BIG’s Blog: The New Golden Age of Fund Raising: Nothing Moves Until Something Is Sold

A year ago, Ian Wilhelm writing for The Chronicle Of Philanthropy titled his article: Are Fund Raisers ‘Selling a Product?'

Jennifer McCrea, a senior research fellow at Harvard University’s Hauser Center for Nonprofit Organizations and Sasha Dichter, the Director of Business Development for the Acumen Fund, weighed in.

Jennifer wrote, “Selling implies that money is the most important part of the relationship. When money is at the center of the relationship, it distracts us from our mission because we are worried that we won’t have enough or that we’ll make a mistake,” she writes. “It sets up a false dynamic that requires that we talk shell-to-shell."

Sasha, on the other hand, “agrees that fund raising shouldn’t be about money, but selling shouldn’t be a dirty word, either. There’s a lot that fund raisers can learn from good salespeople,” he says.

If we are to successfully transform our fund raising organizations for the new golden age of fund raising, we need to get beyond some old hang ups that have cropped up in the: professional ranks of fund raisers. One of those hang ups is that raising funds for nonprofit organizations is somehow NOT selling.

It’s obvious, as the article I mentioned illustrates, this issue continues to be a bone of contention in some philanthropic circles. But, for those fund raising organizations that want to succeed in building relationships, and from those relationships develop willing donors, my position is that nothing moves until something is sold.

It doesn’t matter if you are a fund raiser sharing your mission, a freshman high school English teacher talking about the Shakespeare, an IBM salesperson talking to a major corporation about automation, or the President of the United States sharing his strategy for Afghanistan; the fundamental principle is that you want your audience to own your vision. They are all selling.

Ultimately, what is “Selling” but the art of rhetoric with the goal of having the audience own it?

And until they own it . . . nothing moves.

-Mike

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BIG's Blog: What does good strategy look like?

"A strategy is a way through a difficulty, an approach to overcoming an obstacle, a response to a challenge."

For those who may be building or modifying a strategic plan, I recommend you read June 2011, McKinsey Quarterly’s: The perils of bad strategy.

As fundraising transforms from the print analog world to the digital world, the organization must be prepared to adapt to and grow in this environment. This article provides a perspective on strategies--both good and bad.

Make sure your organization’s strategy is ready for the coming transformation of fundraising.

-Gail

BIG’s Blog: Bad News Is Coming

“Leaders will not make tough choices until the cost of not changing is too high.” -Unknown

This week, Congressman Darrel Issa (Calif) introduced legislation entitled The Postal Reform Act of 2011 that would establish two new panels’ charged with broad oversight of the Postal Service.

A proposed part of the postal reform is moving the nonprofit discount from 40 percent to 10 percent.

How will this affect your organization?

Your current (est.) postal rate $0.18 x fill-in your postal volume = $_
Proposed postal rate $0.27 x fill-in your postal volume = $_
Difference (note, be sure to put in red) $_

Do you really think they will do this?

The proposed loss for the USPS this fiscal year is projected to be $8.3 billion on top of losing $8.5 billion last year.

-Mike

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BIG's Blog: Can you help us?

In my last blog, I posed the question based on an inquiry made by an educational institution seeking help with their fundraising efforts. My thought was: Is direct mail fundraising cost the real problem to the lack of financial growth of this institution or should other factors be considered? Here are a few points that may address this question.

An educational institution is a great example of where multi-channel marketing should be considered. Depending on the age of the institution, five generations of alumni could be present in the fundraising efforts as seen below:

Born 1912 – 1921: Depression Cohort (very few)
Born 1922 – 1945: World War II Cohort (small)
Born 1946 – 1964: Baby Boomer Cohort
Born 1965 – 1981: Generation X Cohort
Born 1982 – 2001: Millennial Cohort

Alumni communication should address not only the message that resonates with that generation, but also how they want to receive it. An example, institutions who use only direct mail to communicate with alumni are not engaging their most recent graduates, the Generation X (Gen X) and Millennial cohorts. Their primary communication tools are Facebook, YouTube and other similar social sites. Sending direct mail to these cohorts requesting support will bring little to no response. GenX and Millennial alumni may want to support their school, but do not own a checkbook. Most use cash or have a debit/credit card. The institution should consider an online giving plan to support these alumni cohorts. Some will not have disposable income due to college debt and/or starting their own families. But, this should not stop the communication coming from the institution to alumni. Keeping connected with alumni after they graduate is key to future support.

