BIG’s Blog: Transaction vs. Interaction

I think I am pretty typical of the Baby Boomer generation.

Take One: You show up at my door and I don’t know you. I am suspicious. Then you tell me your story about your mission and ask me for money. Though you are polite, there is a sense of urgency.

Take Two: You show up at my door and I don’t know you. I am suspicious. Then you introduce yourself and tell me you hope we meet again. Somewhere down the road you run into me and we strike up a conversation. Part of the conversation is sharing your story about your mission. Somewhere down the road we meet again. I have actually gone online and checked out your mission. I ask you if I can help.

Take One is the way of fundraising that is not resonating with the Boomers or younger generational cohorts anymore. The focus is on the transaction.

Take Two is the way of fundraising that is quickly gaining traction and growing. The focus is on human interaction.


-Mike

Welcome to BIG's Blog!  Please feel free to forward this post to your friends and coworkers...and email me a comment at: mike@big-db.com

BIG’s Blog: You Can Do This

When the issue of technology comes up, some… not all… Baby Boomer-age fundraising leaders become tense, thinking that maybe they are not as “on top of it” as younger staff. There is also the hesitation to jump into conversations of new technology for fear of not looking competent.

But, of course, over the next five to ten years, technology will fundamentally shift the fundraising workplace.

I remember the feeling of technological unease very vividly. I had just stepped out of a company in 2000, where the average age was 36, and into a start-up technology company where the average age was 25.

In my former company I had a secretary… not to mention an IT staff… and we used Lotus Notes, which acted as our email platform and was a collaboration tool. In the new company they used Microsoft Outlook. When they handed me the laptop with Outlook on it, frankly I thought, “this is beyond me, I’ll struggle to figure it out, there is no one to answer my questions, and I will look incompetent and too old to be here.”

Within a day I knew a thousand percent more than the day I received Outlook. The second day I learned even more, and by the end of the week I couldn’t imagine being without Outlook.

That experience was my epiphany moment. From that point on I have never assumed I couldn’t learn a new tool or software, or how to navigate a new platform like Facebook or Twitter. Am I instantly a power user? Of course not. But I assume that I will be able to figure it out over time.

Why do I mention this story? Because there are a lot of “me’s” out there. And just like me, you assume you can’t figure it out. Wrong- Wrong – Wrong! Trust me; we will never intuit technology like 20 or 30-somethigs, we are, after all the User Manual generation, but we will get it and then we are ahead of the 20 and 30-somethings because – let’s be frank – there is so much they don’t know about life, work, and relationships.  

The hurdle is not being able to figure it out; the hurdle is between our ears telling us that we can’t do it. Fundraising is going to rapidly change… it’s already changing… regardless of what you are doing or not doing.

Don’t be afraid of this new world… you can do this.


-Mike

Welcome to BIG's Blog!  Please feel free to forward this post to your friends and coworkers...and email me a comment at: mike@big-db.com

BIG’s Blog: List of the Disrupted

Do you want a long list or a short list of those business sectors, products, or services that have been disrupted by the Internet?

My take is that depressing lists should be mercifully short.

Also, I will put a ranking behind the business sectors, products, or services indicating my guess of their chance to transform themselves and prosper. On a Scale from 0 to 10 with 0 being NO CHANCE and 10 being ABSILOUTELY POSSIBLE TO TRANSFORM AND PROSPER.

• Music Business -  3
• Yellow Pages -  0
• Newspapers -  2
• Landline Phones -  0
• Television -  3
• Nonprofit Fundraising - 10

-Mike

Welcome to BIG's Blog!  Please feel free to forward this post to your friends and coworkers...and email me a comment at: mike@big-db.com

BIG’s Blog: Stuck In Concrete? - ReDo

My blog last Wednesday generated a lot of emails to me but the responses fell into two categories. The first group thought my message was “right on” the money. The second group raised questions about Baby Boomers in their donor file. The below comment was typical of the second group.

“Boomers are a big part of our database of donors.”

I am not saying that it is not possible to have a significant percentage of your donors as Boomers; in fact, there are thousands of organizations in which I know that to be the case. Your organization may be one of those. But for the most part, the organizations I work with have historically raised the majority of their donations through direct mail. And this group of organizations with large direct mail programs tends to have a much lower percentage of Baby Boomers than the Boomer percentage of the population.

