BIG’s Blog: Mid-week Musings on Change in Fundraising

“The single biggest problem in communication is the illusion that it has taken place.”  - George Bernard Shaw

I write and speak extensively, all with the core message that fundraising is changing before our eyes. The analogue world of print-and-ink direct mail appeals (that built the revenue that powered your organizations for the last 60+ years) is in decline. And as direct mail declines, you lose your engine to acquire new donors.

So many hear my message, but don’t act.

“The most talented captain can’t save a ship with a hole in it.”

- Unknown

Way too many fundraising professionals who are experts in the art and science of direct marketing (direct mail appeals) continue the delusion that mail will last forever. Seriously, if I see one more fundraising association-sponsored workshop with the title, Direct Mail is Alive and Well … I will become physically ill.

We all know that the future is online . . . but you keep telling yourself that nobody has a way to make it work . . . which of course is utter nonsense. You cling to the illusion instead of doing the work to make the change.

“It’s so easy to talk ourselves into failure before it even shows up.” - Seth Godin

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

The Age of Paying Big Dollars for Databases…or other technology…Is Over!

Last Monday (June 2, 2014), Apple held its 25th anniversary WWDC (Worldwide Developers Conference). This used to be Steve Jobs’ big stage to announce new devices, but last Monday, the show was all software.

Watch the opening four minutes of the video that Apple prepared to kick off the conference. By the way, don’t try to watch it in the Chrome browser (owned by Google); they kinda sabotaged it into not playing.

Why is this important for fundraisers?

Because “software is eating the world,” as Marc Andreessen has famously said.

When we talk about the Internet disrupting virtually every sector of the economy (including fundraising), we are really talking about software programs (also know as Applications or Apps) that can be accessed through the Internet. The Internet is the platform . . . the Apps or software are the functionality.

Up to now, what made Apple was their hardware devices; first the Mac, then the iPod, then the iPhone, and finally the iPad.

Jobs’ brilliant move wasn’t just “devices so cool you had to own them,” but also the seamless integration and functionality of, first, iTunes (99 cents to own a song), then opening up code so software developers could create Applications that would ride on the iPhone, iMac, and iPad. Thus expanding the Apple Store to include the App Store . . . and today over 10 billion App downloads!

Today, Apple has over 9 million registered developers from 69 countries.

9 million people writing software code so you and I can have the functionality we want on our phones, tablets, or computers.

How many software developers worldwide do you think there were prior to the App Store?

Apps are software and more and more … software (Apps) is cheap.

So what is the spillover effect for fundraisers? Unless you are lazy, or your fundraising organization is very large, you SHOULD NOT be paying anything close to what you have paid in the past for technology, including donor databases and Websites.

A shout-out to our program alumni who already learned about this in our program and who, in reading about the Apple WWDC conference focusing on software, recognize that they are really a part of the mainstream, rather than the cutting edge. It only feels like the cutting edge when you operate in the nonprofit fundraising world.

When you move your fundraising online - as you inevitably will -  your infrastructure costs in technology WILL NOT be significant investments (as they have been in the past) for your organization. Yet, you will be able to connect with and engage far greater numbers of people … many of whom will support your mission or ministry.

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

BIG’s Blog: Interesting time of year

This is a really interesting time of year. Well, actually, there are two interesting times of year: the months of June and December. See, our online program that runs 18 weeks and ends with a field trip to Las Vegas begins twice a year, in January and July; two terms a year. This is the program that teaches professional fundraisers in their 40s, 50s and 60s (who are “immigrants” to the brave new online world) what they need to learn to acquire the next generation of supporters.

Throughout the rest of the year I am speaking to groups, at conferences, and doing Webinars. These are good venues to share our insights about what is really happening in fundraising today, and how fundraisers need to be intentional about moving their fundraising activities online with a business model that drives engagement and dollars.

Throughout the year we are sending out Program Overviews for our Acquiring the Next Generation online program. But of course we are all busy, right? So making the decision pops to the top of the "To Do" list typically in either June or December . . . about 30 days before the program begins.

