Tue, February 24 2015
Filed under: Fundraising essentials •
When Heather Yandow of Third Space Studios presented an insightful Nonprofit911 webinar earlier this year she shared some data collected from nonprofits to create the Individual Donor Benchmark Report (IDBR). Our ears perked up: a well-researched report documenting individual donor benchmarks for nonprofits with a budget size under $2 million?! We had to learn more!
Heather and I chatted about the valuable discoveries that can be found in your very own database. Read on to learn the most surprising thing she learned from the 2013 data (hint: it has to do with significant jump in online giving) and find out the two big fundraising opportunities that nonprofits should start investing in ASAP.
Why did you start the Individual Donor Benchmark Report? What problems were you hoping to solve?
Heather Yandow: I started this project to help small and mighty organizations understand their fundraising success and opportunities for improvement.
As a professional fundraiser and fundraising consultant, I had a hard time finding good information about individual donor fundraising results. I had questions like, “What does a good recurring donor program look like? How much should I be bringing in online? What percentage of our income should be from individuals?”
There were (and are) some studies that look at the whole nonprofit community – but those results are hard to extrapolate to a more modest size. If you are looking at a report where the average organization has a budget of $30 million, what conclusions can you draw for your organization with a budget of $300,000?
So I set out to look for data for the rest of us. The first year, I asked friends and colleagues to share their data, and the project has grown from there.
What was the most surprising thing you discovered after analyzing the data from 2013?
HY: One of the most surprising things was that organizations had increased revenues overall and from individual donors. I was thrilled to see, it seems, that things are picking back up for small and mighty organizations.
Online donations also grew significantly between 2012 and 2013 – by almost 80%. Those who used some kind of online platform saw revenue increase more than 120%. It was great to see more small nonprofits taking advantage of online giving tools.
What are some opportunities for improvement that small nonprofits should embrace to help boost individual giving?
HY: Two things jump to mind.
One: recurring giving. There’s still a huge opportunity to build recurring (monthly or quarterly) giving programs. On average, small nonprofits have 20 donors giving in this way - only about 4% of their overall donor base. These folks tend to give significantly more over the year – averaging $625 in total giving per year versus the overall gift average of $403.
Two: larger gifts. The average organization had 16 donors give $1,000 or more per year, representing just over half of the average organization’s individual donor income. Not bad, right? BUT: if you look at a healthy donor pyramid, you want the top 10% of your donors giving 60% of overall revenue (with the middle 20% giving 20% and the bottom 70% giving 20%). For the average organization, this means they should have closer to 50 donors in that $1,000 and up category. So there’s a huge opportunity to be finding more large donors, especially through one-on-one contact – the average organization only held 17 donor meetings in a year!
How is the data collected?
HY: The data is collected through a simple survey that asks a series of questions about your individual donor fundraising. As you go through, the survey tool will also calculate some of your results (like average gift) as you go to provide you with instant information about your fundraising success. The data will be kept confidential, and you don’t have to answer all of the questions!
How can organizations participate in the 2014 survey? What if nonprofits don’t have all the data you need?
HY: If you want to know more about your individual donor fundraising – and your revenues were under $2 million in 2014 – you can be part of the project. You don’t have to have all of the survey data to participate: in fact there are only two required questions – your name and email address! I do encourage folks to try to find the answers to every question, but if that means hours of Excel hell, then I say skip it.
Here are three steps to help you get started:
- Get prepared. Mark your calendar for the survey period – March 2 through March 20 – and see if there’s a good time to dig into your data. To get a better idea of the survey questions, you can take a sneak peek or join me for a webinar on Tuesday, March 3.
- Collect your data. It takes most organizations between 15 and 45 minutes to find and enter the data, depending on their database and current use of data. Once the data is collected, walking through the survey questions is easy.
Sit back and enjoy the rewards. By participating in the survey, you’ll get:
- a report of your results side-by-side with the complete survey results to share with your colleagues and board
- an invitation to a special webinar just for survey participants where we’ll dig into the results together
- a chance to win one of five prize packs including a subscription to the Grassroots Fundraising Journal, a book from the Kim Klein Fundraising Series, two hours of consulting from Third Space Studio, and two hours of consulting from BC/DC Ideas
- the official Individual Donor Benchmark report and infographic
Network for Good is a proud sponsor of this year’s Individual Donor Benchmark Survey. The survey opens on Monday, March 2 but you don’t have to wait until then. Register early!
Big thanks to Heather for doing this research so smaller nonprofits have access to this incredible data!
Fri, February 20 2015
It’s round up time again and I’m excited to share the expertise and resources from our colleagues in the sector—and beyond. It might be freezing here in DC, but I promise: these links are hot.
