Quantity versus quality of pieces in donorcentric fundraising

Food for the Poor, the DMA’s Nonprofit of the Year last year, sends 27 mail pieces in its control donor series throughout the year.  These are all very good donorcentric letters, focused on the impact that you as a donor are having in saving people in their times of desperate need.

Another nonprofit of my acquaintance that will remain nameless, sends out one appeal per year.  When they asked me whether they should send a second piece, I told them that they should make their one piece work first, because it was not a compelling appeal.

There are wonderful donorcentric people who argue that nonprofits need to reduce the amount they communicate across the board.  I would argue that they need to reduce the amount they communicate badly.

Let’s take a look back at the reasons that people give for stopping giving to a nonprofit from Dr. Adrian Sergeant (first covered in Wherefore Segmentation):

 

reasons-for-lapse

As you can see, 72% of the reasons were related to not getting our message across like “other causes are more deserving” or “I don’t remember donating” or “they don’t need money any more.”  Less than four percent said inappropriate communications.  People are leaving because we persuade too little, not too much.

And as for the sentiment you may get about mailing too much, Van Diepen et al looked at irritation from nonprofit mailings.  They found that irritation can be incurred from mailings, but that it had no impact on revenue per mailing.  That is, people kept donating at the same rate per piece.

As Jeff Brooks put it in his wonderful book The Fundraiser’s Guide to Irresistible Communications:

[A] typical donor gets at least 10 pieces of unsolicited mail every delivery day.  That’s 3,000 pieces a year.  If you write to a donor twelve times a year, you’re sending 0.4 percent of her yearly total.  If you stopped mailing, the daily average would drop from 10 to 9.96.  Not a meaningful difference for you and your donor.

But for you, that cutback would mean lost revenue, forever.  A loss of hundreds, maybe thousands, of dollars from each donor.

You’ll never solve the Too-Much-Mail problem if you treat it as a numbers game.  The real issue is the relevance of the mail, not the volume.

All of that said, you could be mailing too much, as measured by both your net revenues and a true donor focus.  Here are some of the symptoms:

  • Channel mismatch. It is correct and laudable to try to get an online donor to give offline and vice versa.  However, there is a point of non-response (that varies by organization) at which the online donor is very unlikely to give.  For example, if someone gave their first gift online, continues to give on online, and hasn’t so much as looked at 10 mail pieces from you, you might be wasting money in sending those appeals (note: I say those appeals – perhaps a mailing that encourages her to go to the Website and make a donation is just what the doctor ordered).
  • Seasonality mismatch. If someone donates every November or December like clockwork, but never a second gift in the year over five years, you are probably safe in reducing the mailings they receive in spring and summer.  Note that I don’t say eliminate.  It could be that the updates they are receiving in the summer are the reason they donate in the winter.  But you can probably save some costs here.
  • Mismatch of interests. As we’ve advocated in the “change one thing” approach to testing, you can find out what messages people will respond to and what they won’t.  One you learn that, for example, a person only gives to advocacy appeals, you can safely cut some of the other types of messages they get.  Or someone who only gives to premium pieces get premiums (but for whom they are a turn-off don’t).
  • Systemic waste. Additional mailings should do two things: increase retention rates and increase total program net revenue.  That is to say, it’s not enough to say “this piece is a good one because it netted positive”; you need to be able to say that without the piece revenues would have been down overall.

To make the math simple, let’s say you mail three pieces, each of which gets $100K net revenue.  If you eliminated one of them and two pieces started making $150K net, that third piece was not netting program revenue (unless it was a cultivate piece that set up future year’s revenues or had an upgrade component or the like.

What this nets out to is that in a donorcentric future (or, at least, in my donorcentric vision of the future), people will ask how many control pieces you send and you will have to say that it depends greatly on the donors themselves (or give a range like somewhere between two and 30 pieces per person).