After doing this awhile, I have seen that the people who are considering our program and requesting a Program Overview fall into three categories.

The first category is "the long-term successful." If you are a board member of an organization or in leadership, these are the people you hope you have leading your fundraising organization. They are all smart, results-oriented, and totally pragmatic. They probably have a successful direct mail program today but are not fools; they clearly get that the future is online. They just want to invest in a plan to get them there.

The second category is also made up of extremely smart people who are primarily trained in theology, human services, the liberal arts, or are pastors. Pastors typically don't learn business or fundraising in seminary. Now they find themselves making business-like decisions about marketing, budgets and income projections and, frankly, spending money is not in their comfort zone. They tend to spend a lot of time on costs, even a relatively inexpensive program like ours. It is understandable, but the good news is that our program is essentially education, and they connect with that.

The third category is by far the largest. Again, these are really smart people (are you seeing a trend here?). These are people in the fundraising organization (sometimes the Development Director and sometimes a subordinate position) who inherently believe the future of fundraising is online, but face difficulties like getting their leadership to seriously consider a model of fundraising other than what everybody knows and what they have been doing for years. They desperately want their organization to go through the program, but have trouble getting leadership to agree.

There is a fourth category, but I hesitate to share it. These are the leaders of fundraising groups who do not request our program overview. Many read my blog and attend industry conferences where they always take my call or greet me. In truth, they are genuinely nice people, but as a group, they are what I call the "Excusers." They always have a different excuse for passing on our program. They tell me that they couldn't agree more that online is the future, but the time just isn't right. They also tell me their direct mail programs are producing better than ever. They all assure me that they will be calling. But of course they never do. As a group, they obviously know something I don’t.

But then for every Excuser I know, there are leaders who are the opposite of the Excusers, like Debbie Korzak who is retiring as a Development Director next year. She clearly sees that the future of fundraising is online and is making certain their designated new Development Director takes our courses so their organization has a future.

Interesting time of year is right …

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

BIG’s Blog: What is the alternative?

What is the alternative to not donating to your organization?

Silly question, right?

The alternative to not donating to your organization is to donate to another organization, right?

But how about the alternative of not donating to any organization?

Or, how about this … never ever donating?

Professionals in philanthropy tell us that the United States is stuck at about 2% of gross domestic product (GDP) going to charitable and other philanthropic causes (north of $320 billion a year). And we have been stuck at that same percentage for over 20 years. This means that as more nonprofit organizations come on the scene, we just divide the money pie up in smaller and smaller slices. Kind of makes it hard to grow doesn't it?

So what is the problem? Why can’t we break above 2%?

The philanthropy professional class’ answer is that we just need to “give more.” But that just lets them off the hook, especially those in fundraising. People in philanthropy use examples like, “If everybody gave up a morning coffee for a year it would mean an additional $220 billion to charities.” Like giving up a coffee is going to happen!

But … as usual … they are missing the bigger point, which is that too few people give.

The “audience” of people who give to charitable or philanthropic causes has been defined by how nonprofit organizations connected with them. Meaning that if you missed the message, it hit you at the wrong time, or it “wasn’t your thing,” you didn’t give. And today that is the real number that is stagnant.

The “audience” for giving has been defined by how charities communicated and marketed themselves.

But the good news is that the "audience" paradigm is fading as the new "Internet" paradigm is essentially taking over. And this offers the opportunity to start growing again.

What is the audience paradigm and what is the Internet paradigm?

The audience paradigm is what we have all grown up with. This was the world of scarcity. You only had a few TV channels, a few radio stations, and maybe, at most, two newspapers in your town. In direct mail, it was the sum total of the limited lists available for you to rent. All the media were owned by a few (scarcity) so you paid dearly for the privilege of using a media. And of course that is where the eyes and ears were. And it worked ... until it didn't.

The "audience" paradigm isn't working well today, is it?

And why is that?

The "Internet" paradigm is taking over.

