Fundraising recession watch

The end of Fundraising Recession Watch...

2009-10-15T14:34:00.000-07:00

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.

Sean

Recession increasing demand on two-thirds of Australian charities

2009-08-24T08:34:00.000-07:00

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.

UK Trusts show commitment - or do they?

2009-08-20T20:20:00.000-07:00

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.

Australian Tax Time Appeal Analysis

2009-08-16T20:05:00.000-07:00

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.

Sean

Donor attitudes to giving in the credit crunch

2009-08-10T18:39:00.000-07:00

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:

Slightly more people say they have been affected financially by the recent economic downturn (now 58%, 52% in Jan/Feb)
Slightly more say they are thinking harder about how much to give - now 57%, up from 47% in Jan/Feb.
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.)

FIA release their 'Managing in a Downturn' report

2009-07-31T00:01:00.000-07:00

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.

Funding strategically during a recession

2009-07-20T08:11:00.000-07:00

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.

Jan

Tranquility or turmoil

2009-07-20T07:41:00.000-07:00

http://www.fundraisingtraining.co.uk

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.

Reserves and recession

2009-07-12T17:50:00.000-07:00

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..

Recession Marketing

2009-07-09T19:30:00.000-07:00

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 http://seantriner.blogspot.com. Worth following my blog I reckon.

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

2009-07-07T05:03:00.000-07:00

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...

Recession Preparedness Assessment 09

View more documents from Sean Triner.

Survey of emerging fundraising nations

2009-06-27T03:35:00.000-07:00

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.

Global Fundraising Confidence Survey Asia And Africa

View more documents from Sean Triner.

Recession busting resources from NCVO

2009-06-13T18:41:00.000-07:00

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.

Sean

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

2009-06-11T18:17:00.001-07:00

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.

The (nearly) true value of regular giving

2009-06-02T23:33:00.000-07:00

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.

Innovate or Die

2009-06-01T23:05:00.000-07:00

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.

Sean

Charities and Recession on Radio National

2009-05-21T18:08:00.000-07:00

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.

Innovation in times of stress

2009-05-19T16:39:00.000-07:00

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.

Sean

Turn media prices on their heads

2009-05-07T22:29:00.000-07:00

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.

Sean

American charities can get stimulus funds...

2009-04-27T23:41:00.000-07:00

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.

Fundraising Institute of Australia survey on coping with downturn

2009-04-21T16:58:00.000-07:00

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 mramsay@fia.org.au for more information.

Retaining donors through tough economic times

2009-04-20T21:22:00.000-07:00

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.

Retaining Donors Through Tough Economic Times

View more presentations from Sean Triner.

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

Sean

Good British website & podcasts

2009-04-19T22:05:00.000-07:00

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.

2009-04-19T20:53:00.000-07:00

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.

Challenging Times Spain English Version 31mar09

View more presentations from darylupsall.

To download a PDF version of the presentation please click here

Fundraising wisdom from a beginner ski lesson

2009-04-14T13:21:00.000-07:00

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. http://www.afpnet.org/content_documents/Survey%20global%20financial%20crisis.pdf.

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.

Acquisition in a downturn - case study

2009-03-23T23:46:00.000-07:00

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.

UK charity commission report on downturn

2009-03-20T21:12:00.000-07:00

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.

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

2009-03-15T19:19:00.000-07:00

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

Source: http://www.measuringworth.org/

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!

Sean

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

2009-03-09T07:36:00.000-07:00

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 jonathon.grapsas@paretofundraising.com

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

Jonathon

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

2009-03-01T17:25:00.000-08:00

Introduction

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?

Methodology

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

Interpretation

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.

Conclusion

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 benchmarking@paretofundraising.com for more information. Other countries - let us know if you are interested.

Sean

Your next appeal mailing

2009-02-26T15:57:00.000-08:00

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.

Fat Cats abandon World Vision

2009-02-19T15:13:00.000-08:00

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.

Christmas 2008 appeals and the recession - Results

2009-02-15T19:24:00.000-08:00

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).

How To Double Your Appeal Income Philippine Final

View more presentations from Sean Triner. (tags: pareto seven)

Sean

Calling Australian Charities

2009-02-15T19:17:00.000-08:00

Hi

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.

Thanks!

Sean

Subjective presumptions kill charities

2009-02-05T15:07:00.000-08:00

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.

Sean

How to 'sell' in a recession

2009-02-02T13:28:00.000-08:00

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.

Good fundraising practice beats the economy blues

2009-01-30T12:44:00.000-08:00

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).

Sean

Fundraising when money is tight - new book

2009-01-28T17:18:00.000-08:00

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.

Sean

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

2009-01-28T06:23:00.000-08:00

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.

Jonathon

Don't mention the economy...

2009-01-20T14:51:00.000-08:00

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!

Sean

Financial Times reckons corporate giving may be up

2009-01-18T18:41:00.000-08:00

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.

Christmas / Holiday Appeal Results

2009-01-15T13:59:00.000-08:00

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:

Any information that shows whether Christmas 2008 bucked the trends

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

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 '...in 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,

Sean

2009 - a great new year for charities!?

2009-01-13T15:16:00.000-08:00

Happy new year. And I mean it, no doom and gloom here.

I am excited and looking forward to it. A decent break over Christmas and New Year was not tempered by my return to work and reading lots of bad news - I think it is going to force change that is needed and can only be good for the communities we serve.

Surely 2009 is going to be a revolutionary year for the charity sector? The whole economic disaster will force better practice, smart strategy and clear, measurable tactics.

There is simply not enough room for complacency or whim. Charities will need to be tough, hold their staff accountable - even 'rich' and 'safe' organisations with big endowments are having to take a good look at themselves.

And the sector must prevail - tough economic times mean we are needed more than ever, so let us make this a turning point for the sector.

I will keep this blog going since even whilst I was away there were a few posts up and hundreds of visits. Thanks for reading, and please send me information and details about how you are changing your charity (unless you were perfect of course!).

Thanks

Sean

All the best for 2009.

Data suggests that corporations continue giving in the US

2009-01-08T12:47:00.000-08:00

Some interesting data that recently came out of the US.

According to a recent report produced by LGB Research, over 70 major US corporations and corporate foundations that participated in their email survey expect to see no change in their charitable giving in 2009.

It also reports that 80 percent of corporations will be more strategic in their giving; with many of those surveyed indicating their corporation will support organisations that can show greater impact and who are more aligned with their corporate goals.

The research also suggests that the anticipated 12.1 percent drop in charitable donations predicted in the Giving US 2002 report will most likely to be as little as 3 to 5 percent.

To read a summary of the research click here.

Is it too late to start really looking after your donors?

2009-01-07T06:48:00.001-08:00

Matt Parkes from bluefrog just posted an interesting piece about relationship marketing/fundraising in light of the current economic climate and the credit crunch.

In his posting, Matt indicates that he feels that it's probably a little late for serious investment in this area, given that what we are really doing is reacting to the turbulent times we are currently faced with.

I'm not so sure. Let's face it, most of the ingredients that bake the 'relationship fundraising' cake are fairly straightforward and easy to put in place. Being really nice to people, feeding back where their money has gone, keeping them updated, showing real impact and so on..

In theory easy things to do. In practice, maybe not so easy, as our mystery shopping studies over the past few years have illustrated.

But the point is: investing in CRM, supporter relationship management, relationship fundraising - call it what you will, doesn't necessarily mean enormous investments in sophisticated technology. It's actually about getting back to basics.

Matt says that "differentiation by customer service is increasingly important". I couldn't agree more.

I say this with a facetious tone in my voice: differentiating yourself from someone else could be as simple as thanking and thanking appropriately within two days, rather than four weeks...

He also goes on to suggest that "fundraisers must start to engage with donors, for example by regularly spending time with Supporter Services, opening post and seeing what they're saying about their appeals." Simple, but so true.

As I recently posted, let's not allow tradition to become destructive and inhibit growth. I often see silly things happening purely and simply because that's the way they have been done for the last 1, 2, 10 years...

Doing the things that we know are right, that enhance the relationship we have with our donors and ultimately translates to more value, don't have to be extortionately expensive in both time and dollars. Even if doing the 'right things' require a shift from the way you have 'traditionally' done something - if it makes sense then just do it.

Remember, let's get back to basics.

Jonathon

Street recruitment kicking goals in North America...

2008-12-22T08:44:00.001-08:00

I have been chatting to James Julien from Public Outreach quite a lot recently to try and get a sense of what's happening on the street in terms of recruitment, specifically recruitment of monthly/regular donors.

This is what James kindly shared with me earlier today....

"In Canada, since September, our results on the street, at the door and in shopping malls have all remained strong, actually improving by about 5% over our summer results for this year. This seems to be true for all our clients; international development, health charities, etc. One possible explanation is that the younger demographics we deal with in face-to-face (average donor age is 30-35 for most of our clients) haven’t been as affected by the economic situation as older donors who may be getting some or all of their income from investment funds.

Results in our US operations have also continued to improve over the course of this fall for both monthly and single donations. More people are using “the economy” as a reason for saying no, but more people on balance are saying yes."

So on the back of our recent post about the research that the Bluefrog guys have done, James comments validate that this is a good time to consider investing in street recruitment.

Numbers are still strong in Canada and the US (and rising) - the health warning here is to ensure that if you invest in recruitment on the street - understand the type of donors you are recruiting and be prepared to treat them as a separate stream of donors, for they do fundamentally behave differently to your 'typical' monthly/regular donors (recruited through direct mail, TV, online, telephone etc)..

Jonathon

From a charity fundraisers point of view part IV

2008-12-21T21:44:00.000-08:00

The final part of the letter from Kimberley Mackenzie from Lake Simcoe Conservation Foundation looks at her relationship with her major donors.

'Major Giving
In the next six weeks our board has agreed to conduct a “micro campaign" to get us to year end.

They have been assigned prospects and are tasked with setting up meetings to solicit major gifts.

Many of those meetings will happen in the next few weeks and if you like [of course!] I’ll report back the outcome. What I can tell you today is that people are booking appointments, donors and prospects are returning phone calls, making time and are willing to talk to us.

My calendar is quickly filling up. Perhaps what is most inspiring about this though is that my board wants to ask, they want to be optimistic, they want to keep momentum going and they are willing to work to do it.

