9 Tips to Maximize Year-end Giving

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2010 is quickly coming to a close.  It’s been a tough year, no doubt.  But this is no time to put the brakes on your fundraising efforts, despite what some “experts” are saying about the continued bad economy. 

In fact, the last few weeks of the year are huge for most nonprofits – so make sure you’re poised to reap the benefits in the coming weeks.

Here are some tips to help maximize your year-end success:

1. If you can, reach out (in-person or via phone would be best, but mail/e-mail can work too) to every middle and major donor that hasn’t yet given in 2010.  Make sure they know just how critical their support is to the lives your organization touches.  And how much you depend on their continued partnership. 

2.  Adjust your marketing calendar to squeeze in an extra year-end mail appeal or telephone solicitation.  Even if you only contact your most committed donors, the extra income from one added solicitation (especially in December), can have a huge positive impact on your bottom line.

3.  If you have a monthly giving program, year-end is a great time to ask these highly committed donors to make an extra “stretch” gift. 

4.  Don’t overlook planned gift donors at year-end.  They’ve planned for your future in their will, but many will also help you meet current needs at the end of the year if you have a compelling reason to give.

5.  Don’t go dark in the week after Christmas.  There’s a tendency to send staff home for vacation that week.  And rightly so!  They’ve worked hard.  It’s been a tough year.  Everyone deserves a break.  But I’d caution you to have at least a few staff members in the office throughout that week to help with gift processing (you should see a spike in gift volume), making thank you calls, and especially to reach out to donors that haven’t yet made a gift in 2010.  This is also one of the busiest weeks for organizations that receive year-end gifts of stocks and other securities.  You’ll want someone in the office who can handle these kinds of inquiries from donors, and who can work with your bank or broker to accept these gifts before year-end.

6.  Invest in Search Engine Marketing (SEM).  In recent years, testing indicates that the final three weeks of the year see dramatic increases in people conducting web searches for terms like “year-end giving.”  Donors and prospects alike are on the web during the final weeks of the year, and are actively searching for causes to support.  SEM will help ensure you’re front and center on the web when people in your community are looking to give.  Even a modest investment in Search Engine Marketing of $500 – $1,000 can yield returns as high as 3:1 – 5:1.

7.  Use a three-part e-mail series to build awareness, excitement and fundraising momentum at year-end.  Tie your campaign to specific year-end and holiday needs to ensure success.  Time your campaign so that each e-mail is at least a few days apart, and e-mail #3 is in mailboxes on December 31, to highlight the final giving opportunity of 2010 (for tax purposes). 

8.  Make sure to ask your volunteers for a year-end gift.  We had one client who recently did this and generated a 16.5% response to this request.

9.  Remember that you still have time to seek out a matching gift from major donors and corporate sponsors.  Nothing will improve your year-end results like offering donors the opportunity to have their gifts matched by others.

I hope you find some of these tips helpful as we come to the end of the year.  Don’t hesitate to give me a call or shoot me an e-mail if I can be of assistance to you in any way.

Want more tips to improve your year-end fundraising?  Go visit Roy Jones Reports for five more great recommendations.

Wishing you much success this holiday season!
Andrew

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Quick Poll: Where will your nonprofit invest in 2011?

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It’s hard to believe, but 2011 is right around the corner.  Right about now, most nonprofit executives and boards are making plans for the coming year, and looking at budgets for the coming year. 

Since it’s budget time, I thought it might be interesting to see where nonprofit organizations are planning to spend their resources in 2011.  There’s a quick poll below.  If you work in a nonprofit, I’d appreciate it if you take a minute to cast your vote.  If you don’t see the area where you’re planning to invest, just add it in the “Other” section.

So you want to be a Nonprofit Rockstar, huh?

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You’re early in your career, passionate about the cause you’re working to advance, but sure wish you could climb the career ladder more quickly.  Right?

Maybe you want to go from being a Program Assistant to a Program Director.  You’d like to make the leap from Special Event Coordinator to Development Director.  Or maybe, just maybe, your goal is to lead a nonprofit from the Executive Director’s office.

But how do you get there from here?  What steps should you take?  What should you be doing right now today to prepare you for those challenges?  And how can the way you approach your career lead you to a brighter future?

You’ll find those answers, and so much more in Rosetta Thurman and Trista Harris’ new book, How to Become a Nonprofit Rockstar: 50 Ways to Accelerate Your Career.

Rosetta and Trista have packed this new book full of smart, easy to digest, actionable recommendations to help advance your career.

