Category: Marketing Communications

In my previous posts, I have discussed some of the most important implications of Regulating Fundraising for the Future: Trust in Charities, Confidence in Fundraising Regulation (aka the Etherington Report) on the future of fundraising. The catalyst for the Etherington Report was what the report described as “public concern over intrusive or aggressive fundraising methods” resulting from “high-profile cases of malpractice” particularly the death of 92-year-old Olive Cooke, who, it was widely reported, had been hounded by nonstop fundraising calls and letters for years.

The report noted that Britain’s Fundraising Standards Board (FRSB) had received 48,000 complaints against charities in 2013, mostly regarding excessive mail solicitations. While the report pointed out that this was out of an estimated 20 billion donor contacts that year alone, Ken Burnett, managing trustee for the Showcase of Fundraising Innovation and Inspiration (SOFII) and author of Relationship Fundraising: A Donor Based Approach to the Business of Raising Money, believes that it’s still 48,000 too many — and he’s not alone.

“We need to focus less on repeated requests that are designed to wear down our donors and learn more about being inspiring,” Burnett says.

Burnett has long championed an emphasis on marketing approaches that are based on “shared emotions, truth, and commitment” — in other words, using marketing techniques not to secure gifts but to secure relationships that lead to gifts. It is a subtle distinction that Burnett says many fundraisers often overlook. It also requires nonprofits to reframe fundraising expenditures in terms of the lifetime value of a donor, rather than the average cost per gift. And in a post-recession economy in which fundraising costs are on the rise and nonprofits are increasingly looking to individual giving to offset declines in grant funding, that can be a very tough case to make.

Twenty-five years ago, Burnet hoped to counter the then prevailing “churn and burn” paradigm that focused on the money rather than the people sending it. “But my fundraising vision was still not based on what the donor wants,” Burnett has written. “I ran a direct marketing agency. Though I tried to switch its focus toward communication, I still described our enterprise as marketing and communications specialists, putting marketing first. Why was marketing a mistake> Because our very success at it had enable us to downplay the donor experience, which is what we should have focused on to build the long-term, 40-year-plus relationships we need. As a result, we’re hemorrhaging our lifeblood while paying a fortune in acquisition just to stand still.

“The escalating cost of acquisition has now, in places, reached proportions impossible to justify unless we succeed in keeping donors a lot longer,” Burnett adds. “Yet, despite persistent protestations of being donor-let and a few inspirational examples of relationship fundraising, our sector seems locked into the ‘you give, we get’ mindset, with the fundraising equivalent of persistent hard selling the norm and brilliant customer experiences the hard-to-find exception.”

Fully aware that many people will see his change of heart as biting the hand that has fed fundraising so well for so long, Burnett points out that the biggest argument against marketing is a simple one: donors don’t like being marketed to. The difference is, donors now have the means to express their displeasure in ways that directly — and immediately — affect a nonprofit’s bottom line.

The ubiquity of “Unsubscribe” buttons has made it easier than ever for donors to terminate their relationships with charities on impulse — even when they continue to care about the cause. And with many nonprofits struggling with donor retention, every loss of a committed and passionate donor is a blow to the bottom line.

Despite what its name might suggest, relationship fundraising is very much a traditional data-driven approach. Marketing is, and always has been, about treating people as individuals, not as numbers. That is because the best marketers know that if you focus on the gift, that’s all you’ll get. If you focus on the donor, you’ll get all the gifts that the donor has yet to give. And the data prove it.

According to the 2015 Fundraising Effectiveness Survey Report, the median donor retention rate was 43 percent in 2014. That is, only 43 percent of 2013 donors made repeat gifts to participating nonprofits in 2014. When looking at new donor retention, for donors giving less than $100, the retention rate was only 18 percent compared with 47 percent for those giving more than $250. The same trend was seen in repeat donor retention: Donors giving less than $100 had an average retention rate of 53.5 percent over the last seven years compared with donors giving more than $250, which demonstrated an average of 76 percent retention. Does this say something about the way the different donors are stewarded or their relationships with organizations?

In his article “Relationship Fundraising and Marketing: Friends or Foes?” major-gifts fundraiser Roewen Wishart, CFRE, addressed what he called the “false dichotomy” that many fundraisers believe separates donor-focused fundraising from marketing. Relationship-based campaigns rely just as much on strategies, goals, quantitative data, and outcomes as transaction-based ones; where they differ is that a relationship-focused campaign necessarily requires a longer-term view of the return on investment.

