Thursday, October 15, 2009

The end of Fundraising Recession Watch...

Well, not quite. But I am not getting enough new stuff from other sources, and have lots of other blogs / newsletters and things to keep up to date so will only occasionally add things here. It will remain as a resource, a lot of useful articles and links here worth searching through.

Any new information will go up on my blog. Please subscribe to its feeds!

In the mean time, check out this recession busting story here all about Starlight and how they reacted to the crisis in Australia - including a pack they put out telling people how they had been affected. They raised over 100% more than last year!

You can download the entire pack and follow up letter here.

Mal Warwick liked it so much he featured it in his most recent newsletter.

You can also follow me on Twitter where I will highlight useful stuff occasionally. @seantriner.


Monday, August 24, 2009

Recession increasing demand on two-thirds of Australian charities

According to their recent survey, Aussie charity research agency Givewell tells us that "almost two-thirds of charities have experienced a material increase in the demand for their services for the 2009 financial year, with a near 5% increase in demand for the important services the charity sector provides."

Of the Humanitarian charities, and astonishing 100% said they had an increased demand, but only 63% blame the recession. Ninety-one per cent of welfare organsations said they had an increased demand and 78% blamed the recession. Of community support organisations, 76% said they had experienced increased demand and the same number blamed the recession.

You can get hold of the report summary here, and I thoroughly recommend subscribing - especially if you are an Australian charity or agency.

Thursday, August 20, 2009

UK Trusts show commitment - or do they?

Two apparently contradictory stories in the current Charity Times Enewsalert:

"Falls in grant-making and asset value for top charities
New analysis of the impact of the recession on charity fundraising shows 41 percent of the top 300 charitable trusts saw a fall in the value of their grant-making in 2008..."

Says one intro but another report in the same Enewsalert says...

"Charitable trusts show commitment to supporting charities, reveals report
Charitable trusts and foundations realise now is not the time to turn off the tap of support for Britain’s charities, according to new research published today by the Charity Commission"

Reading on I hoped that maybe they weren't contradictory, with maybe just eye-catching headlines, and talking about different things - but no, they are totally at odds with each other.

The first, by ESRC Centre for Charitable Giving and Philanthropy at Cass Business School, London looked at the biggest charities and trusts. Charity Times tells us "Her results indicate grant-making by the major charitable trusts has been maintained as a result of gifts and endowments received over the last decade, but this is a hidden ‘time bomb’."

And then, the research by the Charity Commission says "There was a clear indication from these trusts that levels of grant-making are, despite the recession, being sustained.The report also found that trusts and foundations had adopted a sustainable approach which would allow them to offer this vital support not just now, but into the future."

Hmmn. Well, if you have a report to the board coming up, you can use either story to back up whatever case you are plumming for - just hope your board members don't subscribe to Charity Times!'

The good news story is here, and the bad one here. Take your pick.

Sunday, August 16, 2009

Australian Tax Time Appeal Analysis

For most Australian charities who mail DM appeals, our winter appeals (May-June) are often the most important, often more so than Christmas. These are known as 'tax appeals' because the end of the tax year is 30 June.

Fiona Paterson, data expert and senior consultant at Pareto Fundraising analysed a load of charities actual results - and it makes for good reading.

Has the recession hit Australian individual giving yet?

Check out the article here.


Monday, August 10, 2009

Donor attitudes to giving in the credit crunch

Jonathan Waddingham, Charity Champion* at JustGiving sent me some research on donor attitudes in the UK, so an update. Data is from April.

Charities have raised over AUD$1bn through JustGiving so you'd hope he has good transactional data too... (I much prefer transactional data to opinion, but that's just my opinion).

Bottom line:

  1. Slightly more people say they have been affected financially by the recent economic downturn (now 58%, 52% in Jan/Feb)
  2. Slightly more say they are thinking harder about how much to give - now 57%, up from 47% in Jan/Feb.
  3. The majority - 61% - are not reconsidering their gifts but 31% say they may consider giving a little less.

In summary:

"Throughout the first quarter of 2009, a number of trends have started to emerge. As time has gone on, more people have been affected by the credit crunch and, presumably as a consequence, reflected on their charitable giving as part of their personal finances. Encouragingly, more people have indicated that they will be giving more than those cutting back a lot, or stopping giving. However, in the last month, there has only been one large shift in the monitor – with more saying that they will be giving slightly less compared to March.

"We have seen over the first 3-4 months that more people are willing to cut down on household expenses than charitable giving, as well as the heartening statistic that 8% of those who have been affected by the economic downturn and thought harder are actually giving more. So whilst the downturn is certainly having an effect, the majority are still planning to give the same over the next three months, and the outlook is not as gloomy as many have predicted."

JustGiving are being a bit slack in publishing the latest info (I know, they are busy!) but email them to get the latest updates.

(*Imagine explaining to your mum that your job title is 'Charity Champion'. She'd be so chuffed.)

Friday, July 31, 2009

FIA release their 'Managing in a Downturn' report

The Fundraising Institute Australia (FIA), PricewaterhouseCoopers and the Centre for Social Impact collaborated in this comprehensive survey, conducted in April and May 2009.

Focusing on the impact that the last six months has had on the sector and the anticipated future impact, the survey was completed by 263 organisations.

Click here to download a PDF of the report.

Monday, July 20, 2009

Funding strategically during a recession

Fascinating report from The Institute for Philanthropy talking to donors and funders and offering them ten tips to maintain their giving in recession.

Download the report here.


Tranquility or turmoil

Interesting summary from Bill Bruty and his team here in the UK of research they've conducted with charitable trusts to look at whether their giving will decrease in the short term as a result of the recession.

Dowload the summary report from the link above (currently in the newsflash section), but the two things that really grabbed me were (1) the fact that while Trust balance sheets have decreased somewhat in the past year or two, many of them had unimaginably good years in 2006 when the market was strong so the pool of potential income increased dramatically back then. We'd all forgotten that... or at least I had as I was out of the country then.

(2) The report also points out that most large trusts make their grants from their dividend income which is actually remaining pretty stable.

Smaller trusts undoubtedly are more likely to be buffeted by the economic climate as they are much more reliant on exceptional income and donations for their ability to give.

So, as with all fundraising, know your donor. Check their specific circumstances and don't assume they haven't got any money. Anecdotally I'm hearing about trust application numbers falling as fundraisers assume the money is going to be tight. Maybe it is and maybe it isn't - but our charities' needs are still as important, so hang on in there, do your research and don't forget to ask.

Sunday, July 12, 2009

Reserves and recession

Lots of charities keep reserves for a rainy day. Is it raining now? And what should charities use reserves for?

I think it is obvious that the returns from effective fundraising outstrip property and investments so a balanced portfolio should include elements of all.

For more detail and info...check out my blarticle here..

Thursday, July 9, 2009

Recession Marketing

At the ADMA Forum, I attended a fascinating and useful presentation by Steven Noble, a senior analyst from Forrester Research. His presentation is available here. They want your details in return (which is why I'm not posting it here) which is kind of fair enough - they are research after all.

Steven had us going all the way back to basics, looking at needs and 'providing' comfort. Brilliantly illustrated with real examples, including how Ivory Soap advertising in the USA evolved through the Great Depression.

Bottom line: Marketers need to give consumers more 'comfort'. He didn't talk about NGOs and charities, but I reckon we may well have the easiest opportunities to do that.

ADMA Forum was great, and I am posting non-recession learnings on Worth following my blog I reckon.

Tuesday, July 7, 2009

Very useful tool for looking at how 'fit' you are

The rather excellent website of the Nonprofits Assistance Fund has some very useful tools for charities. Here is one that I recomend you download from their website here and complete.

Even outside of a recession, this tool is really useful. And it shouldn't take you long to use.

Below is a preview...

Saturday, June 27, 2009

Survey of emerging fundraising nations

The Management Centre and the Resource Alliance pulled together a survey of charities in Africa and Asia, purely about confidence in fundraising.