You owe it to your future self to pick up a copy of this new book!

Without spoiling too much, here are two key tips they share in the book:

Establish a Great Personal Brand.

Simply, Rosetta and Trista say that your personal brand is, “what other people say about you when you’re not in the room.” 

And they’re right.

Guard your personal brand closely.  It’s the greatest asset you’ll ever have.  It doesn’t matter how smart you are, how many letters you have behind your name, or where you went to school.  If I’m a hiring manager, and I find out you don’t follow through on your commitments, or I can Google you and find links to the wild keg party pics you posted on Facebook, chances are you’ll never get an interview.

Learn How to Raise Money

There’s a natural inclination to shy away from asking for money.  You, like the rest of us, probably don’t like to hear “NO” all the time.  Maybe you’re afraid that someone will chase you out of their house with a broom stick when you call on them (hint: I’ve actually heard a development officer say this).  Or maybe you’re afraid that if you ask a friend or colleague for a contribution for your organization, you’ll damage your relationship. 

Rosetta and Trista point out (so appropriately), that if you can get comfortable – and good – at asking for money, you’ll always have a place in the nonprofit sector.  In fact, if you’re any good at asking for (and getting) contributions, you’ll most certainly get a seat at the table for important discussions and decisions at your nonprofit.  And the more you show your boss that you can raise support for the organization, the more valuable you become.

There are dozens more tips in this book – I’ll share more thoughts in the next week or two.

But until then, get your copy today!

Mobile Giving, the Red Cross, and your nonprofit

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Interesting update on Mobile Giving from Philanthropy Journal today.

Nonprofits find texting tough way to raise money

While the Red Cross raised over $30 million by mobile phones after the Haiti earthquake, triggering a rush by nonprofits to try to raise money through text-messaging, reproducing those results has been tough for most groups, often because the costs of supporting a mobile-donating program can outstrip the returns, The New York Times reported Oct. 31 (see charity texting story).

The bottom line is, the Red Cross is successful here for several reasons. 

1. When a crisis like Haiti happens, it owns the airwaves for a long period of time.  When the Haiti quake hit, it was around-the-clock news on every network and cable news station.  There were evening news specials, mid-day reports, etc.  There were celebrity telethons to support Haiti.  Radio updates throughout every day.  This story was top news on the web.  And everywhere a Red Cross story got exposure, they mentioned the mobile giving option and their short code.

The Red Cross didn’t have to pay a dollar for this media exposure.

2. The Red Cross has a disaster response plan that includes outreach/philanthropy.  They were able to capitalize on this within hours to ensure they had the funding necessary to handle this and future disaster challenges.  They didn’t try to throw a campaign together after the disaster happened – they simply implemented the plan that was already established.

3. They had a truly integrated campaign – not just a mobile initiative.  Yes, the Red Cross raised a TON of money via mobile after Haiti.  But they probably also raised significant dollars via direct mail, online, and maybe even DRTV.  The Red Cross knows they can’t just use mobile fundraising, so they made sure they had an integrated campaign.  And it worked well.

So here’s the dirty little secret.  A lot of nonprofits are looking at mobile as a way to cut costs and still raise money.  But it’s not going to work unless an organization has a MASSIVE audience (like the Red Cross did after Haiti).  You need a captive audience, or a major world-impacting issue in order to leverage mobile in any significant way.  If your organization doesn’t have that, mobile probably won’t work for you.

The downsides of mobile should make you think twice before you jump on the bandwagon.  You don’t get donor contact info (makes it very difficult to build long-term relationships).  Largest gifts you can generate are $10 gifts.  It could take months for you to actually get the contributions. 

I hate to be so negative, because in the long-term, I think mobile has a lot of potential.  But that’s what it is right now, just potential.

You hate telemarketing? So what.

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Everyone hates telemarketing.  I spent three years leading telemarketing for a major national political organization, and I hate getting telemarketing calls! 

Those invasive calls at the dinner hour.  Solicitors not taking no for an answer and asking you twice more for a contribution after you say no.  Always trying to get you to give your credit card over the phone.  Those telemarketers are pushy. 

That’s all true. 

You’ll get a few more complaints from your board and your staff.  And you’ll see a slight increase in complaints from your donors (it averages less than 1% if managed appropriately, fyi).

But you know what?  Chances are your nonprofit can benefit from telemarketing.  Even though you hate it.

Consider this . . . mailing your lapsed donors (37+ months since last gift), you can expect to reactivate 3% of them, at most.  But telemarket that same audience, and you could see reactivation rates as high as 12% – 15%.