The Internet destroyed traditional media monopolies. Local print newspapers, print magazines, television networks . . . and twenty years ago, would you have imagined that the U.S. Postal Service might go out of business? All brought about by the invention of the Internet… hence the Internet paradigm.

We all understand the concept of a media-based audience. An audience is a set number (readers, viewers, number of names on a mailing list, etc.).

With the Internet, although it is true that at any single moment in time, theoretically, there are X number of people on the Internet, as you expand that single moment in time, the number of people on the Internet becomes the total number of people who can connect to the Internet, which is about 2 billion today. That's pretty close to infinite isn't it? And that number keeps growing.

Still isn’t clear? Okay, look at it this way. If you print and mail 10,000 newsletters and mail them, your audience for that newsletter is 10,000. But when you put up a Website, even if you never update it (which of course would be stupid), what is the size of your audience? Right! The number is essentially all the people connected to the Internet … essentially infinite.  

So the Internet paradigm is destroying the whole limitation idea of “audience.”

So as the audience paradigm begins to decline in effectiveness, since virtually everyone has moved to the Internet, doesn’t it become obvious that your future is online?

But being successful on the Internet doesn’t mean you use the same "push" message marketing you used in advertising during the audience-based scarcity of the media era. In fact, using marketing or advertising as you have used it in the audience paradigm isn't going to work. New paradigm ... new approach.

But the really good news is that the Internet paradigm can grow and scale beyond anything we have seen using the audience paradigm.

You do want to grow don't you?

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

BIG’s Blog: What’s the old joke?

What's the old joke?  “Since I graduated (from high school or college) I haven't read a book?”

That was practically me until three years ago when I bought an Apple iPad. Prior to that I read dead tree magazines and newspapers, but very few books. The newspapers I read daily and tossed. The magazines hung around a bit longer. But books? I finished maybe ten since I graduated from college in 1975. Oh, I bought more books than that and probably started 40 or more over the years, but I actually only finished a handful.

Of course we could all say that. Isn’t that what everybody does? Start a lot of books, get the core idea, but never finish them? 

That has all changed for me with the digitization of “information.” That's all books and magazines are anyway, right?

But for me, and I suspect thousands ... perhaps  millions ... of other people, the digital transformation of information has changed our habits, which, in turn, changes our lives.

Today, the better description of my reading habits is more like consuming information.  Funny, I would never have thought to equate reading a book with consuming it five or ten years ago. But consuming is a more apt description for the process I go through now, reading three to five e-books a month, plus at least a hundred articles a month . . . and those hundred articles are just in the fundraising sector. I still read widely beyond our sector as I suspect most of you do as well.  I haven’t even mentioned listening to podcasts on either my iPad or iPhone.

So, basically, I can say that the cloud-connected tablet has changed my life ... for the better. And it's not just me. My sons with mental disabilities’ constant companions are their iPads. And my granddaughter, who is only six months old, is already watching and attempting to play with kid’s games on the iPad. Actually, it’s quite remarkable to watch my boys and my granddaughter on tablets.

My iPad is with me wherever I go. Cooking in the kitchen (following recipes etc.), sitting on the porch watching a movie, navigating to my destination ... I could go on and on.

The tech wizards have absolutely changed our lives … and I haven't even mentioned apps!

So, if it has changed my life, my boys’ lives, my granddaughter’s life (well, she’s barely had a life), and countless others, then what has happened? Answer: Society and civilization are changing.

Are there people who haven't changed? Yes, in fact, many. And of course that explains why your direct mail appeals to current donors still produce excess revenue.

But what about me? I'm 62 and I don't open your direct mail anymore. Notice I said “anymore?” But you argue that you and others do open mail ... and at least so far, enough people are opening to make it pay. 

Ah, but you and the people who are still opening mail are not timeless ...

… but your mission is timeless, especially if your missions or ministries serve people . . . and what mission or ministry ultimately doesn’t serve people? You can count on not running out of souls to serve.

But what if more people become like me and quit reading your mail? What happens to your annual income and, equally important, how do you generate new supporters?