Bottom line; no charities were very worried, but most were slightly worried.

Worth having a click flick through, but please note it is a useful confidence survey, not one based on their actual results.

Saturday, June 13, 2009

Recession busting resources from NCVO

Charles Bosher from NCVO (a UK charity industry body) brought to my attention their resources specifically for charities dealing with the recession. Although British, the lessons in lots of the articles are useful wherever you are.

The article on ensuring Future financial sustainability is in itself a great resource - with links to step-by-step type documents, how to assess your fundraising mix etc.

Plenty of other stuff, mostly from a very strategic point of view, not so much tactical fundraising - but tactics are nothing with strategy.


Thursday, June 11, 2009

Charitable Donations Fell by Nearly 6% in 2008, the Sharpest Drop in 53 Years

According to the new edition of Giving USA, donations were down in the US in 2008. Some evidence to back up a pile of anecdotes.

I am getting my copy soon, so will blog in more detail, but in the meantime check out what Paula Wasley has to say in The Chronicle of Philanthropy.

Tuesday, June 2, 2009

The (nearly) true value of regular giving

We have just finished presenting a benchmarking report to 21 Australian and New Zealand charities. All the charities hand over their entire transactional databases, pool them and run a full analysis on donor behaviour.

This round we had a special section looking at recession impact over here. We found no big impacts (to December 2008) on individual giving - some appeals were up, some down, some averages up, some response rates down, nothing really out of the ordinary. Recruitment numbers were steady - when they were down, it was for tactical reasons rather than recession.

Australia was not hurting much then; we are still not hurting anywhere near as much as developing world countries, and the likes of UK and USA but we are worried so maybe things won't be so rosy next round.

But one of the things we looked at was the value of regular givers. Looking at all regular giving (automatic debits) we noted that the average face to face was giving about $25 a month, and the average non face to face about $15 a month. By face to face, I mean donors recruited by people on the streets, at events and door to door asking strangers to give a monthly gift.

We know the attrition rate of face to face is much higher, on average than non face to face, but decided to look at the three year value. We were bowled over.

We included upgrades, but not additional gifts (non face to face regular donors are much more likely to respond to additional appeals than face to face reruited regular donors) in the analysis. We found that a $15 per month donor recruited by direct mail gave more than a $25 per month donor within three years.

Extrapolated over eight years, a $15 a month non face to face donor will have given 50% more, not including additional gifts, and the average monthly amount will be twice that of the $25 face to face donors. Also, on average, face to face donors are not likely to be good bequest / legacy prospects within the next two decades - mainly because of their age.

So, why would you ever recruit face to face over non face to face?

Well - face to face offers volume, predictability and low risk (you usually only pay for donors you get, whereas with other methods you normally have to pay for the media regardless of success or failure). Also, face to face can be outsourced giving the organisaiton a smaller liability in terms of internal costs.

Also, the fact is that recruiting non face to face regular givers is usually more expensive, even over eight years you would only be willing to pay 30% more for a non face to face donor and need to wait longer for the payback.

The answer? A balanced portfolio.

Invest in face to face, but balance with R&D into other acquisition methods until you get one working and then, to quote Gregor Drugowitsch who owns a face to face agency, '...If your organisation can obtain significant and sufficient numbers of regular donors through conversion, DM or proven DRTV, then you may want to exhaust those channels first.'

He is right, but those other channels are bloody hard to make work. Face to face still rules the roost on volume and net income in Australia.

Monday, June 1, 2009

Innovate or Die

Tribe Chief Marcello Inniara is obsessed with innovation. And he is good at it, having led Greenpeace Argentina's now famous campaign to save crucial forest a few years back - all from an online approach.

And not surprisingly, he wants us all to innovate in times of stress.

Being with him for half an hour is inspiring - and makes you start to push your own boundaries. I am really chuffed that he is coming to Australia to the F&P run Australasian Fundraising Forum this winter (August for us) to inspire Aussies.

One of my clients (I'll call him Al) is also obsessed - but this obsession is recruiting regular givers, cheap. Really cheap. Al currently pays about $280 per donor (giving about $25 a month) from Australian face to face providers.

He also knows than non face to face regular donors giving about $15 a month actually give more on average, over three years than face to face - mainly due to attrition. (I will put up another blog about this tomorrow).

So this means, in theory, he should be willing to pay more than $280 per donor for these but Al is not satisfied. He wants to get donors cheaper, because there is a way - we just need to find it, and online is our mutually preferred 'best bet'.

We told him he has unreasonable expectations - 'massive charities aren't achieving it' we said. At first frustrating, the Pareto team then went to the pub - and felt inspired.

All of us felt lifted by the challenge. His doggedness and determination is coming through, and we want to be part of it. He will force innovation.

I still need to remind him that there will be failures on the way, but we are really up for it. But maybe the recession has forced you to innovate? Any ridiculous ideas to share - that have worked or failed? I love the Ask Richard idea below, but other recession busting tricks welcome.

Marcelo's blog is well worth checking out, short and sweet ideas worth adding to your feed.


Thursday, May 21, 2009

Charities and Recession on Radio National

Following a rather excellent 'Background Briefing' about charities in Australia, ABC Radio National hosted a pretty interesting show last night. I thought it was great, but am biased.

Some interesting thoughts from the public, and a host who started off pretty negative about face to face (direct dialogue) ended with a positive angle on it.

Check out the program here.

And last weeks Background Briefing here.

Tuesday, May 19, 2009

Innovation in times of stress

FBI used to be my favourite radio station when I lived in Sydney. They are a community radio station and I used to be a donor.

They are in trouble, financially, and have gone out with a great idea 'Ask Richard'. Basically asking people to suggest an idea on how to get $1m from Richard Branson.

Good luck to them! Check it out here.

You can follow @askrichard on twitter - if you are not twitter savvy, this is a good excuse to get into it. Much of it is rubbish like 'Just got up, my bed is so hard. Why am I so tired...!?' but it is easy to get away from that stuff.

There is tons of good information, such as one passed on from Mark Philips (bluefrog) about a 'secret meeting' of top philanthropists; you can read about this meeting here.


Thursday, May 7, 2009

Turn media prices on their heads

Just a thought.

Charity A runs a new program to recruit new donors.
Spend is $30k on development fees and $200k on media (print, online, newspaper ads - whatever).

They recruit 1,000 new donors giving an average of $100 ie $100,000 income.

So they raise a net of -$130,000. In the results report a line will appear that the net cost of the donors was $130 each ie cost per acquisition (CPA) = $130. The projected rollout cost, which has no fees would be $100 per donor.

Now this particular charity knows that with its donor development program it needs to actually recruit donors at $50 per donor to make the exercise worthwhile. So, in this case the job is deemed to have missed target (it failed) and it is back to the drawing board.

But let's not start again.

There is a global financial crisis - media sellers are meant to be struggling. Surely a win-win here is to go back to the media seller and say "We will buy your media again - and we will buy four times as much, but at half the price." They get twice the income, and Charity A's cost per acquisition is now acceptable.

I know it seems naive, but if we all take this approach we can take real advantage of what should be a buyers market. There is no need to screw them - just get the price that works for you.

Anyone succeed at this please let me know. And if you try and fail, let me know too.


Monday, April 27, 2009

American charities can get stimulus funds...

For USA charities:

The wonderful people at The Center on Philanthropy at Indiana University are giving out a bulletin for free to help charities put their applications together.

With an incredibly snappy title, check out "The American Recovery and Reinvestment Act of 2009: Act Appropriations Beneficial to the Nonprofit Sector and Key Resources for Organizations to Approach and Access Funding Sources."

If you have someone in your organisation who can actually finish reading the title in full, get the bulletin to them and get them applying.

Thanks Daryl Upsall for bringing this to my attention. Get the bulletin here.

Tuesday, April 21, 2009

Fundraising Institute of Australia survey on coping with downturn

I know, there are a ton of surveys out there - this one is from the FIA. They say it is the only one in Australia that will that will 'capture how charities and nonprofit organisations are coping with the economic downturn.'

