Tuesday, December 30, 2008
As an ex events fundraiser, I used to love it - but the bottom line is that for most charities, fundraising events are useful tactical boosters but there are much easier ways to get long term strategic growth.
There are rare, superb examples of events that work, like Australia's Biggest Morning Tea put on by the Cancer Council in Australia, and the Race For Life another big cancer charity event.
Some charities have grown through events and it is interesting to note that the most successful tend to be direct marketed events like the two above.
My company, Pareto Fundraising, is doing a lot to make events work even better and be more effective for our clients, but when you look at where growth is coming from across the sector in every country I have worked in or researched, it ain’t events.
Saturday, December 27, 2008
Oh, and Happy new year!
Thursday, December 25, 2008
I am hopefully enjoying my holiday in South Africa right now, but looking forward to more blogging in the new year.
Thanks for visiting my blog!
Saturday, December 20, 2008
Tuesday, December 16, 2008
Often very tempting, and for those without data seems to be the obvious place to go next. But corporates contribute around 5% of total (non-government) fundraised income in most of the mature fundraising markets and are very, very hard work.
A recession doesn't help, with Australian data showing corporates slashing their charity budgets.
But for small charities, local small and medium sized private businesses can be a saviour.
Overall, generally speaking corporates are NOT a good source for most charities to achieve strategic growth.
For more on this see The Inconvient Truth of Corporate Fundraising.
Monday, December 15, 2008
Look at my previous blog 'Urgent - fundraisers, read this and act!' below for instructions.
In it you will see I say that many potential donors intend to give but don't get around to it. Well I know of lots of fundraisers that intend to call their donors but don't get around to it.
Just by calling your top donors this week, you can have some lovely conversations and add a wad of cash to your bottom line.
Please call them, please - it will make extra money and is a high yield activity.
Saturday, December 13, 2008
SOFII features video content and more information about Action Aid's Bollocks to Poverty campaign aimed at motivating British youth. It is cool. Now let's rock.
Check out more multi-media fundraising ideas like this on SOFII.
Thursday, December 11, 2008
The economic downturn won't be especially helpful on this front, since many trusts make their money from investments.
There are huge obvious ones like the Bill and Melinda Gates Foundation but most are smaller. Although in most countries there is not as much money and less growth than fundraising from individuals, the good thing about trusts and foundations is that they exist to give money to charities.
They are only there to give you money - if you meet their criteria and they have enough. There are lots of resources to find out where they are for example, The Directory of Social Change in the UK. If you know of any foreign trust directories, please post a comment below for other people.
Tuesday, December 9, 2008
In most countries, the biggest 'donor' worldwide is government. Local, Federal/National, International, EU, UN etc.
Whatever you are doing, research whether you want, and whether you can get, government money. Here are some development examples.
Canadian International Development Agency
The Swedish International Development Corporation Agency's (SIDA)
Finland's Ministry for Foreign Affairs Development Cooperation
UN Development Program
There are very likely to be local funding opportunities from your own Government too - but try and use your imagination to go beyond the obvious.
Sunday, December 7, 2008
Regardless of how the appeal is doing, follow these simple tips and you will add 5% to 40% onto your income - extra money for helping beneficiaries in 2009.
There is a barrier though, and a difficult one for most fundraisers. You need to talk to some donors - I mean actually speak with them. But the telephone gives us one of the most powerful fundraising tools ever.
This plan is built on three premises:
- The Pareto Principle. 80% of your appeal income is likely to come from just 20% of your donors. And over 50% is likely to come from just 5% of your donors.
- Your past donors are lovely people, who care a lot about you and they like to be thanked and appreciated.
- Inertia. More donors intend to give that actually give. After receiving your mailing they may become distracted or forget - they simply don't get around to it.
Part I: Immediate action required
- Organise a team of people (if you can't get anyone else, still crack on with it yourself) and invite them for one or two evenings next week to stay late (or come in late) and join you from about 5pm to 8pm. The team does not have to just be fundraisers, get CEO, board members, sevice providers, your mum and their mums.