It is true I am being a bit of a hard ass about it right now – but most of the board is mobilized and focused unlike ever before.

Sean, I think at times like this history has shown that true leadership emerges. I certainly don’t have all the answers, I am not published [well, you are now] nor am I a frequent presenter a conferences.

I’m just a fundraiser in a small shop and I hope the work we are doing will help meet targets and to do our bit to help our sick planet to heal.

My plan is a simple one. To stay honest, empathetic, positive, flexible, optimistic and work very hard to provide the tools and support to our fundraising volunteers to help them be as successful as they can be.

...I’ll let you know how it all goes – I know this note doesn’t have much data in it, but maybe it could help you in some small way write a book about it for us all! There’s an idea.

Sincerely, Kimberley'

Well that is the end of the letter, but hopefully a bit of inspiration for all you hard working fundraisers in large and small organisations.

Please, keep us informed and take care.

Sean Triner

Research suggests that donors will consolidate their giving

2008-12-17T15:24:00.000-08:00

The guys from bluefrog have done some further research into the attitude of donors during the economic crisis. After interviewing 2000 donors, they found while donors are committed to giving to the charities they already support almost 40% of the same group surveyed are less likely to give to new charities.

Does this mean that charities should not look at acquiring new donors? Not at all. Acquisition is an investment – and a good one. Charity income over the past ten years shows that those organisations that have invested in acquisition have been able to increase their impact. It’s been said time and time again that looking after your current donors is key and making sure that any acquisition strategy you embark on is supported by a strong Supporter relationship management programme.

It may not mean lessening the recruitment you are doing, but it certainly does mean being smarter about how and who you recruit. In his blog Mark suggests that recruiting younger donors, on the street, may make even more sense at this time.

This may in fact be true, but I would dig a little deeper into your database to get a sense of who specifically we should be targeting at this point time. Not based on our gut feeling or intuition but based on which donor groups have performed best for us in the past and how we recruited them.

Consider:

Looking at your historical acquisition efforts. Not just the initial injection of new donors, average gift or cost per acquisition – but factor in subsequent giving and costs of donors by various sources. This will allow you to get a true sense of a donors worth over time, specifically their VTD (value to date). This will certainly help you make decisions about which channels might be suitable for your organization. This may not be easy to do but in the current climate will be incredibly powerful information for you to be armed with.

Some donor profile analysis looking at the behavioural analysis of your best donors – whether that’s monthly/regular donors or onetime cash donors – overlaid with some basic geo-demographic profiling (where they live, age etc) that enables you to look at who really is giving to you . Again this will enable you to look at channels that will allow you to target like for like donors based on who you already have on file that has historically performed well in terms of their overall value to date.

The team at bluefrog will continue with the survey each quarter over the next 12 months. You can check for updates via the bluefrog website or by checking out this Marks blog.

For more details click here to see Mark’s blog

Knowledge and the flexibility to do something with it

2008-12-15T14:06:00.000-08:00

Fiona Paterson, Head of Data Services at Pareto Fundraising and the benchmarking team have been keeping an eye on the giving behaviours of donors involved in the Australia/New Zealand and North American benchmarking cooperative.

There have been some interesting and sometimes counterintuitive findings which Fiona explains in her article 'Knowledge and the flexibility to do something with it'.

Key to the article is really having an understanding what your data can tell you and sometimes delving a little deeper to find out what is really going on.

Click here to read the full article.

Enjoy!

Trusts and Foundations - the next to be hit?

2008-12-14T15:23:00.000-08:00

Contribution by James Huitson

I have been chatting a lot recently to my friend and mentor Bill Bruty which is something I enjoy a lot, and occasionally in between comparing the relative tribulations of supporting Portsmouth and Leyton Orient football clubs we do talk about fundraising.

Now Bill is a real expert on trust and foundation fundraising and is unusual in this field in that he is as much of a data nerd as we are at Pareto. He likes nothing more than a pleasant afternoon at the Charity Commission in the UK wading through the information on the various charitable trusts who give in the UK and as seems to be ubiquitous these days, the chat turned to the recession. Once we had finished discussing bankers and whether they are now above or below lawyers in our lists of favourite people I asked the question – so Bill, I assume the trust market is shot at the moment then?

“Funny you should say that" he replied. "I’ve been looking into that. There are a lot of trust fundraisers who want to reduce their targets by a third because of something they have read about the Barings Foundation”.

For those of you who don’t know, the Barings Foundation was one attached to Barings Bank which was infamously brought down by Nick Leeson in the 90’s and they know a thing or two about financial crises. They have said that because they make decisions on their giving based on three year market forecasts, they are anticipating that in two years time they will reduce their giving by a third because they think that two out of the next three years are going to be bad.

That all sounds reasonable, but said Bill, “I’m not sure that that is going to be typical. Lets follow the money around”.

“Take the Garfield Weston Foundation. They give out around GBP39 million a year. Do you know how much of a percentage of their assets that is? Just over 1%, they have GBP3.6 billion in assets and they have a expendable capital fund which is worth almost three years of typical grant giving. They can continue their giving levels and ride out a pretty big storm. It’s similar for lots of the oldest and the biggest of the UK trusts and foundations – they have been around for a long time, they know how to smooth things out”.

It will probably be different for the corporate foundations. Lloyds TSB for example only get money from dividends from profits from the bank and well, there might not be any. But it is not all doom and gloom and setting targets lower is probably just a cop out.

Yes, you will probably have to run faster to stand still, and yes there is ever more pressure to put forward good pieces of work with demonstrable impact and outcomes, but when was that ever a bad idea?

The recession will impact on fundraising, but it might not be the disaster some people seem to think. One thing is certain, the way to guarantee you have problems will be assume you are going to have problems and give up and go home.

From a charity fundraisers point of view part III

2008-12-10T21:39:00.000-08:00

Following Part I and Part II of the letter from Kimberley Mackenzie, which looked at corporates, here we explore direct mail.

Here is what Kimberley, from Lake Simcoe Conservation Foundation has to say.

'Direct Mail.

The mailing is being stuffed as I write this. [early November].

I already mentioned that yes, we are mentioning the economy. Now more than ever their donation is important and I didn’t pull back from letting donors know that we understand how important their decisions about donations will be this year and when they think about what to do they should think of us.

Yes it is bold – we are fighting for market share. I’ll let you know how it does.'

Unfortunately, I don't think Kimberley had the numbers to do a controlled test - but if anyone is doing that out there, please let us know any results.

Interesting Article by Penny Stephens

2008-12-08T22:02:00.000-08:00

A few weeks ago I was one of four speakers who kicked off a jam-packed forum organized by three special interest groups of the Institute of Fundraising in the UK. It was an excellent cross-discipline coming together of fundraisers all keen to discuss what actions they could be taking in light of the financial climate. After some perspectives from the speakers, attendees split into groups to share information on and discuss four key themes. Penny Stephens attended and wrote the article below following the event which I thought other ‘recessionwatchers’ might want to read over.

Jan Chisholm
International Development Director

How will the recession affect fundraising now and into the future?

Fundraising departments could shrink by up to a third by 2010 to see charities through the recession, according to Andrew Thomas of Charity Consultants.

Thomas was speaking at a round table event organised by the Insight, Trusts & Statutory and Major Gifts Special Interest Groups of the Institute of Fundraising this week.

Looking at historical data, Thomas said that charities generally go into recession later than other sectors. He said he was expecting severe cuts in fundraising departments during this recession because there were not sufficient cuts in the last economic downturn. “Trustees will be looking for more cost-effective fundraising,” he told delegates.

Stephen Dodds of DMS felt there is a strong likelihood that donors will change their behaviour and that we should be paying close attention to the demographics of our donors. “There is a sense of unease about the financial situation,” he said. “In research donors have said they will hold back generally to see what happens, or they will not extend their giving for the same reason.”

However, he said that the recession was likely to just emphasise existing trends and that we should expect to see response rates on direct mail continue to fall, and experience more difficulty getting donors to commit to a second or regular gift. “Donors increasingly see through our efforts, are more marketing savvy and cynical,” he said. Fundraisers should stay close to donors to understand how different groups will be affected and they should be able to engage with donors to prove that they understand motivations.

But maybe there isn’t so much of a problem. Jan Chisholm of Pareto Fundraising deals in data, not opinions. “We see opinion surveys saying people will cut back, charity CEOs saying they will see income drop. It’s scary that decisions are being made on the basis of these opinions,” she said. “It will be self-fulfilling prophesy: if you cut back, you won’t recruit as many donors.”

She advocated investing in top data analysis to give fundraisers the best chance of understanding their donors.

Conversely Stuart Sheriff had sought the opinions of trusts who generally feel that they will have less to give but anticipate the number of applications increasing significantly. They advise that charities will have to show they are planning for the recession and not just carrying on as normal and will really have to demonstrate exactly why they need the trusts’ support.

Have targets been increased to an impossible level? Several delegates agreed that their targets had been increased dramatically for the next year and had in some cases become quite unrealistic. Sightsavers is expanding and therefore looking at new markets to maintain trust income. Delegates have experienced trusts reviewing giving strategy with the feeling that most will do the same. They are likely to give to those they know best, first. Advice is to maintain good relationships with trust and to use stewardship to get buy-in across your organisation. Sense advocates getting support from other departments, and particularly relevant information from CEO.

Charities need to be very transparent to get money and may also need to consolidate and start working together more. Trusts are going to want to see economies of scale and cost-effective fundraising being done. This could lead to more mergers in the sector.

Delegates argued that the organisation cannot be led by a donor or trust, but it was agreed that organisations should see this as an opportunity to save resources and work more efficiently.

Do donors consider how the recession impacts on charities, and should you talk to them about it? No consensus because people had very different views on this. Majority felt it was reasonable to point out that costs had risen, exchange rates worsened and that programmes might have to be cut or replanned without additional resources.

Major donors are asking deeper, more insightful questions and charities need to be ready with answers for these. Donors want to be better informed about where their money is going and what it’s being spent on.

Some charities have noticed a big drop in individual giving, but not in trusts – others vice versa. More have seen a downturn in corporate giving. Anecdotal evidence that there are fewer regular donors but they’re giving more.

Groups

Internal comms

Transparency should be mirrored internally and externally.

Need to know what our contingency plan is if our income falls off.

Need a visionary CEO out there talking to people and not letting accountants take over.