It is pretty thorough and will make interesting reading as it asks for what you have experienced as well as what you are anticipating.

Australian charities, complete the survey here.

The Blurb from the FIA:

Managing the Downturn

FIA would like to invite you to participate in a survey FIA is running in partnership with PricewaterhouseCoopers and the Centre for Social Impact to assess the effect of the economic downturn on Australian charities and nonprofit organisations. It is the only comprehensive research in Australia that will capture how charities and nonprofit organisations are coping with the economic downturn.

A similar survey was run in the UK in November 2008 and this has been useful in informing the decisions policy makers and charities must make to ensure their organisation and nonprofit sector is buffered from the economic downturn if income streams dry up and the demand for services rises. In Australia, early indications are that charities are anticipating a drop in their donations and have begun to reduce the number of services offered.

The survey will close on Monday 4 May 2009. Click here for the survey.

Who should complete this survey?
This survey should be completed if your charity or nonprofit organisation provides services to the community (arts, human rights, advocacy, welfare, health, family etc) and is predominantly funded by donations, grants or government funding.

This survey should be completed by a senior member of staff who is overseeing and managing all fundraising projects or the CEO. To ensure the results from this survey are accurate, please ensure this survey is only completed once by your organisation by forwarding this link to the most appropriate person in your organisation.

Please feel free to distribute this survey to your colleagues or other interested parties.

What do I need to complete this survey?
Managing the Downturn survey will be assessing the projected increases and decreases in fundraising and other income streams. You may find it useful to have your most recent annual report on hand.

How long will the survey take to complete?
This survey should take approximately 20 minutes to complete. As a participant, your organisation will receive a copy of the report.

When will the report be released?
The report will be released in mid-June 2009.

Please contact Marianne Ramsay, Policy Assistant at for more information.

Monday, April 20, 2009

Retaining donors through tough economic times

We are all worried about keeping our donors in tough economic times. Whatever the recession brings us, fundraising will keep going on.

Here we have yet more useful slides worth nicking for board reports. This presentation was one I presented at workshops in Sydney and Melbourne over the last two weeks.

Whatever happens, talking about the work your charity does in an appropriate way is essential. Telling your story. This presentation starting with stats about fundraising in a recession, but quickly moved on to good donor care and ensuring you are telling good stories.

Absent from the presentation, because it is video and workshop based, is a great exercise on making stories 'sticky'. A link to the Made to Stick blog with step by step instructions on how to run this exercise is below the presentation. Take time to get your team to do the exercise - it is truly mind expanding.

Click here for the Girl Effect / Made to Stick exercise.


Sunday, April 19, 2009

Good British website & podcasts

ACEVO, the organisation for charity bosses in the UK, set up a cool website last month which is worth checking out. They call it Recession Support.

Although it is aimed at CEOs, it is pretty useful and goes beyond fundraising. For example, it includes an article on employee benefits during tough times. Even though the news is UK focused the advice is appropriate world-wide.

Check it out here ...

Interesting presentation from the Irish FR Conference in Dublin.

The chap bearing partial responsibilty for this blogsite, Daryl Upsall, and his colleague Diana Ruano recently ran a workshop at the Irish FR Conference in Dublin in March and also in Madrid this month. While predominately focusing on data from Europe, the presentation looks at various data sources and has some interesting information in it; especially the bit pointing out how much different data is contradictory!

Worth checking out.

To download a PDF version of the presentation please click here

Tuesday, April 14, 2009

Fundraising wisdom from a beginner ski lesson

There’s no way to tell if it was that funky blue envelope that skewed your campaign results or the general collapse of global markets…
unless you also tested the white envelope.

I learned to ski a couple of weeks ago. After learning the fundamentals, but before heading up one of Canada’s mile-high mountains to really put myself in harm’s way, I asked my instructor, “If I suddenly find myself heading toward a cliff, a tree or an immobile human obstacle hunched in terror as I bear down upon it with flailing poles, what do I do? Is there a certain technique to minimize the damage or have the best chance of saving myself?”
The instructor said, “Yes, absolutely. Don’t look at whatever it is you’re trying to avoid. Stare at an object in a safer direction and make yourself go toward it. If you look at what you’re trying to avoid, you will crash right into it each and every time.”
I tested the instructor’s advice. I tested it both ways. First, by not following the advice, of course.

For fundraisers and aspiring skiers alike, it is unnatural, if not impossible at first, to follow the disaster avoidance technique my instructor shared with me. Essentially, “look away if you want to be OK.” There’s a certain satisfaction we get from being in control – from observing the catastrophe unfolding, documenting it and analyzing it with our senses – even as we head toward it at full speed. Following the instructor’s advice, on the other hand, requires temporarily abandoning some perceived control of the situation in order to ultimately regain it. I can distinctly remember the almost immediate effect I experienced when I decided to take my eyes off the snow covered spruce tree accelerating toward me. I shifted my gaze to the pretty horizon as far in the other direction as my neck would go and I immediately felt my efforts to avoid the tree take hold. My skis bit down in the snow as if I actually knew how to command them. I turned away in a satisfying arc, and the tree was no longer an obstacle.

This is not a random analogy but an uncanny match with the climate facing fundraisers and the tools we have to help our organisations succeed in spite of great external challenges. I feel compelled to put my beginner ski lesson experience together with some unfiltered observations on non-profit fundraising behavior in the recession. My work as a fundraising direct marketer connects me with dozens of non-profits in Canada and Europe. I am fortunate to have somewhat of a birds-eye view of several varying responses to economic hardship.

Here are some examples of cases where some of my clients are looking right into the eyes of the recession and are heading on the ideal path to become a casualty of it as a result. Others are actually prospering by embracing recession busting tips and long-term planning strategies that are strong strategies for any economy.

· A regional health organisation is cutting all premium-based control packages (address labels, notecards, etc.) from their fall fundraising direct mail plan. They project a noticeable decline in net revenue as a result. The charity is hoping to maintain a perception among donors that funds are being put to good use when times are tough. The charity acknowledges increases in short-term costs and risk by abandoning their control acquisition packages. And decreased long-term revenue resulting from fewer new donors that will hit the books in subsequent years.

· In response to economic conditions, two large charities eliminated all testing from their direct response fundraising strategies, citing “when times are tough, stick with what works.”

· A regional organization called attention to the declining results of a fundraising appeal by issuing a press release in a newspaper read by their donors and prospects. They publicly acknowledged the drop in results in 2008 compared with 2007 and asked for help making up the shortfall.

· Observed from decision makers in the past sixty days, in response to campaign revenues that were lower this year compared with the same period last year: “Maybe the control copy needs updating. Perhaps our minimum ask level is alienating donors whose financial circumstances have changed. Maybe we should change the package – it might look too expensive in the current economy. Etc.”

· “We can’t compete this year – we’re going to hold off on donor acquisition campaigns until things get better.” I have observed organisations with arts, education and international aid missions curtailing donor acquisition efforts because of apprehension over competitive market positioning. They have expressed an unsubstantiated fear that they cannot compete with other charities. We saw some of these attitudes expressed by fundraisers in the 2008 IFC poll regarding which types of charities would fare best in a declining economy.

Now, here's a rundown of recession busting fundraising solutions, all of which I’ve seen successfully deployed by my clients in response to some of the doom and gloom:

· Stress financial accountability, urgency and critical program information. A charity added a financial accountability insert to all of its donor fundraising appeals beginning in October. The accountability insert does not directly mention the global recession but highlights the specific needs that the non-profit is serving in the community around the time the appeal goes out. In many cases, their case for support has been strengthened by a weak economy because of increased demand for services.