The Depression and WWII generational cohorts today make up approximately 12.8% of the population, while the Boomer population equates to 24 ½ % of the population. The Boomers span 18 years from 1946 to 1964. The Boomer cohort spans so many years that demographers actually break the cohort into two subsets: 1946 to 1954 and 1955 to 1964.

The oldest of the Baby Boomers, those born in 1946, famously turned 65 years old last year. So clearly, the Boomers’ oldest subset (born 1946 to 1954) will hit technical retirement age within the next seven years. If they are your supporters, they should already be on your donor file.

From the perspective of a fundraiser, to check the health of your donor file, by this time fully half… and I am being generous… of your donor file should have an average age of 66 and younger. And to have a really healthy donor file, fully two-thirds of your donor file should be age 66 and younger.

How do I calculate that? The Depression and WWII generations make up 12.8% of the population. The Boomers make up 24 ½ % of the population. By now you should have even the youngest Boomers on your donor file as they are 48 years old. 24.5% divided by 12.8% equals a factor of 1.98. The factor of 1.98 is almost 2.0, therefore for a donor file that is representative of the “donating population” (and of course I am completely disregarding Gen X and Millennials who are fully capable of donating) your Boomer donors should be twice the size of your age 67 and older donors.

How does your donor file stack up?

Unfortunately, our experience is that most donor files we analyze show the Boomer and younger cohorts representing only 20 to 30% of the donor base with some even smaller than that.

I don’t have to explain that this is a recipe for a coming catastrophic collapse in donations, and it’s going to happen in the next ten years.

But frankly, virtually all the fundraising leaders I talk to already know this. Most are struggling to make budget this year. Their question is,“What do I do?”

Clearly, historical direct mail fundraisers need a new fundraising plan.

At the upcoming NCDC annual conference in Nashville, TN, we will be introducing our new Transformational Strategic Plan program which offers fundraisers a Roadmap to developing a new growing and sustainable fundraising plan built online. And in October, we will be launching free Webinars that explain the program as well.

Let me know if you would like to receive an invitation to these free Webinars, or talk to me at the NCDC show in Nashville.


-Mike

Welcome to BIG's Blog!  Please feel free to forward this post to your friends and coworkers...and email me a comment at: mike@big-db.com

BIG’s Blog: Stuck In Concrete?

Virtually all the fundraising organizations I talk to have a fundraising business model that is firmly locked in the 1950s. But don’t get me wrong, it works for my 86 year old Mother. Keep sending her direct mail appeals and she will keep sending you checks.

Will my Mother still be walking this earth in ten years? I sure hope so, but I am also realistic and we are planning accordingly.

But most fundraising organizations that count my Mother as a supporter certainly believe she will be around in ten or even fifteen years, and unless I miss my guess, they are betting their organizations on it.

I know they have all added Websites, and some tell me they are actually looking at apps. Great! But how do those digital initiatives mesh with their direct mail appeals? Or do they?

It seems they have one foot firmly planted in the past…in fact, embedded in concrete… and another “playing” with digital tools without any real plan or strategy.

A lot of fundraising groups whose direct mail results are sliding tell me they are ramping up planned giving, and even creating a new planned giving category for major donors. That’s great. But where are the leads coming from for planned giving? They are coming from your direct mail program… right? So as your direct mail declines, where do the new leads come from?

The online world isn’t a fad. Virtually all commercial companies have had to adjust their marketing and communications to the online world. That’s clearly where most of the people are. Most commercial companies understand that their growth is coming from their online marketing. Not all, but the fastest growing part.

Like I said at the top of this note, you’ve got my Mother as a supporter. Problem is, do you have her kids and her grandkids? The Baby Boomers, Gen X, and the Millennials make up the generations that will support your mission in the future. And if you are going to engage them, it is probably online.


-Mike

Welcome to BIG's Blog!  Please feel free to forward this post to your friends and coworkers...and email me a comment at: mike@big-db.com

BIG’s Blog: Jay Leno Gets A Pay Cut

Recently The Tonight Show announced that it was trimming about 10% of the staff of The Tonight Show. In fact, Jay Leno took a significant pay cut to keep even more staff from being let go.

So what’s going on here?

Bottom line, broadcasters are finding that fewer and fewer people are tuning into television shows, which means they can’t charge advertisers what they were charging five years ago. Broad-based forms of media – like TV – are seeing audience plummet. The irony is that people still want to watch the shows, but just not via traditional broadcast or cable channels. People are finding the shows through online digital platforms like Hulu, YouTube, and even Netflix.

