An ode to the mostly filled thermometer

When was the last time you saw an analog, mercury-based thermometer?  Chances are, it was in a fundraising campaign, indicating how close you were to goal.  Even as thermometers go digital, their ancestors are honored through skeuomorphism* to symbolize progress.

But we come here not to bury the fundraising thermometer, but to praise it.

Specifically, we want to praise how the fundraising thermometer, or a specific state of it, can make people more likely to donate.

fundraising-thermometer-template

Cryder, Loewenstein, and Seltman took a look at how the amount toward goal already raised impacts a person’s likelihood of giving here.

They call it the goal gradient hypothesis: they think that people will be more likely to donate the closer a campaign is to goal.

So they tested this with Kiva, the microlending site that you may remember from such hits as “does being more attractive increase your chances of getting funded on Kiva”?  (Yes, it does.)

They found that when an individual fundraising goal was 0-33% complete, the average hourly progress toward goal was 6.7%.  When it was 33-66% complete, progress was 10.8% per hour; for the final third, it was 12.8% per hour.

So, having the thermometer partial full helped increase fundraising efforts.  This would tend to make sense, since the thermometer is a measure of social proof, a potent persuader.  (It’s the same reason that servers will seed a tip jar with larger denomination bills — it helps set the pressure and the anchor)

Hey, I can hear you yawning.  Yes, I know you aren’t going to be going on Kiva tomorrow.  But we’re just warming up.  The researchers then worked with a nonprofit to mail lapsed donors.  They had three separate goals that they were trying to reach and mentioned that one was 10% complete, a second was 66% complete, and the third was 80% complete.  They also had control conditions where no progress was mentioned.

Sure enough, the 10% and 66% conditions were not significantly different from the no progress control.  However, the 85%-to-goal piece significantly increased response rate (from .5% in the control to 1.17% in the 85%-to-goal version).

They even tested the “why” of this with donor surveys.  They asked people if they would be more likely to buy candy bars from a 7th grade fundraiser if the fundraiser was two bars short of goal or 32 bars short.  Two-bars-left won handily.  Additionally, the donors who chose the two bars indicated they felt like they were having a bigger impact and were more satisfied with their donation.

So, since not everyone can be the donation that pushes you over the finish line, how can you use this?

One tactic is to have a silent period of a campaign.  For online year-end giving, I’ve worked with organizations that will set their goal and their thermometer based on what it will take to hit goal starting from November 1, but only announce the goal and the effort on Giving Tuesday.  That way, their thermometer is at least 20% full when the first donor hits the form.

Another is to ask internal audiences (especially board members) to make the first gifts.  Showing them this research may help them feel like their gift is making a difference by getting others to give more freely.

Finally, you can define down your goal.  The 85%-to-goal condition mentioned above was based on being 85% toward buying a GPS unit for an international relief organization.  This is not a high-ticket item.  By setting the goal low, they were able to talk about 85% complete easily.  This type of microcampaign, repeated writ large, can help illustrate impact for your donors.

So keep those thermometers more than half full and you should be on your way to filling it up the rest of the way.
* A design based on an older version of an item to help people understand the newfangled version.  It’s the reason that email programs look like folded envelopes and your video app probably features an old-school movie clapper.

Thanks to Tim Vandevall here for the thermometer image.


If you’d like more nonprofit direct marketing content like this, please subscribe to my free weekly newsletter. You’ll get all of my blog posts, plus special subscribers-only content.

An ode to the mostly filled thermometer

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

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

Implications of more donors versus better donors

Let’s say you’ve organizationally had the debate that we’ve been following the past three days and you have come down on the side of better donors: you’ve taken into account all of the long-time and non-financial benefits of lower-dollar donors and still can’t make the average $10 or less donor work for you organizationally.

Here are the steps you can take in your program to skew your results toward getting fewer, better donors.  Note that if you decide the other way — neither of these approaches are right or wrong — just do the opposite of everything listed below.

Up your ask strings.  As we’ve seen in two different studies of ask strings (here and here), increasing the bottom number on your ask string increases average gift.  If you are in a Pareto efficient model like we talked about on Monday, there will likely be a resultant decrease in response rate.  

Like this study indicates, I would do this with single donors and not try to get my multi-donors to elevate when they aren’t ready to.  There, I think you would be wise to keep the highest previous contribution as the base donation, but increase your multiply.

Change your defaults.  This can be the default online (where you have the radio button start on $50 instead of $25) or the amount you circle on a direct mail piece with the social proof “Most people give X”.  Moving the default up should get you fewer higher-value donors.

Move up your list selects.  When you rent or exchange with outside lists, even if a list works well for you with no qualifier on it, you can request only $5+ or $10+ donors to that organization.  It will cost a little bit more to get that list, but you will be able to cut some of the potential tippers out of your program.