· Avoid emotional “knee-jerk” decisions that will questionably have some kind of perceptual impact with donors but certainly create risk of overall income decline. You can know something about the preferences of a particular donor from what the donor tells you. But the only thing you know about your entire donor file is what the data tells you. Organisations that are already in touch with donor preferences through surveys and engagement techniques avoid making costly assumptions. However, some non-profits are showing a tendency to abandon data driven fundraising outlooks that have served the organization well year after year, in favor of new "insights" and theories on what donors are thinking. If you see this happening, ask "why?" It probably has more to do more with reading into consumer confidence and what's happening on the news than anything your donor data will tell you.

· Cutbacks that are conservation-based, e.g. energy savings and operations strategies, probably should have been in place before times got tough. Think twice about the immediate return on investment associated with implementing cutback decisions. These types of measures are a sound long-term strategy for any organisation but can’t be counted on to produce immediate returns. Focusing on them may distract from activities that have more promise to deliver incremental revenue. This is also not a donor-centric strategy. Don’t expect points from donors for “not wasting energy.” This kind of thing is now expected. Two of my clients recently used space in their newsletters and e-blasts to highlight new internal cost cutting strategies. The article came off as informative and reassuring but the info was not used in direct support of a financial gift.

· Don’t cry poverty. Certainly, don’t spend valuable ad space or dedicate portions of fundraising appeals to talking about how hard conditions are. Surely some donors some will empathize and respond but most will avoid this type of appeal angle altogether. Scarcity of resources creates additional scrutiny for the pool of resources we have left. Surely your core donors will want to hear about your latest accomplishments and funding needs instead of a recap of what’s going on around them.

· Don’t willingly roll over and surrender market share. Fight for it. Donors are individuals but they also react like any market. Individuals make decisions based on information, misinformation, fear, etc. These are the same forces driving the financial markets. Instead of being part of the fear engine, be part of the solution. Engage donors with vocabulary that they connect with in both good times and bad. Be their rock. When fuel prices and stock portfolio values are all over the place, it’s important to underscore the value your non-profit will continue to deliver for each invested donor dollar.

· Forge onward with somewhat of a blue sky attitude. Several of my clients say that they are doing nothing differently as a result of economic hardship. Surrendering market share willingly is perhaps the only absolutely certain way to create a serious long-term income decline and help others profit from your decision at the same time.

· There are certain short-term costs that are just too important to risk cutting. For example, keep investing in revenue-generating initiatives, such as direct response testing. Without testing, it's hard to justify decisions that otherwise carry risk. Don’t be shy about asking partners to help absorb such costs. Throughout the fall of 2008, a regional charity invested roughly $15,000 in tests of completely new direct mail packages. Results show the new innovations will yield roughly $250,000 in cost savings in 2009. ROI is still king.

· Coming up with new ways to analyze and label the problem won’t fix it! Don’t over measure. If you did not have clear and evolved campaign results measurement and testing processes in place before the economy started to slide, this may be a wake up call but it’s no time for drastic departures from what was working for your non-profit before. Reading into the nuances of campaign performance that you cannot isolate through testing is not a valuable investment of time. There’s no way to tell if it was that blue envelope that skewed results or the general collapse of global markets…unless you also tested the white envelope. Instead, consider opportunities to audit your testing and results benchmarking strategy, in search of general improvements.

Monday, March 23, 2009

Acquisition in a downturn - case study

With Australia experiencing the economic pain of the rest of the world, with our first contraction in 8 years during the last quarter of 2008, many charity staff are especially concerned about acquisition. We know it will become harder (wasn’t it before the recession?) and we know it will become more expensive, so should we still do it?

I wanted to share the story of The Lost Dogs’ Home, which has grown their regular giving programme through cold acquisition during the last quarter of 2008; on budget and beating targets. For me it illustrates that with effective planning to minimise risk, acquisition is still possible in tough economic times.

I would recommend the following steps to help with your acquisition.

1) data analysis
2) strategic plan
3) implementation and monitoring
4) results and evaluation.

Data analysis of past campaigns

Analysis of past acquisition activity allowed us to see subsequent donor behaviour - attrition, upgrade, conversion, additional cash gifts, bequest conversion – by recruitment source (face-to-face/direct dialogue, direct mail, phone, online etc.). Armed with this information we were able to see which recruitment channel was delivering value beyond the original results, and determine where to invest.

Developing the strategy

The data analysis showed the differing behaviour of donors recruited through each channel. For example, DM recruits went on to make cash gifts through cash appeals where F2F didn’t, and online recruits upgraded at a higher rather rate than DM.

Using the information about additional value from regular givers, we opted to focus acquisition on straight to regular giving. We knew that at a campaign results level we would get a lower year 1 ROI with regular givers vs cash, however, the additional value identified in the analysis (especially cash gifts from regular givers in year 1), would lift the year 1 ROI for regular givers closer to that for cash. Also, additional gifts aside, we also knew regular givers offer a higher year 5 ROI than cash.

To keep costs low and maximise learning from prior campaigns, we focused on tactics, creative and media that we knew worked for each channel.

Implementation and monitoring

We opted for a 3 month trial phase using F2F, mail, phone and online to see if the economy was affecting particular channels. With the learning from this we would then roll-out across the best performing channels.

With campaigns running at different times, it was essential that we had real-time monitoring to keep spend and acquisition rates on target.

Results and evaluation

At the end of three months of activity we had recruited 1600 monthly giving donors, increasing the active supporter base by 19%. Other key metrics were also positive with the ROI and average gift meeting target.

We also reached a milestone for the Home recruiting the 10,000th active Friend of PAWs regular giving donor, having only 97 regular givers just four years ago.

Building on this success, we are now in the roll-out phase to the end of June and hope to have recruited another 2000 Friend of PAWs donors by the end of the year. Watch this space.

Friday, March 20, 2009

UK charity commission report on downturn

The UK Charity Commission has just published a useful report based on feedback from charities.

Being a data, I prefer analysis of actual data not just what people say is happening but I think it is still useful - especially in looking how the financial mess is impacting charities beyond fundraising.

Bottom line in UK Charity Commission report is that charities are being hit on several fronts:

* Reserves / investment income
The most common source of income, the most important source of income and most damaged by the recession.

* Services
Only 20% reported an increase in demand for services, and three quarters of them most reckon they can meet the demand.

* Currency exchange
Those raising pounds and spending other currencies are smarting with the pound exchange rate being so bad. (Us Australians are finding this even harder - I was in USA last year where 1AUD=0.97USD, now it is 0.69USD! So everything being bought in Australian dollars now costs a massive 40% more - an increase that makes any potential fundraising woes pretty insignificant).

* Fundraising
Not flagged as being down by many, and one in nine said they were spending more on fundraising. None seemed to have flagged spending less on fundraising as being a mitigating measure they intend to follow.

In summary I reckon that those fundraisers that managed to persuade their boards / finance managers that fundraising is a good alternative investment -especially regular giving - deserve a medal.

View the full report here.

Sunday, March 15, 2009

'Fundraising When Money is Tight' by Mal Warwick - Chapter One

Mal Warwicks new book 'Fundraising When Money is Tight' hits the shelves in about a week. I shared with you in an earlier blog that there is loads of good advice for fundraising during these times which also translate into when times are good.

Mal has given me permission to publish the whole of the first chapter which is below.

'Fundraising When Money is Tight'
Chapter 1: What history teaches us

“Onward and upward” appears to be the byword of the human race in the modern era. That’s why a massive interruption in the notion of progress, such as the near-collapse of the world’s financial systems late in 2008, has been so traumatic.

But history’s role is to put things in perspective. An historical view of these matters can help. And the single biggest lesson to be learned from economic historians and economists is that the U.S. economy—and the world’s— continues to grow over the long term.

In the USA, the increase in the Gross Domestic Product above the rate of inflation averaged 3.25% annually over the 107 years of the 20th Century and the first seven of the 21st. Such seemingly dramatic financial shocks as the OPEC oil embargo in 1973, the collapse of the U.S. stock market in 1987, or the dot-com bust in 2000—even, ultimately, the crash of 1929—sooner or later come to look like minor setbacks. And, yes, the meltdown of 2008 will eventually be viewed as a hiccup from the vantage point of history. You can see the pattern in Exhibit 1-1.

