BIG’s Blog: It’s About You – Part 3

This series of blog posts contains information I learned in conversations talking to Development Directors over the holidays, in between fielding calls and signing up people for the Winter Term of our online learning program. I had the opportunity to reach out to many people I hadn’t talked to in a while and catch up. In most of my conversations I tried to be intentional in asking questions about how they viewed their fundraising in the coming year (2014) as well as any trends they were noticing.

In Part 1, the trend I picked up from my observations was that Development Directors were talking about and actually using the words “disruption” and “innovation.” Those two words kept coming up in our conversations.

In Part 2, I observed that more and more fundraising leaders were admitting they need to bring in younger (more online savvy) staff because they realize online is the future. This is a 180-degree turnaround for the vast majority of DDs I spoke to last year at this time. Last year only the early adopters were new and younger staff. This year the online mentality has gone mainstream.

And, speaking of “mainstream,” the third trend I am noticing is that social media is now mainstream in the minds of the Development Directors I talked with.

A year ago Facebook was still “iffy” to a large segment of Development Directors. Many of them had a Facebook page but were still worried about controlling the message. More than one of them told me “We are just concerned that someone will post something that didn’t have a sign-off.” While others voiced that it wasn’t important since it doesn’t raise money. What a difference a year makes! This year the conversations with the majority of Development Directors were more about how to make it work for them … not avoiding it.

This perceived trend on my part syncs up with what is happening in society as a whole. According to Pew Internet Research, in 2013 43% of Seniors – those defined as age 65+ - are now using social media and 72% of all Internet users are on social media.

I have written this before, but if I were back in the commercial world and using social media, I am not certain how effective social media would be in driving sales. But for nonprofits whose focus should be on “relationship development” … social media is a no-brainer.

So as we move into 2014, the real issue for nonprofit fundraisers will be: How do they learn to leverage the inherent relationship building power of social media to accomplish their financial goals?

Drip, Drip, Drip.

-Mike

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BIG’s Blog: It’s About You – Part 2

This series of blog posts contains information I learned in conversations talking to Development Directors over the holidays, in between fielding calls and signing up people for the Winter Term of our online learning program. I had the opportunity to reach out to many people I hadn’t talked to in a while and catch up. In most of my conversations I tried to be intentional in asking questions about how they viewed their fundraising in the coming year (2014) as well as any trends they were noticing.

In Part 1, the trend I picked up from my observations was that Development Directors were talking about and actually using the words “disruption” and “innovation.” Those two words kept coming up in our conversations.

In today’s post, I’m going to share a topic of conversation that most surprised me. These were the “frank admissions” by several Development Directors about needing to bring in younger staff and lieutenants, even some in their 20s and 30s who were digitally savvy.

It never ceases to amaze me that the most successful fundraising organizations also have leaders who are generous and self-effacing, as well as frank about their organization’s shortcomings. Although several came late to understanding and admitting that direct mail was not their future, they have since shifted gears and are moving. Clearly we are happy when that means that one of their first moves is taking our online e-learning program, as we believe that only accelerates the learning curve of their organization into the digital world.

One Development Director told me, “We really don’t have staff that understand how online tools and especially social media works.”

Another Development Director told me that she was retiring in the next three years and that she wanted her 40-something lieutenant to be the next Development Director. “I know she will have to figure out how to make online fundraising work if our organization is going to be around for another 20 years, but she grew up with computers, I did not.” she said.

Think about this: 2014 marks the 20th anniversary of the World Wide Web. People who are just now turning 40 have virtually known nothing but the Internet all their working lives, and as they move into their 40s, they will also be assuming positions of leadership responsibility in fundraising organizations.

So the trend that I see starting in 2014 is the speeding-up of moving younger Development staff (in their 20s and 30s) into leading roles in digital initiatives within Development.

Drip, Drip, Drip.

-Mike

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BIG’s Blog: A Gift from God

We will get back to the projected 2014 trends that we started last week with my next post . . . but there was some news last week I don’t want you to miss!

I realize that not all of my readers are Catholic, but whether you are Catholic or not, you had to stop for a moment when the Pope himself tweeted out that the Internet is a gift from God.

