BIG’s Blog: It Happened Again!

John Henry, the principal owner of the Boston Red sox, recently purchased The Boston Globe . . . and this following the earlier news that The Washington Post was sold to Amazon.com CEO, Jeff Bezos. And a bit closer to home … for me … billionaire investor Warren Buffet purchased the Omaha World Herald.  

Arguably, these guys are extremely smart and savvy investors (all billionaires after all). Presumably they don’t make investments to lose money. Warren Buffet is even on record as saying five years ago that he would not buy a newspaper at any price.

So what’s going on here?

What’s changed?

Here is my take from my own study and the consensus I have gleaned from other commentators. And MORE IMPORTANT TO YOU is that the implications of these billionaires’ decisions have a DIRECT LINK to your success in fundraising very soon.

Simply put … the worm has turned. Savvy investors have always known that newspapers have a strong brand and are trusted in their communities, but the delivery mechanism of newsprint and the business model of printed advertising aren’t viable anymore. People get their news online, and online services like craigslist have decimated “want ads” in the local paper. From the investor standpoint, as the presses shut down, costs drop dramatically, yet people still want news and information and they trust the brand of the newspaper to deliver their local news and information.

Savvy investors know that to make money you “buy low,” and the fire sale prices of these “news institutions” are low, low, low.

The old owners believed that a newspaper is newsprint and without the “dead tree” publication (as a good friend of mine calls it), it isn’t a newspaper. The old newspaper owners only know what they know about how to run a newspaper. Are these old owners stupid or just lazy? I say neither. The old owners just don’t want to step up and make the change; basically they are tired and looking for an exit ramp. They’ll let someone else figure it out.

How will newspapers generate revenue to pay their writers and editorial staff? These savvy investors believe that answer is already here and coming soon … and I believe them. They see that online communications technology is everywhere and that all forms of valuable content is being accessed … and paid for by customers. Honestly, tell me you don’t read the news on your phone, tablet or computer.

But who is going to pay these news organizations like The Washington Post, The Boston Globe, or the Omaha World Herald for their news?

See, that’s what separates some of you from the John Henrys, Jeff Bezos and Warren Buffets of the world. You keep thinking like the OLD owners of these newspapers!

How much did you pay to rent movies at Blockbuster? How much do you pay a month to access movies on Netflix or a similar service? How much did your landline and long distance cost before the era of cell phones? And most people pay for their cars and their homes with “affordable” monthly payments.

Do you get it?

Hello! Monthly payments!

  

So how do the travails of the newspaper industry connect to nonprofit fundraising???

Your organization also has a tremendous brand name. You’ve been around awhile. You stand for something and your reputation has trust and respect and this goes double, triple, and quadruple for faith-based organizations!

The print-and-ink world of newspapers is going away even as online media opportunities are exploding … and THAT IS WHERE PEOPLE ARE … ONLINE!

I HAVE NOT READ A PRINTED PUBLICATION OR BOOK IN THREE YEARS AND I AM OVER 60!

You don’t need print to tell your story or reach people to have them connect with and support you. Quit thinking like OLD newspaper owners!

Your organization can be ITS OWN MEDIA COMPANY!

And, just like a fairly famous religious television network, people WILL send you monthly donations to underwrite your work!

Drip, Drip, Drip.

-Mike

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BIG’s Blog: It’s a New Year, Time to Take Stock: Have you changed?

Do you ever go to work, get to your office, sit down at your desk and think, "what the heck is going on here?" Or maybe it’s when your mind is racing on your commute to work as you are thinking about your "to do" list, and you suddenly think, “wow, I feel like a cog in a big wheel.”

You stop and wonder to yourself or even say out loud, "when did raising funds become such a mechanized method of working multitudes of people through the steps of a process?"

It's beginning to feel really industrialized, isn't it? It's all about the numbers. It's all about the money. Where has the "soul" of fundraising gone? All that we do sometimes feels like a facade doesn't it, as if we are creating another personality just for our job?

Over the years we have become really good at perfecting our messaging, telling our stories, lowering our cost structure, all to eke out profitability. But . . . It . . . All . . . Feels . . . So . . . Industrialized.

We reconcile that "this is just the way it is." Our JOB after all, is to deliver the bucks. Delivering the bucks is what we are hired to do and if we don't deliver, we are out the door.

But then, it wasn't always this way, was it? Remember when you first started? Remember your excitement of doing your first campaign or sitting down the first time with a potential donor, or meeting long-term donors? 

Yes, something has changed. But it isn’t just one thing, it’s TWO things … IT'S FUNDRAISING … AND IT'S YOU!

Societal attitudes towards philanthropy and giving have shifted over the last twenty years but have massively shifted in the last ten years.

