BIG’s Blog: You can never go back

I take way too many arrows in my back about my position on direct mail because too many people A) don’t read my words, and B) don’t listen to what I actually say in my Webinars and speeches.

My position on direct mail is that direct mail … done correctly … is a fantastic vehicle to generate new donors and annual revenue.

I love the predictable, beautiful mathematics of direct marketing. You test . . . if all looks good, you up your quantity and test again . . . and if the numbers validate, you roll out. I have been a direct marketing professional for almost 40 years! And, yes, I still consult occasionally with nonprofit fundraisers in direct mail techniques.

That is my real position. Keep using it as long as it is working for you.

But …

The best days of direct mail are in the past. Some would say “way in the past.” For nonprofit fundraisers who use direct mail, the best I can surmise is that the last good year for all fundraising organizations was 2005. Since then some have still been able to make it work while other programs are failing fast.

With each passing year, the symptoms of decline become more obvious and acute.

The truth is, as much as I love direct mail marketing, you can never go back. Time marches on, and though I would love to turn back the clock to when direct mail fundraising was simple and profitable, its best days are in the past.

But just when you are ready to join the “club of the disrupted industries” like the music business (which has seen album sales tank for the tenth straight year), new voices are popping up, talking about how the Internet and digital technology can create a new music business model. New people are coming onto the music scene, and despite the talk of doom and gloom, they see the prospects for massive growth.

As I list some of the new ideas that are now being touted in the music business, I will connect the ideas from it to the fundraising industry where, by the way, I see massive growth.

1) Holistic, multifaceted online music services that tie together many of the individual music-related elements today (social, streaming, downloads, concert tickets etc.). I know most of you have heard of Spotify and Pandora for streaming music, but have you heard of Kickstarter or GiveMob for fundraising? These are the new acquisition tools of the online world. Coupled with other elements and technologies, they help you reach people faster.

2) Direct artist-to-fan and fan-to-fan engagement. When you send your direct mail to prospects or donors, is that a person-to-person connection? It used to be state-of-the-art 20 years ago, but now the Internet has changed the definition of connection. And as far as fan-to-fan connection in the music world, why do you think fans want to connect to each other? Could it be they share a passionate common bond with the artist and their music? How about your passionate supporters who share a common bond with the people and the mission of your organization? The tools exist to let your passionate supporters talk to each other. Why wouldn’t you do that?

3) The rise of music festivals fueled by social media. Just imagine what you could be doing with technology-driven engagement in offline (real life) and online connection. Music festivals are where fans come together to hear music. How about creating a live and virtual conference to re-ignite your supporters?

4) Younger players in the music ecosystem inherently understand that a multipronged, community-based business model of fan expansion and direct ongoing engagement is the new normal. Young and new start-up nonprofit charities are already all over this (this is part of our online e-learning Courses), and unless you don’t want a future, you had better be figuring out what they already know and are succeeding at. New start-up charities don’t have an arms-length relationship with their supporters and neither should you.

Drip, Drip, Drip.

-Mike

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BIG’s Blog: Ah Oh

In just the last week I have been in a conversation where a person used the term “begging letter” to refer to an organization’s direct mail appeal, and another person in a Tweet referred to Public Radio fundraisers as “beg-a-thons.”

How deep and how wide are those sentiments?

To be sure, those thoughts would never cross the mind of my 84-year-old Mother in the way that she thinks about either direct mail appeals from organizations she supports or Public Radio telethons.

But how about you? How about me? How about your best friend? Different generations and different attitudes.

I don’t think the comments were meant to be snarky as much as mainstream descriptive of the way most people (including us) feel about the puzzling way nonprofit organizations choose to reach out and gain support.

Other than the Super Bowl or maybe the Olympics (though they are delayed broadcast), few of us watch shows on TV at their scheduled broadcast time. Typically we record them for playback later. Why? Well, a more convenient time to watch is probably #1, but being able to blast through the commercials is a close #2, if not co-#1.  

Forgetting the convenience factor for a second, why do we enjoy blasting through the commercials? Because they are an annoyance, right? Honestly, for those of you who listen to radio stations that take a whole week to interrupt their programming twice a year to raise money, is there anything more annoying? And even when you give – IT DOESN’T STOP!