The use of direct mail with Baby Boomer alumni has a better chance of being opened. Some alumni of this generation may use the Web to pay bills and to support nonprofit causes. Others will write checks. Alumni from this cohort are more likely to support an educational institution’s needs, but the communication piece (letter or website) must show perceived value. Alumni in this cohort are more likely to search the Internet seeking information about what is going on at their past alma mater. A strong website with a “donate now” button could bring additional funding to the school from those who do not respond to direct mail.

These are just a few ideas I would suggest that an educational institution consider when seeking funding. Review current alumni communication and fundraising strategies. If you are not sure of how to incorporate new strategies into your plan, consider hiring outside help to guide you through the process. Together you can create a new strategy to grow and sustain the institution’s funding needs.

-Gail

BIG’s Blog: The New Golden Age of Fund Raising: Is Your Fund Raising Organization Exceptional?

Well, how about it? Is your fund raising organization exceptional?

Or, do you think about your fund raising organization as just a job?

It occurred to me as I was starting this series on The New Golden Age of Fund Raising that I can write about all the new methods and technologies that will allow fund raising organizations to develop deeper connections and relationships with their donors . . . but, if its just a job . . . will you make it happen?

After all, what’s the point of making changes if it’s just a job?

Change involves risk? Of course, as the fund raising industry sits today, NOT changing probably involves failure.

There are some really smart and really courageous Executive Directors, Development Directors, Presidents, Provincials, Boards and Councils in the nonprofit world and I know they understand the risk of not changing – and the rewards of changing. All of our clients fall into the smart and courageous category. But, if you asked them if they were exceptional organizations before developing plans to transform their organizations, I believe that they would tell you that they were NOT exceptional organizations. In fact, they would probably tell you that their organizations had grown complacent, bureaucratized and ossified.

But, they wanted to become exceptional.

How about you and your organization?

Your organization can also become exceptional.

-Mike

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BIG’s Blog: The New Golden Age of Fund Raising: Getting Rid Of Silos

The Harvard Business Review’s Management Tip of the Day (see below) from Friday of last week was perfect for my continuing series of blogs on The New Golden Age of Fund Raising. Virtually every nonprofit fund raising organization I visit is divided into two silos: direct response fund raising and charitable gifts (also called major gifts).

JUNE 17, 2011
You Can Prevent Silo Thinking

If you do your job well, and everyone else does their jobs well, everyone succeeds, right? Wrong. In fact, in any organization, it's not only important that everyone do what they are supposed to — everyone also needs to work together. Don't let a silo mentality take over your company. Recognize that you are all responsible for each other's work and if there is a problem anywhere in the organization, everyone fails. Refuse to allow people to go to their separate corners. Encourage people to meet regularly to share what they are learning. Have the courage to call out when one part of the organization is struggling and find a way to fix it together.

The Management Tip of the Day admonishes us to not let silo mentality take over the organization. “If you do your job well, and everyone else does their jobs well, everyone succeeds, right? Wrong.” What’s missing? How about working together?

I am perfectly aware of the historical reasons why direct response developed separately from charitable gifts and why they developed separate working silos. But was that ever the optimum?

Today, virtually all fund raising organizations with substantial direct marketing (direct mail) programs are only connected to charitable gifts through their donor database. And in some egregious cases, these two groups actually have separate donor databases. They have separate staffs, agendas and financial goals. Not only do they not work together, but the silo mentality in many cases actively forces them to work against each other.

This makes no sense to the mission of Development.

Fund raising is hard enough without battling over turf and donors.

There is a lot of talent in nonprofit fund raising organizations, but, to be an effective team, these two silos need to merge into one integrated organization and start working together.

This Harvard Tip of the Day is a great reminder.

Think I am wrong or naïve about how deadly silos can be to an organization? Below is a short story link from the author of the above Tip of the Day blog about silo mentality.

Solving Your Organization’s Open-Face Sandwich

-Mike

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BIG's Blog: Can you help us?