And guess what? Your ideas and attitudes have shifted right along with those of society in general. YOU’VE CHANGED, and so has fundraising. What are those changes? Transparency is expected. Accountability is expected. Expectations of potential donors (yourself included) such as more personalized contact, more attempts to connect the supporter to the mission and the people they serve, as well as connecting supporters to each other. 

So even though your attitudes have changed toward what you expect from a nonprofit that you would support, the methods, the way of operating, the attitudes toward donors in your organization probably haven't changed … not that you haven’t tried! 

But it gets worse . . . 

In what appears to be a mere twinkling of an eye . . . things aren't working in your fundraising plan like they used to. Mail responses are down and costs are going up. Some of your donors are giving larger gifts, but overall, fewer people are giving. Trusted long-term supporters are passing, and though a few leave the organization a bequest, year over year your number of donors grows smaller and older.

So you have two HUGE looming problems don’t you? Well, actually three if you count yourself.

Problem Number One: The generational cohorts that have supported your organization for the last forty years and were the vast, vast majority of supporters, are shrinking due to their age and you are not getting enough younger supporters to take their place. Why are you not getting younger supporters? Because the media and the message that worked for your 70/80 or 90-something parents doesn’t work for the vast majority of Baby Boomers [age 67 and younger] as well as GenXers and Millennials.

Problem Number Two: We already alluded to it in problem number one, and that is that HOW people communicate has changed. You’ve all either heard me say this in talks and certainly in my blog posts: The Internet Changes Everything! This is REALLY important; the people you are missing are 100% online. And though you are playing around with online, you haven’t figured out how to make it pay for itself, let alone become the fundraising vehicle to take the place of direct mail.

And Problem Number Three: YOU … you have shifted your expectations of how a nonprofit fundraising organization should be communicating to YOU as a potential donor, and you desperately want your organization to catch up to your expectations!

But you might need a little help. Our company can help, but so can other consultants.

Help is available.

What isn’t available is a lot of time to make the switch.

Drip, Drip, Drip.

-Mike

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BIG’s Blog: Evolve or Die?

The “heart” of successful fundraising is still relationship.

When I talk to my 80-something mother about the “relationship” she has with the different organizations she supports, and I have essentially the same conversation about the “relationship” my 50-something wife has with the organizations she and I support, I quickly understand that each of their definitions of “relationship” is very different.

With my wife, relationship speaks to whom she knows, where they are working and what they are doing. Whereas with my mother, relationship speaks to the story or narrative she understands about the organization built up over decades.

My mother’s “know” is knowledge, the story, the narrative. No doubt the product of the mass communications paradigm we are quickly exiting.

My wife’s “know” is much more intimate and tied to the people and a particular mission and, yes, is driven by online communications.

We are quickly coming to a time when large monolithic nonprofit organizations like CARE, the Red Cross, and the American Cancer Society (and I chose these organizations because they are very large) are going to be under pressure to connect with new, younger generations of potential supporters in a much more intimate and personal way. And, to their credit, I am starting to see some signs of that move. For instance, following disasters, texting $10 has been very successful for the Red Cross, but the test will be how they follow up and develop these one-time donors into annual supporters … even without a disaster. That will take care and nurturing of the relationship.

It isn’t that my mother’s generation was easy and younger generations (beginning with the Baby Boomers) are hard. Rather, I think it’s more that younger generations are very different in what they look for and expect from the organizations they support today.

It isn’t harder vs. easier … they are just different.

Making a determination of “hard” versus “easy” is really more a reflection on what we know … our experience.

But this much is clear . . . going forward, relationship is going to be defined in a more intimate and personal way.

Drip, Drip, Drip.

-Mike

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BIG’s Blog: How many Checks do you write?

I ran a mail-order company in the 1980s. We processed thousands (actually, tens of thousands) of checks. How many credit cards did we process a month? Maybe ten. Checks dominated!  

Do checks still dominate your personal life? I’m not talking about your workplace; I’m talking about YOUR LIFE.

How old are you? 40s? 50s? 60s? Seriously, how many checks are you writing a month compared to five years ago?

YOU are obviously living in 2014, yet your fundraising organization is stuck … yes, stuck … in a time warp of the 1980s if more than 20% of your revenue comes in through checks. Some would say I am being “awfully generous” when I say 20%.

So who writes checks today? You think I am only going to mention people in my Mother’s age group who are in their 70s, 80s and 90s. Yes, that is true, but I’m guessing you are getting checks today from people in their 40s, 50s and 60s.

And if they are in their 40s, 50s and 60s, then they are just like you, right? They have “to dig out their checkbook” to send you a donation.