If men are from Mars, what does that do to their willingness to donate to causes? New research from Stanford University sheds some light on how to overcome the gender gap in giving. via Stanford (and more on this from The Chronicle of Philanthropy)
Storytelling. Expert tips. Getting smarter while staying toasty warm in your sweats and PJs? Where do we sign up? Don’t miss the
Storytelling Non-Profit Virtual Conference, starting on Monday, February 23. via The Storytelling Non-Profit.
Want a fun way to expand your donor base? (Who doesn’t, right?) Trish McFarland, the Executive Director of the YWCA of Spokane, shares her experience with a new approach in this video clip. via Movie Mondays
We know you party like a rock star, but do you write like one? Here’s how to craft readable, believable, and inspiring copy for your spokespeople. via M+R
That’s it for this week. What’s on your reading list? Share your favorite links in the comments below!
Thu, February 19 2015
Filed under: Nonprofit leadership •
Surprising, distressing, but all too true! According to findings released in the 2015 Nonprofit Communications Report, one of your greatest challenges to fundraising effectiveness is the difference in priorities and perspectives held by you (a fundraiser) and your key colleagues—your executive director and communications colleagues.
Just take a look at these startling differences in goals and preferred tactics:
- Seventy-two percent of development staff versus only 12% of communications staff feel directly responsible for fundraising goals.
- Forty-four percent of development staff versus 65% of communications staff feel responsible for community engagement goals.
- Development staff (along with communications directors) value YouTube more than EDs do, while EDs value LinkedIn more than you and your communications directors do.
As a consultant who’s been the fly on the wall in so many organizations, I’ve come to see such disconnects as the norm. But in most organizations, the existence of the gap and what the conflicts are—must-knows for organizational success fundraising and beyond—remain hidden and dangerous. Because each of those players (fundraising, communications, and your ED) assumes the others are on the same page and acts accordingly.
If you proceed in planning and implementing your fundraising campaigns based on the assumption that your communications partners and ED share your take, you’re likely to be surprised. When they don’t—and launch messages, campaigns, and/or programs that are different from yours—that’s confusing (if not totally contradictory) for the folks you hope will give or take another action.
Like you—and me—your people hate feeling confused. Confusion is a greedy grabber of time and attention and makes us all feel like something is wrong with us (“Why don’t I get this?”). Ugh. Worst of all, confusion undermines your campaigns.
Instead, dare to be different!
- Make sure you have a clear understanding of key organizational goals and have shaped your fundraising goals (plus campaigns and tactics) to best support them. Document both elements.
- Ask your communications director and ED to share the same.
- Include all three inputs on a simple chart and use it as the focal point of an initial “let’s make sure we’re working together” meeting.
- Ask the others to commit to quarterly reconnects and ongoing chart updates.
- Start to close the gap and motivate more of the actions you want.
Go get rid of your devil! I’m eager to hear where you get with this. Let us know in the comments.
Wed, February 18 2015
If you aren’t familiar with Lynne Wester’s work in donor relations, you are missing out. Last year she presented an amazing webinar (one of our highest attended!) on donor relations and ever since then I’ve been hooked on the topic of donor relations and Lynne’s wise words on this important work that many fundraisers don’t (unfortunately) know much about.
Since the webinar, Lynne has published a book, The 4 Pillars of Donor Relations. It’s a great resource for any fundraiser who wants to increase their donor retention rate (aka everyone).
I did a quick Q&A with Lynne so you could understand what the book is all about.
BONUS: She shared the names of a few organizations who are excelling at donor relations. If you want to see what a great donor experience looks like, consider giving a small gift to one of the organizations she mentions.
How did you first get interested in donor relations?
Lynne Wester: I guess you could say I’ve been in donor relations since I was a child and my mom made me write thank you notes before I could play with my Christmas and birthday presents. But in reality, as a career, it came at Rollins College where I got my start writing thank you notes for leadership and my career blossomed from there. I am so blessed to be able to spend a lifetime helping others express gratitude.
Of the four pillars of donor relations (acknowledgement, stewardship and impact reporting, recognition, and engagement) where do you see nonprofits struggle the most?
LW: By far, it’s in stewardship and impact reporting. Nonprofits don’t take the time to tell the donor the impact and power of their gift, where the money went, and how it was spent. Instead, they’re too eager to obtain the next gift which leads to horrific retention rates.
We have to make the donor the hero and tell a story, not overwhelm them with news and information about the organization or ask them for more money. First we have to thank them, and then tell them the impact their money had. It’s a simple formula, really.
We get this question all the time and I think you’re the right person to weigh in: what is a GOOD donor retention rate?
LW: If the average first-time donor retention rate is 27%, and that’s the average, I would want to keep at least HALF of my first-time donors. It has nothing to do with the size of the organization, but rather the mindset and the attitude of gratitude that one possesses. Large or small, holding onto half of the people that invest in us shouldn’t be too high of a goal.