So if there is some kind of societal shift underway where the idea of a cold mail appeal or interrupted programming for a telethon is evoking negatives in the minds of consumers (prospective supporters), then maybe it has gone mainstream. And if it has gone mainstream, then maybe it is time to re-think how to ask for support.

About now I suspect that some of you are starting to feel bad because you agree that most people don’t really want to receive your mail appeal. Excuse me for being blunt, but that kind of thinking is just stupid!

Ask yourself: Do I believe in what my organization is doing? I’m not talking about the fundraising methods you are using to raise money, but rather the cause, ministry, or mission of your organization.  

If so, then why would you feel bad about asking for the support your organization needs? That’s just silly.   

“And don’t forget Mike, it works.”

Yes, it HAS worked for years and, as I stated above, my Mother and her generation have absolutely no problem with the methods you have been using for 60+ years.

So how are you doing in generating younger donors, starting with the Baby Boomers?

Here’s another question: When you mail an appeal to a group of long-term donors, are they all engaged at the same level? I’m not talking dollar amounts, but emotional involvement.

Huh?

What is their level of engagement? Clearly this is something you can measure. But the real question is, does it matter to you?

If it is important to you, then you can measure it. Name me a single nonprofit fundraising group that can’t tell you to the decimal point and to the penny what the last mail campaign results were. Or, exactly how much the annual dinner brought in and how much net revenue it generated.

Yet, with the exception of one group that I know of, I don’t know one other organization that is consistently measuring the level of engagement of their supporters.

Do you think it matters?

Does it matter to you as a supporter? Does it matter to you that they know you care?

And even if you did know the engagement level of every single one of your supporters, what would you do with that information?

In fact, CAN you do anything with that kind of information, considering your current methods of “doing” fundraising?  

Drip, Drip, Drip.

-Mike

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BIG’s Blog: Strategy vs. Tactics

This is one of the most-asked questions that almost never gets asked out loud when I speak at a conference or the Webinar Q & A sessions following my presentations. I can always count on someone coming up afterward or sending me an email asking me to define, specifically, the difference between strategy and tactic.

It is so common for all of us to throw out the word “strategy,” as in, “my strategy for this next mailing is to use a premium,” instead of referring to the premium as a tactic in the mailing.

Tactics = Tools

Strategy = A Plan

We all do it. And if you had asked me ten year ago, I probably would have brushed it off as mere semantics . . . but no longer.

In times of stability and little change, misunderstanding a word’s actual meaning isn’t that important in the big scheme of things. But in times like we are living in now, when very serious issues of strategic disruption can spell the difference between remaining viable as an organization or not, then yes, not understanding the true meaning of a word can be serious for fundraising leaders.

There is no question that most fundraising leaders understand that their future is online . . . but for about 85% of them, though they understand that fact, it is where they stop.

Most GenX and baby boomer age fundraising leaders don’t even use social media themselves. And if they do, it is probably Facebook. Then they rarely – if ever – look at it, or worse, post anything. Actually, that was me a few years ago.

And for those who have opened a Facebook, Twitter or other social media account, my complements! But, as the authors of The Networked Nonprofit say, “social media is a contact sport.” Which of course is their way of saying, if you don’t use it, you DON'T UNDERSTAND IT!

Today, virtually all fundraising organizations use social media.

Upwards of 85% of fundraising leaders really don’t understand social media because they don’t personally use it. These same people are somehow going to come up with a new strategy (because they are the leaders) for the Web that incorporates not only social media, but other online tools and technologies . . . how exactly is that going to work? 

But maybe I am getting ahead of myself by making a wrong assumption.

Those fundraising leaders whose organizations are using social media (but they themselves don’t really understand it because they don’t personally use it) probably aren’t thinking of Web-based tools like social media in a strategic sense, are they? They are probably thinking of them as mere tactics . . . and these social media tactics are essentially tied into their existing strategy.

But isn’t the Internet disrupting all other industry sectors? I am at a loss to think of any industry sector that, at some level, is not being altered or directly affected by digital disruption.