It’s schizophrenic isn’t it? You don’t use that many checks, yet you expect the people that are just like you to dig out their checkbook to make a donation to YOUR organization? You have long-since stopped making checks the center of your financial transaction world and you KNOW many of the people who donate to you are just like you … and yet … the check remains THE mechanism of nonprofit transactions.

Why?

Maybe because your primary mechanism to communicate with them is mail. And what is in every mail package? Answer: a reply envelope. And what are reply envelopes for? Answer: to carry the check to you.

Doesn’t it make you wonder what would happen if your major transaction mechanism switched from offline checks to some online payment option? But how is THAT going to happen when your major communications vehicle still includes a reply envelope?

Drip, Drip, Drip.

-Mike

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BIG’s Blog: I Never Work on the Last Day of the Year

I never work on the last day of the year, or on any of the other 364 days either.

I grew up in a small rural community in Kansas. For those of you that have only known east coast megalopolis or the west coast LA basin, or the myriad large cities in our country, there is no way I can explain it to you. Life is just simpler and fairly black and white. You learn at an early age in this culture to get up every day and start working.

My first “real job” was baling hay at the age of 11. To be fair-skinned on a clear summer day with the temperature hovering around the century mark as you walk through what seemed like endless fields of wheat stubble or cut alfalfa, picking up and tossing 60 to 80-pound bales onto the bed of a slow-moving trailer was the lot of rookie balers at the age of 11. One of your buddies (everybody that you work with in a small town is your buddy; the term co-worker was a foreign concept) rode on the trailer picking up the bails you had thrown and stacked them six to eight-high, depending on how smooth the field was. The lucky stiff (usually the oldest kid on the baling team, or the farmer himself if it was a small farm) drove the tractor that pulled the trailer.

But the work in the field was just a warm up … no pun intended … for the real work of putting up the bales in the barn. You remember the movies when you were a kid where the train robbers always pulled their bandanas up across the lower half of their face so as to be unrecognizable? Well, all cowboys and farm hands really wear bandanas to this day, and it’s not for robbing trains. You need bandanas pulled up over your nose and mouth when you are unloading the hay bails in the barn so you don’t get choked up with dust. Hay dust is thick in an enclosed barn with not a breath of air moving, and if you thought the temperature was hot in the field, you can only imagine how stifling it gets when the temperature in the barn approaches 115, with no air moving. Dust cakes to the sweat on your face, arms, and down your neck onto your back where it starts to itch like crazy. A real rookie can be spotted by wearing a short sleeve shirt to do this work; you only make that mistake once.

But I was fortunate. My farm-hand experiences taught me at an early age what real work was all about, and from that point on, I have never wanted to have anything to do with it. Lesson learned!

That is why for the next 50+ years I have always … with very few exceptions … done only what I wanted to do even though most people would say I was a hard worker. I would say I did what I enjoyed doing. Big difference!

So then, work is a state of mind. Of course it is how we earn the money that we need to pay our bills, but “work” is a choice. You can either wake up five days a week (or more) and have to force yourself out of bed in the morning or you can choose to do what you love to do.

Right now there are hundreds of people (probably thousands) who work in nonprofit fundraising and hate their jobs, whether the problems are a toxic work environment due to inept or no management, or co-workers constantly sowing discord or lack of direction by leadership or the board of directors. Either way, it leads to plummeting morale and dissatisfaction in the fundraising workplace.

I wouldn’t say it is endemic across the whole of the fundraising world since we work with fundraising organizations that are the exact polar opposite, but I would say it is prevalent in way too many fundraising organizations.

Why?

My sense is that the dividing line between highly-functional and successful fundraising groups and their opposite numbers comes down to leadership. But more than merely leadership, it is about leading with a vision of first, “what you want to accomplish” and then second, “laying out a plan (a roadmap) of how to get there” and finally, “sticking to the plan and measuring your progress along the way to your goal.”

If it cannot be measured, then it should not be done!

This is what separates the successful from what I refer to as the “functioning dysfunctional.”

Apparently the New Year is a time for many fundraising organizations to rearrange staff, add new staff, or create a new organization chart to better accomplish their fundraising goals. Insofar as it is driven by a real vision and plan … then great! But if it is just another attempt at “doing something” to right a failing plan, then it will be like a Jell-O mold. You know what a Jell-O mold is, don’t you? You mix Jell-O and pour it into a mold, refrigerate and what comes out is molded Jell-O. When you hit a Jell-O mold it shakes, just like some organizations announcing some kind of change or shakeup. But because the change or shakeup really isn’t driven by a vision or a plan, pretty soon – just like a Jell-O mold that has been whacked – it reverts back to exactly as it was before the shakeup. Nothing will have changed, except lost time.

No caring leader ever wants to intentionally be a part of that!

