gifts

The first thing that many major gift officers will instinctively do when they see their donor portfolio is to shut down direct marketing efforts to those donors.  After all, you want the donor to take your call and don’t want them mistaking you for a telemarketer.

Imagine if you tried this in any other walk of life.  Imagine going to Jeff Bezos and saying “this person has been buying a lot of stuff from us on Amazon.  Let’s make sure they never get another email from us, because I really think that I can sell them the Lladro Niagara chandelier for $100,000 (plus $4.49 shipping, which is either far too much for shipping or far too little).”

bond_villainHe would laugh at you until he got stomach cramps.  Or he would have an underling, possibly with a mechanical arm, throw you in a vat of piranhas while he stroked a cat.  All depends on the mood.

Bottom line, it’s silly to take someone who has been donating routinely by one means and, by all available evidence, been satisfied with it and cut them off from that means in the hope they might give more.  You should only change this if the donor asks you to (in which case, you should do so immediately, while smiling) or if you have a relationship with the donor to the point that there’s an alternate communication strategy in place.

That said, the major gift officer is right.  You don’t want to treat a potential donor the same way as a potential $10 donor.  This is not a defense of sending someone with the capacity to give a transformative gift the same 12-mail-pieces-and-a-cloud-of-dust approach that everyone else gets. It means:

A donor newsletter.  You hopefully are doing this already.  And you hopefully are basing it on Tom Ahern’s Making Money With Donor Newsletters.  In case you aren’t, your donor newsletter should:

  • Focus on “you” — you being the donor
  • Focus on what “you” did — progress updates and impacts
  • Have short articles
  • Be written for skimmers — white space, bullets, and compelling headlines and images
  • Have a return envelope but not be as “ask forward” as a traditional mail piece.

This more cultivating newsletter will help you make money from these donors.  But it also creates a holding pattern for your major gift officer.  You’ve already made the segue to what impact the person can have, leading to a more natural conversation when the officer is able to get in front of the donor.

Higher-touch communications.  This can be simple things like crossing out the impersonal salutation on a letter and writing in “Dear Nancy,”.  Paperclips in your mail pieces show that the piece has been touched by human heads.  First-class postage is a nice touch, as is expedited postage to get the mail piece to the donor.  One nonprofit of my acquaintance has their CEO write a holiday letter in blue ink, then copies it on the color copier for a handwritten appearance.  These are techniques that can segue naturally to higher-value communications with a major gift officer.

Higher-value communications.  We’ve discussed the supreme value of exclusivity.  A major donor may want to be able to get a sneak preview of your upcoming report or have an exclusive briefing call with your head of government affairs.  These types of velvet rope communications can build to events where major gift officers can meet with them face to face.  Once natural enemies, direct marketing can set up the major gift relationship.

Helping define the major gift portfolio: You are looking for one of two things: a long giving history with multiple gifts per year, increasing gift amounts, and participation in the mission or someone who makes an unusually high first gift.  Usually the first group will be better prospects.

Thank extremely well.  Have you ever heard a potential major donor consider not making a major gift because they were thanked too well or too often?  Me neither.

Overall, you are looking to create a spirit of cultivation with these donors.  And you should give of your donors to your major gift officers.  By being a strong resource for them, you prevent them from trying the nuclear suppression strategy with you, allowing you to maximize revenue from these donors over time.

Breaking down the “my donor” mentality between direct marketing and major gifts

Nailing the direct marketing-event relationship

Yesterday, I argued:

a quality direct marketing program can help increase both event and non-event giving.  Moreover, you get people who are more connected to the organization.  And when these people are already giving to 6-9 other organizations, usually through direct marketing, unilateral disarmament doesn’t seem the wisest approach.

Let’s test the three major assumptions here:

  • Event participants and donors are connected to your organization
  • Event participants and donors are likely direct marketing donors
  • Direct marketing can raise all boats

First, are event participants and donors really connected to your organization?  Yes and no.  Certainly they are willing to give money that benefits your organization.  However, let’s take a donor to a person’s walk team for your organization.  Your organization clearly isn’t repugnant to them.  However, they are likely giving more to their friend than to your organization.  So let’s say they are more likely to support you than a person off the street would be (because some of them won’t like your organization), but not much more likely than the average outside acquisition list (because you’ve chosen those lists to include people who support like-minded organizations).

fh6wo8vmcukic2qcl4p2lq Second, are event participants and donors likely direct marketing donors?  Yes and no. Yes, because they are willing to give to charity.  Gallup asked Americans if they gave to charity in the last year.  As you can see, not everyone did.