But in the minds of most fundraising leaders, digital disruption is passing them by. They are happy with the new online tools, but they don’t lose sleep over them . . . in fact, they don’t worry about them at all.

Using what are clearly disruptive new tools within an old paradigm is nothing more than treating them as tactics. However, when you use new tools in a new way, THAT is changing your strategy.

You will never understand the strategic significance of something until you use it yourself.

Drip, Drip, Drip.

-Mike

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BIG’s Blog: How Does It Feel?

How many charitable organizations ARE NOT pulling in enough annual dollars to cover their organization’s overhead? That question goes double for faith-based organizations. AND BEQUESTS DON’T COUNT … because you can’t budget for bequests in any real way.

Blackbaud just released its 2013 Charitable Giving Report, and, from the highlights, they report that overall charitable giving grew 4.9%. They also reported that online giving grew 13.5% … but we’ll get to that point later.

Did your fundraising organization’s “annual” revenue grow at least 4.9%? And, again, don’t play games with bequests, because we all know the WWII and Depression era cohorts that have been … and remain … the vast majority of your supporters (upwards of 85% in some organizations) are passing, which means that now you are receiving an unprecedented number of bequests from this group of loyal supporters.

If you can say you grew annual giving last year, are you coming off of several down years? Don’t play the Wall Street stock exchange game where the market goes down 5,000 points in 2009 and the next year from this low you grow 1,000 points and sing, “the market grew 15%!”

Come on.

Of course you all know the problems, and the truth is most fundraising leaders are looking for a solution.

Be honest . . . what you really want in a solution is a fix that is kinda-sorta like what you already know and understand.

But what if “the solution” doesn’t look like what you have been doing for the last 20+ years?

Huh?

That’s right, what if the fix … the solution … to your flagging fundraising doesn’t look like what you have been doing in fundraising for most of your career?

Join the Club!

Join the newspaper people, the music industry people, the retail industry, local and network television people … and on and on! Almost every segment of the economy you can think of has been disrupted by the digital Internet revolution.

Revolution? What exactly do I mean by revolution?

Let’s use the Sociology definition: a radical and pervasive change in society, especially one made suddenly and accompanied by violence.

Yikes!

I suspect you … like me … didn’t like that reference, “accompanied by violence.” But here is the good news: for your fundraising organizations it doesn’t have to be a “violent revolution.”

The answer … the solution … is right in front of you and the Blackbaud report featured it prominently. Online giving increased 13.5% from 2012 to 2013; the second straight year it has grown by more than 10%. But the growth among fundraising organizations was uneven.

Groups that raise LESS THAN $1 million a year chalked up the biggest increase at 18.4%, while those larger organizations that raise more than $10 million only saw online gains of 5.7%.

Again … huh?

Wait a minute. Why are the big-budget, large and established fundraising organizations being beat by the pipsqueaks of fundraising?

BECAUSE MOST OF THESE SMALL GROUPS ARE JUST STARTING UP … THEY ARE BRAND NEW!

Somebody forgot to tell them that they must have direct mail to be successful!

But I overstate my case … right? After all, you still have older donors that still give when you mail. And thank God for that … right?

But where is your future?

Why aren’t you bringing in baby boomers, GenXers and Millennials to take the place of your senior citizen supporters in the future?

Come on, it’s not too early to put a fork in your old fundraising business model and admit that the Internet has already triumphed in fundraising. It’s time for established fundraisers to create a group within their fundraising organization that owns the Web and generates 100% of their support online.

So the question for larger and established fundraising organizations: Why can’t you walk and chew gum?

Why is it “a stretch” to believe you cannot A) learn how to be successful online with a new model, and B) implement a new model within your organization?

Of course, keep sending mail to your oldsters; it is what they expect from you and while they still can, they will continue to support you as they always have.

But OBVIOUSLY what you are doing now online isn’t gaining significant traction or resonating with “potential” younger supporters.

So if you just keep doing the same-o, same-o while these start-up fundraising organizations are learning what works and what doesn’t work . . . pretty soon they are going to be the big guys.

Remember, they just started; they only know what they are learning . . . they have no secrets yet. Except to be online!