That’s 300% – 400% lift in reactivation compared to typical lapsed donor direct mail.

Telemarketing is also valuable for upgrading donors beyond their current giving levels.

Hate it or not, telemarketing is valuable, and can significantly improve your direct response fundraising efforts. 

You owe it to the people you serve to at least test it, regardless of your personal beliefs.

Check out these companies for additional information: Strategic Fundraising, RuffaloCODY, Infocision, and MDS.

Are low dollar online fundraising campaigns really a good thing?

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Give $10 on 10/10/10 to support our cause.  Cute, huh?  Kinda catchy?  Low price point could work well in the current economy.  Easy to implement on Facebook, Twitter, your website or elsewhere online, right?  Would probably get more responses than an offer asking for $25, $50 or $100 gift.  Right? 

All of those points above are probably technically correct.  But what do they do to the quality of your donor file?

Take, for example, this ‘Just $5’ e-mail appeal from MSPCA that I found tonight on SOFII. 

On the surface, it looks like a great campaign.  The organization touts that they raised $9,000 from 600 donors, and attracted 243 new donors.  In a short amount of time, raising $9,000 and acquiring 243 new donors are both pretty good accomplishments.

But . . .

$9,000 / 600 = $15.  That’s a $15 average gift.  From an online donor.  We know that typically, online donors make larger contributions than do direct mail donors.  So to have a $15 average gift to an online campaign should be of concern.  Two things will likely come of this.  First, I’d bet that existing donors were downgraded through this very low dollar ask campaign.  Second, the newly acquired donors are probably lower quality than those that could have been acquired with a higher dollar offer.

Once you’ve downgraded an existing donor, you’ll have to work even harder to bring them back up to their original giving level – or to increase their giving to a level above their original gift amount.  And you also run the risk of more of these downgraded donors lapsing (especially if your segmentation strategy calls for suppressing donors with a last gift below the threshold of their recently downgraded gift amount).

If you’re acquiring donors through a low dollar online offer like this, you will want to pay special attention to second gift conversion, retention and long-term donor value.  It is more likely than not that low dollar donors will never make a second gift.  And for those that do, the likelihood that they will continue giving is also lower than those donors who come on your file at a larger first gift amount (unless the donors acquired are monthly donors via credit card or EFT).  It’s also very difficult to upgrade a donor that comes on your file at a very low amount. 

I applaud the organization’s attempt to increase revenue, acquire donors, and cast a wide fundraising net.  However, I am concerned that this particular effort may do more harm in the long-term than the good it will do in the short-term.

The True Value of Monthly Giving Programs

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While in D.C. two weeks ago my good friend Roy Jones and I shared a lunch conversation about Monthly Sustainer fundraising programs.  Specifically, why more nonprofits don’t have sustainer programs, how we can promote and encourage organizations to start them, and what the long-term value (beyond just current year net) really is.

Then a few days ago I saw that Roy wrote a great post on this topic over at Roy Jones Reports.  I hope you enjoy his thoughts on the subject. . .

Do you have a “PREAUTHORIZED GIFT” program? Why Not?

It doesn’t matter whether you call it a pledge program, recurring gift program, monthly giving program, sustainer program or preauthorized gift program it is the same technique and they all add up to a huge additional revenue stream for your organization or charity.

The bottom line is when a donor gives you permission to systematically collect a specific amount money on an agreed upon date each month you are going to increase annual giving exponentially.  Test after test has concluded that the life time value of donors who participate in preauthorized giving will increase from 100 to over 1000 percent. 

Just do the math…. If you get just 100 people to give you $50 per month that is an additional $60,000 a year for your organization; 500 people would be an additional $300,000; and 1,000 monthly donors at $50 per month would be $600,000.  You cannot afford to delay implementing a monthly giving program.

Preauthorized giving is so successful because it focuses on how the donor wishes to give.  It is donor centric in its application.  The offer therefore combines the convenience of giving with the savings to the charity.  In addition, you emphasize that “time is money” and giving through this method has immediate impact on their local community.

Preauthorized giving programs make it easy for donors because they never have to make another decision whether to give.  Preauthorized gifts can be collected in any form the donor deems as the easiest for them.  Gifts can be collected by credit card; electronic funds transfer (EFT), or bank draft (ACH).  Bank drafts (ACH) are different from EFT’s because the use the Federal Reserve’s Automated Clearing House (ACH) system.  ACH transactions usually offer lower fees and no expiration dates. Of course, some donors like to send a physical check each month in the mail each month and in those cases your organization will want to do a monthly thank you and reminder letter to this group.