But the old broadcast business model, like that of other traditional forms of non-digital communications like print newspapers, can’t keep paying high salaries for talent and big staffs if revenues continue to decline.

Sound familiar? Is there a fundraising group, especially those that have historically depended on direct mail that haven’t had to cut overhead?

But just like The Tonight Show, there are still lots of people that want to see Jay Leno; they just don’t want to watch it on television.

Same for your organization. The demands for your mission aren’t shrinking; they are probably growing… even as your direct mail revenue slides. It’s not that your mission isn’t compelling; the problem is that fewer and fewer people are reading and responding to direct mail.

The Tonight Show will have to realign its production costs with revenues and will have to figure out a way to monetize (make money) through online outlets.

So, too, most charitable organizations will find they need a new strategy to be effective at growing and developing supporters and donors in the digital world.


-Mike

Welcome to BIG's Blog!  Please feel free to forward this post to your friends and coworkers...and email me a comment at: mike@big-db.com

BIG’s Blog: We are the Cloud

The technology of “the Cloud” that you hear so much about today is just the latest iteration of what computer users have been doing at least since the 1970s, which is accessing computer power from long distance. My uncle worked for GE his whole career. GE in the 1970s was in the mainframe computer business, but unlike IBM, who actually sold and supported computer systems at their customer’s locations, GE rented computer power to corporations and other large institutions. They had computer complexes all over the country and companies would access them through phone lines. Yep, it was analogue phone lines but it was essentially the forerunner of today’s Cloud.

Of course the backbone of today’s Cloud is the digital Internet. And the power, speed, and functionality… not to mention the low computing costs… could only be dreamed of back in the 70’s.

With very few exceptions, your organization will – in the not so distant future – access all its software through the Internet. There will be a few gigantic organizations that will maintain actual software/hardware at their locations but the vast majority of corporations and organizations…including nonprofit fundraisers… will access software via the Cloud. Accessing software via the Cloud is called the “Software as a Service” or “SaaS” model as opposed to loading software on your computer. And the SaaS model is way less expensive.

The big upside of SaaS and the Cloud for fundraising professionals – beyond the obvious price advantage - means that speed and software functionality allow us to access, manipulate and see (yes, I said “see”), and ultimately learn information faster from wherever we are. And as we learn faster…we can act faster.

As we all learn and act faster, our organizations progress faster. And THAT for fundraisers translates into raising more revenue.

Ultimately…We are the Cloud.


-Mike

Welcome to BIG's Blog!  Please feel free to forward this post to your friends and coworkers...and email me a comment at: mike@big-db.com

BIG’s Blog: What Don’t You Know?

In my case, there are thousands… no, millions… of things I don’t know. Just start with an emotional understanding of those closest to you… your spouse, your kids, and your friends.  Now move further outside that close-in circle to acquaintances. We really know even less. And we haven’t even touched on general knowledge.

So why would you … or I… think we could presume to know and understand (two very different things) all there is to know about the new communications world that is building around us?

Part of communications is marketing… right? Well, marketing as we have known it all our lives is essentially dead. Maybe I should say it’s dying rather than dead, but when the decline reaches a certain point, it’s really dead for all practical purposes.

Just two examples…

Vertical versus Horizontal marketing

Vertical marketing (broad-based media): All our lives we have practiced vertical marketing. Starting at the top, it is our plan, our money, and we are in control. It may not work, but we are still in control of the timing and the message.

Horizontal marketing (Internet-based): You create a marvelous story or product and set it up to spread person to person. Unlike Vertical marketing, where paid agents (TV, magazines or direct mail) carry your message, in Horizontal marketing unpaid but passionate agents spread your message. The tough part is you are not in control.

Interactions versus Transactions

This is really important for fundraisers.

Interactions: People become fans or friends long before they ever become donors or supporters. In fact, they may never become donors. Interactions are the first crucial step in building a relationship in this new process.

Transactions: People either donate or they don’t. Black and white. Do you have a relationship with them? Don’t know, but if they donate again… maybe.

The problem is it’s really not an “either/or” world anymore. The Internet changed everything. Broad-based media, including direct mail, is in severe decline, hence Horizontal marketing is your only future and the same with Interactions vs. Transactions. The decline in the effectiveness of direct mail means you need to know about and understand Horizontal marketing and Interactions.