Incidentally, there is a trick you can do here with a list that performs well and offers a higher-value list select (say, $50+): rent the list twice.  Once, rent it with a $10+ select and the other with a $50+ select.  Then, you can separate out your ask strings to those two lists and mail the $50+ list twice (like multis) with an appropriate ask string.

Work with your modeling agencies and coops.  They will be more than happy to build you a model that maximizes gift instead of maximizes response rates.

Invest in telemarketing upgrades.  Upgrading seems to work better when people talk with other people.  I would counsel doing this with a monthly giving ask with the appropriate audience — it’s literally the gift that keeps on giving.

Shift your lapsed reacquisition selects.  Because you “own” those names, you have the most freedom to play around with who you are trying to reacquire.  You may be able to change the complexion of your file by communicating less deeply (say, moving from 12 months to six months) among under $10 and more deeply (say, moving from 36 months to 48 months) among your $50+ donors.

Use ZIP modeling.  This can work with both acquisition and donor communications.  In both cases, you can get more aggressive about your ask strings with wealthy ZIP codes.  In acquisition, you may even choose to omit the bottom half (or whatever) percent of ZIP codes from some lists.  As with tighter donation selects, you will pay a bit more for those names, but you will get higher average gifts.

Invest in your second gift apparatus.  This is probably a good idea regardless, but if you are going to bleeding donors intentionally, you are going to need a way to make sure you are converting those you do bring on.  This may be an investment you only make for $20+ donors or the like, but a welcome series for this audience will help you keep the donors you want to keep.

Thanks for reading.  Be sure to sign up for my newsletter to keep up with the latest debate.

Also, I’d appreciate it if you’d let me know at nick@directtodonor.com if you like the debate format.  If so, we can try this with some other hot topics in nonprofit direct marketing.  If not, then we need never speak of this again.

Implications of more donors versus better donors

More donors versus better donors: long-term and external benefits

To review, yesterday, Betty (arguing in favor of better donors over more donors) won a slight victory over Mo (arguing in favor of more donors over better donors) in talking about costs of fundraising.  Today, they will debate again: this time on the topic of external benefits of donors.

Mo: The case here is manifest.  To put a value on a constituent that comes only from what they give through direct marketing is myopic.  Having more donors means having more people that support you and having more people that support you means:

  • More awareness of your mission in the community
  • More volunteers
  • More advocates

Betty: It’s nice to believe that there are something things you can’t put a price on, but you can.  You can get awareness with PSAs and earned media. You can advertise for volunteers (and incidentally, thinking someone who gives $5 at time is dedicated enough to your mission to be your top volunteer is wishful at best.)  And you can get online advocates for $1.50 a pop from Care2 or Change.org.  If you want real change, the high-dollar donors in a congressperson’s district will hold more sway; they are who you get through consciously soliciting for value.

Mo: That works for some districts, but if you are doing the things that you need to do to get high-value only donors like zip selects, you are going to be ignoring a lot of districts that are just plain poor.  And you are going to be ignoring them with your message, mission, awareness, and advocacy.

But if you want to boil it down to dollars and cents, let’s go there.  Some smaller donors make for extremely effective peer-to-peer fundraisers.  You rarely know who is a deacon at the church and can pass the hat at the plant.  And casting your net broadly gives you a greater opportunity to get those types of donors.

Betty: You may have a point on peer-to-peer fundraising, but low-dollar peer-to-peer fundraisers are likely to bring in more low-dollar donors.  Now you have twice the problem.

Someone who gives more money at the outset is also likely to give more outside of a traditional single-channel direct marketing program.  They are the ones who will become the multichannel givers, major donors, and monthly givers.

Mo: Yes, if you go exclusively for the people who eat with multiple forks and pinkies out, you will get more of those high-value upgrades.

But you will rarely get bequests.  There is a great case study from the ASPCA.   Because they had focused on higher-value donors, they were not getting as many bequests.  In fact, they were excluding the 70+-year-old, $10 and under givers that were their best planned giving prospects.  So they made a conscious choice to go back and reacquire these donors, sending them (only) the best house mailings and working to upgrade them to bequest giving.

The verdict: Have to give this one to Mo on points.  A traditional lifetime value calculation ignores the value of donors as volunteers and advocates, which do have their own quasi-monetary value.  And bequest giving often comes from “tippers” on your direct marketing file of a certain age who give to help you in their lifetime, but are saving a nest egg for donation at the end of their lives.

This is certainly not to say that higher-average-gift donors don’t have greater major donor prospects; it’s just saying that a portfolio approach of quantity will have hidden benefits that should be uncovered.

More donors versus better donors: long-term and external benefits