Communications initially differs hugely between large and small organisations.

Targets

Expectation that targets will rise each year, but have a need to be flexible and should have a yearly plan to be reviewed at regular intervals.

Targets should be set in a consensual manner, not just picked out by CEOs.

Data

Need to keep a close eye on figures and to use 10-year-on files.

Look at trends of data over time – response rates could be falling for another reason.

If the organisations still has data silos then now is the time to integrate it all so you have all your data in one place.

Focus on major donors and look after them.

Benchmarking – share data to see if trends you’re seeing are being shared in different sectors.

Donor communications

Need honesty and transparency with donors but need to reassure them.

Fundraising efficiency feels to be increasingly relevant.

Donors still think money is wasted on fundraising. OK to have conversation with donors about effects of recession and use facts to talk to them but need to be able to point to evidence.

Safe to assume if you don’t understand your donor base then your fundraising won’t be as effective as it should.

Are you making the most of thanking your donors and making them feel as great as possible about giving to you.

Speakers suggestions:

Stephen Dodds – use the internet more. It has a role in drastically reducing the costs of communicating with donors. As a sector we don’t know how to use the internet and this should force us to find out.

Jan Chisholm – We should use this opportunity to get to know our data. Really get in and find out what’s going on in our programmes so we can see what changes. Gives us the chance to look and interrogate data.

Jeremy Payne – Look at gaming and gambling. People gamble more in a recession.

Andrew Thomas – Imagine a scenario where a third of the fundraising team is cut and how you could reallocate staff into more profitable areas, include your CEO and finance director in the discussion.

Stuart Sheriff – Make sure you have projects that are attractive enough for trusts to want to fund them.

John Sauvé-Rodd – Donor level profitability. Identify the most profitable and most loyal donors, allocate someone to look after them because we really don’t want to lose them.

From a charity fundraisers point of view part II

2008-12-02T13:06:00.000-08:00

Following Part I of the letter from Kimberley Mackenzie, here is the much anticipated Part II.

The last blog finished with a story about a corporate who stopped supporting Lake Simcoe Conservation Foundation - this time we start on a postive note.

'Corporate Fundraising – Getting the Money
A key sponsor of our annual event this year hasn’t fully paid their sponsorship. We had a lunch meeting this week.

My intent was to secure payment before the end of the year. This was a tough job because I knew that their $100 million project is in a bit of a holding pattern and many of their banks are outside of Canada.

Do you mention the recession?

Well, these guys are international businessmen – they know we are in the worst economic crisis since the depression. In fact conversations with their banks everyday remind them. How could we not?

The first twenty minutes of lunch was full of empathy for their situation. If we ask and listen we can learn a LOT about a corporation’s financial structure – particularly right now. The next five minutes included us very candidly sharing with them our reality and our expectation of them for 2008.

By the end of the lunch, through candid, honest and very pleasant conversation (yes okay there was a little wine too!) we secured the 2008 commitment AND a further commitment for 2009.

(As well as serious intent to take on a leadership role in a $500,000 project next year.) The total cash value of the lunch after talking about their current financial challenges, acknowledging the importance of the relationship and being flexible about terms of payment is $50,000 over the next 14 months.

This is significant money for organizations with budgets under $1 million. The CEO of the corporation told me – and gave me permission to share with you – his advice for negotiating with the corporate world:

...spend time with prospects whose interests are aligned with your organizations mission. Staying involved from his perspective is just common sense and good for his business. Pretty simple really isn’t it? '

Posted by Sean Triner, but really written by Kimberley

IoF Conference: Fundraising in an Economic Downturn - Surviving and Thriving

2008-12-01T17:36:00.000-08:00

The IoF have just announced they will be holding a conference 26th February 2009 focusing on fundraising in an economic downturn.

When: Thursday 26th February, 2009
Where: Ibis, Earls Court, London UK

To view details of the conference you can do so at www.institute-of-fundraising.org.uk/economy

The blurb:

Don't say the 'R' word
UK charities are facing up to operating and surviving in the weakest economy for many years. Professional fundraisers are at the forefront of maintaining financial stability and even rising to the challenge of raising more money to cope with increased demand for their organisations’ services. The Institute of Fundraising is currently focussed on supporting fundraisers through these challenging times.

Survival and revival
This conference offers you the opportunity to learn from experts and other organisations in the sector about fundraising strategies that deliver survival and stability. Keep up to date with the latest thinking and trends, be inspired and get fresh ideas to stay positive and sharpen your approach to fundraising in these unchartered waters.

Click here to sign up

But what is happening in Belgium!?

2008-11-28T22:05:00.000-08:00

As the only country other than Somalia to spend much of 2008 without a Government we are all desperate to know what happens to fundraising in Belgium in a financial crisis.

Well, luckily Ilja De Coster from EthiCom has come through for us.

'I did a small survey in Belgium and several journalist asked me about the impact of the financial crisis on fundraising. Your session at the IFC and your blog was really helpful for some international comparison.

...for you interest to main observations:

- 2 big campaigns annually happening in Belgium did made their best result ever right in the middle of the financial crisis.

- From my survey ofBelgian NGO’s: most of them fear the crisis, but most of them do not in any way adapt (neither reduce, increase, adapt, refocus) their fundraising efforts. And to worry even more: most of them do not have real objective figures or data on possible impact of the crisis… '

Thanks for that information, and please send anything else from Belgium and any other countries too. Please email my colleague, Justine, because I am off on holiday.

Sean Triner

Recession and passion

2008-11-27T08:19:00.000-08:00

I spent the last 3 days at the AFP Congress in Toronto which was a great few days, with economic uncertainty on most fundraisers lips.

I covered this in some detail in the session I facilitated and made mention of the following email that Fraser Green from Canadian fundraising agency the FLA Group sent to delegates that morning.

A timely reminder for what's important right now. Thanks to Fraser for sending this and allowing us to put it up on this blog.

Jonathon Grapsas

Recession and passion...

The sentence?

During this recession, it’s more important than ever to fuel the passion of your most loyal donors.

Let’s face it. Times are tough – and they’ll get tougher. Just as with your own life, when the crunch hits – it’s family you can count on. Pretty simple idea, no?

Here are three simple ways you can do that:

1. Be candid. Acknowledge that your donors are feeling the pinch – as is your organization. Fess up to the fact that funding your work is a tough challenge right now (without sounding whiny and needy).

2. It’s all about the cause. Don’t talk about yourself so much as you talk about the cause. Donors give to the hungry, abandoned pussycats – more than they do to the Save the Pussycats Foundation. (Our favourite fundraising maxim is that the institution has no needs!)

3. State your immediate funding needs in a simple, dramatic way. (Between now and Christmas, we need to get 32,000 pussycats into our shelters where they’ll be warm, well-fed and safe.) Don’t get caught up in jargon – and don’t get too far into describing your process for saving pussycats. Your loyal donors trust you to get the job done if you have the money.

Use this strategy everywhere you can – and make sure everyone in your organization is on the same ‘message page’. This approach won’t make the recession go away – but it will maximize your revenue in the short term. We’re convinced of that.

Good luck.

More opinion from UK

2008-11-26T13:17:00.000-08:00

UK agency bluefrog have been out and about scouring for, and doing more, quantitative research.

On his Queer Ideas blog, founder Mark Philips told us that the bluefrog research with the RNLI indicated that 21% of people would be slightly less likely to give and 11% would be much less likely to give.

Mark's latest blog now reports on recent MORI research on behalf of St. Mungo’s which "presents a rather depressed attitude amongst consumers with over half of all those surveyed being very or fairly concerned about their financial situation and 17% seeing their money worries impacting negatively on their relationships with families and friends."

But not too much worry for us- seems we are more important than even household food and heating are more likely to be in the firing line than charities!

They looked at what areas of expenditure have been cut or are likely to be cut next year, and giving to charities fared well. Only 6% said they had cut giving, and another 5% reckoned they may cut giving next year.

An 11% cut in giving is not to be sniffed at though, so work hard to keep those donors giving.

Sean Triner

Australian recession busting forum...the questions raised

2008-11-24T01:28:00.000-08:00

At the recent fundraisers Forum in Sydney, we had quite a few questions for the panel; the panel consisted of Sue-Anne Wallace (FIA), Chris Washington-Sare (Greenpeace) and Sean Triner (Pareto Fundraising).

Q. Is establishing a 'new' charity the right thing to do now?
Clive Hughes of Microloans Foundation

A. Why not? Depends on your target market. If you're targeting institutional or corporate maybe not. Now is as good a time as any, so do it now. (Chris)
This environment is creating greater interestin in organisations that act ethicaly and morally. There is a need to show that you are ethical and transparent in hoe you use donors funds. (Sue-Anne)

Q. Nicola of the Fred Hollows Foundation, agrees with focus on net income, and focus on that, however there also points out that there is an opportunity for charities to lift their game. We need to share more and work together. She is worried that the recession is a good excuse to delay further opportunities for collaboration.

A. (Sue-Anne) Charities aren't in competition, they can work together. FIA provides training and networking opportunities for 6000 people each year. The next FIA conference is in Sydney and 800 people will attend.
(Chris) Build networks: it is importnat to build your own internal networks with your competitors.
(Kelly from Redkite added) We work with other childrens cancer charities. Take the initiative, opportunity and do it.

Q. Libby, Breast Cancer asked - Do you think like-for-like charities will merge similiarily as has happened in the UK?

A. (Sue-Anne) Maybe. Some initiatives may be on hold in uncertain times.
(Martin) Triggers for mergers tended to be financial mergers. Consolidation can be beneficial.

Q. Laura, Cancer Council NSW asked should we be going out with urgent messages. How do we tweak our messages?

A. (Sean) Be honest. Don't give people excuses not to give. What is really important is how you phrase the need. No-one likes to step in to fill a hole left by Government or incompetence. It all comes down to how you write it, the key is integrity and honesty. One charity tested this in the UK and said that mentioning the recession has seen a decline in income.
(Chris) Greenpeace won't be mentioning the recession in donor letters, it is not relevant.

Q. Gabriel from Anglicare asked, Is there a pyschological barrier now for new donors to commit to regular giving?

(Chris) When you are aquiring new donors to regular giving you will find that more people will say no compared to a one-off gift. Manage your expectations.
(Sean) If you haven't got regular givers, you need to get them. And yes, it might be harder to get them but you need them, so do it. Now is the opportunity to cut back on the things that aren't effective i.e. expensive events or ineffective communications.
(Sue-Anne) If expenditure is put on hold, make sure you are still investing in training.