His exact tweet: The Internet, in particular, offers immense possibilities for encounter and solidarity. This is something truly good, a gift from God. —Pope Francis

We all know the horror stories of the Internet: pornography, bullying, cyber stalkers, etc. Too many of us, however, focus on the Internet’s dark side, not even thinking about its possible positive side.

So, to whom is Pope Francis talking? It’s not teenagers or 20 or 30-somethings since they are already there; it is already a big part of their lives. So, whom is he talking to?

It’s us! It is we who are fearful of what we don’t understand. After all, most of us remember the world and the workplace before computers, let alone the Internet. And, let’s be frank, many of us worry that we can’t keep up and that this is a young person’s game.

But it's not.

Yet too many of us are holding ourselves back. Which, in turn, holds back our (fundraising) organizations.

This is a shame for secular nonprofit organizations, but it is much worse for faith-based organizations. Why? Because it means we are really not fully engaging the world.

That is why Pope Francis is saying to all of us, “get with it folks, this is a gift from God.”

Drip, Drip, Drip.

-Mike

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BIG’s Blog: It’s About You – Part 1

Over the holidays and between fielding calls and signing up people for our online learning program’s Winter Term, I had the opportunity to reach out to many people I hadn’t talked to in a while and catch up. Some called me after receiving our “Video Christmas Card,” and, yes, that was my pregnant daughter as Mary carrying the Christ child.

In most of my conversations – and, sorry, I couldn’t connect with all my friends – I tried to be intentional in asking questions about how you viewed your fundraising in the coming year [2014] as well as any trends you were noticing.

I’ve got to tell you that some of what I heard actually surprised and delighted me.

Apparently the words “disruption” and “innovation” are taking hold in many of your minds. I’d like to think I was partly responsible, but, hey, in 2013 those words were everywhere. They obviously are making it into our consciousness and lexicon.

So, over the next few blog posts, I’m going to summarize some of the trends around disruption and innovation that I heard from you. I will try to add context and hopefully bring to the subjects some clarity.  

Today we are going to focus on the words “disruption” and “innovation.”

Several of you talked about how you were trying to use digital and social tools to break into new groups of younger potential supporters. One even said, “ I want to build innovative disruption into the culture of our organization.”

Clearly, more and more fundraising groups are looking at digital and social tools as the means to carry their organization to new audiences.

My question is this: How does disruption and innovation play in your current culture?

There is no question that digital disruption is affecting virtually every industry, and we know that nonprofit fundraising is not immune. But if you are going to be a disruptor, don’t you need to first develop an innovative strategy that pulls together the people, resources, new processes, and the “change” culture to make it work?

In his book, The Innovator’s Dilemma, Clayton Christensen suggests adopting the successful idea by other groups facing disruption. That idea is to create a separate group tasked with using the new disruptive technology. This is what Federated Department Stores did back in the 1970s when they saw the rise of discount retailing. They didn’t try to change their department stores, rather, they set up a new retail group with its own people, processes, plan, and culture. Today we know that discount retailer as Target.

I realize the idea of setting up a separate online group focused on using new digital and social tools within your fundraising department might sound strange to fundraisers, but our clients are doing it even as I write this. Leave your direct mail and planned giving areas alone! Send a small group down the hall, to a different building, or to another city with all the online tools (including the Website) and charge them with bringing in younger supporters.

I am hearing loud and clear from many of you the understanding that either you are going to be innovative or be disrupted. It’s a stark choice, but to those who are reading this, I suggest you seriously think about being the innovator!

If you are really going to attempt to let digital and social tools successfully reach younger potential supporters … you can only do that by innovating your status quo.

Drip, Drip, Drip.

-Mike

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BIG’s Blog: Distant Thunder Portends Rain

Throughout the 1990s while I ran a database marketing company, our sole customer base consisted of the retail branch networks of large retail banking organizations (Chase, Bank of America, Wells Fargo). Electronic banking had been on the scene for a decade, but in the late 1990s its adoption really began to accelerate. To help our bank clients we would always put out predictions of trends we were seeing across the whole of our network of common bank clients to help them get a sense of what was coming. We found this was valuable since a trend that caught on in Indiana and California might take off in other markets as well.

One of those trends that I personally took ownership of (and had major economic implications for our banking clients) was the coming decline in the growth of printed checks by the bank’s retail customers as electronic banking caught on and gained momentum.