“Relationship fundraising does not mean abandoning or neglecting how we ask for money,” Wishart writes. “It does mean that the transaction is the result, not the goal — and being careful with steps that reduce donor choice or favor quick returns over higher long-term returns, even where there is short-term cost.”

This post was adapted from “Inspiring Better: How Relationship Fundraising Can Win Back Skeptical Donors and Change the Way Fundraisers Think about Approaching Them” by Paul Lagasse, Advancing Philanthropy, Spring 2016 (reprinted with permission) You can read the whole article here.

In my previous post, I discussed the publication of Regulating Fundraising for the Future: Trust in Charities, Confidence in Fundraising Regulation (aka the Etherington Report) in response to public concerns about fundraising tactics employed by some UK charities that many people felt were overly aggressive.

Even though the Etherington Report doesn’t have the force of law outside the UK, fundraisers in other countries have been hearing similar calls for increased government oversight of charitable activities. Concerns over how donor advised funds are managed in the United States, for example, have led many observers to urge that laws be changed to require greater transparency and even mandatory time limits. In Canada, the threat of federal legislation that would impose salary caps on nonprofit executives recently galvanized over 500 charities to convene a summit to hammer out a common strategic roadmap and implement a nationwide educational outreach campaign that succeeded in forestalling the proposed law.

Ken Burnett, managing trustee for the Showcase of Fundraising Innovation and Inspiration (SOFII) and author of Relationship Fundraising: A Donor Based Approach to the Business of Raising Money, believes that, along with the concerns about oversolicitation that prompted the Etherington Report, these and other calls for increased regulation are an inevitable result of the widespread perception — accurate or not — that fundraisers cultivate supporters just to gain access to their wallets. It’s the antithesis of the philosophy that Burnett spelled out in 1992, in the first edition of Relationship Fundraising.

In the book and when speaking to fundraisers and stakeholders alike, Burnett defines relationship fundraising as “a donor-based approach to the business of raising money.” The relationship, he elaborates, can be “remote, slender, and distant, or it can be intense, close, warm, and even intimate.” The choice, he says, ultimately belongs to the donor. Whatever type of relationship the donor chooses, ideally it should be mutually beneficial, “where both [the donor and the organization] can see direct, tangible benefits that will encourage their relationship to continue by mutual consent and even grow.”

This mutual commitment is what sets fundraising apart from other types of marketing activities that also seek to motivate people to show their support through financial means.

The difference between the two methods is really just a matter of perspective. In Burnett’s view, a financial gift from a donor is the result of a relationship, not the reason for it. Put another way, an emphasis on the financial tramadol cod saturday need of an organization or a cause is analogous to “pulling” a donor toward your desired goal. In relationship fundraising, you strive instead to motivate people to want to give, in effect “nudging” them toward finding that goal for themselves.

As Burnett has written, “Instead of building the long-term relationships we need, fundraisers often opt for the low-hanging fruit of short-term money now, chasing the easiest bucks they can find to hit their quarterly or even monthly targets. At conference halls and seminars, there’s talk of buying donors in volume. We’ve commoditized fundraising and devolved the job of talking to donors and prospects to commercial third-party contractors who ration out among us the fruits from their sites. For this short-term saving, we’ve sown the seeds of our own downfall. Many are brilliantly talented and committed fundraisers, and we couldn’t and shouldn’t do without them. But the way we oblige them to work for us may not be what we need now.

“It seems to me and others, too, that what’s missing is the emphasis on the why and the pleasure of being a donor.”

Burnett believes that the most successful way to emphasize the why, to rekindle the pleasure of giving, and to nudge a donor to want to make a gift is through storytelling. In the quarter-century since the first edition of Relationship Fundraising, Burnett has become so convinced of the central importance of storytelling to fundraising — and of the need for fundraisers to embrace it passionately — that his latest book, which he calls his most important so far, is titled Storytelling Can Change the World. While the idea of storytelling is not new to fundraising, Burnett argues provocatively that fundraisers often don’t know how to identify the best stories to tell, or how to tell those stories effectively.

Burnett seeks to establish — or restore, depending on your perspective — the creative process to donor outreach.

As Charlie Hulme, managing director of Donor Voice and a former creative director for a major marketing agency, wrote in his review of the book, “We’ll never change the world unless we change the way we tell our stories.”

This post was adapted from “Inspiring Better: How Relationship Fundraising Can Win Back Skeptical Donors and Change the Way Fundraisers Think about Approaching Them” by Paul Lagasse, Advancing Philanthropy, Spring 2016 (reprinted with permission) You can read the whole article here.