And, of course, that each of these pieces is customized and crafted to appeal to that particular donor or segment.  That, in my mind, is listening to the donors and not trying to let a Platonic ideal donor get in the way of each precious unique donor snowflake.


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Quantity versus quality of pieces in donorcentric fundraising

Donorcentricity: it’s only a fad if you aren’t doing it

I had the pleasure of doing a debate at last week’s DMA Nonprofit Federation Leadership Conference with Lynne Wester, the Donor Relations Guru, about donorcentricity.  She was pro (and was a pro, surprising no one); I was con.

Several people asked me afterwards what I actually believe.  For the most part, I’m very much pro-donor-centrism.  I took the con side because I believe what John Stuart Mill said:

quote-however-unwillingly-a-person-who-has-a-strong-opinion-may-admit-the-possibility-that-john-stuart-mill-125-26-67

And also because sometimes an admirable goal of improving the nonprofit sector’s sometimes abysmal treatment of donors loses sight of the goals of fundraising.

So this week, I’d like to poke, prod, and challenge the wisdom for and against a donor focus, starting with what it is and why it’s important.

The answer is not to make our donors feel better.

The answer is to cure cancer.  Or end drunk driving.  Or prevent mistreatment of animals. Feed the hungry.  Protect the abused.  Light the fire of education.  All this and more.

To do these things, we need money.  To get money, we need donors.  To get and keep donors, we need our donors to give happily.  Thus, making our donors happy is a good goal.  It’s just not the end goal.

But at the same time, we ignore it at our peril.  In the room, I talked about the amazingly low retention rates we have, especially for first-time givers, as a reason to churn-and-burn.  My actual conclusion could not be farther from the truth – retention is something on which can we continually work and improve.

We face numerous challenges right now to the very model of nonprofits historically.  Donors are looking to fund an impact and a cause, not necessarily an organization.  Why should they pay what they perceive to be (but aren’t) high overhead rates when they can do a microloan with Kiva, or directly fund a school through DonorsChoose or find a particular person in need through GoFundMe ?

In addition, aggregator sites are more than happy to give nonprofits the money as long as they own the constituent.  Facebook, usually a reliable example of most examples of walled gardens and rented land, is one of these where information does not get to the nonprofit for meaningful communication.

All of these satisfy donors’ needs to make a difference and feel an impact, while not engaging with an organization.

There are three ways I can see to adapt to this new world:

1. Fail.  Remember, in the words of Adam Savage:

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This may not sound particularly palatable, but it’s better than being the best buggy-whip salesperson or whale-oil-light manufacturer or print journalist left on earth.

2. Compete on the value of our models for effectiveness. Small scale efforts like GoFundMe can fund one person, but they can’t fund a systemic scale against hunger.  Individual donors tend to pick projects based on the basis of attractiveness and skinniness and whiteness (unfortunately), so nonprofits fill a role in helping everyone.  Small efforts can’t effectively change laws or study methods for change.  And they while they fix things well, they can’t prevent them from breaking.

Unfortunately, these are usually tough sells.  For years, we have talked about the systemic problems through the story of the one.  It’s the one that touches the heart and we know that emotion is far better than education in low-dollar appeals (and since you attract people as low-dollar donors, that hurts acquisition as well).  If someone can see a person’s plight and fix it, rather than the underlying problem, easy trumps thorough.

3. Compete based on how well we can treat donors. That’s donorcentricity.  That’s where we can have a meaningful advantage.  One-off sites like Facebook can’t build a relationship around an issue like we can.  And while Kiva is fabulous in terms of creating an addiction around helping, other sites lack in this regard.

So rather than die off, donorcentricity is going to be (in my mind) how we justify our very existence: we are the best at creating meaningful connections between donors and the world they wish to create.

So this is not a fad.  It is not everything, but neither is it nothing.  But in my mind, it also doesn’t mean what some people think it means.

Along those lines, I’ll be talking about communication quantity tomorrow.