There were two major check printing companies, Deluxe Check and Harland, who together easily controlled 80%+ of the retail check business with banks.  I had a small team that tracked the slowing growth of check volume by these two companies in hopes of allowing us to validate to our clients the decline in checks that was surely coming. By the mid 1990s, year-over-year growth in printed checks for these two companies had slowed to the low single digits. In 1995, the growth was under 2%. This gave me the confidence to predict in my January 1996 prediction that check volume would fall for the first time. I felt I was on fairly safe ground.

In 1996, however, printed check volume rose 4.3% over 1995. Huh? 

Although I felt chastened, I could read the trend lines, and every subsequent year until I sold the company in 2000, I predicted that "this coming year" would see the expected drop-off in printed check volume. And every year up until 2000, check volume grew.

Though I sold my interest in the company and moved on to another industry, I kept my eye on check volume.

In 2001 the worm turned, and for the first time in over 100 years, check volume declined, down 6% in 2001 over 2000. Then came the waterfall. Check volume, which, for the past decade had been growing by low double digits - but still growing - suddenly went into freefall. Off by 14% in 2002, then another 17% in 2003, and then I quit tracking it because my long-predicted decline had arrived.

The banks were fine. By this time they had long-seen the trend to electronic banking and had been building out their electronic banking infrastructure and downsizing their check-processing capacities. They were ready for this major shift.

The check printing companies? Well, that is another story. They clearly saw the shift coming and they knew the end of their check-printing gravy train was coming to an end. They tried to diversify and to date have had some success. Are they still printing checks in 2014? Of course, but every year their volume drops. These check companies are still scrambling to find the new growth business that will be their future. 

So why am I dredging up a story from my past?

Well, its because it really is an apt comparison to the fall-off of analog printing in general and direct mail (printed matter) in particular.

In fact, when I compare printed checks for banks being displaced by electronic banking, and printed direct mail appeal communications being displaced by online communications, I am struck by “the Internet” being the common thread. From the inception of the Internet in the 1990s, it has been disrupting industry after industry.

Recently The Agitator (another well-read blogger in the nonprofit fundraising space) played up the same post from AnalyticOnes I mentioned in Monday’s blog over three separate posts. That fact is quite remarkable for The Agitator. The post we were both focusing on is Unsustainable Trends (Part One and Two).

The implications contained in these two posts are not only the evidence of the coming fall-off in direct mail that so many have been predicting, but also show exactly why the fall-off is coming. Their conclusions are based on the data that AnalyticOnes has compiled in their work with nonprofit fundraisers . . . especially those with large direct mail programs.

Once you read these two posts and have digested the implications, you are left with two questions.

First, you now understand that it is about managing the decline of your direct mail program. Growth is coming to an end if it isn’t here already. How do you maximize and optimize your profitability as your program declines?

Second, what takes direct mail’s place?

My suggestion …

Call AnalyticOnes for the answer to the first question.

I think you know who to call for the second question.

Drip, Drip, Drip.

-Mike

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BIG’s Blog: In Plain English

In all things oriented to fundraising, I tend to communicate primarily in words … plain English … to paint the picture. And when the subjects are adverse trends in fundraising that my readers need to know and understand, fortunately … or unfortunately, I can wax a bit verbose.

Yet, let’s face it, some people more quickly comprehend the seriousness of an issue by looking at mathematical formulas. Maybe you are one of them. To that end, my friend Bill Jacobs, who writes a blog for AnalyticalOnes, recently posted a blog entitled “Unsustainable Trends.” If your thing is mathematical parlance or if you more easily understand a situation by studying equations …  

Click Here: Unsustainable Trends

Of course Bill wants everyone to understand his point, including me, so he also summarizes his point in plain English.

Thanks Bill.

Drip, Drip, Drip.

-Mike

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BIG’s Blog: Why is Smokey Robinson Scared?

In their 2011 book, The Networked Nonprofit, the authors, Beth Kanter and Alison Fine, make the argument that for people in nonprofit organizations (think fundraisers) who are going to use online tools, technologies, and especially social media, they need to be using the aforementioned themselves. Or, as the authors say, speaking of social media, “it’s a contact sport.”