Exhibit 1-1. U.S. Real GDP in Millions of 2000 Dollars

Recessions are always temporary—by definition. Even depressions, which are much more severe and longer-lasting, yield to the long-term trend of economic growth. Of course, sometime later in the 21st century, we’ll start running out of the resources that fuel economic growth. It’s not only oil production that will eventually peak, if it hasn’t already. Just as serious are the sharp and continuing declines in the availability of drinkable water and arable land, both of which will be greatly exacerbated by global warming even in the best-case scenario. Eventually, the growth curve will flatten and perhaps turn downward. At that point, humanity may need to dispense with the notion of progress itself. But for the foreseeable future, we can expect any recession that comes along to be followed by a recovery, even, possibly, a rapid one.

Unfortunately, so long as the current recession continues, that statement begs the question. What can we expect from our donors—now, when money is truly tight?

Philanthropy in recessionary times

In recent years a growing body of research on fundraising has come pouring out of the Center on Philanthropy at Indiana University as well as other academic centers devoted to the study and advancement of philanthropy. We practitioners might have long memories and anecdotes to spare from decades of experience, but it’s the scholars who tap into the raw data increasingly available about fundraising and philanthropy and put our work and our memories into a solid historical framework.

The lesson from the academics is profoundly simple.

Their research shows that overall fundraising results roughly correlate with economic conditions, chiefly the trends in personal income and, in the USA, the Standard & Poor’s 500-Stock Index (S&P 500). If the economy’s up by these measures, fundraising tends to rise. If it’s down, fundraising revenue slips.

But this cloud has a lining of silver, or possibly even platinum.

According to the Center on Philanthropy at Indiana University, economic reversals during the past four decades have impacted philanthropy less than they have the overall economy. Before adjusting for inflation, charitable giving has increased in all years since 1956, with the sole exception of 1987. (Giving actually declined in that year, but just by one percent. And the scholars attribute that decline not to economic factors but to a change in the tax laws the previous year that altered the deductibility of charitable gifts.) From 1967 through 2007, the average rate of growth in giving was 2.8 percent in years of economic recession and 4.3 percent in years of economic growth. However, the story is a little different after adjustments for inflation. During the years 1967 to 2007, inflation-adjusted giving fell an average of one percent in years of recession. In those years when the recession lasted eight months or more, the decline averaged 2.7 percent (again adjusted for inflation).

But we’re more interested in the future than the past, right?

The S&P 500 is what economists call a “leading indicator,” which means that it tends to predict economic conditions in the near future, while fundraising is a “lagging indicator” that doesn’t slip until a recession is well underway. By the time fundraising results have dropped, the economy may even be on the upswing. And in a mild recession, the recovery may get underway quickly enough to head off any significant decrease in giving—which may help explain the shallow effect of a slow economy on philanthropy.

In addition, economic conditions affect fundraising results in specific ways. The rise and fall of the stock market tends to indicate the ability and willingness of many major foundations and big individual donors to give generous gifts. Foundation grants may be especially prone to drop sharply, since most foundation assets are invested in securities, and foundation boards tend to limit their annual giving to the minimum five percent of assets required by law. During previous economic reversals, this effect was also likely to come later than the downturn itself, as grants are typically made on the basis of a three- to five-year average asset evaluation. At worst, foundations tended to allocate funds for the current year in accordance with their asset values at the close of the previous year. In other words, foundations in the past may not have cut back on grant-making even in a severe downturn, because the value of their assets was still set by an average that included previous boom years. It could take three to five years for the average asset value to decline sharply—and by that point, almost always, the securities markets had resumed their upward climb.

However, this recession is like no other economic event in history. Although some foundations are responding to the stress on the nonprofit sector by giving more, many others are pulling back sharply. All bets are off at this writing. But don’t take that cautionary news as cause for panic. It would be a mistake to assume that the bottom will drop out just because you’re feeling (or fearing) some effects now.

Corporate contributions also tend to shrink as corporate profits decline, and more quickly than at many foundations, although the impact of a poor economy will affect different companies in very different ways. Many companies manage to stay profitable through cost-cutting even in a down economy. And there are businesses in “countercyclical” industries—ones that serve basic human needs such as groceries that don’t go away in a recession—which may even benefit from a downturn and might therefore increase their giving.

Similarly, there are countercyclical effects in the nonprofit sector, helping to explain why a recession doesn’t typically hit all nonprofits equally. Difficult economic conditions underline the importance of services for poor people, such as food banks, homeless shelters, and urban missions, reinforcing the case for giving to such traditional charities, while other sectors such as art museums, performing arts organizations, public broadcasting, and (in the USA) international aid and development might suffer.

Except in cases of severe economic downturns, the effects tend to be much less pronounced on membership renewal rates, average gifts in direct mail and telefundraising, cash contributions in churches and on the streets, and other barometers of giving by people who aren’t necessarily wealthy. It’s possible that current demographic changes will eventually moderate or even eliminate that tendency of donors to continue supporting their favorite charities through thick and thin. For now, though, I’m banking on what seems the boundless generosity of the human race. However, as a recession drags on, donor acquisition efforts may become even more challenging than they already are. Even those people whose day-to-day finances aren’t curtailed by a recession tend to become more cautious, and response rates in acquisition may shrink because donors hesitate to expand their giving choices. Shrinking personal income and a bear market in stocks will take their toll.

In summary, then, here’s what to watch out for in any recession:
  • An economic downtown may—or may not—adversely affect your fundraising results to any great degree. It depends on the severity, length, and character of the recession.
  • Even if nonprofits generally are feeling the pinch of a gloomy economic outlook, your organization might not be similarly impacted. The effects you’ll feel will depend on how you raise your money, what services you provide, and, ultimately, what you do in response to deteriorating economic conditions.
But now you may be asking yourself whether our current economic crisis is a recession—or something much closer to the protracted economic stagnation of the Great Depression. After all, the impact of most recessions tends to be focused on one country or region at a time, and there’s no denying that today’s meltdown in the financial markets is a global phenomenon. As I write, it is becoming increasingly clear that today’s crisis is no mere recession. Its ultimate depth and scope are yet to be seen, but it has already been underway for a full year, and commentators on economics and business are now shying away from comparing current conditions to those in any previous economic reversal since World War II. It would seem that the more relevant comparison will prove to be with the Depression. What do we know, then, about philanthropy in the 1930s?

Giving during the Depression

During the early years of the Great Depression, according to the limited data we have available, giving did indeed decline significantly three years after the Crash, though not nearly as precipitously as the economy as a whole. But philanthropy recovered as the 1930s proceeded, even in the absence of significant improvement in economic conditions.
The best information I’ve been able to locate about philanthropy during the Depression years comes from Robert F. Sharpe, Jr., a fundraising consultant widely known for his encyclopedic knowledge of planned giving. A 1991 paper published by The Sharpe Group, re-released in 2008, draws upon both the contemporaneous studies of the legendary fundraising consultant John Price Jones beginning in 1931 and a 1950 study by F. Emerson Andrews characterized by the New York Times as “ . . . the most comprehensive survey of philanthropy ever undertaken in this country” up to that time.

Summing up the overall picture gleaned from these two sources, Sharpe related that
The Andrews report showed a somewhat significant dip in total giving from 1931-33 at the beginning of the lengthy period of economic stagnation that characterized the 1930s. The report shows a slow annual rise in giving throughout the remainder of the 1930s, a time period when inflation was non-existent—and which might even be characterized as a period of increased giving were deflation of the period factored in.

Viewed graphically, the picture emerges very clearly, as you can see in Exhibit 1-2.