Donorcentricity: it’s only a fad if you aren’t doing it

It’s time to stop… the big check photo

Every nonprofit has a photo like this somewhere:

ansari_x-prize_check

It’s not necessarily a bad thing to do.  It’s a photo that your corporate partner can use on their Web site or in their annual report as a way of showing their commitment to the community.  And, among a still-sadly-plurality-older-white-male business community, the big check sends the message to other business people in the audience:

Your check is too small.

And this, to stereotype broadly, is not an audience that wants their anything to be too small.

But for goodness sakes: do not put this big check picture in your donor communications.

Ever.

Because it sends the message “your check is too small.”  This is sometimes a message you want to send.  We’ve talked about social proof nudges like “the average donor gives $X” as an upgrade strategy for people who don’t know what the socially acceptable amount is.  (Side note: can any of my readers let me know what the proper amount is to tip a shared-ride (Uber, Lyft, Sidecar, etc.) driver?)

But that is usually trying to get a person to increase their gift by double or less.  What you are saying with the big check is:

  • “What you are giving is 1/10000th of what this person is giving”
  • This is how we treat people who give us things like this: note that we look to be dressed nicely at what appears to be a fancy hotel and really yucking it up with each other.”
  • “This is how we treat people who give us what you give: we send them this letter.”

Needless to say, this is not a response rate booster.  And, since the amount is so far off from not only what they give, but what they could possibly give, it is not an effective anchor for a higher gift.

It also indicates that this type of thing is what you do with your time as nonprofit employees.  This doesn’t help us dispel the overhead myth that we should have Robin Leach narrating the story of our non-profit; it reinforces it.

But the most grievous sin the picture has (and this goes for award pictures and ribbon cutting ceremonies): it’s not about the donor.  Remember that for the donor, you are a means to the end that they are hoping to create in the world.  The opportunity cost of that photo is immense when you could be showing visual proof of the impact the donor is having on the world.

It is a cultural shift because the big check photo is one of those things that is done.  But it shouldn’t be.

Instead, ask if you could also get photos of your corporate partner, grantor, or their employees doing some of your mission work.  Someone in a logoed polo shirt planting a tree or serving on your crisis phone line or reading a story to children is something you can use in your communications.  And it helps cement the bond between you and the person who gave you the big check.  Because they are (hopefully) in it for the impact as well and having a photo of trees, services, or kids is a far better reminder of that than phony grins and foam core.

It’s time to stop… the big check photo

Why welcome your donors?

I’ve read a lot about online and offline welcome kits, packages, and series.  These are almost always treated in separate articles by separate people in separate universes.  If your organization is sufficiently large, chances are they are written by separate people; if it’s even larger, they are written by separate people in separate departments.

In studying, I’ve found one deep and profound difference between welcoming donors and constituents online versus offline:

One is made of dead trees; the other is made of electrons in tubes.

Other than that, not much difference.  There are four major purposes for welcoming someone:

  1. To appreciate them in a way that makes them like you.  Online, there’s research from Powerthru Consulting from their work with Environmental Action that is worth a read.  They found that everyone who opened an email from their welcome series, it increased their likelihood of opening an email over the next six months by 20%.  Further, it increased their likelihood of opening all of the emails over the next six months by 1-3%.

    Welcoming emails also are well-opened and clicked on, far more than regular emails, according to MarketingSherpa

    It’s more difficult to get such data on mail pieces, but I’d wager they run the same way.  This first post-thank you mail piece is going to be (if you are doing it right) in the honeymoon phase of the relationship and thus affect the trajectory from there.

  2. To learn about the person and engage with them.  If you doubt why should know about your donors, sneak over to my Winter is Coming end-of-times prediction about nonprofits who do not know their donors.  Suffice it to say, your best chance of getting future donations from someone are by making sure you are customizing your asks to their desires.  You won’t know how to do that if you don’t know them.