When is too much simply too much? For donors, it is too many asks from too many fundraisers for too many causes.

Relationship fundraising has become the foundation of successful fundraising, with many development professionals worldwide hard at work finding new and interesting ways to engage people with the causes they care about. However, a report released late last year in the UK is forcing fundraisers there to rethink how they define and build relationships, and the implications of those changes are likely to spread far beyond national borders.

Regulating Fundraising for the Future: Trust in Charities, Confidence in Fundraising Regulation, also called the Etherington Report after the chair of the panel that wrote it, was published in response to public concerns about fundraising tactics employed by some UK charities that many people felt were overly aggressive. The issue received extensive press coverage — some of it highly sensationalized — and sparked an often-heated public debate over whether nonprofits had crossed an ethical line.

Concluding that fundraisers and the public alike had lost confidence in the UK nonprofit sector’s ability to regulate itself, the Etherington Report made several sweeping recommendations that, if enacted, would have the force of law, including the establishment of a national registry for people who choose not to be solicited by charities. The major fundraising bodies in the UK, the Public Fundraising Regulatory Association and the National Council for Voluntary Organizations, have endorsed the report’s recommendations. Nevertheless, some commentators have predicted that such a registry would effectively starve nonprofits of new revenue.

Ken Burnett, managing trustee for the Showcase of Fundraising Innovation and Inspiration (SOFII) and author of Relationship Fundraising: A Donor Based Approach to the Business of Raising Money, disagrees. He argues instead that the “do not solicit” list is an inevitable outcome of a fundraising mindset that assumes that the best way to get more money is to simply ask more people more frequently.

“In taking regulation out of the hands of fundraisers in the UK, the review body, while chastising British fundraisers for being overly aggressive, has insisted that fundraisers must put donors, not financial targets, at the heart of fundraising practice,” says Burnett. “We’re going to have to review how we do asking.”

Nor is donor dissatisfaction with oversolicitation limited to the UK. The Burk Donor Survey 2014, for example, found that in 2013, 64 percent of U. S. respondents and 71 percent of Canadian respondents reported that they had reduced or even canceled their financial support of nonprofits that had oversolicited them.

The proper course of action in response to this donor backlash should be clear, Burnett believes. As he wrote in a recent blog post, “The upshot of the past horrible half year is that in future fundraisers are going to have to be a whole lot less persistent in asking. Which seems to suggest, logically, that we’re going to have to get a whole lot better at inspiring.”

This post was adapted from “Inspiring Better: How Relationship Fundraising Can Win Back Skeptical Donors and Change the Way Fundraisers Think about Approaching Them” by Paul Lagasse, Advancing Philanthropy, Spring 2016 (reprinted with permission) You can read the whole article here.

The differences between the nonprofit sector and the for-profit world have become something of a mantra among fundraisers. Charities work for a greater good, you say, while businesses are only interested in their own profit. Fundraisers are motivated by a desire to change the world (or at least a corner of it), while salespeople are only interested in raising their company’s bottom line. However, nonprofits and businesses share some important things in common — most obviously, the need for money. Because fundraisers and salespeople seek to achieve vastly different ends, fundraisers argue, their means must differ as well. Otherwise, fundraisers fear, what are they except a salesperson by another name?

“We’re both trying to encourage someone to make a decision, but for very different reasons,” says Brian Saber, president and co-founder of Asking Matters (www.askingmatters.com). “What we’re ‘selling’ in the nonprofit world is helping others and goodwill.”

A major difference between fundraisers and salespeople, Saber points out, is motivation. “In for-profit sales, you learn to love the product and you go sell it,” says Saber. “In the nonprofit world, you believe in the organization and you sell it, but your reasons for doing so are much more personal.”

As the person in charge of training for the silent phase of a major capital campaign, Matthew S. Cottle, CFRE, director of advancement planning and special projects at California Polytechnic (Cal Poly) State University (www.calpoly.edu), had to confront the issue of fundraiser motivation head-on. Because of a dearth of available development officers with major-gift experience, Cal Poly has been recruiting people with commercial sales backgrounds and training them to understand the differences between the transactional approach used by salespeople and the relationship approach preferred by fundraisers.

Explicating the differences between fundraisers and salespeople, Cottle says, has helped him to understand more clearly the role of the fundraiser in the donor relationship equation, as well as the risk posed by the cultivation of a transactional mindset that values the fundraiser’s need to secure a gift above the donor’s desire to join a group that shares the same passion “A donation indicates a shared aspiration and a shared emotion,” says Cottle. “If we don’t understand our own emotional responses, we run the risk of allowing the relationship to veer off in unanticipated directions.”