If your “team” that is responsible for donor relations is just one person, or 50% of one person’s workload, what do you recommend they focus on first? What has the potential to have a big impact in a short amount of time?
LW: The first thing is thanking without an ask. There is NO such thing as a soft ASK, that’s like being partially pregnant. So, sincerely thank your donor in a timely manner and then, once you’ve spent their funds, tell them the story of the impact their funds had on the people your organization serves.
I always tell my clients the amount of the gift is the LEAST important thing. The behavior is the MOST important thing. To have bottom line ROI impact focus on two groups first:
- first-time donors
- loyal or consecutive donors
This will really move your needle. You have to hold onto your first-time donors, otherwise they will never become loyal donors.
What is the most meaningful message you’ve received from an organization after a gift was made?
LW: I would have to say that the most meaningful messages I receive in a consistent manner come from the folks at charity:water. They make me feel important, they show me the impact of my donations, no matter how large or small and they make me feel very valuable and essential to the process.
Do you have any good examples of monthly giving programs that were branded as a “society” or “member” vs. a monthly giving program that had no separate branding? Do you know of any research that shows this works well or not?
LW: I give monthly to two organizations that do a great job of this. I’m a member of charity:water’s Pipeline, their monthly giving program, and I think this does a great job of keeping me informed, telling me why my support is important, and making me feel inextricable to their mission. Also Make-a-Wish does a great job with their monthly program and it has a brand. They call it the “wishmaker” club.
But honestly, being a part of a club is not why I give monthly. Just as powerful is my monthly gift to Livestrong, as a cancer survivor, they don’t need to brand me with a moniker or anything like that. They do a great job ensuring I have a sense of belonging and importance to them. Their donor relations and impact communications are spot on and I’m so proud to support them.
If we want to see what a great donor relations experience looks like in reality, who should we make a small donation to and experience it ourselves?
LW: charity:water, Whitworth University, Livestrong, and Kalamazoo College
Thanks to Lynne for giving us a peek into the topics covered in her book and for sharing her recommendations with us. For more of Lynne’s thoughts on donor relations, follow her on Twitter.
Tue, February 17 2015
Many psychological studies have shown the power of habit. Once people have established a behavior, they are primed to stick with it. Changing a habit takes a lot of effort and when the reward is consistent, these routines are almost impossible to interrupt.
The best part is that this holds true for good habits, not just our questionable ones. Fundraisers can use this principle to nurture a pattern of generosity. What if you could make giving a habit for your donors? One really effective way to do this is with a strong recurring giving program. Here’s how:
- Make it a priority for your organization. To begin a monthly giving habit for your supporters, you first need to make it a habit within your organization. To do this, include recurring giving targets in your marketing and fundraising goals, and make it a point to discuss your monthly giving program any time you talk about your fundraising strategy. Add appeals for monthly giving to your communications plan and create a special donor relations track for your sustainers.
- Always leave the door open for recurring giving. Habits rely on cues to signal a behavior. In your fundraising appeals, on your website, and on your online donation pages, always highlight the option to make a recurring gift. Well-positioned recurring gifts give supporters more flexibility and allow them to make a bigger impact. Also, don’t forget to follow up with one-time donors and ask them to consider becoming monthly sustainers. Donors give more over time and you have a steady stream of dependable funds.
- Make it easy. Do everything you can to make it dead simple for your donors to opt for and set up a recurring gift. Of course, online giving makes this hassle free. With services like DonateNow, recurring donations are automatically processed—no extra effort for you or your donors. Do a quick test run of your monthly giving program. When you think you’ve made your recurring donation process easy, try simplifying it even further. Then ask yourself, is it easy enough?
- Make an offer they can’t refuse. In line with making it easy, is your monthly giving offer compelling enough? Break down your monthly giving amounts into meaningful actions that attach a reasonable monthly ask to a measurable outcome. Tell specific stories that show the collective impact of your sustainers and highlight how every member of your program makes a difference.
- Start donors as recurring donors. Want to establish a routine that helps your donors expand their impact and improves your revenue and retention goals? Small monthly gifts can be an manageable entry point for new donors. A gift of $15 or $20 a month feels more doable than a one-time gift of $100. Of course, once they’ve created their monthly gift, it’s easy for them to keep it going.
- Focus on the reward. Habits are reinforced by rewards, and the good feeling of helping others is huge. Make sure monthly giving is a gratifying experience from the donation confirmation page to the first thank you to ongoing recognition. Let your monthly donors see exactly how their contributions add up and how they make your mission a reality.
Need some help with your monthly giving program? Want to win some cash? Network for Good’s Recurring Giving Challenge has you covered. Take the Challenge and get step-by-step guidance with our free e-course. Plus, NFG clients are eligible for Challenge Rewards and get access to campaign templates and personalized coaching. Find out more and sign up today!