  3. To allow them to learn about and engage with you.  In this honeymoon period, you are still a bit new to them as well.  Maybe they are actually more interested in something that you do than the one they donated to.  Maybe they are interested in advocacy, volunteering, downloading materials — who knows at this point?

  4. To get another gift, perhaps an upgraded one.  A one-time giver is not really a donor.  About a quarter will give another gift.  While this is better odds than putting your finger on a name in the phonebook (side note: we really need a new analogy for this), it’s not someone who is committed to the organization.  Double this for online donors, who are even more fickle on average.

    A donor who gives a second gift early in the process is more than twice as likely to retain as a long-term donor than someone who waits.  Do not be in the “oh, they just gave; let’s not ask them” crowd that does not strike hot iron.  The debate over whether or not to ask in thank you’s is a legitimate debate (I say you should, but other smart people say no), but not asking in the welcome series at some point is simply incorrect.

This should not be restricted by medium.  I’ve already talked about this extensively in the post on breaking down your thank you silos.  So, I’ll just add two quick things here:

  • You usually will have someone’s mail address when they donate online, but not their online address when they donate through the mail, so this is easier to do from online to mail.
  • fMRI studies show that reading from dead trees causes more emotional processing than reading from electrons.  Roger Dooley and his Neuromarketing team have the story here.  So there probably is greater applicability of these techniques going from online to mail.

This week, I’ll go through each of these purposes in turn for a welcome strategy that is medium-agnostic.  Personally, I view hitting all of these points as more important than whether you send two emails or five or the exact timing of when the mail gets out, so we will focus on technique and usable tips.

Why welcome your donors?

Getting donor intelligence by asking your donors

Yesterday, I said you can get a good idea of who your donor is through their actions.  The trick here is that you will never find donor motivations for which you aren’t already testing.  This is for the same reason that you can’t determine where to build a bridge by sitting at the river and looking for where the cars drive in trying to float across it, Oregon-Trail-style.

10-trail_208

Damn it, Oregon Trail.  The Native American guide told me to try to float it.
Don’t suppose that was his minor revenge for all that land taking and genocide?

To locate a bridge, you have to ask people to imagine where they would drive across a bridge, if there were a bridge.  This gives you good news and bad news: good news, you can get information you can’t get from observation; bad news, you get what people think they would do, rather than what they actually will do.

True story: I once asked people what they would do if they received this particular messaging in an unsolicited mail piece.  Forty-two percent said they would donate.  My conclusion — about 40% of the American public are liars — may have been a bit harsh.  What I didn’t know then but know now is that people are often spectacularly bad at predicting their own behavior, myself included.  (“I will only eat one piece of Halloween candy, even though I have a big bucket of it just sitting here.”)

There is, of course, a term for this (hedonic forecasting) and named biases in it (e.g., impact bias, empathy gap, Lombardi sweep, etc.).  But it’s important to highlight here that listening to what people think they think alone is perilous.  If you do it, you can launch the nonprofit equivalent of the next New Coke.

“The mind knows not what the tongue wants. […] If I asked all of you, for example, in this room, what you want in a coffee, you know what you’d say? Every one of you would say ‘I want a dark, rich, hearty roast.’ It’s what people always say when you ask them what they want in a coffee. What do you like? Dark, rich, hearty roast! What percentage of you actually like a dark, rich, hearty roast? According to Howard, somewhere between 25 and 27 percent of you. Most of you like milky, weak coffee. But you will never, ever say to someone who asks you what you want – that ‘I want a milky, weak coffee.’”  — Malcolm Gladwell

With those cautions in mind, let’s look at what survey and survey instruments are good for and not good for.

First, as mentioned, surveys are good for finding what people think they think.  They are not good for finding what people will do.  If you doubt this, check out Which Test Won, which shows two versions of a Web page.  Try to pick out which version of a Web page performed better.  I venture to say that anyone getting over 2/3rds of these right has been unplugged and now can see the code of the Matrix.  There is an easier and better way to find out what people will do, which is to test; surveys can give you the why.