Q. Ian from Special Olympics asked, is there a register of corporates that you could partnership with?

A. (Sue-Anne) No. Research as much as you can.

Australian recession busting charity forum

2008-11-19T15:04:00.000-08:00

Over 60 people from 35 Australian charities met in Sydney this week, to discuss the economic downturn and how we should respond.

I presented information based on my Whitepaper (available here) but Chris from Greenpeace Australia and Sue-Anne Wallace from the Fundraising Insititute Australia also presented.

We were especially chuffed to hear that Greenpeace in Australia used the 'ten tips for fundraising in a recession' as a reference point to check against their strategy. Chris then sent the document to all the Greenpeace offices around the world. Please let me know how - or if - you have used any information on this blog by emailing me.

Here is the presentation, and I will blog the discussion points shortly...

Pareto Fundraising Recession Forum November 2008

View SlideShare presentation or Upload your own. (tags: recession forum)

Sean Triner
(c) Pareto Fundraising 2008 all rights reserved

DMAW Webinar

2008-11-18T01:34:00.000-08:00

The DMAW have a US$99 webinar which will be worth checking out - unless you are this side of the world, where it will be middle of the night. I reckon non Americans may find it useful too.

Please send any useful data!

Wed 3 December, Webinar, 12pm-1pm, I guess Eastern time.

Click to sign up.

This is their blurb:

Economic blues got you down?

Is the pressure of making your FY09 budget keeping you up at night?

Has your organization or client had to make cuts to staff or programs in order to stay afloat?

Do you want real answers on how your organization or client can survive this economic crisis?

If you answered YES, to any or all of these questions…we've got the cure, with a can’t-miss Webinar just for you!

Please join KIM CUBINE, Principal and Senior Vice President of Adams Hussey & Associates, and TIM KERSTEN, owner of Tim Kersten Consulting, for some relief--and answers--about what your organization can do to survive this economic crisis.

Join Kim, Tim and the DMAW on December 3, 2008 at noon, for a thought provoking Webinar that answers the questions we know you have been asking yourself for months:

How have charitable groups and nonprofit organizations weathered the economic cycles of the past 40 years? And how have these groups been impacted in 2008?

How should you address this with the President of your organization and your Board of Directors?

How do we raise money and talk about issues in an economy that's gone from bad to worse...with no end in sight?

What are some ideas for maintaining current members?

How do we manage risk in an unknown economic environment?

Click to sign up.

From a charity fundraisers point of view part I

2008-11-17T13:05:00.000-08:00

Most of the papers and advice around recession giving is from consultants (though I still think the best was from a charity bod, Amanda Seller from WSPA in the video previously blogged).

Agencies and consultants dominating published materials is no surprising, since our job is to help charities raise more money and it is important that we make ourselves feel important, oops, I mean important that we display leadership and bring clarity to the situation, arm fundraisers for board and CEO battles and help give charities what they need to avoid recession suicide.

But last week I got a letter from a fundraiser. A proper letted, on headed paper with a signature and everything - (though it was emailed)... anyway some useful tips and feedback from Kimberley MacKenzie who is Executive Director at Lake Simcoe Conservation Foundation, and also responsible for 90% of the comments on this blog!

She starts by saying she likes the blog, which I guess lots of people do considering the numbers of people that visit it. But she is worried -

"Many fundraisers seem to be at a bit of a loss right now, perhaps because we can’t find the answers in any of the books in our libraries. No one has put this situation in a geometrical shape for us yet. No pyramids, ladders, concentric circles, stools, pillars or infinity loops to guide us. Eeeek! Trusting our intuition and taking some risks at a time like this will be very important and for some a little scary. "

Despite conflicting advice, she has been debating whether she should mention the recession when talking to donors. I have put my two penneth up about whether to mention it but the question has to be more about how you talk about it.

Kimberley decided to mention it. '...and I have everyday this week. Donors are smart, meeting with them and not talking about it is like not acknowledging the giant elephant in the room and trying to talk around it. Better I think, to admit there is an elephant, roll up your sleeves together and figure out what to do about it.'

Since she started doing that, she has gathered some stories. Here is the first:

Corporate Fundraising – Not Getting Money

We have a major corporation we have been cultivating for years. They are HUGE.

They have been helping and supporting us in small ways for two years. They have hosted events for us, had meetings, sponsored our annual dinner even hosted our board in their corporate board room.

A lot of time and effort has been spent engaging them. We planned the last quarter of this year as the right time to firm up their leadership commitment.

In the meeting today we were told that due to the financial crisis that has hit them very hard ($215 million dollars worth of corporate pain!) “All discretionary expenditures have been stopped”.

We have no choice but to continue to keep them engaged and stand by them through the storm – hoping that one day when the “discretionary spending” comes back they think of us and the relationship will realize its full potential. MORE patience.

----

Thinking about her positive approach - keep them engaged. This makes sense in theory, but with our limited resources I worry about the impact of the opportunity cost. ie whilst keeping them engaged, is she missing out on other areas of fundraising to fill the gap?

I will post her other stories on future blogs.

Sean Triner

CEO Breakfast: "Good fundraisers raise more money in a recession. Bad fundraisers use it as an excuse."

2008-11-12T23:57:00.000-08:00

We met with a bunch of CEO's and Finance Director's over eggs and coffee here in Sydney this morning with some fundraisers there, too. We talked about fundraising in a recession and the measures that they and their boards are currently taking with regard to the recession. There were about two dozen of us including people from big charities, small charities, international and local.

It was an interesting session and some good positive feedback came out of it. It looks as though from the charities that attended most are looking at ways to diversify their fundraising portfolios and will be investing in fundraising activities.

Great to hear and regardless of a recession it's these charities that will come out the other side with more money and be able to create bigger impact.

At the end of the presentation we threw it out to the floor and asked 'How will you respond'

Some of the bullet points from the group:

- Breeding Major Donors - ask major donors who are in a holding pattern because they can't afford to donate, to fundraise from friends

- Board strategy session – to map out what the strategy will be

- Spend more money on marketing going forward

- One charity reported acquisition average donation like for like on last year was down $10 (20%) but response the same

- Improve monitoring systems. Make sure information comes through on a monthly/quarterly basis. Greenpeace are generating weekly reports on some metrics.

- Increase expenditure in fundraising to keep the same net

- Need to do similar things (as what they currently do now) but get smarter in terms of data analysis

- Concentrating on the segments that give the most return

- Framing a case for support – people need our help more than ever

We also discussed as to whether for some charities a recession is an opportunity to clear out dead wood. Re-evaluate those marginal campaigns, even marginal services, under-performing staff can be moved on (ouch).

Two other fantastic things that came out of the breakfast and networking with peers, is that;

Dave (from Amnesty International) thought he may be able to share with the group the recession relevant headline results of the intra-benchmarking (comparing results from different countries) that Amnesty International are doing with Pareto Fundraising

Corporates are pulling advertising at the moment so for those organisations out there with adverts ready to go there is possibly more media opportunities than before - things could be cheaper!

But my favourite comment was from Claire Mallinson of Amnesty International (for those who know her yes, that is correct - no typo, she left Greenpeace a couple of months ago).

"Good fundraisers raise more money in a recession. Bad fundraisers use it as an excuse."

Thank you to those that attended and spoke so candidly about their experiences so far.

Sean Triner

Most donors will give the same or more

2008-11-12T12:34:00.000-08:00

In another blog from Mark Philips of bluefrog, he draws our attention to a Mori poll telling us that most UK donors intend giving at similar or better rates.

Donors were asked to choose the statement that best described them. "In the current climate I would be..."

1 in 7 said they were more likely to donate, over half said they were neither more or less likely to donate to charity.

On the downside, 1 in 5 said they were slightly less likely to give, and 11% said they were much less likely to donate money.

The poll was of GB adults though, not donors - I would love to hear of similar polls of actual donors please!

Sean Triner

Research © Ipsos MORI 2008

Mid value donors - anecdotal research in UK

2008-11-11T12:22:00.000-08:00

Mark Philips, owner of London charity agency bluefrog, tells us about mid value donors in his blog.

Last year his company interviewed 100 mid value donors 'those who give cash gifts of between £100 and £1,000' (equivalent to donors giving about US$200 to US$2,000).

You can get the full 2007 report here.

Mark tells us "This was a qualitative study and, as such, is about motives, attitudes and feelings behind their giving behaviour."

Recently though, bluefrog followed the same donors up to see 'how the credit crunch has influenced their attitudes to giving.'

Initially they found that:

'1. Unless someone has been directly hit by the crunch, they are in denial and have no plans to make a significant cut back in their general expenditure. If they are questioning spending, giving less to the charities they currently support is not on their agenda.

Some people are looking at having less expensive holidays and one person is taking left-overs into the office for lunch. But are they going to really cut back? No, not at the moment.

2. If things did get bad, they claim they would still want to support their favourite charities at their current level but would give slightly less to the remaining ones. Cutting back on giving to a favourite charity would make them feel very guilty and, for the same reason, they would favour smaller organisations over the larger, well-known charities.

3. Giving to new charities was far less attractive to them. They would continue to give if someone asked them to sponsor them or if they passed a street collector, but setting up a new regular gift, much like any new expenditure decision in this economic climate, would provoke thoughts of should I really be doing this?

The new report is still in progress, but hopefully Mark or someone from bluefrog will comment or email me when it is available.

Sean Triner

Improve your Christmas Appeal

2008-11-06T10:00:00.000-08:00

If you are just putting the final touches to a Christmas appeal, or equivalent - some useful tips for increasing the chance of a good one.

1. Send (test) a pre cursor to donors to let them know about your upcoming Christmas appeal

Tell them what you are going to tell them. Tell them. And then tell them what you told them.

A great piece of advice I was once given during a training course. Think about how you could apply that to your program. A week or so before your Christmas appeal, tell your donors about the appeal they are about to receive.

This can be done by email, a postcard or even a phone call. But test this to see whether it has a positive impact on your overall campaign.

Oh, and don’t forget to tell them what you want to tell them in the main appeal and then tell them what you told them if you do a reminder mailing.