Another crucial element is the fear of rejection. If a fundraiser’s fear of rejection were to prevent him or her from securing a major gift from a high-net-worth individual, the result for the organization’s bottom line could be disastrous. That crucial difference, Saber believes, can sometimes be a hindrance to fundraisers. “Because you care so much, it can feel like a personal rejection if a donor turns you down,” Saber says. “It becomes a reflection on you. and that gets in the way of asking.”

Not only can fundraisers learn from salespeople how not to take rejection personally, Saber suggests, but they should also seek to minimize the risk of rejection by taking a more strategic approach to the way they identify and cultivate prospects. And that means taking advantage of knowledge that’s already out there.

“Good fundraisers know that money is a byproduct of putting the right opportunity in front of the right person at the right time,” says donor communications expert Tom Ahern (www.aherncomm.com). “And that’s straight out of sales and marketing.”

Ahern, whose background is in commercial sales and marketing, points out that his field is built on a century of empirical research into human behavior that allows people to predict the outcome of a marketing campaign with a high degree of accuracy. Furthermore he argues that, whether or not fundraisers realize or admit it, fundraising is a specialized kind of sales and marketing. The difference, of course, is the use to which fundraisers put that neutral data — the reasons that they seek to place a suitable philanthropic opportunity in front of a strong prospect at a moment that is opportune for both the donor and the organization.

Both salespeople and fundraisers are in the business of persuading people to part with their money, but for very different reasons. Whereas a salesperson can promise a tangible benefit for the person with the money to spend, a fundraiser instead can only offer an intangible benefit to the donor, in exchange for the promise of tangible results for other people. And if sales is about persuading people to do something they may be in some way resistant to doing, fundraising is about encouraging people to do something they passionately want to do.

“My motivations are to alleviate suffering and help people better their lives through education,” says William F. Bartolini, Ph.D., senior advisor for principal giving at George Washington University (www.development.gwu.edu). “Earlier in my career, when I sold shoes and kids’ clothes, the sales were transactional. I provided a service, people bought the product, and I got a commission. It was a job. But that’s changed now.”

In providing a donor with an opportunity to achieve self-actualization, a fundraiser achieves self-actualization as well. “I’m sharing my passion and my enthusiasm with donors,” Bartolini adds. “I’m helping change lives. How great is that?”

This post was adapted from “More Than the Sum of the Parts: What Makes a Fundraiser?” by Paul Lagasse, Advancing Philanthropy, Fall 2014 (reprinted with permission) You can read the whole article here.

“I’ll support program activities, but I won’t pay for your salary,” a new board member recently explained to Donald K. Rhoten, CFRE, President of the Meadville Medical Center Foundation (www.mmchs.org) in Meadville, Pennsylvania. Instead of avoiding further discussion of a potentially touchy topic, Rhoten seized the opportunity to have a deeper discussion about overhead. “I explained that I respected his choice, but I also asked him to consider this: for many local nonprofits, it’s the overhead that’s actually providing the service. In such cases, overhead is an asset.”

An asset?

Rhoten asked the board member to consider the example of a soup kitchen run by a paid staff of one. That person’s salary would technically be considered an overhead expense, but without her, the soup kitchen would not be able to operate. “If I were choosing to support that organization, I would give to pay for her salary,” he explains, “because she is the organization.”

Rhoten’s argument showed the board member the value of paying for overhead, and he believes that other nonprofits can use the same approach to make the case to donors that they should think of overhead not as a cost, but as a means to a greater end.

Rhoten says fundraisers and executives should welcome opportunities to make the case for overhead. “Those questions are not bad questions,” he says. “They show that people are engaged. The donors we have who are the most active and who stay with us for the long term are the ones who are asking those questions. They’re not just going to write a check and go away.”

The challenge, he says, is to get people to see that overhead can provide long-term stability and even grow an organization.

As it turns out, the board member needn’t have been concerned about paying for Rhoten’s salary. Meadville Medical Center, an independent community hospital that serves Crawford County and the surrounding area in northwest Pennsylvania, funds 100 percent of the foundation’s overhead expenses. While this frees Rhoten from having to make an explicit case for overhead support, it also allows him to point to the benefits that such support provides to the foundation. Thanks to the hospital’s support, in 2013, Rhoten and his small staff were able to focus their efforts on raising $500,000 in support of myriad activities, including purchasing a new vehicle to deliver patients to the hospital’s oncology institute, constructing a new hospice house and dental center, purchasing adaptive bikes for disabled children, and providing new training mannequins to hospital physicians and nurses.