I just told you that I personally "have been changed" by the digital transformation of information. My habits have changed. And guess what, I suspect yours have too.

It's only a matter of time ... and I suspect a short time ... until both of us have stopped reading direct mail appeals.

Then what?

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

BIG’s Blog: Online Tools Can Help Supporters Raise Funds From Their Networks

The above title, Online Tools Can Help Supporters Raise Funds From Their Networks, was an article published May 29th in The Chronicle of Philanthropy’s online edition (I don’t read their dead tree printed version). They even have a section called “Online Fundraising.”

So you read the headline and ask yourself, “Do our supporters have networks?”

Frankly, your question is a good one and points to a big (no, make that a huge) problem for you and your fundraising organization. The truth is YOUR supporters DON’T HAVE networks, at least not in the sense that the article is describing them. Your supporters have friends and family … but not networks.

Your supporters, who were 99.9% acquired via direct mail, are mostly in their 70s and 80s with a few in their 60s sprinkled in. Most use a computer and some use tablets and smartphones. But these folks don’t have networks in the sense that the Chronicle is describing a network.

The article is describing online networks of primarily friends. It is talking about younger people who use social networks and other online channels to stay in touch with their friends daily… if not more often. It is a concept that people over 65 find hard to grasp. “Why would anyone need to connect with their friends hourly?”

The point is that this “online network phenomenon” is not remotely a part of the vast majority of your older, direct mail-acquired donor’s life experience. And that means it probably isn’t important to your fundraising team’s plan.

Yet there is the article about “networks” and supporters in The Chronicle of Philanthropy.  

Whose supporters are they talking about?

Do you think the Chronicle would be writing an article about “networks” if they weren’t important?

A part of this blog’s readership has already shifted online. Many have been through our online learning program. They actually get what the authors of the article are writing about and, for them, it is valuable information. Valuable … as in, it is information they can use to grow revenue for their organizations.

But for too many reading this post, it seems unnecessary … even worthless. It just doesn’t connect to your supporters . . . at least your supporters today.

So how many more articles, association sessions, or webinars about online fundraising are you going to attend while nodding your head in agreement before you go back to your fundraising organization and actually make online growth part of your fundraising?

And sorry, being online is more than having a website, sending out email blasts and having social media pages. Come on, how does that generate new supporters and, ultimately, revenue?   

I mean seriously, today you are not only hurting your career by delaying … you are now beginning to seriously impact your organization’s financial future.

Wouldn’t it be nice to read a fundraising publication story about online fundraising and be able to say, “We’re already doing that!”

Isn’t it time to figure this online thing out?

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

BIG’s Blog: Always a Crisis

Seth Godin is one of the best thinkers in marketing communications who is actively writing about our changing marketing environment. He recently wrote a blog post entitled Tribal organizing (right and wrong, slow and fast).

In his blog he touches on fundraising to make a single point, but I think for fundraisers, what he is getting at is the point!

Where are fundraisers going off the rails today?

Today, most fundraising … ESPECIALLY DIRECT MAIL FUNDRAISING … is all about Crisis, Cash, and Cliffs.

Crisis: Every mail package is a mini-crisis or a full-blown crisis. “Emergency need for urgent action NOW!” There is always a reason why the benefactor must pull out their checkbook NOW!

Cash: Every crisis demands only one solution … CASH. “You can help solve this with cash … now.”

Cliffs: The organization lurches from cliff to cliff … or so it seems. There is no future, only the imperative issue of the NOW. Emotional energy is drained just reading the appeal as the organization’s mission is viewed as riding the edge.

BUT THERE IS AN ALTERNATIVE. The answers are Connection, Commitment, and Conversation … communicated online.

Connection: Our mission is a journey and we want you along for the whole ride. This is about building a relationship.

Commitment: We are not just about today, but are committed to the long haul of our mission. We want you to join our commitment to the cause so that, together, we can do more over the long haul.

Conversation: Put your stories and updates out there. Keep the community and supporters “in the know” about what’s happening every … single … day.

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