“When you ain’t got nothin’, you got nothin’ to lose. You’re invisible now, you got no secrets to reveeeeeeal. How Does It Feel?

Props to Bob Dylan and Bro JB.

Drip, Drip, Drip.

-Mike

BIG’s Blog: The Beatles 50 Years On … and Us

Did any of you catch the CBS special last week, Celebrating The Beatles on Ed Sullivan 50 Years Later? GenXers and the younger baby boomers were influenced by The Beatles, but those born between 1946 and 1954 “lived” The Beatles from the start!

The show was a nice nostalgic walk down memory lane and had today’s stars performing The Beatles’ music, but when Paul sang “Sgt. Pepper’s Lonely Hearts Club Band” and the band segued into Ringo singing “With A Little Help From My Friends,” as another blogger named Bob Lefsetz put it … “everything was right with the world.” If you were alive and old enough to be aware of what was happening in February of 1964, you knew that, fifty years ago, our country was transformed in one night.

Musical instrument shops sold out of electric guitars and drum sets as wannabe Beatle bands popped up in garages across America. Men’s stores had to start stocking new fashions that looked like what The Beatles wore, and every guy wanted to be the first to sport “Beatle boots.” Of course, the barbers’ business fell off until they could figure out how to cut long hair, but the few who couldn’t or wouldn’t learn soon went out of business.

The Beatles were different; it was a different look, a different sound, and we were ready for it.

So where did these guys come from? They grew up in different working class neighborhoods in Liverpool, England, a fairly poor industrial and shipping city. Most had lost their mothers. When you’ve got nothing, you’ve got nothing to lose. It’s like the new nonprofit organizations popping up all around you. They don’t have money for direct mail so they are learning how to use the cheap Web to get their messages out and raise support. And they are figuring it out every day and growing. When you’ve got nothing, you’ve got nothing to lose.

You’d think that today’s fundraising leaders who are seeing their donations declining … especially their direct mail programs … would look at the Web and these small start-up charities and would try to figure out what they are doing and how this might work for them. I guess they are too busy either watching their numbers decline or calling up their old supporters, yet again, to donate one more time to save their quarter or year.

They have apparently forgotten that their goal is to raise increasing amounts of revenue to keep their organizations growing, not to be just direct mail fundraisers!

Celebrating The Beatles on Ed Sullivan 50 Years Later was pure nostalgia and fun, but it had none of that lightning in a bottle feeling that we who watched it live felt when we first saw and heard The Beatles. They blew the music of the sixties wide open. They built on American rock and roll, the folk culture, and the civil rights movement to empower a whole generation . . . and the baby boomers have never been the same since.

Today’s baby boomer and genX fundraising leaders had better start doing something different or they will soon be like those barbers in the 1960s, many of whom went out of business.

Today’s remaining Beatles, Paul and Ringo, are living legends that people still want to see. Why? Because 50+ years ago they took a different road … their road! Sure, the young lads from Liverpool studied the likes of Elvis, Buddy Holly, and Little Richard as their foundation, but their sound was their own.

Today’s fundraisers need to take a page from the lads from Liverpool. Learn all you can about what works and doesn’t work on the Internet, then start changing things while you have a backstop of the older generations still supporting you.

You want a goal?

Shake things up.

Drip, Drip, Drip.

-Mike

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BIG’s Blog: It’s About You – Part 4

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.

In Part 3, the observed trend I shared was that social media is now mainstream in the minds of fundraising leaders. A year ago it was still “iffy” with a large segment of Development Directors, but now it is simply assumed that they will have Facebook and even a Twitter page. A few are actually connecting with multiple social media sites. Most Development Directors I talked with, however, are still trying to figure out how it fits into effective fundraising.

The fourth trend I noticed was just bubbling up to the surface from a few Development Directors. This was the realization that their workplace and workplace culture will look different as fundraising communications and giving move online.

Some of these conversations revealed to me that some pragmatic Development Directors are buying into the fact that organizationally they will look very different in ten years based upon the rise and growth of online. But they are all perplexed as to how to balance and maintain their current fundraising methodologies (read direct mail) today while at the same time growing and staffing the needs of online.

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