2. Keep it clear and give donors a compelling reason to give
Not that you need the holiday season to remind you of this point, but keep you message clear and ensure you ask donors to do one thing only.

Conflicting messages suppress response to any campaign.

3. Make it hard for donors to stop reading your appeal

I once read some great copy feedback from Ken Burnett which pointed out that what you want to do is get the reader mentally nodding in agreement as they read the letter. We might think we have developed brilliant and compelling copy but is it going to keep the donors attention for two, three or four pages?

Make it hard for them to put it down. Not by focusing on Christmas, but by establishing a need and helping the donor help you find a solution.

4. Donor recognition – make it more prominent than ever

Thank, thank and thank again.

A simple mantra to live and breathe. But go a step further. Recognize the donor’s type of support (monthly donor, confirmed bequestor etc) and refer to past support at this time of year.

Make sure it is apparent that you know who your donors are and how they have supported you in the past. Everyone likes to know they are remembered and valued.

5. Christmas ends in January

The perfect donor communications cycle asks people to support, thanks them for their generosity and cares for them along the way.

This last ingredient is often forgotten or not done well. Your Christmas appeal doesn’t end in December, it ends when you tell your donors (including those that didn’t donate at Christmas) where their money has gone and the impact it will have, or has had, on your beneficiaries.

OK, all those points above are good practice anyway, and not unique in this recession era, you probably know you should do them anyway. But now it is more important than ever.

Jonathon Grapsas
Pareto Fundraising North America
Based in Toronto

Ask strategy in a recession

2008-11-05T11:13:00.000-08:00

Another question: Should we adjust our ask strategy in a recession?

Good one. And again, hard to know the answer without testing. By ask strategy, I mean the amount that ask donors for. It is a bit more complex than this, but basically we tend to ask people for about 1.25 - 1.5 x their lst gift in appeals. In other words a donor who gave $100 last appeal may be asked for $125 in our next mailing.

The amount would be personalised in the copy eg 'Please will you make a special donation of $125 this Christmas...' with the response coupon matching the amount. So should we ask the donor for $100 instead?

Well I think that if a recession hurts averages or response rates then tinkering with ask strategy is more likely to exasperate the harm than mitigate.

However, Pareto hasn’t been working since the last big recession, so my evidence is based on my experience (when I worked at Mind in the UK we took more bullish approaches during financial problems which certainly did no harm).

So, my advice is NOT change to ask strategy, but if you have the volumes - please test it! And if you do, please let me know the result.

Sean Triner

Asking for money - should I mention the recession?

2008-11-03T10:13:00.000-08:00

A few people have asked:
Should I mention the recession in my appeal copy?

eg 'times are difficult, but we’re reliant on your funds and don’t want to put our programmes in jeopardy' or 'we need your gift more than ever'.

Tough one, because I believe in honesty and integrity in all donor communications and it is silly to pretend a recession isn't happening. My instinct is to mention it. But their is the worry of whether we are introducing a barrier - ie a reason not to give.

So instinct aside, Kimberly Mackenzie of Lake Simcoe Conservation Foundation in Canada said she heard 'Lots of people are saying it is dangerous'. I am not worried about contradicing 'lots of people' but am worried about giving the wrong advice.

So let's look into this further...

The most successful early mail appeal Pareto Fundraising sent out back in 2003, mentioned 'economic uncertainty following the war, SARS, bush fires and ...' it raised very close to the entire annual appeal income for the charity in one mailing so mentioning economic woes there didn't seem to harm things.

However, I got feedback about another test from another charity (which I blogged) reckoning not to mention it.

The bottom line is you should be honest. If it is relevant to you, you should tell the truth!

So, I think you should consider mentioning it if:

It has an impact on your services (ie we need more money because more people need our help)
You have lost funding, ie corporates dropped out, event cancelled and you would have to stop a service because of it - but don't be specific, people would not feel motivated by replacing money that some nasty bank promised, then withdrew

But I am not convinced of it’s usefulness in telling people you are ‘worried’.

I reckon it is all to do with how it is written, and needs very skilled copywriter but on balance, the safe tip is probably not to mention it.

Finally, I think there would be no harm in mentioning it in thank you letters: 'we know times are difficult, so we’re extra appreciative of your gift ...'

We will hopefully test and I will look for more test feedback...Please people - anyone who tests, please share feedback and preferably details of the test.

Sean Triner

IFC / Blackbaud NFP Synergy Presentation

2008-11-02T20:42:00.000-08:00

I had trouble getting this up two weeks ago, but here is the presentation from Blackbaud. Phew.

Conference Information 2008 Final

View SlideShare presentation or Upload your own.

Sent in from Martin Jervis, Blackbaud.

CRUK clarify reports of budget slashes

2008-10-30T13:08:00.000-07:00

Tania Mason of Professional Fundraising reports that CRUK, one of the top UK fundraising charities, is expecting a decline due to the economic climate.

Harpal Kumar says "The fall in the property market is having a direct impact on our legacy income stream and people may also need to consider their level of personal giving. " He says they are planning on a decline of perhaps 4 or 5 per cent this year. With such huge amounts of money that comes into CRUK from legacies this seems perfectly reasonable.

There is no comment there as to what they will be doing to fundraising expenditure.

See Tania's article here.

The Word on the Street

2008-10-30T03:39:00.000-07:00

I am back in Australia now, but when still in UK I took a train to meet an old pal. The train was delayed so I went up to strangers and asked them if they gave to charity, and if they did if it would change now that the recession was here.

Totally non-scientific and completely weird I know, but once convinced that I wasn't a nutter (the fools!) they all told me they wouldn't give any less.

How useful is this? Not really. What people do and what they say they will do are very different - lots of focus groups telling you that donors prefer short appeal letters when donors are likely to respond to longer ones - is testament to that. But heh, it was fun and I am always learning. I want to know what they say they will do. Any proper polling, please bring to my attention and I will blog it.

So much for my hearsay - I am just telling you what they said. Pure vox-popping without the video.

But what if someone was organised enough to have a video and some editing gear? A quick chat with my pals at London based agency Open and we get a cool video on their blog.

Not that scientific, but a nice opener for any presentation to the board posing the question: 'But what will really happen?' (before concluding 'I don't actually know, and nor does any expert but here are some scenarios, Ms Chair, and here is my strategy...')

Just make sure that you credit the chaps at Open for their effort!

Sean

A few 'data' anecdotes

2008-10-29T01:51:00.000-07:00

Fundraising in Ireland
Damian O'Broin from Ask Direct tells me like for like acquisition for one of his clients has been in decline:

2006: 1.11%
2007: 1.22%
2008: 0.65% - 0.80%

But he also adds that "Admittedly the reasons for the drop may not simply be the economic downturn. Ireland has a relatively small amount of commercially available cold lists, so list fatigue is a possible contributory factor. And as we're dealing with just one charity here, the strength of the pack used for each mailing could also have had an impact." Hmmn, not sure if it actually tells us much about the Irish market, and no clues about cause and effect yet.

Fundraising in New Zealand
Our colleagues in New Zealand are not debating about official definitions of recession, they are all agreed they are in one. But one of our charity friends there are still doing well, "...we have made target in a country officially in recession with an RG conversion." (they actually got 50% more than they expected).

Fundraising in Australia
A major charity direct marketing event in Australia has just let me know that their mass partipatory event raised $250,714 - it had been in decline, grew in 2007 (it raised $249,008) and seems to have stabilised.

Australian 'tax appeal' results I am looking at still show no big effect. The variances are all 'normal'. However, impact of recession has not hit Australia as much as North America and Europe. Please email European and North American data.

Fundraising in Hong Kong
Brilliant results too date, new strategies are hammering last years, so it is hard to tell what effect if any, the recession is having. The new strategies started one year ago 2007 lifted net charity income by 250% on previous year - so the new approach is doing well, but this years are hard to compare because there is not enough history.

Sean Triner

It's all about data. But what data? Part II - analytical data

2008-10-28T00:14:00.000-07:00

In Part II, I am exploring data closer to home.

Internal data, also referred to as your analytical data, needs to be monitored carefully too.

How are your donors behaving? What is actually happening to your campaigns?

Of course – this data can tell you if donations are up or down compared to last year, but it is impossible to do a controlled test. (Unless you can find a way of mailing donors that don't know anything is happening to the economy!)

So, if income is down, it could be because your campaign is not as good just as much as it could be the recession.

Historical data provides useful guides, and whilst what happened last time is a useful reference point it is no guarantee about what will happen this time. There could be multiple variables at play, things could be very different to last time, so plan accordingly.

Your early decisions should all be about ensuring that you are doing everything you should be doing. E.g. You know you should be calling your top donors to thank them, but haven’t been because you were too busy, or you know you should be hyper-personalising your copy in your appeals but the return on investment (ROI) was lower. In times of crisis aversion it is even more important to concentrate on net – not ROI).

But keep on top of the data. You should measure these key indicators:

Cash appeal response rates: year on year comparisons for equivalent appeals (the same one last year) and equivalent segments not just overall response rate.

Cash appeal average gift: year on year comparison for equivalent appeals (the same one last year) and equivalent segments as above.

Look at those donors who respond to this year and last year equivalent appeals and see if there is any difference/movement in their average gift.

Also have a look at response compared to what you asked (are you asking for a fixed amount, the same each year? did you make an upgrade ask each time etc?).

It would be easy to declare 'My average donation is down!' but look at what most people were asked for. For example, last year, you may have asked for 1.5x previous gift, but this year - in fear of recession - you asked for just 1.0x previous gift.

Number/value of large gifts to appeals: although this is hard to compare if you are only getting a handful, say up to 20 $1000+ gifts per appeal.

Keep in mind high value givers tend to give less frequently than lower value givers so ensure that you are not directly comparing the performance of your top givers with your mid – low value multi givers as their behaviour is different anyway.

Regular/Monthly giver attrition: Ensure you are looking at Face-to-Face (Direct Dialogue) recruits separate to those recruited via other methods Mail, Phone, Online etc (which you can group together).

Look at the attrition by month since recruitment.

Cash donor lapsing rate (% change in comparison to last year): This is a useful top line measure but keep in mind its not going to be until well into next year when we are going to be able to see if there is an impact.

The majority of cash charity donors give either once or twice per year – higher for those organisations that make more than 6 appeal asks per year.