If you set aside that people are likely to inflate their charitable giving to pollsters, you have one out of every six people who don’t give to charity.  Clearly, you’ve weeded out this group by talking to event folks.  However, it’s likely that your event participants are different demographically from your “normal” direct marketing donors.  If you take an extreme example like walk participants versus telemarketing or mail donors, you may find that the former are demographically the sons and daughters of the latter.

Thus, as before, they are more likely than a person of the street to donate through direct marketing.  But they haven’t proven channel responsive and that could be troubling.

 

You might question, then, whether event participants and donors are good direct marketing prospects.  The answer is definitely yes.  Both Making Strides Against Breast Cancer and MS Society (this link goes to an excellent webinar on the topic) reported significant gains in both event and direct marketing revenues from adding direct marketing to their marketing mix for events.

So why?

It’s because these communications centered on the person’s previous experience.  I can support this anecdotally. I’ve both customized communications to walkers and walk donors and dropped them unprimed into an ongoing direct marketing stream.  Customized is better.

What would a program like this look like?

Recruiting people to the event: This would include inexpensive communications to your existing constituents about the event (inexpensive because the transitive property says that if your event donors are unlike your direct marketing donors, your direct marketing donors are unlike your event donors).  These could include buckslips, stories in existing donor newsletters, email communications, outbound voice mail announcements, and online co-targeting.  Using lookalike audiences and remarketing could also help bring new people to the event.

Reattracting lapsed participants: This would look very much like any other lapsed campaign you would run.

Engaging current walkers: Try new walker online welcome kits that engage walkers in the general mission.  Also, don’t forget direct marketing nudges to fundraise for the event.

Converting the event donors:  Here’s where you customize your regular communications to event participants.  You might even try “The walk is over, but the fight continues” walker specific emails and mail pieces, but mission-forward pieces and engagement opportunities like surveys, membership appeals, and the like tend to do better with this audience.  And, as any good donor steward knows, making sure these event donors get outstanding gratitude is highly predictive of future donations.  

And, as I’ve stated previously, because of the inherent national/field friction in some national organizations, I would strongly recommend running these techniques as a test in year one with sites that are willing to experiment.  Using the other sites as a control, you can then present how much better the direct marketed to walks did versus those that didn’t have the wind at their back from email, online, mail, and telemarketing.
Hopefully, this will help you acquire your own donors and cross people over into organizational/cause donors.  More importantly, I hope it helps break through the “my donor” mentality that can be so destructive to programs.

Nailing the direct marketing-event relationship

The myth that our donors are unique and special snowflakes

Charitable people do charitable things.

Things, plural.

There’s a reason that most of the outside lists and people that you pursue to be donors to your organization aren’t from a cohort of magazine subscribers or motorcycle enthusiasts or even a political party.  They are from other nonprofits: charitable people do charitable things.

Russ Reid’s Heart of the Donor survey indicates that the average donor gives to six different nonprofits.  If anything, my experience would say that this number is a bit low.  I once modeled a list of walkers and it indicates than the median walker gave to nine other nonprofits.  It’s the same reason multis are the most profitable donors to acquire.

Charitable people do charitable things.

Yes, it’s a tautology.  But it’s one we often forget when we make our policies around fundraising, especially when we put up walls around our donors internally.

We must accept that our donors will be charitably promiscuous.  Personally, I’ve been impacted by or had family and friends impacted by Alzheimer’s, autism, cancer, depression, heart disease, kidney disease, MS, sexual assault, suicide, and more.  That’s life.  And people who give will give.

We are in that competitive environment.  And the way to differentiate ourselves is to build closer ties to our donors, not to try to build walls around them.  As French playwright Andre Gide said, “It is not enough to be loved — I wish to be preferred.”*

So why do we:

Eschew list cooperatives?  This is a way to take other organizations’ best donors and build models that allow you to get the best of the best.  If you are doing a good job of focusing on your donors, you will be able to steal them away.  If you are doing a bad job, you were going to lose those donors anyway.  You didn’t deserve them.