You don’t know… what you don’t know. And that’s not a bad thing necessarily – unless it’s your job.


-Mike

Welcome to BIG's Blog!  Please feel free to forward this post to your friends and coworkers...and email me a comment at: mike@big-db.com

BIG’s Blog: Innovation

Did you see the article about Amazon.com creating lockers for customers to pick up orders locally at grocery stores, drug stores, etc.? Apparently, one of the problems that online retailers have is that people follow UPS trucks around and steal packages that are left on doorsteps. This has happened to us and probably to you as well.

Now forget for a minute that the issue that drove Amazon to set up these local places where people could pick up their packages was thieves; does this ring a bell with something that I wrote about regarding an idea for the U.S. Postal Service?

Let me refresh your memory. From my blog of last December 18th; Where Is The Postal Service Going?

“The key move in saving the postal service as a business will be the cost saving transformation of how they distribute the mail. Home or neighborhood and business delivery will end. Every person or household and business that wants to receive mail will have to get a Post Office Box but they won’t be at post offices. Post office buildings will cease being retail outlets. Interesting enough, this change will set off a bidding war by retailers such as CVS, Walgreen’s and grocery chains to host neighborhood boxes. Retailers will love having postal patrons coming into their stores once or more times a week.”

The goal here is not to point out how smart I am… far from it… in predicting this type of similar solution by comparing the Amazon response to a very real threat to their business and the similar non-response to the financial problem that the Postal Service is having. Rather, it is to point out how organizations (like Amazon) that have to make a profit to stay in business come up with innovative solutions to solve real problems rather than A) complaining about how unfair their lot is, B) continuing to miss revenue goals and provide increasingly poor service, or C) doing nothing.

The word for the way Amazon and others positively find solutions to problems is called “Innovation”… our middle name, by the way.

So are fundraisers “innovative” in dealing with the problems that they face in continuing to grow donations? My answer is YES. In fact, I would say many individual fundraisers and their staffs are ingenious in coming up with solutions or work-arounds to vexing problems.

But, it is one thing to tinker with a process that is part of a whole methodology that still works, and another to come up with a solution to a problem that is completely different and never seen before, such as the fundamental shifting of the fundraising model that fundraisers have used for 50+ years. At times like this, internal innovation is difficult, if not impossible. Why? Because nobody in the organization is on familiar ground.

Is this a time to bring in outside expertise? Maybe?  The only reason to ever bring in outside expertise is when you don’t have the internal expertise, and only for a set period of time. The same applies to some programs and services.

But the key point is when your organization is fast with a significant threat, it is best to positively act to innovate, rather than doing nothing.


-Mike

Welcome to BIG's Blog!  Please feel free to forward this post to your friends and coworkers...and email me a comment at: mike@big-db.com

BIG’s Blog: Alignment

Who does Development work for?

Now, I clearly understand that the personnel in the Development department work for the organization. That’s no different than saying that the employees at the local JC Penny work for JC Penny.

That’s not exactly my question.

A better way to phrase my question is “Who is Development aligned with?”

While the sales clerks at JC Penny work for JC Penny and want to sell their merchandise, when they engage the customer, they work to understand the customer’s needs, thereby aligning themselves with the interest of the customer.

The given must be that they offer excellent merchandise and, of course, offer a customer guarantee of satisfaction. But beyond that, the sales clerk must empathize with the customer and align his interests with hers so that ultimately she remains a long-term loyal customer of JC Penney. If that means losing a sale now and then, so be it.

You would say then that the JC Penny sales clerk is customer-focused rather than JC Penny-focused.

Of course, this attitude of the JC Penny sales clerk is taught and encouraged by JC Penny management because they understand the link between being customer-focused and building a successful retail operation built on loyal customers.

Does Development align with their donors in a similar way to the JC Penny sales clerks and their customers?

My sense is that in the past… not so much. Thirty years ago the organization had a mission and their job was to “do” mission. Development’s job was to fund the mission and the donor’s job was to give money. They all knew and understood their roles, and thirty years ago the donors were primarily from the Depression and WWII generations, and they were fine with that alignment.

But beginning with the Baby Boomer generation, the roles weren’t so clear. The organization still would do mission and Development was still charged with raising the money to fund the mission, but now the donors wanted to be treated as more than an ATM.

Accountability and transparency are more and more the watch words in donations received from the Boomer, Gen X, and Millennial generational cohorts.

Today…who does Development work for?