The response rates of Regular/Monthly givers who have never made a cash gift and Regular/Monthly givers who have made previous cash gifts to cash appeals (yes you should be asking all recruited via methods other than Face-to-Face for donations in some of your appeals). Compare to previous years.

We know they are still supporting but they may stop the “extra support”.

Recruitment response rate: should be monitored though variables such as audience (compare proven or unproven lists), creative (new or proven pack) and timings are all determining factors – you need to compare like with like.

If you are running ongoing and/or large scale acquisition via mail, phone or online try for evidence across several campaigns as opposed to looking at a campaign only level.

For Face-to-Face, attrition and recruitment volumes are your best measures.

Benchmarking
If you can’t get in a benchmarking type program, chat to those who are in them and find out what is going on with them, and also chat with agencies, experts and most importantly other charities – but always ask ‘What is the data saying?’

Make sure you understand the difference between opinion - eg “Charity Commission says 1 in 4 fundraising directors say that their income has been harmed by the economy slowdown” and fact “23 Australian charities compiled their data which shows no decline in individual (cash and regular) giving for 2008 compared to 2007”. Both convey valid information, you just need to know the evidence behind what you are reading before making a decision.

Fiona Paterson

Head of Global Data Services

Pareto Fundraising

News round up: CRUK, Obama

2008-10-27T02:24:00.000-07:00

Articles and news from over the last few days
_____________
Leaked report
According to this article, originally from the Daily Mail, leading UK charity Cancer Research UK says that fundraising has been hit.

"A leading cancer charity is preparing to slash its budget by up to £643m over the next five years as the credit crunch hits fundraising. Cancer Research UK needs to make the drastic cuts following 'the dramatic decline in the economy' over the past year, according to an internal report.

"The economic slowdown has hit fundraising in two ways - a reduction in regular donations as householders tighten their belts, and a fall in legacy donations as falling property prices slash the value of bequeathed estates. Cancer Research UK said the final budget figures were still being considered, but it acknowledged that the economic gloom presents real challenges for the future."

Oh dear. Not good. Except it is not true either.

"Reports in today's newspapers claiming the charity will make budget cuts totalling £643m are both incorrect and grossly misleading." says Harpal Kumar, CRUK's Chief Executive on their website.

"Almost all Cancer Research UK's funding comes from the efforts and generosity of the public and we are extremely grateful to them for their continuing support of our work to beat cancer. At this time, more than ever, we need people to support our work."

It is easy to believe the papers, but just a little bit of extra research got me closer to the truth. I am trying to find out more from CRUK.
_____________
Opinion

Lots of pieces about US election fundraising over the weekend. This Independent article is a good summary.

Presidential election fundraising hit by recession! Nah. Not at all. Funny how Obama raises more than Bush and Kerry did added together in these 'difficult fundraising times'. Obama's team proves for me that strategy and marketing tactics outweigh the effects of a recession.

Sure, maybe he would have raised $200m in September instead of $150m if there was no recession, but the very fact that he just got got on and fundraised resulted in $150m more than if he hadn't. In these tough times, cutting back on fundraising is the best way to reduce your income...

Sean Triner

Amanda Seller of WSPA says "Pull Your Finger Out"

2008-10-27T01:00:00.000-07:00

Watch and listen to Amanda Seller from WSPA reporting back from her meeting with lots of other International INGOs at the IFC Conference in Holland.

No messing, practical stuff with a great big kick in the arse for us all. My highlight is her pleasant telling off of us all:

“...Just need to do the stuff you’ve known you should be doing" she urges. "We all know we should be doing good stewardship, good donor care, providing a sense of belonging and building relationships with people.

"We all know we should be tracking our data, staying on top of our data and analysing what is going on – we didn’t need a recession to remind us of that.

"But I do think the one impact this recession is going to have ... is that it is going to make us pull our finger out. You don’t have any choice, you have got to sort out your supporter care, got to stay on top of your data.”

Good on ya Amanda!

(Thanks Howard Lake of http://www.fundraising.co.uk/ for the video).

Sean Triner

Public market research from YouGov!

2008-10-25T03:32:00.000-07:00

MARKET RESEARCH
Here is YouGov's July research into UK public attitudes to giving. Bottom line, 21% of UK adults reckon charities are on their list for cutting expenditure. Weird bit is that the methods for giving to charity are all stuff like using charity credit card, sponsoring an event - nothing about regular giving and donations.

Sean Triner

It is all about data. But what data? Part I - environmental

2008-10-25T01:43:00.000-07:00

Really, when it comes to fundraising there are only two types of data of great interest for the empirical approach to information. Environmental and internal (analytical) data. There are other data sets out there. For example market research, which is usually about opinion or intentions and personal data which is not really relevant for this discussion.

So what empirical data is crucial to your planning? Let’s concentrate on the financial data available within the environmental and internal data available.

Environmental data is the big picture stuff. What is happening beyond your charity. This can be broken into two, historical and contemporary. Both of those can be broken into three bits:

1) The economy. Beyond charities – how much do people have?

2) The fundraising business. How much are people giving? (And how much did they give last time something like this happened).

3) Product or activity data. Breaking down types of fundraising; eg how is corporate fundraising doing? What about regular (monthly) giving? (And again, what about last time?)

The key measures you should keep an eye on are below. How much attention you need to spend on them will depend on your fundraising mix.

Unemployment - influences corporate giving and individual giving
Surely increased unemployment will effect giving? People without jobs will have to re-prioritise.

Property prices - influences legacies
Look at your legacies (bequests) in detail and you will see that much of the value is realised from sale of property. So, if property values decrease so will your legacy values.

Share indexes - influences high net worth individuals (major donors), trusts, foundations, and legacies
Understanding where your big donors' wealth comes from will be handy when talking to them, but for many their money will be invested in stocks and shares. Most trusts and foundations' portfolios will also be hit. And of course, the second biggest contributor to deceased estates is usually stocks and shares.

Actual giving trends (not giving intentions but actual giving) – the best source is from compiling your data in a charity benchmarking program like Pareto Fundraising Benchmarking* or Blackbaud’s Donor Analytics. These programs provide direct comparisions, standardising data sets giving us like for like comparisions.

Looking at historical data here is useful, but not definitive. For example, a paper claims that during the 90s recession, giving declined - but how much of that decline was caused by 'recession suicide'? Looking at individual charities (such as real world case study, NSPCC) we see that

In Part II, to be published on this blog on the 28th November, I will be looking at internal - or analytical data.

Fiona Paterson

Head of Global Data Services, Pareto Fundraising

* For more information on Pareto Benchmarking in any country/region please email our insights team.

Tony Elischer reckons a good time to revisit strategy

2008-10-24T05:48:00.000-07:00

In his excellent article "RECESSION: Watching Is Not An Option" Tony Elischer of ThinkCS seems to agree with most of what the other experts are saying, and his ideas about how different areas of fundraising will be effected coincides quite nicely with my white paper and what Mal Warwick has to say, in particular Mal's belief that "...as a recession drags on, donor acquisition efforts may become even more challenging than they already are."

A couple of differences or greater elaboration and emphasis on different areas makes his paper an essential read. Just some of those are highlighted below...

Tony reckons "Any switched on marketer or fundraiser knows that the current climate WILL impact on their fundraising and their portfolio of techniques." I believe he is right, and it already is (for example, with corporates), but as you read his paper (and most of the other opinion pieces out there) the measures he and others recommend will be good for your charity even if it turns out things aren't effected as bad as we expect.

Within his paper, Tony also brings attention to the fact that fundraisers "...must take account of the pressures on [our] own unique portfolio of funders..." very relevant, for example in the difference responses needed from those with diverse portfolios against those relying on one or two corporates and events.

Although there are tons of papers out there about what happened last time - most saying 'not a lot happened, but things were a bit worse', and one actually saying we will be fine, one thing I can assure you is that no one actually knows what will happen.

It is different; life is full of new things and unique circumstances. Tony says "...No charity can simply look at its numbers today or trust the previous macro trends and say that it is holding up against the recession." Great point - there are far too many unknown unknowns out there.

Don't be afraid to tell your boss or board you don't know what will happen (you wouldn't want to tell a lie) but make sure you tell them what you are doing in preparation for the known unknowns. Most of these preparations will, of course, be good practice.

Tony reckons "Customers learn to spend differently and, as a result, their values change with higher expectations of experience, service and value." So good customer care will help! Yaay! you know you should be doing that anyway.

Some other knowns include "Corporate fundraising: possibly the first area to show signs of moving to a static position and then decline. Already we have seen deals falling through
that have taken many months of planning and negotiations." (Dear reader, please send me any examples like this, I believe Tony, but some anecdotes would be good).

Our research of actual income data on 23 Australia charities shows that the Australian market is indeed experiencing this already, and although you can't prove it is because of the recession...it feels as though it must be a factor. (OK, I work in a data obsessed agency, but I still have feelings).

On individual donors, Tony claims "Already visible in markets such as the USA, UK, Netherlands, Ireland is the effect on the key area of recruitment of new donors." (Tony - or anyone else - please send me some references / evidence, anonymised if need be). he continues "This has been getting harder year on year over the last three years or more and the recession will really put further pressure on this area."

This contradicts Steve Thomas' view from Canada - he agrees acquisition and appeals income has been in decline for years, but tells me his data shows the decline has not got any worse this year.

But regardless of whether it is getting worse, Steve wouldn't disagree with tony that "Charities cannot give up on recruitment but we are going to have to work much harder and be much smarter in this area..."

Although Tony thinks "...my money would be on the next significant surge in digital recruitment for the charities that continue to invest in this area and effectively to integrate it with the rest of their marketing" I reckon people should be careful about switching budgets from tried and tested fundraising methods like face-to-face, which - according to the F2F agencies I spoke with - is not in decline. Yet.

Of course, another advantage with products like F2F (and to some extent phoning) is that you would quickly notice a decline and can afford to watch and see there. As Amanda Seller from WSPA says "We all know we should be tracking our data, staying on top of our data and analysing what is going on..."

Still on individuals, Tony points out that "UK charities are already seeing reductions of up to thirty percent in the value of estates, so reforecasting may be necessary." Along with other legacy experts telling us estates will take longer to be realised I think this essential advice - don't bank on your legacy income holding up. Better to plan for decline, and be pleasantly surprised if it does hold up than the other way around.