Not try to get donors who are uniquely tied to us?  This sounds like it contradicts the entire rest of the post.  But if you are worried about fishing in overfished waters (and you should be), you are then looking at how to bring people into your organization who may not have given to nonprofits before.  That starts with content marketing and with lead generation tools, especially online.  This is when it pays to have a strong vision of your donor and constituent journeys.

Try to protect our event donors from becoming organizational donors?  This confounds me, because a quality direct marketing program can help increase both event and non-event giving.  Moreover, you get people who are more connected to the organization.  And when these people are already giving to 6-9 other organizations, usually through direct marketing, unilateral disarmament doesn’t seem the wisest approach.

We’ll talk more about the data on this tomorrow.

 

* No, I haven’t ever read any of Andre Gide’s plays or really know who he is.  He was quoted in I’m With Stupid, a book that while not on the same intellectual level, is waaaaay funnier.

The myth that our donors are unique and special snowflakes

“Our donors” and channel conflict

According to psychological studies, human territoriality is a multifaceted concept that includes physical space, possession, defense, exclusiveness of use, markers, and personalization.   

giphyI think of Milton from Office Space.  He possesses his personalized red stapler in his tiny cubicle fortress than he does not want to leave and eventually fights to defend. 

How often are we like this with our donors?

Even the phrase “our donors” is illusory.  A donor no more belongs to your organization than I belong to Google just because I am dependent on their search engine and mail programs for even the most basic forms of knowledge seeking and human interactions, respectively.

OK, bad example.  But you get the idea.

A donor doesn’t really belong to your organization; they are free to leave at any time (and frequently do).  

And they certainly don’t belong to any one aspect of your organization.

Yet we aim to possess donors, erect walls for their defense from other types of fundraisers, even mark our territory on them.

The thing that got me thinking about this is Joshua Benton’s excellent piece with NiemanLab about NPR’s decision not to promote the NPR One app or its podcasts on its terrestrial radio stations. 

They will not ask for any downloads or mention podcast hosts in a way that would be seen as an endorsement.

Part of this is understandable.  Radio stations pay the bulk of NPR’s bills.  These stations want to hold on to their share of ear and make sure that people listen to radio stations.  They exert pressure; NPR folds.

But this feels very much like the classic Theodore Levitt article about Marketing Myopia:

 

The railroads did not stop growing because the need for passenger and freight transportation declined. That grew. The railroads are in trouble today not because that need was filled by others (cars, trucks, airplanes, and even telephones) but because it was not filled by the railroads themselves. They let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business. The reason they defined their industry incorrectly was that they were railroad oriented instead of transportation oriented; they were product oriented instead of customer oriented…

 

OK, a virtual show of hands.  Who thinks that NPR’s long-term future is in traditional radio-wave-based radio?  OK…  OK… thanks.  Hands down.  

Now who thinks their long-term future is in online radio, podcast, and things we haven’t even thought of yet?  OK… OK… keep them up… there are a lot of you to count…

Yep.  Exactly.  Yet because of territoriality, they mortgage the future for the present.

So what business is NPR in?  Are they in the radio business?  Or are they in the informational (or entertainment or thought-provoking) business?

The same is true for your nonprofit.  You put up barriers to protect your walk donors from being over-solicited or make sure your major donor prospect don’t get mail pieces that might soil their hands.  You make sure that national/local doesn’t get their stinkin’ mitts on “your donors” because that money should stay local/national.  As if it matters which pocket gets filled.

In what business are you in your direct marketing?  If you are not in the loving-donors-and-being-loved-by-donors business, might you be in the wrong business?  If a $20 mail donor becomes a $500 walk team captain, and that fills that donor up with warmth, do you view that as a $20 loss?  Then you are in the wrong business.

So this week, we’ll try to explode some myths about “our donors.”  They are not only your nonprofit’s donors.  They are not permanently destined to stay in a single channel.  They are not national’s or local’s.  They can be communicated with both personally and through direct marketing.  And so on.

And we’ll discuss some solutions, including a potentially radical (ironic) solution on Friday.  You won’t want to miss it.