I recently participated in a conference call where an educational institution sought help to meet the fundraising goal for the upcoming year. The goal was to double their fundraising income within a two-year period. After an analysis of their fundraising results, it became clear that the revenue goals were unrealistic. Let me explain why.

First, their universe of 60,000 which consisted of alumni or parents of students was not going to grow. Instead, due to a declining enrollment, the number of future alumni would not meet the attrition rate for this file.

Second, the institution’s fundraising strategy to alumni was direct mail. The institution saw a significant decline in response rate over the past few years. Currently, the response was less than four percent. As expected, the school’s revenue was down significantly from prior years. Staff attributed this to the increase in direct mail costs.

The question asked by the institution was how they could address the rising costs. My thought was: Is cost really the problem or are there other changes that this institution should consider? In my next blog, I will present my theory on their question. I would love to hear your perspective on whether you think that cost is the “real” problem.

-Gail

BIG's Blog: Risk!

I heard someone comment once that fundraising is a risk. That could be a true statement if you don’t pay attention to your constituents, donors and fundraising efforts. Today’s opportunity is adapting a fundraising strategic plan that will mitigate these risks.

Fundraising is challenged due to the changing demographics and new technology. How does a nonprofit address both factors without the possibility of risk? The answer is creating a strategic plan that allows the organization to slowly move in a new direction. The plan must have checks and balances to ensure that risk can be avoided.

The biggest challenge once the plan has been developed is the monitoring of the process. Many times management fails to review the checks and balances and problems arise. Be sure that the management team has the skills to implement the final plan. Risk can be minimized with the proper plan and people.

-Gail

BIG’s Blog: The New Golden Age of Fund Raising: An Assignment To Those Who are Single and Over 45

It has come to my attention that a lot of the things I talk about are not resonating with some of you and I think I know the reason. Although I am 58, and therefore pretty much a representative of a large segment of my blog reading audience, I am considered, at first glance, maybe not as “with it” technologically as someone in their 30s. But, I have a secret weapon, actually I have two of them . . . my daughters, ages 24 and 26.

All of us look at the world and judge information we read or hear through the prism of our own experience. That’s normal. But, it can be a significant handicap during moments of significant change and disruption if we don’t have a means to test the information; meaning it doesn’t fit with our life experiences. We are going through one of those times. And for those of you without benefit of children around, you must do the following:

Find young people in their 20s or early 30s and interview them. Ask them how much they use their cell phones and computers, tablets, etc. Ask them what functions they use; social networks, other programs. One of my clients did this when we first started meeting to gauge whether what I was saying about how young people interact with technology was fact or fiction.

I thought it was a great idea, so I am passing it on to you.

We really are headed into a new Golden Age of fund raising, but, if you don’t believe how younger people interact with technology, much of what I am saying will be dismissed. That’s a problem these interviews will fix.

-Mike

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BIG’s Blog: The New Golden Age of Fund Raising: Is Your Mind in the Cloud?

Last week, after Steve Jobs announced the iCloud, suddenly the average Apple customer (iPhone, iPad, or Mac user) standing in line at Starbucks “gets” the Cloud. Of course, people have been talking about Cloud computing for the last few years, but, when Steve Jobs describes how it will automatically sync up your calendar, email and contacts across all your Apple devices with iCloud, suddenly the dots were connected.

Our personal devices such as smartphones, tablets and computers can now run programs, retrieve and store information from software applications housed somewhere on the virtual Internet.

With the advent of the Cloud, the new digital platform that is the Internet is quickly morphing into something new, fundamentally different and very important. The most immediate change is that localized software, which is software loaded on servers or your computer at your office or at home, will soon be a thing of the past. Software companies will begin to offer Software-as-a-Service options (SAS) where your copy of the software and your information reside on their servers and you access it via the Internet using encrypted and secure protocols to keep it safe and secure.

But, it isn’t just personal software programs like Word or Excel that will be available via the Cloud or applications (apps) that run on smaller devices like smartphones or tablets, but even your major enterprise applications including your donor management software (what many of you call your donor database) will also be able to be accessed from any device connected to the Internet. To be sure, most enterprise software today has accessibility features built in, but, moving to SAS models changes the way nonprofits will purchase and support these services.