Tony finishes with some sound management advice "And finally here’s the practical advice some organisations will really struggle to face up to – recession is the perfect time to ensure that your staff, your board, and your organisational structure is right to meet your future needs and bring success.

"Whilst you may have to fight cuts in the donor recruitment budget and other vital fundraising areas, you can use the recession to tackle any unproductive staff and structures, ideas and programmes that didn’t work. Your donors won’t tolerate anything else, so think of it as starting a healthy diet to give your organisation the energy and resources to face the future."

Let's face it, whatever happens you should be doing that anyway.

Sean Triner

As well as this article, ThinkCS publish tons of useful stuff on their website.

Calling all agencies / suppliers and charities

2008-10-23T12:02:00.000-07:00

The hundreds of people who visit this blog every day need your help.

Please send me any data you have, or if an agency, from across your clients - anonymised or if you can get permission, better still. Good anecdotes too, and any other research / papers you see or produce please tell me about them and I will blog them.

Agencies, I will put links up to your site, because you exist to help charities make more money and some may be interested in finding out about you. Not quite free advertising, because I want something useful to share - but pretty good value.

Please note, I will queue stuff on the blog, first come basis, so that everything doesn't get published at the same time and therefore unread.

Don't worry, it is good for us

2008-10-23T02:06:00.001-07:00

John Sauvé-Rodd of Datapreneurs sent me a summary of a useful article from AFP, (mentioned in a previous blog) reckoning bad times are good for philanthropy...
-----------------------------

"...In particular, there are some surprising findings:

Changes in total philanthropy are not directly correlated to changes in the stock market. Total philanthropy appears to weather storms in the stock market with great resiliency and less dramatic fluctuation.

There has been only one year in the past 27 in which philanthropy has dropped from one year to the next (1987), and it was only a modest drop. Otherwise, philanthropy has increased from one year to the next, even during years in which the market has dropped (see Table 2).

Even during the worst decline in the stock market (in 2002, when the Dow Jones Average decreased 17 percent and the S&P 500 Index dropped 23 percent), philanthropy increased by 1 percent

What does this all mean? Philanthropy remains strong and resilient during declining economic periods. While it is clear that a strong stock market provides donors with a greater ease and sense of confidence in making gifts to nonprofit organizations, the opposite is not true. Down markets do not always foretell decreased philanthropy.

We owe a big thank you to those wise heads who asked for this work to begin after the 9-11 catastrophe."

John Sauvé-Rodd

-----------------------------

Also, I got an email from a fundraising director who wants to remain anonymous about what he is experiencing in Australia:

Monthly regular giving income has increased by over 10% in five months

Upgrade by telephone uptake currently over 50% (up from 40-43%)

3rd Quarter 2008 one of our best ever for face to face.

I want to add a disclaimer: Australia is not hit as bad as North America and Europe (yet?) but it is all on the news there as well, and our Government is doing a $10bn bailout too; people are worried!

Charities - please send stuff like this to me, and agencies - send me your data too, hundreds of people are visiting this blog every day and I will make sure you get a link and credit! Anonymous data is welcome, just get it to me. (Please note I queue up blogs so they don't all come out at the same time!)

Sean Triner

IFC Fundraisers Poll

2008-10-23T01:49:00.000-07:00

Bernard Ross of the Management Centre pulled together this quick survey of fundraisers whilst he was at the IFC.

Bottom line:

Almost 40% of respondents believe that the best response is to fight for
market share now- expansion to secure market share is the only option.
Almost as many favoured another strong proactive action though the specific
responses varied- from downsizing to using reserves to weather the storm
European and North American fundraisers are more optimistic than their
African or Asian counterparts
Globally respondents believe that the three areas most likely to lose out are
arts and culture, international development and animal welfare.
Respondents also agreed that children’s’ causes, emergency relief, medical
and faith-based causes would be least affected.
North America disagrees most strongly on the effect of the funding crisis on
Disability, Education, the Environment, and Faith based causes.
Europeans are more concerned than others about the impact on Disability,
Human Rights, and Elders.

For the full report, download from here, link will work until November 15.

Sean Triner

IFC - Blackbaud / NFP Synergy presentation

2008-10-23T01:41:00.000-07:00

Sorry, I am having problems embedding this presentation from Blackbaud UK director, Martin Jervis so please click here to download it instead. The file will be available until 14 November.

Sean Triner

Fun poll closes

2008-10-22T22:54:00.000-07:00

39 people voted on the little poll on this blog.
Of them, 28 people reckon now is the time to spend more money on fundraising, 7 say business as usual, none said to cut back. Oh, and six said they wished they had invested in regular (monthly) giving before now...

Innovate? How about stealing ideas?

2008-10-22T06:05:00.000-07:00

SOFII is a charity that exists just to help fundraisers world-wide, for free. Ken Burnett sent me this email...

Sean Triner

"Hi Sean

Congratulations on your recession-watch blog. Very timely, useful and much needed.

Tough times, of course, can also produce the best ideas. Many currently established methods of donor acquisition can be seen to have arisen as innovations when the need was greatest. See ActionAid’s insert story on SOFII, and Greenpeace’s development of face-to-face.

Plus an array of legacy marketing and other initiatives that arose directly out of fundraising uncertainty.

The whole idea of SOFII itself becomes even more appropriate in tough times. Why trouble to think of your own great idea if you can borrow someone else’s? Why take a risk testing the unknown when you can see how well or otherwise similar initiatives fared, when used by others?

To quote (very reluctantly) Donald Rumsfeld, fundraisers suffer from too many ‘unknown unknowns’, particularly in hard times.

So I hope you’ll direct your followers to SOFII, where as many of the ‘known knowns’ as we can uncover are being gathered and displayed to help fundraisers to shed light on the best ways of doing things, however hard times get. And all for free, too.

Keep thinking

Ken Burnett, SOFII– The Showcase of Fundraising Innovation and Inspiration
ken@sofii.org, http://www.sofii.org"

.

Someone doing the work for you part I

2008-10-22T03:09:00.000-07:00

After reading tons of articles, news-stories and more, I reckon I am in a good position to summarise what I am reading, and what is missing:

What they are saying

So much opinion, but generally feeling is that donations will be hit, especially corporates, trusts & foundations later on and probably legacies
Charities who invested in regular giving (monthly donations) and legacies are the safest
Don't cut fundraising expenditure
General feeling donor acquisition will be more expensive
Be calm, don't panic

What they are doing

I have two examples of charities who are cutting their fundraising expenditure budgets Please send me more examples. If you want to remain anonymous, just tell me.
All the agencies and consultancies are rushing to do surveys about what people think. Please send me the summaries / links.
Key thought leaders are pulling together 'emergency' sessions, like the one organised by Pareto Fundraising in Australia (details to come) and John Sauvee-Rodd on 4 November in London (sorry, it is full). Please send me details of any other such sessions.

And what is lacking

Charity thought leadership - apart from Amanda Sellar and the INGOs at IFC I struggle to find stuff from non-agencies. Fair enough, it is our job as agencies, it is in the interests of our businesses, and we usually have access to the thoughts of multiple charities - but Please, charity people send me details / results / data. Again, I am happy to anonymise.
Data, data, data. Tons of anecdotes. Steve says Canadian donations not down, Paula says USA donations down, UK Charity Commission says fundraising directors say income down - but no data. Please send data!

Sean Triner

Thank you

2008-10-21T09:08:00.000-07:00

Wow, within 2 working days of launch, this blog had over 700 fundraisers (presumably) visit. Thank you for those who are putting the word out, especially the top 5 website links:

Third Sector Magazine, Valerio (Italian blog, who has driven tons of Italians - I am guessing Valerio's blog must be good to get so much traffic, so if you read Italian, add it to your feeds), Conor's Fundraising blog, Fundraising Research, and Ask Direct. Thanks guys.

Please, everyone else - tell people to visit, and please send me data.

Sean Triner

Fundraising Associations put in their two penneth

2008-10-21T07:44:00.000-07:00

The Resource Alliance have the one article from Kevin Kibble of Our Lasting Tribute, which is another opinion piece, and agreeing with all the others. In addition, Resource Alliance hosted the IFC meeting that led to the re-alignment of this blog and they sent out an email to attendees to get information from this blog.

AFP (Association of Fundraising Professionals) have pulled together a good 'toolkit', basically links to opinion and advice from consultants.

My favorite is when Paul Lagasse reminds Americans that 83.4% of fundraised income is given by individuals and he shares more environmental data, in his 'How the Economy Effects Giving' article.

The UK's Institute of Fundraising has a few pieces up, not least a promise of some great research planned with PwC, but you will need to be a member :(

"Although the survey will be available online for a wide variety of contributors, the results of the analysis - carried out by PwC – and a copy of the final report, will only be available to Institute members and members of the CFDG." Meanies. Any members, please ask IOF to send a summary for our international viewers and we will encourage people to join.

Australia and New Zealand's Fundraising Institutes (FIA and FINZ) have got nothing up on their websites, though they may well be sending out newsletters or something. Amy (FINZ) and Sue-Anne (FIA) please send me updates.

They are the organisations I am familiar with, and can read. Members of organisations in other countries please send me links and - if not in English - a 2-3 line summary which I can post. It would be great to get stuff from non-Anglophone countries please.

Sean Triner

Question from Russia

2008-10-21T07:02:00.000-07:00

Katya Pal from WWF in Russia wants to know if we should change our message in light of the economy.

"My question is whether there are concrete examples of how we can reformulate our message and take provocative and effective actions in order to achieve better results in acquisition during the crisis times on such inmature market like Russian. I will be especially interested in ideas in the area of environment - as it is not in the top priorities of existing donors in Russia at all (children and health issues are).

"My thinking at the moment is that we have to change our statement underlining that there are values that will never undergo inflation - which is GIVING - CHARITY - SOCIAL PURPOSE..."

Anyone with any examples of using changed message, please leave a comment.

Sean Triner

Links to information

2008-10-21T05:35:00.000-07:00

There is so much information and so many links, I am taking them off the right hand side and blogging them instead.

Use the search function to find links and summaries.

-------------------------

OPINION

In his 'Recession-proof your fundraising' article Marc A. Pitman says don't make the three fatal mistakes:

spend less on fundraising

become pessimistic

apologize when you’re asking

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ENVIRONMENTAL DATA

NFP Synergy compare sector growth with GDP and show they are related.