Exhibit 1-2

As you’ll note on Exhibit 1-2, giving didn’t begin its decline until 1931-32, long after the Crash that most people today associate with the onset of the Depression. Although the dollar amount of total contributions did decrease from 1929 to 1931, giving actually rose when adjusted for the inflation (and deflation) that occurred during this time period. Similarly, taking deflation into account, the drop from 1931 to 1933 is not pronounced. (The dollar increased in value from $1.00 in 1929 to $1.33 in 1933.)

While it then took a full seven years before the level of giving in America returned to its peak before the onset of the Depression, there were only two years of significant decline (1932 and 1933). The recovery in giving began in 1934—long before the improvement in the overall economy was truly meaningful.

Sharpe notes that the John Paul Jones studies, working from a different set of raw data that was based on more limited surveys, showed a similar pattern. “They reveal, however, a more dramatic drop in initial gift activity from 1931 to 1933” and a recovery to earlier levels that was more erratic than shown in the Andrews study. However, “[o]ther more broad-based reports at the time of gifts to Community Chests [the United Ways of yesteryear], Catholic Charities, and others also showed a continuous, though slow, rise in giving each year and tend to corroborate the Andrews study.”

Not all nonprofit organizations were equally affected by the Depression, however. The Sharpe paper reported on a study of giving to higher education which indicated that many colleges and universities—especially the largest and best-known—fared relatively well during the 1930s. “Those organizations related to human services, religion, and health care also appeared from contemporary reports to have fared well,” the Sharpe Group noted.

During this period there was another, highly significant trend: “a much higher percentage of individual gift income [was] derived from bequests and deferred gifts during the 1930s, with a with a return to more normal levels occurring as current giving mushroomed in support of war-related charity.”

In other words, during the worst financial crisis in the memory of any living person, there were a couple of significant decline for the nonprofit sector, or at least for most nonprofits. But philanthropy bounced back to pre-Depression levels far more quickly than the world economy in general.

* * * *
It’s important to weigh this perspective in the balance against the many changes in American philanthropy since the 1930s. A far smaller proportion of the U.S. population then could be counted as donors, so major gifts—and, as Robert Sharpe notes, substantial bequests—constituted a far larger share of overall giving than they do today. Only after World War II did a substantial middle class capable of sharing its prosperity begin to dominate the American economy. Direct mail fundraising—mass fundraising of all sorts—didn’t begin coming into its own until the late 1940s. The number of charitable foundations was a tiny fraction of the more than 100,000 in the USA today. There were no computers, no Internet, no email. Still, the fact that giving was less sharply impacted than the economy as a whole seems relevant. The same pattern has prevailed through every subsequent economic downturn. It appears as though the philanthropic impulse is stimulated, not discouraged, by the widespread evidence of growing need during difficult times.

If you are interested in reading more you can pre-order through Amazon in USA here and UK here.

Thanks Mal!


Monday, March 9, 2009

UK data shows regular/monthly gift cancellations on the rise: so here's what to do...

Data just released from Rapidata Services in the UK shows that the number of people cancelling their direct debits each month has increased substantially over the past six months.

Scott Gray, managing director of Rapidata says:

“Cancellations rates skyrocketed last summer so that, for example, in July, 54 per cent more people cancelled their direct debits than in the average July for the pre-recession period, while in December, there were 67 per cent more cancellations than for the average pre-recession December.

“We’ve looked very closely at these figures and what they suggest is that the monthly cancellations rates during 2008 were so high that they were not likely to have been subject to the same factors influencing cancellations before the credit crunch hit. There have been a lot of surveys suggesting how donors intend to revise their giving during the recession but this tells us what they actually are doing.”

The monthly cancellations rate is the percentage of live direct debits that are cancelled each month. Average monthly cancellations rates for each year are:

2003/04 3.54%

2004/05 3.45%

2005/06 3.18%

2006/07 3.05%

2007/08 3.32%

2008/09 4.64%

For the first time, the financial year 2008/09 saw monthly cancellations rates exceed five per cent, on four separate occasions – July, September, October and January.

The report released by Rapidata, the Charity Direct Debit Tracking Report 2009 sets out several recommendations to win back cancelled donors, including:

• Acknowledge the cancellation quickly, in writing, and thank the donor for their support
• Offer alternatives to cancellation, such as giving at a lower level or taking a payment holiday
• Make sure donors can reactivate easily and securely through the charity’s website
• Attempt reactivation sooner rather than later: try it within six months and don’t leave it 12 months or more
• Regularly test sample reactivations: for instance, try telephoning a sample of 100 donors who cancelled within six months to test for reactivations.

Gray goes on to say there is a need for a “culture shift” away from an emphasis on acquiring new donors to looking after and stewarding the donors you already have.

“The findings in this report point to trend for more donors to cancel their direct debits, which will mean increased costs in acquiring new donors to replace those you have lost.

“Wouldn’t it be better to spend some of that money in trying to keep your existing donors? Commercial companies invest heavily on customer retention; charities need to follow suit."

I agree that we need to spend more time on donor care, although I am not convinced it's at the expense of acquisition. Refer my earlier post about smarter and no less acquisition.

But Scott's point about stewarding donors is spot on. Over the past seven years having mystery shopped hundreds of British, Canadian, Australian and Asian charities, I have witnessed the same fundamental flaws appear in the way we service donors, which are contributing to their ongoing loyalty and subsequently the figures that are now surfacing in the UK.

Lack of thanking, not responding at all, or in a tardy fashion, not acknowledging the donors type of support. Fortunately, all really easy things to fix.

So as well as the reactionary measures Scott refers to, I'd suggest the following steps:

- Mystery shop yourselves and others and see what you find. Rip off what works well, but as importantly, do something about the things that aren't working in your organization.

- Review your acknowledgement and thanking strategy. It shouldn't and can't take 4 weeks to thank someone who ahs made a gift. My experience is this is always down to systems rather than a conscious decision to do so. Don't allow donors to question why they have supported you: thank and reaffirm within a week after they come on board.

- Review your outgoing communications (particularly your thank you and welcome materials) and ensure that each piece uses personal and engaging copy, talks to the donor as an individual, focuses on the donor and the beneficiaries (not your organization) and talks about real impact.

- Ensure your communication cycle continues to ask appropriately (and for monthly donors attempts to upgrade at least once a year - for this is an attrition buster as well as being revenue generating).

The outlook could be grim if you don't get back to basics and do the things we know we should be doing. The evidence from Rapidata is actually in contrast to what we are seeing with our clients at Pareto Fundraising particularly in Australia and Canada, where we see monthly (regular) giving continuing to grow. But that's not to say things won't take a turn for the worse if charities don't practice proper supporter relationship management.

We'd love to hear your experiences with your monthly/regular giving program. Please post here or email me at

If you would like a full copy of the report mentioned above, please email Rapidata's Managing Director, Scott Gray at .


Sunday, March 1, 2009

Australia, Christmas appeals and the economic downturn: Results and interpretation


I have compared results of nearly 30 charities in Australia raising funds for a diverse range of causes. The smallest has about 3,000 donors, the largest well over 100,000.

I wanted to know if the there was a pattern – any decline in income that could indicate economic downturn impact. I ignored targets, and just compared year on year, as close to like for like as I could get, looking at the most recent appeal cycle, Oct-Nov 2008 (Christmas appeals).

My main measure was ‘income per thousand letters mailed to known donors’. I didn’t have costs available, but income per thousand ‘smooths’ costs, giving me a more realistic reflection of the performance of the donor file. These results are just warm donors – ie donors who have given before.

Through the Pareto Benchmarking Insights group, we had compared mid-year (May-June) appeals between 2007 and 2008. There was no difference that could be attributed to the economy then, but things have got worse in the past six months.

Would Christmas 08 appeals be worse than Christmas 07?


I had available gross income, average donation and response rate across each and all of charities who supplied that data, comparing Christmas 07 with Christmas 08. I then calculated income per thousand. All the data was just 'warm' donors - ie donors who have given before.

If the economy was harming donation levels more in December 2008 than December 2007 we would expect Christmas 2008 income per thousand mailings to perform much worse than the previous year.