So what are the implications for nonprofit fund raisers of this new Cloud computing?

Most fund raising organizations will continue to host their donor management software and productivity tools (such as Word or Excel) on their own servers as long as the applications are up-to-date, but, over the next decade as fund raising organizations decide to upgrade their software, most organizations will begin moving to SAS models. And, as fund raisers begin looking at software programs, both for marketing uses such as Constant Contact for sending mass emails or CRM such as SalesForce, they will begin moving more and more software applications to the Cloud.

The work of IT staffs will change as more and more software applications are accessed through the Cloud rather than hosted onsite. You will still need IT, but just doing different things.

The Cloud will transform many things but more than anything else, it will transform how work is done within fund raising organizations.

-Mike

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BIG's Blog: It’s all about time!

In my last blog, I addressed one of the three key reasons for the failure of a strategic fundraising plan. This blog will address “TIMING” and the need for a schedule to ensure a plan is successful.

Time is what most nonprofits do not have enough of in their day-to-day operations. Demands on the organization continue to grow while downsizing occurs. This phenomenon challenges the nonprofit. The question becomes, “Can your development and fundraising staff create and implement a strategic plan along with their current responsibilities?”

A strategic fundraising plan that has unrealistic expectations and timelines can derail the success of the nonprofit’s mission. Timing problems stem from leadership unable to make decisions or insufficient staff and professional expertise to implement the plan. These obstacles can affect the overall budget for the organization.

Organizations know there is a need for change. But, how does one go about the transformation of its fundraising plan? My advice is to find an outside resource to look at the organization from a different perspective. Develop partnerships with those entities that can help the organization develop and implement a viable strategy. Don’t let time pass you by!

-Gail

BIG’s Blog: New Golden Age of Fund Raising

Merriam-Webster dictionary defines Golden Age as: “The period when a specified art, skill or activity is at its peak.” If you google “golden age,” you get a list of the “ofs” as in the golden age of . . . fill-in-the-blank.

Invariably, golden ages are referred to as a “past time.” But, what if we are headed into a fund raising time that will be so much better than our history to date? We will view this coming time as . . . the New Golden Age of Fund Raising!

I believe it is coming . . . and coming fast. But, just like child birth, there will be birth pains as this new Golden Age is born. The old ways of doing things will pass as new tools and methodologies take their place.

If, as we all believe, that building and maintaining Relationships is the heart of effective fund raising, then the convergence of personal media, personal communication devices and information technologies and processes will usher in this Golden Age for fund raisers.

Over my next few blogs, I am going to describe what this new Golden Age looks like.

-Mike

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BIG's Blog: Transform fear into success!

Today I read a business advertisement stating there are three main reasons for IT project failure. The three key reasons stated were:

1) Ineffective management of stakeholders

2) Poor estimation of time for implementation

3) Insufficient attention to risk management during the transition

The premise of project failure can be applied when transforming an organization's fundraising strategic plan.

Ineffective management of stakeholders is one cause for a plan’s failure. Everyone from leadership to those who implement the plan must be on board with the need for organizational change. This is the key reason for failure.

Communicate often with the stakeholders so everyone is on the same page. For those uncomfortable with change, encourage discussion to identify fears. Ensure their ideas are being heard. Good communication is the key to growing and sustaining fundraising success.

Read my next blog that addresses another factor that can attribute failure to a strategic fundraising plan.

-Gail

BIG’s Blog: Is Your Fund Raising Wobbly?

Your fund raising model is wobbly if you’re using a lot of direct mail.

A fund raising model is similar to a business model in the commercial world. A business model is defined as: management's operating assumptions of what a customer wants, how they want it, how the organization can organize to best meet those needs and get paid for it.

An example: In the late 1990s and early 2000s, newspaper business models took the twin hits of first, alternative news services online and second, losing advertising. The newspaper business model’s value proposition is that they delivered news that readers (people) wanted to read. By bringing readers to the newspaper’s pages, they could also bring advertisers to the pages. The advertisers paid the newspapers to be in front of their readers. As the readers and subscribers declined, the newspaper business model became wobbly as advertisers either left the pages or demanded lower rates for their advertising.