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OPINION WITH ENVIRONMENTAL DATA

Mal Warwick and Dan Doyle

'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.'

This article includes a bit of data, some great advice and is a pretty good source to nick stuff from to present to your board.

-------------------------

OPINION WITH ENVIRONMENTAL DATA

This report from 2into3 is well referenced and looks at the history of how the sector has changed alongside big external events including Second World War and 1929 Crash. Bottom line - don't panic, look after your donors... sound familiar?

-------------------------

OPINION

Great pocast, starting off with FDR speech: "This great Nation will endure as it has endured, will revive and will prosper. So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance...." Worth 15 minutes of your time listening to this on your iPod. Download Program 13, 'Fundraising in a bad economy'.

-------------------------

Sean Triner

Ken Burnett has this to say...

2008-10-20T11:11:00.000-07:00

Ken wrote a book, Relationship Fundraising, many years ago. If you have implemented many of the ideas in the book, you are probably not worried at all about a recession. It is packed full of brilliant advice(except for the bit about asking donors how many communications they want).

Advice that would make sure yours is the last charity that donors leave.

Below is what he reckons...

Sean
--------------------------------------------------

... I feel most past financial downturns have not proved to be negative for fundraisers in Europe, in fact often they’ve been relatively positive.

Some areas though – major donors and corporate donors for example, will usually be hit. But individual giving has mainly stood up well – except for those organisations who cut back activity.

They fail. This crisis though is of a different order of magnitude. It hasn’t hit most organisations yet. But it will, soon.

The lessons learned from past crises are that it is time to be bold and to reaffirm the fundamentals. But this is a new situation now. Here’s what I would recommend.

Do not cut back investment in fundraising. This would be very foolish.
Focus on presenting your cause positively and optimistically.
There’s safety in focusing on individual giving. Concentrate on ‘the big three’ - regular donors, legacies and major donors. Cut all unprofitable/low return activities.
Define your products very well. Make sure your donors see your cause as the last thing they will cut.
Get to be very good at communication – particularly low-cost, electronic media.
Now is the time that your efficient friendly donor service will pay off. You’ll be glad that some years back you invested in donor care/relationship building.
Demonstrate value for money for your donors at every opportunity.
Be genuinely transparent, open and accountable.
Share your problems with donors. Ask them to stand by your cause through this crisis. (Don’t be negative).
Show and demonstrate your dedication and commitment to your cause. Don’t be afraid to ask your donors to be similarly committed.

Now is the time to get back to basics.

Ken Burnett

Fundraising in a recession - roundup

2008-10-19T07:10:00.000-07:00

Rather than add hundreds of links on the right, I will blog useful new stuff. Make sure you subscribe to feeds to get updates when a new blog is posted.

--------------

OPINION/ADVICE

Adrian Beney reckons we need to understand where wealth really comes from before we talk to donors in his Professional Fundraising blog.

---------------

OPINION/DATA REFERENCES

Mainstream Kentucky press article 'Hard times require more give and take' shares some Giving USA data, and also concludes with a quote from Sarah Warner, executive director of the Ronald McDonald House Charities of the Bluegrass.

'"The most important thing is to keep asking for money, even though the economy seems rough", Warner says. "People are afraid to ask because they assume donors have lost money. "You can't be afraid to ask

"The top reason people don't give is simple: ...because charities don't ask."'

--------------

OPINION

Stephen Bubb, CEO of ACEVO (Association of Chief Executives of Voluntary Organisations) in the UK calls for Government support of the UK charity sector in this Third Sector article.

--------------

ACADEMIC

Jenny Harrow and Cathy Pharoah of the ESRC Research Centre for Charitable Giving and Philanthropy (UK based, City University) reckon charities who invested in legacies are seeing legacy provide some degree of 'recession-proofing' in their short paper, 'Recession and charities; the paradox of charitable opportunity?'

--------------

DATA

Not enough coming in. Please send me any data that you have.

And don't forget to get hold of our 'Ten Point plan to coping with a recession' white paper click here and register to receive it.

Sean Triner

Bequests get a double whammy

2008-10-19T05:03:00.001-07:00

As well as property prices and lower value investment portfolios likely to drive the average bequest (legacy) value down, a member of the audience pointed out that with property taking longer to shift we are likely to see a delay in the realisation of bequests as well.

To mitigate against this of course, make sure you are getting more people put you in their will, and try and make suret they are leaving you legacies / bequests as 'residuary' gifts, or percentatge of estate.

IFC Fundraising in a Recession special

2008-10-17T01:18:00.000-07:00

Fundraisers Need In A Crisis

View SlideShare presentation or Upload your own.

Argentina's bad economy survival kit

2008-10-17T01:13:00.000-07:00

I Will Survive

View SlideShare presentation or Upload your own.

What about Major Donors?

2008-10-17T01:00:00.000-07:00

I am not afraid to make corrections and additions to my white paper - and this could be the beginning of one. Steve Thomas is working on Amnesty International Canada's capital campaign and he told me of a donor who had pledged $10k just a few weeks ago. The donor just withdrew because 'he lost too much in the crunch'.

I always say be wary of anecdotes, but with major donor fundraising, anecdotes are often all we have. Please send me any information - and especially data - on the impact of the economic downturn on major donors.

IFC special session on fundraising in a recession

2008-10-17T00:46:00.000-07:00

Over 100 people attended an 8am session at this years IFC to discuss the recession. This blogsite was 'launched' as well as Daryl Upsall chairing a discussion about the implications of the recession on fundraising.

Pareto Fundraising's whitepaper was introduced (sign up for a copy) and Marcelo Iniarra and Norma Galafassi presented their experiences of the massive econonic downturn in Argentina in 2001/2002. The presentation is on this blog.

Amanda Seller from WSPA international presented back the views of many INGOs following a planning session they had at the IFC. Their bottom line conclusions were:
* Look at this crisis as an opportunity
* Stay on top of the data, make sure you understand the facts
* Do the things you know you should be doing: Invest in supporter relationship management, data analysis, effective acquisition.

Only a couple of charities were considering cutting fundraising budgets. The INGOs included UNICEF, WSPA, Plan, UNHCR, WWF, Save the Children, Childfund, Christian Aid, Greenpeace, Action Aid, World Vision, Amnesty International.

They also acknowledged that things might be different for some national based charities, but were not sure how. So please, national charities, email me.

More to come... Please subscribe to the feeds and become a 'follower'.

Pareto Fundraising's whitepaper has tons of information and data, but it is too big for here so click here to register for a copy.

Recession suicide and the ten point plan to avoid it

2008-10-16T12:43:00.000-07:00

Much is being written, and speculated about the potential impact of the economic downturn on fundraising. But what is going to happen?

Well, the most dangerous thing about this time is the decisions made by charities. Whatever happens, us fundraisers need to help our boards and management making the possibly fatal mistake of cutting fundraising expenditure.

I just wrote down a collection of thoughts and information from researching our data sources and what other ‘experts’ are saying about the recession. By the time I finished it was 9,000 words long, with a ton of data and proof but basically it boiled down to one thing:

Don’t commit recession suicide.

Whether donations (responses and/or average gifts) go up, down or stay the same the tactical decisions taken by charities will have more influence on the fortunes of the charity than a recession.

If things get worse, you need to spend more to make the same net and net is the key to delivering services. If things get better because of a recession (which is unlikely) it is a great time to spend more money and get great results.

If things stay the same, then keep things the same. Here is my ten point plan for coping with the recession:

The board and management need to understand the data and stop unrealistic expectations

1. Stop using cost of fundraising (COF) as a key measure and concentrate on net income
2. Work like a business, accept reduced short-term growth in service expenditure to gain increased long-term growth. Don’t commit recession suicide.
3. Stop putting off bequest (legacy) marketing every year – it won’t make any difference to your income next year, but the charities who invested in bequest marketing during or after the last recession are in a lot healthier situation than those who didn’t
4. Accept that donors are not cheap

Apply the Pareto principle internally and externally
5. Look at where your money really comes from now, and concentrate efforts on high yield activities like bequests and major donors
6. Look at where growth is coming from for successful charities, and ensure you are getting your slice Look after your donors
7. Implement proper, well thought out and planned ‘supporter relationship management’ – just think if you had implemented Relationship Fundraising back when the book was written, your donors would be much more likely to stay with you now.
8. Ensure you are using the right tactics for fundraising – number of mailings, personalisation, length of letters, actually asking for money in your appeals, telephoning to upgrade regular givers; any of these things not done right will cost you much, much more than any impact of a recession.

Get more donors
9. Regular givers are still the best bet in most countries right now; they are expensive and it may take you two years to recover costs but, guess what; that is life in fundraising
10. Understand the implied life time value of such donors – plan long term

Oh, if you are a glutton for punishment and want all the 9,000 words, charts and tables which you can nick stuff from to impress your board then just sign up here and we will get it to you this week.

Pell and Bales (UK) says no effects yet

2008-10-16T12:42:00.000-07:00

Karl Holweger of Pell and Bales - a UK telephone fundraising agency reports no declines, just anecdotal feedback. He will send more data when he has some.

PTF says don't mention recession in your copy

2008-10-16T10:07:00.000-07:00

Jane Cunningham of UK charity phone agency PTF tells me a client tested mentioning the economic downturn in a direct mail shot and the appeal with the mention harmed response. I haven't seen the copy, or the actual data but just a warning to be careful - definitely test it.

I will try and get more information.

Call for help

2008-10-16T10:04:00.001-07:00

We have plenty of data in Australia, but things are different here. We need American, British, French, Canadian, Hong Kong, Indian, Latin American, German, Dutch - anywhere else data.

Any evidence of change, please email me links, data or information. sean@paretoworks.com.

Thanks

Be careful with anecdote

2008-10-16T09:54:00.000-07:00

"Donors are not giving because of the economy". I have heard this from those on the frontline - telefundraisers and face to face advocates.

If you hear this, don't take it on face value (yet). NON-DONORs will jump on this excuse, just like any other. Check the figures carefully before making any decisions.

If / when things do get bad, phone and face-to-face will pick it up first. We will monitor this and let you know what is happening. Our Australian phone agency (Pareto Phone) will be looking at the data there carefully. We would love other phone and face-to-face agencies to post their findings too.

If you have such data, email me what you know and I will post it, or send me a link.

Sean