Or, if you do want to miss it, hopefully we’ll catch you next week!

“Our donors” and channel conflict

Converting advocates to donors

Let’s say you did the calculation of the value of an online advocate yesterday and it came out to thirty cents per.  Thirty measly cents.

After all the work you put into making sure every advocacy action was liked and retweeted and forwarded to friends.  You’d checked your bucket for holes and plugged them.  You’d dedicated real estate on your site and in your emails to the advocacy action.

But those darn advocates aren’t converting to donors.

Part of it may be your advocacy actions.  Remember the research from Tuesday: actions taken privately convert far better than public declarations that can be used as Facebook aren’t-I-a-good-person-today-so-I-guess-I’ll-have-that-brownie wallpaper.

But more often, the problem is that the communication stream for your advocates looks exactly like your communication stream for everyone else.  Remember our “change one thing” philosophy of expanding constituent horizons: if someone tells you that they like doing advocacy petitions online, your best bets for their next actions are going to be:

  • Doing advocacy petitions online
  • Doing other interactions online
  • Doing other advocacy efforts besides petitions
  • Doing advocacy petitions in other media

The next logical actions are not mailing in a check to support your annual fund or taking a call from a telemarketer who don’t know anything about the constituent or even joining your walk coming up in 42 short days.

And yet that is frequently our next action as nonprofits.  We want to expose people to so many different aspects of our nonprofits we might as well wear a sign that says

This organization doesn’t know who you are
or what you care about,
but they want your money.

A singularly unappealing message.

So how do you convert your advocates?  A few thoughts:

Strike while the iron is hot.  Quick, remember what the last survey you took online was about.  Unless it was in the past week, remembering the when or the what is probably not happening.  The same holds true for online advocacy — people are busy and may not remember they took an action a week later unless the issue is really important to them.

Thus, your communications to them need to start with the confirmation email and take advantages of those first few weeks where they remember you who are and what you do.  This will be easier if you…

Playback their action to them.  This shouldn’t take the form of (I swear I’ve seen this) “thank you for emailing your legislator about the importance of K-12 swimming education on Monday, January 13, 2013 at 8:43 PM.”  This is a conversation — play it just a little bit cool and bring it back to why they did what they did: “Thank you for helping protect kids from drowning by emailing your legislators.”

This playback reminds them that they did act with your organization and primes them for consistency influence: “I am the type of person who does things to protect kids from drowning.  Therefore, I should take this other action to do likewise.”

Report back on their action.  The best thing you can do to keep someone engaged is to make your action more than just a one-time event.  If someone emails their assemblyperson to pass a bill out of committee, let them know when the bill gets a hearing (with that picture of your organization testifying) and when it passes out of committee.  Now, you need that same person’s help to get it passed through the full Assembly.  You are able to get that passed, thanks to this wonderful person and people just like them all across the state.  Now, we need to get the Senate to act: would you email your senator as well?

And so on.  Most actions aren’t a one-time thing (or don’t have to me).  Reporting back on that action lets a person know that their action wasn’t wasted — they are helping to make a difference.  And asking again to help make the same or similarly things happen in multiple ways helps build a pattern: take an action, feel good about yourself, hear that it made a difference, feel good about yourself, take another action, feel good about yourself again…

At that point, it isn’t that big a leap for the final email in that series to say “your support helped pass the Zebra Endangered Animal Law (or ZEAL, because every bill has to spell something now).  Now we need to make sure that judges enforce the laws in place.  Your $17 monthly donation, in honor of the 17 zebras you will be helping to save, will monitor the courts to make sure that zebras will not be poached in our state.”

This leads into…

Customize the ask.  When you ask for a donation, the donation should be to help achieve the same ends that they took an advocacy action about.  If they wanted to save zebra habitats, don’t ask them to stop cosmetics testing on rabbits.

Go multichannel.  A simple campaign that I’ve seen work is mailing online advocates an offline petition for a similar action that they’d taken online, then doing an outbound voice mail campaign to let them know to watch their mailboxes for the petition.  They also received an online version of the same petition and both the offline and online petition asks also asked for a donation to support advocacy efforts.  This tight package can help bolster all efforts.  Similarly, some organizations have seen success telemarketing to advocates post-action thanking them for their action and asking for a monthly donation conversion.  This ties together the idea of a customized ask and striking while the iron is hot.