Here is a radical thought to start your new year. If you are the leader of an organization that has tried but failed to right the ship and your fundraising organization isn’t moving forward and, frankly, you really don’t look forward to going into work each morning, maybe rather than foist yet another slap to the Jell-O mold … announce your resignation.

Yes, resign! It really isn’t that novel; I’ve done it several times in my career. Quit wasting your life “working” at something that has obviously become unfulfilling to you. You’re clearly smart and talented, but for whatever reason right now your talents are not matching up to what is needed in your organization.

Life’s natural order is birth and death. Death is life’s way of regenerating itself. In your case I’m not talking about physical death, but rather emotional death. There is a reason why people say “my job feels like a ‘dead’ end.”

If you need to wait on a new successor or quickly groom someone from inside the organization to take your place, then announce you are leaving and get on with it!

Your best days are ahead of you!

But please, don’t hang on thinking YOU are irreplaceable. Listen, the cemeteries of the world are full of indispensable people.  

Quit “working” … go do something you love and are passionate about.

Not only make it a New Year, make it a Happy New Year!

Drip, Drip, Drip.

-Mike

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BIG’s Blog: Drip, Drip, Drip into 2014!

What if they threw a party and no one came? Does it strike anyone else as odd that the Postal Regulatory Commission’s award on Christmas Eve of a 4.3% “exigency” increase to the Postal Service, now being decried as the end of direct mail, is really the most expected non-event in the history of the Postal Service as well as many circles (though not all) within the nonprofit fundraising community?

I mean, come on! Up to now everyone and their dog could have an opinion on the future of direct mail; or more particularly for fundraisers, the viability of direct mail as a long-term, cost-effective fundraising tactic. Now the “big boys” have stepped up to the microphone and have weighed in . . . and, by the way, they are the only voices that count.

Their verdict (it is now official) is that mail volume will continue to decline and to manage that decline without going deeper into the red, rates must rise, and quickly!  The definition of the peculiar word “exigent” is in line with Merriam Webster's interpretation of “needing to be dealt with immediately.”

Make no mistake about what just happened, it is about managing the decline with as little red ink as possible. What part of “death spiral” don’t you understand?

Please see this as an extremely clear signal for what it is. I know some of you – up to now – still believe that direct mail is your present and your future (“we are up over last year. . .”) but please, please see this for what it is.

Drip, Drip, Drip.

And this is my final blog post mentioning anything related to postal rates, responses, costs, demise etc., etc. I personally am closing a chapter on direct mail. As many of you know, I have been a direct mail marketer for over 30 years! Actually, I closed my personal direct mail chapter five years ago, but up until now my “mentions” were to get you to the same point.

Now it’s over. The PRC’s ruling coming on the heels of the Canadian Postal Service announcement that it will stop home delivery and raise rates substantially ought to be all that you need to . . . as I said in a previous blog post . . . “change your mind.”

You don’t have to “read tea leaves;” this is in plain English. If you can’t see it now . . . there is nothing more I, or anyone else, can do for you.

So are you ready to move on and start building your plan to start growing your revenues significantly again in 2014?

Okay, so now we set about “getting serious” about VIABLE alternatives to direct mail.

But what do we really need to replace?

Direct mail is “relatively easy” to do, there was a time many years ago when it was new to us. Direct mail is also able to reach and build a “national constituency” from wherever your organization happens to be located.

Let’s start with those two criteria.

Relatively Easy: Have you ever learned something new? Skiing (snow or water)? Typing (now called keyboarding)? Driving a car? Would you say that you were an expert at the end of the first day? The second day? The first week? The first month? How about the first year? Even if it took you several years to become “expert” or “competent,” it didn’t mean you couldn’t . . . ski, type, or drive . . . when you started, you just became more competent over time.

National Constituency: Your message needs to cost-effectively reach thousands, even millions of people to find the individuals that share your passion for your ministry or mission. While the Postal Service provided a superb delivery mechanism, there was a cost to it. So you need a new mechanism through which you can share your message that is national (even international) in scope. Hmmmm, I wonder where we could find that?

So, where are we?

1. We need to “learn” a new way to communicate our message. It will help you that you understand direct mail. But, it will be new. But you CAN learn something new and though you won’t be an expert the first day, week, or month, you WILL have started the journey. Can you master something new? Yes!

2. We need a cost-effective mechanism that can allow us to share our message far and wide. And we don’t want to just depend on the written word. We want to share our message via the spoken word and even video. We think the Internet could be that mechanism. Are there limitations on media on the Internet? Not if they are digital. Can we learn and master the Internet? Yes?

Okay, we’ve started . . .

Have a wonderful New Year’s celebration . . . 2014 is the beginning of a “new” fundraising chapter for your organization.

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