Are you lamenting that your donor base is getting smaller and older? Every month I run into charitable and religious organizations that either A) do not even have a Facebook page, or B) have a Facebook page, yet no one in leadership or even the senior Development person has ever used Facebook themselves.

And they wonder why their fundraising organization is making no headway in attracting “younger” people!?!?

When I discuss with them the reluctance of either themselves or their organization … I get all the rational explanations. But the truth is, they’re just scared. Scared that they won’t be able to figure it out, scared about something getting posted that shouldn’t be posted, or just scared that people will know what they don’t know.

I understand all those concerns, after all, I’m 60+ years old. But you have to use these new online tools yourself to really understand how they work and their value.

I saw an interview with Smokey Robinson, the R&B singer, a while ago. Smokey is 74 years old and he is still out there performing. In this interview, however, you could see he was scared of the new music world. It used to be that he could write, perform, and cut an album . . . and if it was successful, it would provide him with a nice income stream to augment his live performances. Today, though, the music business is moving to online streaming services like Pandora or Spotify. With these streaming services, people can get their music whenever and wherever they want it. Online streaming is killing terrestrial radio. In fact, streaming is the new radio. In addition, with services like Spotify, you can pick your list of songs, so it’s radio + ownership. No wonder CD sales and even Apple’s iTunes Music Store sales are down. Why would you purchase what you can get on your portable listening device for a flat monthly fee? Music streaming services are the music delivery model in the same way that Netflix is the movie delivery model … a low monthly charge or even free for unlimited service.  

In the interview, Smokey Robinson said he was scared about losing album and song revenue as the old album sales model that he has known all his life was essentially dying.

Is Smokey still scared? Does Smokey subscribe to Pandora or Spotify? I hope he does, because then he would understand that streaming is the future of the music business . . . and if you are a musician today putting out new music, or, in Smokey’s case, have a body of great music, people will listen. And, of course, Smokey will not only get a cut of the music stream income, but he will be building new audiences … worldwide.

Drip, Drip, Drip.

-Mike

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BIG’s Blog: Watching Gladiator in an Empty Theater

The movie Gladiator, starring Russell Crowe, came out in the summer of 2000. If you have seen the movie then you know it was one of the best epic movies of all time. If you haven’t seen it, it’s worth watching.

Gladiator grossed over $450 million worldwide, making it a huge theatrical success. Yet when I saw it one afternoon way back in 2000, I was the only one in the theater.

Of course, part of that could be chalked up to an afternoon matinee with lots of summer options available, and indeed the fact that it grossed $450 million worldwide in theaters puts this movie (for the year 2000) in the blockbuster category. But even in 2000, the trend toward home entertainment (including watching movies) was well-established. In 1991, the author Faith Popcorn (yes, that was her real last name) identified and described the larger societal trend of “Cocooning” in her book, The Popcorn Report. She described Cocooning as individuals socializing less and retreating into their homes more.   

Of course this “staying in at home” trend was not new, and had been going on since the advent of radio, and then was accelerated by television in the 1950s. I remember when I was growing up that older people [my age now] used to be out sitting on their porches talking to passers by, or be out in the yard talking to neighbors, or even off to social and civic club meetings in the evening. I have observed in third world countries (where poverty prevents the acquisition of much home entertainment technology) that the people are out socializing in the evening. I have also heard that in some European countries, especially the more Latin cultures, that evening socializing culture is so ingrained that it has resisted the rise of Cocooning as it is found in the United States.  

Especially in the US, the Internet is creating the pipeline for all kinds of downloadable entertainment. This technology build-out is solidifying the trend toward more viewing/listening/reading in the home and less outside-of-the-home socializing. And while most of us enjoy the greater menu of in-home entertainment options that our Internet-accessed gadgets provide, we also hunger for human connection.

In the evenings, when we are caught up on work-related stuff, that is “our time” to read, watch, or listen to something of common interest or passion to our family, our friends, or us. And for many people that is when they are online reading and catching up on social media, which, in turn, introduces them to contacts through social media that they may have never heard of.

Cocooning and the connected Internet lead to more opportunities to discover what is out there on the Web. Insofar as your organization is making a focused effort to shift your messaging 100% online where you can deliver all kinds of news and stories about “who you are” and “what your organization is about” … the potential to intersect many, many new potential supporters is huge.

Drip, Drip, Drip.

-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