The bottom line
  • In total, Christmas 08 raised 9% more per thousand mailed than Christmas 07.
  • Half of the charities had a higher income per thousand, the other half a lower income per thousand.
  • Christmas 08 total gross income was 2% less than Christmas 07 - This is despite the fact that the charities mailed 10% fewer people
  • Lower response rate was biggest variable contributing to those that raised less


This is pretty benign data. It is nowhere near strong enough to tell us that the economic downturn is having any impact on charities.

On the face of it, there’s not enough evidence to conclude that the economy has been a significant factor to date on warm appeal mailing results – we just don’t know.

Like many, I feel as though the economic mess should be harming fundraising but the fact that it is so marginal provides us with no proof.

The slight decline in gross can be attributed to the fact that most of those who had bigger declines have not been recruiting many new donors and so therefore mailed fewer. Later, we need to investigate to see if the reason they are not recruiting so many donors is due to the economy.


From this sample, I cannot conclude that the worsening economy has, by December 2008, directly harmed or reduced the amount given by a selection of charities own donors in Australia.

There is no need for panic. But despite all the non-evidence, I am still feeling fearful of what is to come.

Whatever country we are in, we don’t know how things are going to pan out, and must be prepared for the potential scenarios.

Also, it is important to note that the very nature of comparing warm results mailings is actually looking at how your best donors are responding to the economy. We know that they can be pretty resilient – but we also know that no matter how dedicated they are, a small percentage still attrite (stop donating).

Some more useful measures, which we are investigating in our Benchmarking Insights* program, include:
1. Acquisition volumes
2. Acquisition ROI
3. Regular Giving attrition
4. Attrition among high value donors
5. Attrition among low value donors
6. Unsolicited gift volumes

What to do - strategically
1) All the stuff you should be doing anyway – it is written in tons of fundraising books and papers, just make sure you are doing it.
2) Carry on with your acquisition, but budget for things to be tougher.
3) Do some scenario planning; look at your strategy and work out how it would turn out depending on two or three ‘what if’ scenarios (see Mal Warwick’s new ‘Fundraising When Money is Tight’ for more details – when it is published next month).

* Australian, Hong Kong and Canadian charities may still join the Benchmarking Insights co-operative, which is a member led group of charities sharing results just email for more information. Other countries - let us know if you are interested.


Thursday, February 26, 2009

Your next appeal mailing

Despite the economy, many charities are still doing better this year than last.

There are examples all over the world.

So how can they do that when there are so many charities saying things are much worse?

It can only be about tactics. There are lots of documents about strategy - here is a short bunch of tactical tips for your next mail appeal.

1) Personalise the ask amount, and put a personalised ask throughout the copy of the letter, that is, mail-merge the whole letter. “Please send $75 by 20 August...” where the $75 is 1.3 to 1.5 times the donor’s previous gift.

2) Have a deadline and a target in your letter.

3) Sandwich your mailings with email . Don’t replace your mailing with email to save money (it costs less and will raise less) but do a pre-email ' 'there is an important letter coming, please read it...' and a post email reminder driving to a specific landing page with all your appeals.

4) Consider pre- or post-mailing phone calls for top tier donors. Ring them, be nice and ask for their usual gift. At least 80 per cent of your money will come from just 20 per cent of your donors. Call those donors.

5) Apply the Pareto principle. Get the best pack, at any cost - and mail it to as many as you can afford to, rather than choosing the numbers to mail and designing a pack to fit that budget. It is nearly always better to mail a $3 pack to 10,000 people than a $1 pack to 30,000 - provided the $3 pack is better! Design the high value pack first, and make the low value pack a version of that rather than the other way. Put 80 per cent of your effort into the high value pack.

6) Consider Express Post Envelopes / DHL / Fed Ex for top 100 people if you can have an urgent deadline.

7) Send a follow up mailing to your best donors – non-responders and responders.

8) Spend 80 per cent of your precious time on the copy and 80 per cent of that on the letter. The letter is the most important thing in your direct mail packs.

9) Make sure the letter looks like a letter on headed paper and the response mechanism (which can be pretty or dull) flows from the letter and reinforces the appeal.

10) Ensure you have a wonderful case study / story with a beginning, middle and end. Not just statistics. Time and time again, personal stories have been shown to hammer statistics and internal jargon. And put personal detail in the story, make it more real.

An eight year old boy who has an epileptic fit six times a day is sad.

But when he shares with the donor that his biggest fear is peeing himself in front of his mates, and that they then tease him - that is personal.

11) Do what is right, not what is easy. Argue with the boss to put in those killer lines “Please call me on my direct line to discuss the mailing.” To quote Mark Philips from UK charity agency bluefrog "Embrace the hassle."

12) Don't worry about ROI or Cost of Fundraising - be driven by NET income; right now that is what your organisation needs more than anything else.

Be one of those charities raising more from their next mailing than last year.

Thursday, February 19, 2009

Fat Cats abandon World Vision

According to an AP report, Wall St Fat Cats didn't contribute the big gifts World Vision is used to getting. But the charity, quick off the block to reduce the impact of losing donors to the economic mess called sponsors and offered them a sabbatical.

No results of the calling here, but it would be good to hear other stories of success or failure along those lines.

Also, it would appear than soe of the big International NGOs like Oxfam are being hit harder by currency fluctuation than by the actual economy.

Good article - check it out here.

Sunday, February 15, 2009

Christmas 2008 appeals and the recession - Results

Thanks for those who sent results in. I didn’t get a statistically useful sample beyond Australia, and only have data from Canada, Australia, Hong Kong and NZ.

One NZ charity and a large Canadian charity were both up 40-50% on Christmas 2007, which I think bucks the trend, but need more Canadian and Kiwi data. A small Canadian charity raised almost the same as 2007, and a medium sized HK charity was 40% down on last year – but their 2007 appeal beat their previous record by over 4 times. They were expecting a lower return regardless of economy, and Christmas 2008 is still one of their best results ever.

The lesson here is that regardless of the impact of the economic meltdown, it is possible to use tactics to beat the downturn.

The Canadian charity is especially interesting.

They implemented a new approach to mail appeals with some of the well published and proven direct mail techniques including, but not limited to:

1) Increase in personalisation, including personalised ask amounts based on previous giving throughout the letter copy as well as response coupon.

2) Much longer letter, that looked like a letter (4 pages).

3) Separate full page response coupon.

4) Urgent call to action throughout the copy.

5) Full on, emotional case study with clear call to action.

The increased cost of the pack were well out-weighed by the huge increase in net income. The Slideshare presentation below expands on the tactics which have worked for many charities in the past, and still seen to be working in this economic climate.

Any more case studies or results, please let me know.

A separate, more detailed blog on the Australian results will be posted later this week.

(The presentation below was originally presented at the Passion Forward fundraising conference in the Philippines).


Calling Australian Charities


I encourage Australian charities to complete the Givewell survey here. Givewell are a great bunch, dedicated to constant research of the Australian charity sector.

Hopefully Givewell will press release the results so that I can link to the final report.



Thursday, February 5, 2009

Subjective presumptions kill charities

Tough times mean charities need to do what all evidence and points to being the right thing, and not let subjective presumptions drive fundraising decisions.

I come across many charities around the world who are complaining about the current economic woes but refusing to take certain actions. Fellow fundraisers - we don't have the luxury of being able to avoid things because we don't like them.

Some examples of things that on balance, fundraisers who deal with large scale donor programs should do but often don't. They are usually stopped from doing so for unsubstantiated reasons from often ill-informed people who say things like 'well I wouldn't like to be telephoned at 7pm when I am in the middle of making dinner' as a reason to block a telephone upgrade program.

Each one of these five - if done professionally - has tons of evidence in its favour, from well known experienced gurus and fundraising 'experts' as well as normal hard working evidence based fundraisers. There are counter arguements to each - in brackets, but the evidence against for each of these is pretty weak.