Surveys are good for determining preferences.  They are not good for explaining those preferences.  There’s a classic study on this using strawberry jam.  When people were asked what their preferences were for jam, their rankings paralleled Consumer Reports’ rankings fairly closely.  When people were asked why they liked various jams and jellies, their preferences diverged from these expert opinions significantly.  The authors write:

“No evidence was found for the possibility that analyzing reasons moderated subjects’ judgments. Instead it changed people’s minds about how they felt, presumably because certain aspects of the jams that were not central to their initial evaluations were weighted more heavily (e.g., their chunkiness or tartness).”

This is not to say that you shouldn’t ask the question of why; it does mean you need to ask the question of why later and in a systematic way to avoid biasing your sample.

Surveys are good for both individual preferences and group preferences.  If you have individual survey data on preferences, you absolutely should append these data to your file and make sure you are customizing your reasons to give to the individual’s reason why s/he gives.  They also can tease out segments of donors you may not have known existed (and where you should build your next bridge.

Surveys are good for assessing experiences with your organization and bad for determining complex reasons for things.  If you have 18 minutes, I’d strongly recommend this video about how Operation Smile was able to increase retention by finding out what donors’ experiences were with them and which ones were important.  Well worth a watch.

If you do want it, you’ll see that they look at granular experiences rather than broad questions.  These are things like “Why did you lapse” or “are we mailing too much?”   These broad questions are too cognitively challenging and encompassing too many things.  For example, you rarely hear from a donor to send fewer personalized handwritten notes, because those are opened and sometimes treasured.  What the answer to a frequency question almost always leads to is an answer to the quality, rather than quantity, of solicitation.

Surveys are good when they are well crafted and bad when they are poorly crafted.  I know this sounds obvious, but there are crimes against surveys committed every day.  I recently took a survey of employee engagement that was trying to assess whether our voice was heard in an organization.  The question was phrased something like “How likely do you think it is that your survey will lead to change?”

This is what I’d call a hidden two-tail question.  A person could answer no because they are completely checked out at work and fatalistic about management.  Or a person could answer no, because they were delighted to be working there, loved their job, and wanted nothing to change.

Survey design is a science, not an art.  If you have not been trained in it, either get someone who is trained in it to help you, or learn how to do it yourself.  If you are interested in the latter, Coursera has a free online course on questionnaire design here that helped me review my own training (it is more focused on social survey design, but the concepts work similarly).

You’ll notice I haven’t mentioned focus groups.  Focus groups are good for… well, I’m not actually sure what focus groups are good for.  They layer all of the individual biases of group members together, stir them with group dynamic biases like groupthink, unwillingness to express opinions contrary to the group, and the desire to be liked, season them with observer biases and the inherent human nature to guide discussions toward preconceived notions, then serve.

Notice there was no cooking in the instructions.  This is because I’ve yet to see a focus group that is more than half-baked. (rim shot)

My advice if you are considering a focus group: take half of the money you were going to spend on the focus group, set it on fire, inhale the smoke, and write down the “insights” you had while inhaling the money smoke.  You will have the same level of validity in your results for half the costs.

Also, perhaps more helpful, take the time that you would have spent talking to people in a group and talk to them individually.  You won’t get any interference from outside people on their opinions, introverts will open up a bit more in a more comfortable setting and (who knows) they may even like you better at the end of it.  Or if you hire me as a consultant, I do these great things with entrails and the bumps on donors’ heads.

So which do you want to use: surveys or behavior?  Both. Surveys can sometimes come up with ideas that work in theory, but not in practice, as people have ideas of what they might do that aren’t true.  Behavior can show you how things work in practice, but it can be difficult to divine deep insights that generalize to other packages and communications and strategies.  They are the warp and weft of donor insights.

Getting donor intelligence by asking your donors