Today’s newspapers have moved online even while keeping their print editions. And though the definition of a newspaper may change as some newspapers completely drop print editions, they are doing what it takes to remain in business by remaining relevant to their readers even as their operations and business models evolve.

Direct mail fund raisers, though feeling the squeeze of postal increases, production increases and declining response rates, are still generating excess revenue. It’s not broken yet; it’s just wobbly.

But, just like the newspapers, this is absolutely the right time to be looking at alternative fund raising models. It is important to look at alternatives while you still have excess revenue from your direct mail program. Don’t wait until your direct mail program is irretrievably broken; take heed that it is wobbly and start looking at alternative fund raising models now!

-Mike

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BIG’s Blog: Watch Political Campaign Marketing

In 2008, now President Obama’s political campaign was one of the most successfully executed campaigns ever from the standpoints of organization and fund raising.

Whereas John McCain stuck to traditional massive direct mail to get his message out and generate campaign contributions, Obama’s organization used only online to direct volunteers to get his message out and double the campaign contributions of the McCain campaign.

I know it is still 18 months until the presidential election, but, the campaigns are already underway. However, this time around, both Obama and the Republican challengers will be online.

Political campaigns and nonprofit organizations are very similar in what they need to do in sharing their mission, communications and fund raising. The only difference is duration.

As all the presidential contenders kick off their campaigns (and even as Obama’s campaign starts to become more active) go to their Web sites. You can learn a lot by just poking around, signing up for information to just learn what you can from how these groups position their message, communicate and raise money. Studying these Web sites (which, by the way, I did with Obama’s last time around) will teach you and give you more of a vision for online than me writing 1,000 pages explaining it.

-Mike

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BIG's Blog: Is Your Organization’s Mission Being Heard?

I recently attended a seminar on social media. The speaker began her presentation by telling a story of a bird that awakened her from sleep. The bird was singing its “song.” As she lie awake, she heard another bird join in the singing. That bird’s song was different. Eventually, so many birds joined in the song that she could not hear the original bird that initially woke her up.

Even though I had not heard of the “bird song,” the analogy of social marketing fits perfectly. Let me explain.

When social marketing began, there were only a few who were actively telling their story through social media. It was easy to get the organization’s mission heard. Now, our society is bombarded with media from all directions with everyone’s goal being the same: to make certain that their message is heard.

Now, a computer can be a phone. A TV, game system and a phone can be a computer. These are just a few examples of how technology has changed our lives. So, how can an organization use technology to get the attention of constituents, especially if there is limited staff?

Simple; begin with a plan. An organization may start by introducing one type of social media in its current fundraising strategy. Create a plan that addresses timing with current fundraising programs. Be creative and have good content. Don’t forget to “ASK” for their support. Good advice is, "Do it well or don’t do it at all."

-Gail

If you are interested in hearing the “bird’s song” in the morning, click on the link, then click Morning .wav.

BIG’s Blog: So Acquired, So Retained

Last week, Target Analytics released its 2011 Benchmark study of Internet and Multi-channel giving.

The sample of organizations (28) used in the study were major national nonprofit organizations and covered a range of sectors including animal welfare, the environment, health, human services, international relief and societal benefit.

A major qualifying statement to the study was, “These organizations receive the majority of their direct marketing revenue from direct mail.”

With that one major caveat to the study in mind, let me summarize the findings.

• The majority of the gifts received are still received through direct mail.

• Online-acquired donors give almost double the donation amount of direct mail acquired donors.

• A large percentage of online-acquired donors switch from online to direct mail, but, give less than when they were giving online.

• A significant percentage of online-acquired donors quit giving.

Let’s dissect these findings.

First of all, if the vast majority of their direct marketing fund raising is direct mail, is it surprising that the vast amount of gifts received are direct mail?

Pretty logical – right?

But, then we learn that the online-acquired donors give almost double what the direct mail donors give. And when we drill into the data, we also learn that the online-acquired donors are younger and wealthier than the average direct mail donor. So, at this point, we know for certain that they give more and they like to give online.

That’s good news – right?

Then the last two findings seem to be saying different things, but, upon closer examination, it turns out these findings are merely two-sides of the same coin.