1) Regular giving program - the biggest revolution in fundraising for European, Australian, Hong Kong, Canadian and more but not huge in USA yet.

('It will harm our Christmas appeal' / 'It will harm our lottery')

2) Face to face / direct dialogue - the driver behind the biggest revolution. Asking people on the street / mall or at the doorstep to sign up to a regular gift.

('I just don't like it, the idea of being harrassed on the street' / 'It will damage our reputation')

3) Tele-marketing - proven to be the most effective way to ask regular givers to give more per month, provide donor care and general tool for relationship building.

('I just don't like it', 'It is expensive')

4) Reciprocal mailings / swaps - Exchanging data sets between charities, achieves 3-10x better results that buying cold lists.

('It is illegal' /'It harms my database')

5) Longer letters - Letters need to be as long as they need to be to tell a story with a begining, middle and end, contain a strong proposition, and respect the donor. With the right tactics, they work better, negating the additional costs with extra income.

('I would never read it' / 'too expensive')

Times are tough, and often internal wrangling makes it tougher - we need to have some tough fights to do the right thing.

Please feel free to add more.


Monday, February 2, 2009

How to 'sell' in a recession

Another ten point plan -- this one rather commerical, but really quite useful, all about selling in tough times.

Click here for the tips.

Thanks John at Sense Scotland.

Friday, January 30, 2009

Good fundraising practice beats the economy blues

In my paper 'Ten Point plan to recession-proofing your fundraising' I argue that good fundraising practice is needed now more than ever, regardless of how the economy is doing.

I had a great boost to this theory with the results of our first ever direct mail appeal in Canada. Amongst all the doom and gloom there, and the seemingly accepted fact that charities are suffering, this mailing made over 50% more than last year.

The mailing is up from about $1m income last year, to $1.5m this year. And the charity's staff are still processing donations. This is after mailing the same set of donors as last year. Although the costs were higher (the pack was bigger, longer and was personalised) the increase in costs were not significant compared to the extra half million in the bank.

At the same time I hear of appeals for many other Canadian charities being down for the same period.

Of course, I am pleased with the efforts of the charity staff and the Pareto Fundraising people in Canada, Singapore and Australia who worked on the job but I am not trumpeting this as a free advert.

All we did was follow good fundraising practice. We did nothing that isn't in the fundraising or direct marketing books or on courses; the charity was willing to invest more on a respectful, highly personalised and targeted approach.

With this appeal alone, the charity effectively 'ticked off' half of the points in the ten point plan and it worked. (See 1,2, 6, 7 and 8)

You don't need to hire us (or other agencies) to make this work - just make sure you are implementing good fundraising practice, please. Don't try and do things on the cheap.

(A note for North Americans readers: this is not an ad, but of course our regional director would love to help you, email Jonathon Grapsas).


Wednesday, January 28, 2009

Fundraising when money is tight - new book

I just finished Mal Warwick’s new manuscript “Fundraising When Money is Tight”. I got to tell you, it is bloody good. I am sure the title will help sales right now, but it could well have been called “How to fundraise”; there is nothing in there that I wouldn’t recommend when times are not tight. Not that I can remember a time when fundraising wasn’t tough.

Just 137 pages long, I whizzed through the book in a few hours, it is a journey flying high in big picture strategy but dipping down into sensible tactics and practicalities – including a short lesson on the basics of segmentation and a full case study of an (Australian!) donor survey.

Suitable for the fundraising strategist, the CEO and the board, the book gives clear tips, steps and processes – almost like a ‘how to’ checklist book.

If you can’t get your board to read a fundraising book, get them to read at least the first 44 pages that make up Part One. Mal doesn’t pretend to tell us what may or may not happen in the future (let’s face it, no-one knows) but what he does show us is how scenario planning can give a clear overview for how NGOs can respond to whatever happens.

Part two outlines incredibly sensible and immediate steps that can be taken to protect your beneficiaries now and into the future whilst illustrating with examples, a case study and a short practical lesson or two.

No moaning about the economy is allowed. If you raise money from the public get on and do the right thing – buy this book and do what it tells you to do. Mal is internationally respected for a reason – he knows his stuff.

This is not an advert, but I reckon the book is the best thing (except this blog, which you already read) around to help you manage your situation - and your board. Pre-order through Amazon in USA here and UK here.


Attention Canadian based readers: Surviving and thriving in challenging times...

For those Canadian based readers, here is a quick plug to the upcoming event I am proud to be involved in with my good friends at Canadian Fundraiser.

The event Surviving and Thriving in Challenging times, sponsored by Pareto Fundraising to be held in Toronto on the 17th of February will bring together people from all parts of the sector to discuss what is happening out there in the trenches, and how we can best manage these turbulent times.

This is a Canadian first, with nothing else of this magnitude been run here to date. It's aimed at Executive Directors, trustees and senior fundraising professionals.

It's an interesting bunch of talented people presenting on the panel and presenting. Oh, and I managed to score a gig as well.

We've got representatives from large and small charities, we've got researchers, consultants, leading Canadian philanthropists and social entrepreneurs.

The day promises to be full of meaty and useful information, lots of interesting discussion, some data to show what's really happening as well as some practical advice on what to do moving forward from some of the best in the industry.

Check it out.


Tuesday, January 20, 2009

Don't mention the economy...

You may recall some debate as to whether you should mention the economy in your appeal letters... I asked if anyone tests it to tell me the results.

Mark from bluefrog did - the idea was that maybe average donation would increase if they talked about the economic woes.

Mentioning the economy in a carefully controlled test they found that it harmed average gift considerably. I don't know the response rate but presum no significant difference or he would have said.

See the whole article here.

So, be careful about mentioning it!


Sunday, January 18, 2009

Financial Times reckons corporate giving may be up

At 4,000 words you need to put the kettle on before diving into this brilliant article but it is worth it.

A thorough report, starting with the Quakers in the 19th century it takes on a journey of corporate giving right up to now.

Please take time out to read this one, and keep it handy for when the boss is asking why you are not getting tons of money from big business.

If you haven't time to read it here is the bottom line:

Corporates (in the UK, and the USA) give so little cash to charity that the economic woes won't make much difference. What about the £1.1bn companies are meant to give in the UK per annum? A quarter of that is in-kind donations of drugs from one company, and much of the rest is 'in kind' too.

The article explains the history of corporate giving (in the UK) and also explains why they give so little.

Check it out here.

Thursday, January 15, 2009

Christmas / Holiday Appeal Results

Here in Australia, Christmas time is a big charity time and this was an unusual Christmas with people worrying about what may happen with the economic downturn and giving.

In February, I am going to have a look at as many Christmas house mailing* results as I can and give some feedback on this blog. I will be looking for:
  1. Any information that shows whether Christmas 2008 bucked the trends

  2. Any tactics / ideas people implemented - that worked or didn't

  3. Clues to what may happen next.

Why? Not just for academic interest. The information can hopefully join your other inputs and research to help with your budget planning and also there may be some specific tactics you can implement next time.

Please help. Email me your results, or if you are an agency then any results you can get hold of- but only if you can give me a context. I will credit those who want it but won't be using the information in a way that can identify which charity / agency it came from - unless you explicitly invite me to use yours as a named case study.

*By house mailing, I mean mailings to people who had donated to you previously. I don't mind how long ago provided similar selections were made in previous years.

Let me know, for Christmas mailings of 2004, 2005, 2006, 2007 and 2008

1) How many (warm) people were mailed

2) How many sent a donation

3) The total income - just immediate donations, if you asked for regular or monthly gifts, please add that in comments

4) Comments (eg '2006 was really high because we had a capital appeal...', or ' 2008 we tried an entire new approach by...' 'also 55 new monthly gifts @ av $32.22 per month'.)

Please, please send it in Excel format, with the five years (2004,2005,2006,2007,2008) down the side and the four fields (mailed, responded, income, across the top. This will make it easier for me to copy and paste and do my comparisons. You can have a look at a sample below or here.

Thanks a lot,