“Our overhead truly adds value to our hospital, our community’s healthcare services and our community’s overall way of life,” says Rhoten. “Without it, we could do nothing” — much like the soup kitchen example.

IRS Filings are Not the Whole Story

Just like his skeptical board member, Rhoten used to feel differently about overhead. “Initially my perception of overhead was in line with the myth,” he says, referring to the traditional view of administrative expenses as an accurate measure of a nonprofit’s performance. Rhoten faced questions from donors seeking justification for overhead expenditures. “But I quickly realized that ‘overhead’ is just a catchphrase,” he says. Instead, now Rhoten argues that nonprofits need to think about fundraising as a continuum that includes both administrative and program expenses. “We have to think of fundraising not as asking donors for money, but as helping the organization provide the best service,” he says. In other words, overhead is just as vital to mission success as program funds.

That is why the focus on one or two specific numbers, such as the percentage of overhead, can be so misleading. While the Meadville Medical Center Foundation’s IRS Form 990 filings provide donors with a broad-brush view of the foundation’s revenue for a given year, the filings don’t reflect gifts that were made to the hospital itself or to related organizations. As a result, donors who rely on the foundation’s 990s for assessing the foundation’s performance might see very little revenue in some years, and even what appear to be losses in others.

“I think that the transparency that the 990 provides is very important, but it affords people the opportunity to create misconceptions,” Rhoten points out. “The 990 is looking at dollars. I wish there was an equivalent document for looking at mission yield.”

Until such a form is developed, Rhoten will continue relying on old-fashioned persuasion to sway skeptical donors to his conviction that overhead is truly an asset, not an expense, for his foundation. “The questions may demonstrate the donor’s interest,” he says, “but the answers make a relationship.”

This post was adapted from “Not a Money Pit! How Nonprofits Can Convince Donors and Funders that Outcomes Can be Achieved More Effectively When They Support Overhead along with Programs,” by Paul Lagasse, Advancing Philanthropy, Spring 2014 (reprinted with permission) You can read the whole article here.

Relationships with the community are as important for sustaining and growing an appropriately diversified funding base as they are for creating them. And one of the most effective ways to appeal to people who are passionate about your mission is to share your story. Terry Axelrod, founder and CEO of the fundraising training and education firm Benevon (www.benevon.com), advocates this approach to her clients as a matter of survival. “If nonprofits don’t engage donors,” says Axelrod, “they’re going to become extinct.” Instead, she suggests, nonprofits should “throw open their doors” and give what she calls “a tour of the mission.”

She advises holding twice-monthly tours that highlight different aspects of the organization’s work in order to appeal to as broad a range of prospective donors as possible. Then, follow up with those people who expressed an interest in what they saw on the tour. “Think of it as a customized cultivation process,” she says. Storytelling is also a valuable exercise for leaders, staff, and volunteers, Axelrod adds. By talking with guests about the value of the mission, they reinforce their own commitment to it as well.

High-touch activities like tours may be time consuming, but they help you stand out in an increasingly crowded field. When employed as part of a sound fundraising buy generic viagra soft diversification strategy, they can also help an organization jump off the budget treadmill. “Many small nonprofits have difficulty getting past the annual budget pressure for cash,” says fundraising management consultant James M. Greenfield, ACFRE, FAHP. “When you don’t have any sense of a plan beyond survival, it’s hard for fundraisers to come up with something that suits the mission.”

That’s where the storytelling comes in, says Greenfield. Any story — and, by extension, any plan — that serves the strategic goal of cultivating new sources of revenue must be able to answer five questions:

• Why do you exist?
• What do you do?
• What have you done?
• Where are you going?
• What’s the money for?

Greenfield, who has been in the fundraising field for 40 years, says that the traditional “giving pyramid” model that served the field for many years is a useful tool for developing a soundly diversified funding base. “It takes time to develop contributor relationships to the extent an overall fundraising program is engaged at all levels of the pyramid,” he says.

This post was adapted from “The Right Mix: How to Strengthen Your Organization’s Sustainability through a Well-Thought-Out Plan That Sees Money as a Strategic Asset,” by Paul Lagasse, Advancing Philanthropy, Summer 2013 (reprinted with permission). You can read the whole article here.