A large percentage of online-acquired donors suddenly switch to direct mail and another significant percentage quit giving. What’s going on here?

Well, if the major fund raising channel is direct mail, then here is what is going on. All 28 organizations are making no distinction between online-acquired and direct mail-acquired donors. And I will bet that your organization doesn’t either. To make a distinction would imply that you and they are really doing integrated direct marketing. And transforming your organization from direct mail centered to integrated direct marketing takes planning and work. Instead, they (and probably you) take the easy route with acquired donors--both direct mail-acquired and online-acquired--and throw them into your direct mail appeal stream.

And, what happens? Some of the online-acquired donors, in deference and respect for the mission of the organization, continue to give through the only channel offered them: direct mail, but not as much. The rest of the online-acquired donors don’t respond to the direct mail because, well, they don’t respond to direct mail.

If you want to KEEP online donors and their nearly double size gifts, communicate with them the way they want to be communicated with.

Pretty logical – right?

The answer is to move from single-channel direct marketing to multi-channel integrated marketing. But, this means you need to transform your organization into an integrated direct marketing organization.

If you want to keep those online higher dollar donors, remember, “So acquired, so retained.”

-Mike

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BIG's Blog: Can your organization survive disasters?

It all began with the Japan earthquake, followed by the Mississippi floods and now the devastating tornados. In less than a month, the hurricane season will be upon us. How do natural disasters effect a nonprofit’s bottom line? Are you seeing a decline in your donations? If you answer “Yes” to this question, what should your organization do to improve your results?

The answer – segmentation! In a blog in April, McKinsey & Company identified the characteristics of Americans who support at least one social cause. Whether you are planning an event, selecting donors for a mailing or e-blast, you want to be sure that you target those most likely to respond. This is especially true when our emotions are drawn to those who have been affected by a disaster.

Data analytics is a tool that can help you identify constituents and donors who will support your mission even as it competes against Mother Nature’s wrath!

Not sure how to use analytics? Give BIG a call. We can help.

-Gail

BIG’s Blog: “Tell the Pope I Don’t Get Social Media”

Last month – May 11 to be exact – I wrote a blog sharing the fact that Pope Benedict XVI himself had designated a Social Media Day to promote the use of social media by Christian individuals and religious communities.

This sparked several emails to me which essentially could be summarized by the sentiment of one email, “Tell the Pope I don’t get social media.”

That’s really the problem, isn’t it? Too many of us in fund raising leadership are of the generations that did not connect with what Facebook and other social networking sites were about when they first came out. And, even today, although more and more of us are opening personal and organization Facebook pages, the natural intuitiveness of using this new mode of networking and communicating is not natural; it’s learned.

Check out the book, The Networked Nonprofit by Kanter.

It’s written for us.

-Mike

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BIG’s Blog: My Hardest Lesson

I first heard the fable related below from Cory Treffiletti. Just giving credit where credit is due.

When someone tells you something or tries to sell you something, do you listen first and speak second?

It doesn’t matter how smart you are or how knowledgeable or how long you have been doing what it is you do; sometimes the person talking to you may be smarter or more knowledgeable than you.

What tends to get in the way is ego.

When you talk first and listen second, your ego is getting in the way of you potentially learning something.

There was once a very successful older executive that had a mannerism that everyone noticed, but no one dared ask him about. In tense or challenging situations, he would always reach into his pocket and pull out a neatly folded piece of paper, unfold it, read it then refold it and put it back in his pocket. Whatever he read tended to give him a sense of calm and helped him overcome many difficult situations. At his retirement party, a young executive asked him what was on that little piece of paper. The older man took out the piece of paper, unfolded it and handed it to the young man and walked away. On the piece of paper was the simple phrase, “They may be right.”

-Mike

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BIG's Blog: Keep it Simple

Is your mission statement effective? You may ask, “What do you mean?” Having worked with nonprofits in all sectors, I can say that many mission statements are long and wordy and sometimes contain objectives that are ambiguous.

Not sure if your mission statement is effective? Read How to Create an Effective Non-Profit Mission Statement

I have shared this information with clients in the past but I think it is always good to hear it again from a new perspective.

-Gail