-Mike

Welcome to BIG's Blog!  Please feel free to forward this post to your friends and coworkers...and email me a comment at: mike@big-db.com

BIG’s Blog: What Millennials Can Do For You

The Millennial generational cohort – born after 1980 – is the generational cohort that is drawing a lot of attention these days. The leading edge age turned 30 years old last year. The PewResearchCenter tells us that every generation has a personality, and though difficult to determine in its younger years, as the leading edge of a generation begins to move into their twenties, they begin to act upon the collective values, attitudes, and worldview of their generation.

Millennials are the quid essential iPhone, Facebook, and digitally-connected generation . . . but that doesn’t mean they are socially inept and incapable of person-to-person relationships. If I read one more screed calling the Millennial generation socially backward by virtue of their ubiquitous digital tools, I will seriously become ill.

This IS the social generation as anyone who has sons, daughters, nieces, nephews, or have friends from this cohort can plainly see and attest. Their adoption of digital means to communicate only amps up their generational predisposition towards all things social.

Why is this important to fundraisers?

Millennials are the largest group of passionate outsiders who can… and will… carry your message from person to person.

But you have to talk with them… engage them. Win them as fans and your story gets taken far and wide.

Are you ready for this? Are you organized for this? Are you staffed for this?


-Mike

Welcome to BIG's Blog!  Please feel free to forward this post to your friends and coworkers...and email me a comment at: mike@big-db.com

BIG’s Blog: The Soviets Just Couldn’t Evolve

It’s been said that the old Soviet Union was brought down not by the might of western military superiority, but by Rock and Roll and blue jeans. When the Soviet Baby Boomers were in high school and college, they were really no different than western Baby Boomers. They loved the Beatles, rock music, and western youth fashion, which was first and foremost blue jeans.

Of course, when the Soviet Boomers were young, their parents’ generation was in full charge. But as they matured during the 60’s, 70’s, and 80’s, just like their Boomer counter parts in the west, they still looked to the west for the material culture of music and fashion that their system either couldn’t provide or worse, repressed.

The west and the United States in particular have been building a full-on consumer society since the end of WW II. But to be honest, the Depression and WW II generational cohorts who preceded the Baby Boomers never really were fully inculcated in the consumer culture that  began in the 1950’s and 60’s.

Their ethos was forged in the depression of the 1930’s and the very real supply shortages and rationing during the Second World War. Baby Boomers may know the stories but don’t have the same emotions about money and personal savings as those generations.

My mother is 82. Most appeals I see today (virtually all direct mail) are still written to my mother even though I receive the same appeals. They speak her language and play to her generation’s ethos. And the funny thing is, I know they are written by copywriters who are Boomer or younger.  

I know most of these organizations are getting some Boomer donations but as time passes, the approach has to change. Would the writers of the appeals donate?

How consumer-friendly is your organization? Potential Boomer and younger donors are consumers before they are donors.

Remember what happened when the Soviets couldn’t evolve.


-Mike

Welcome to BIG's Blog!  Please feel free to forward this post to your friends and coworkers...and email me a comment at: mike@big-db.com

BIG’s Blog: Pat Answers

Is it just me or is the nonprofit fundraising literature – articles, blogs, books, etc.– full of 3 or 4 or 6 step programs?

Alcoholics Anonymous is famous for their Twelve Step Program to sobriety. Twelve is a lot compared to most screaming headlines: 3 Steps to More Donors. Google “twelve step” and look at all the programs, everything from twelve steps to serenity to weight loss.

But we like step programs don’t we? We like the 8 Tips to “whatever” to solve our issue of the minute. We know it’s not that easy, but we click on it anyway.

And it isn’t just step programs. It’s “The List” … Madonna’s 5 Worst Fibs.

What do all these step programs and lists have in common? Aren’t they the easy way out? Someone else did the work to compile the definitive list for us so we don’t have to.

We are all busy. We all get sucked into way more than we have hours in the day, and then someone is offering us the 3 or 4 or 6 points that we need… that really plays to our desire to get a quick answer. Save time!

As fundraisers, maybe we should join the club: 3 Reasons to Donate to Our Cause!

My resolution: I will not click on anything that offers me the easy way, or the quick list for thirty days… unless it has to do with Madonna.


-Mike

Welcome to BIG's Blog!  Please feel free to forward this post to your friends and coworkers...and email me a comment at: mike@big-db.com