Any other best practices you have seen for advocate conversion?  Please let us know in the comments or email me at nick@directtodonor.com.  I’d love to publish your success story, whether anonymously or to your greater glory.

Converting advocates to donors

A direct marketing bridge to… planned giving

If you look at a planned giving consultant’s guide to how to approach planned giving, direct marketing will be a significant part of it.  In fact, they will want to take over the entirety of your direct marketing program.

It goes without saying that you shouldn’t let them, for the same reason your three-year-old does not get to pick what s/he eats.

However, there are intelligent ways to use your direct marketing savvy to cultivate planned giving prospects.

In order to market your planned giving society, you need to create your planned giving society (contrary to popular belief, my master’s is in marketing, not the obvious).  That is to say, you need to give your society a name (even if it’s as simple as the [Your Organization Name Here] Legacy Society) and let people know what will happen when they join by letting you know they have named you for a bequest.

In addition to creating the society, you need to create the systems to handle inbound queries by phone, mail, or email.  The person or people that help with this need not have legal training – in fact, it will likely help you avoid acting like a lawyer if you are not one – but should have a knowledge of different types of instruments for giving.  At its simplest (which can you shoot for if you are just starting up your planned giving program), you can start with just wills/bequests, of which there are few variations:

  • A fixed amount of money
  • A percentage of an estate
  • A fixed amount of money after X is taken care of (X can be family, friends, other charities, etc.)
  • A percentage of an estate after X

Pretty simple; don’t let the lawyers complicate it.  This can be a part where a direct marketer can help.  We are used to boiling things down to a low reading level and making abstruse concepts understandable (for example, by not using the word “abstruse”).  Research shows that complicated words like “charitable remainder trusts” and “bequests” can scare people away when we really mean “making a will.”

The systems you create should be fairly simple as well.  You should have a response system for whatever means they contact you for people who are considering a planned gift and one for people who have told you they have designated one to be made.  For the latter group, you should show them the love – donor newsletter, customized copy in mail and email pieces, recognition and regular thank you’s.  You want these donors to have guilt if they choose to remove you from their will.

Once you have your inbound systems in place, it’s time to work to attract planned giving donors.  You are looking for similar quality here as we talked about for major givers.  In fact, planned giving is a common fallback from a major gift ask (“I realize you may not be in a position to make that gift of eleventy billion now; would you consider us in your will?”).  To summarize for those who have not memorized the canon of this blog, you are looking for loyal, long-term donors, or those who have demonstrated a deep passion in other ways (e.g., volunteering, a large initial acquisition gift).

And you are looking for people who are older.  Planned giving experts will tell you that you should start with people in their 40s and 50s, because these are the people who are most likely to be putting together their first will or thinking seriously about this.

This may be true.  But there’s not one single other investment you can make at your nonprofit where you will say “now, all we have to do is wait 30-40 years and we’ll start to see if this investment paid off.”  Nor should there be.  For one, you lack effective testing data (reporting of leaving in a will is only a middling indicator of actually leaving in a will); for another, the time value of money has eroded so much over that time as to be negligible.

And, as a fundraiser, not one single person will pat you on the back for the bequest in 2058 that you set up with your marketing today.

So I would suggest a much older age selection for your planned giving prospects.

Then, planned giving experts will tell you to mail and call this entire file.  Also, car donation experts will tell you to mail and call your entire file about donating your car.  Everyone wants you to spend your money on their thing.  I haven’t seen anyone advocate a telemarketing campaign to get people to use text to donate, but I’m sure I will.

Instead, save your money by piggybacking on pieces you are already doing.  Donor newsletters are a great place to put planned giving information because those are the loyal donors who are most likely to participate.  Similarly, you can insert a planned giving buckslip into your acknowledgment envelopes for people who are in your target audience much cheaper than you can for a single mailing.

Now take the money you saved and run another donor acquisition campaign.  You’ll do more for planned giving by having a larger file with better donors than you will having a one-off planned giving campaign.

So those are bits of the direct marketers guide to planned giving.  Tomorrow, we’ll wrap up the week with the bridge to monthly giving.

A direct marketing bridge to… planned giving