Just remember the most successful sustainer or preauthorized giving programs allow donors to give any way they want, whenever they want. The best programs are always integrated across all of the marketing channels with an emphasis on using the telephone to close the deal.  Also, pay special attention to recruiting new donors to the organization to pledge monthly. You will have much greater success with new donors that with converting your existing multi-donors.

There are huge advantages to implementing a preauthorized giving program. Target Analytics recently released a study highlighting just some of the advantages:

  • Monthly sustainers tend to be younger than single gift donors
  • Monthly sustainers give significantly more per year than single gift donors
  • Monthly sustainers have higher retention rates than single gift donors. 
  • The majority of sustainers continue as sustainers when they renew each year.
    • The higher retention rates from sustainers result in much higher loyalty over the long term.  Compared to single gift donors, many more are still giving after three, four or five years.
  • Monthly sustainers account for 10% of the donor population, contributing 21% of the total income.
  • Multi-year sustainers give on average 9 gifts per year compared to a multi-year single gift donor that gives on average 1.6 gifts per year.  Note: 9 gifts out of 12 per year equal a 75% fulfillment rate.

Harvey McKinnon in his book “Hidden Gold” says that preauthorized giving will become more prevalent as more Americans move to on line giving.   He notes that 50% of Canadians now pay ALL of their bills through EFT or on line.  He notes that 50% of Canadians, 85% of Europeans, and 95% of the Japanese use EFTs to pay bills and make all of their donations.

In addition to the HUGE spike in revenue, there are lots of advantages to not-for-profit organizations and charities using preauthorized gift programs.  McKinnon outlines some of the biggies:

  • Builds a better relationship with donors.  Monthly giving helps donors feel special, elite and plugged in.  Monthly givers should be your top prospects for wills, bequests and planned gifts.
  • Keep donors giving longer. Preauthorized monthly giving dramatically extends the giving life of a donor over decades, not just a few years or months.
  • A sustainer program lowers your overall costs of fundraising and improves your fundraising cost ratios.
  • Sustainer income grows over time.  Within a few years it is not unusual to see 5 to 7 percent of your entire 0-12 month file giving in a preauthorized program.  This can essentially double your organizations overall income

HOW TO GET STARTED? 

  1. Good Record Keeping. First and foremost you must have a database or system of accounting to track each member you sign up to ensure timely processing of the contribution every month.  The worst mistake you can make is to launch a program, beginning signing up donors for monthly pledges and then not be able to track the donors giving.  So make sure you have a system that works for sustainer donations.   I am not suggesting you buy an expensive system for tracking monthly gifts. I have seen many outstanding programs managed on an Excel spreadsheet or simple ledger system.  The most important thing is processing gifts on the same day for each donor each month.  Donors often get frustrated if EFTs or credit card payments get deducted “willy-nilly” anytime of the month.
  2. Ask Every New Donor to Make a Monthly Pledge.  Test after test has proven that the best time to get a donor to make a monthly commitment is immediately after getting involved in an organization.  They are excited.  They have made an initial investment and now, if you ask them that will have an annual plan through monthly giving some amount they are comfortable with to your organization.
  3. Segment and Target before a Special Appeal.  Monthly preauthorized giving programs are not for every donor.  Never, never, never mail your entire donor file a standalone appeal exclusively soliciting a monthly gift.  Target and segment your prospects beginning with donors who have given three or more times in a calendar year to your organization.  We often call these donors “multis” because they are donors who give multiple times in a calendar year.  What you are looking for are “super multi” donors who can give 12 or more times a year.
  4. Suppress your major donors who give more than $1,000 a year.  Although major donors often make three or more gifts a year, you do not want to give them the opportunity to reduce their annual giving by pledging 12 smaller gifts a year.  Major donors are very sophisticated and they have money to donate because they can add.  If you write a $1,000 major donor and ask her to pledge $50 a month, make no mistake about it, she will do it and you’ll end up with $600 a year instead of $1,000.
  5. Suppress your “super duper” multis.  You will have some donors on your file who are already writing 10 or more checks a year.  I have seen some donors who literally write a check every week, more than 50 checks a year.  Leave these donors alone!  If they are already giving that frequently you run the risk of suppressing overall giving anytime you lock them down to only making 12 donations a year.

A recurring donations program will dramatically increase the lifetime value of your donors while reducing your cost of fundraising.  It takes time, patience and tenacity but get started and stick with it.  In the end you may just double your net revenue each month.

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