- Organise pizza / curry / snacks / drinks / treats / nice things for the evenings that have been agreed
- Do a selection from your database of people that were mailed. Use this criteria:
- Gave last Christmas, but not this Christmas
- They have a phone number, and have not forbidden you from calling
- 'Rank' them by size of gift last Christmas
- Print out the list, in order, of the top 200. Make sure you include in the printout any additional donations made by each of those donors in 2008
Part III: Next week - the brief
Brief your team (or if by yourself, use a mirror) on the following
- The three premises above (Pareto Principle, donors are nice, and more intend to give than actually give)
- The fact that we are now going to call all the best donors that gave last Christmas, but not this Christmas.
In the call you need to get across these points:
- Thank you. You are wonderful. Your most recent gift of x was really appreciated.
- A short story about someone or something that benefited from their last gift NOT statistics, but an actual story and preferable in first person. "I met a young man with cancer called Phillipe and this is what it meant to him" is better than "Let me tell you about a young man with cancer called Phillipe and..." but the latter is better than statistics. If you are not a people charity, then use your imagination but talk about the beneficiary of their donation.
- Ask them if they recall your Christmas appeal sent recently.
- Remind them about the case study in the appeal (if there wasn't a case study, there should have been so you really need to do these calls right now - and you need to hire someone who can make sure next appeal has one).
- Ask them what they thought about the appeal, if they read it.
- Ask them if they were going to donate (nearly all will say they intend or intended to) - if they say they have already given, thank them and tell them you will look out for it.
- If they don't say they have already donated, then thank them and tell them that you can take the donation by credit card now on the phone if convenient. Most will decline.
- Obviously, if they say OK, process the donation but for those who don't pay by credit card don't worry, just say you will look out for their donation.
- Sit back and wait for a big boost to your response rate and average donation from your best donors.
- The best, long term thinking strategic fundraisers will then call donors again when they receive the donation.
Saturday, December 6, 2008
Gordon Michie from Relationship Marketing wrote a whitepaper all about Stewardship, available on SOFII.
In it he covers all sorts of things about what is stewardship, differences between UK and US definitions, barriers to adoption and what happens next.
In a tremendously exciting climax, the white paper concludes by calling on the Institute of Fundraising to set up a working party to develop a code of practice on fundraising stewardship.
If working parties and White Papers float your boat, I am sorry - there are not too many of them on SOFII. But there are tons of great exhibits, and Gordon's Stewardship paper is useful for fundraisers either side of the pond - and beyond UK/USA too.
To find it on SOFII, register and search for Gordon Michie.
Thursday, December 4, 2008
A board that doesn't understand fundraising will cripple you.
There is no point embarking on a fundraising strategy without some fundamental basics.
- Fundraising is expensive. The the most important variable for how much a charity raises is how much it spends.
- Most fundraised income in most countries comes from donations from individuals.
- It can take well over a year to generate net contribution - ie income you spend on services - from most fundraising programs.
- Fundraising works best when there is a clear need, and your organisation is good at addressing that need.
- Fundraising works best when you are able to demonstrate that need and ASK the prospect to help. Hinting, or implying they should help does not work as well as asking. "Please, send $50 to reach me by 20 January so that I can..." is a proper ask.
- There is no room for hope or luck in fundraising. Plan and make things happen - including making sure the ask happens.
- Skimping on expenditure usually holds things back - just like anything in life, you get what you pay for. It is more expensive to get an experienced fundraiser than an enthusiastic new graduate, but the time taken training the new person will cost you more in lost opportunity than paying for a more expensive person. The same goes for volunteers. Asking volunteers to be in charge of your fundraising, is like asking a volunteer to be a pilot. It is cheaper but I wouldn't want to be on that plane.
- The board should set key measures and delegate authority to the fundraiser. They should not interfere in day to day decisions, writing copy, discussing design etc, this is not the job of the board.
- If board members are not prepared to ask people for money, they have to let their staff do it without interference.
- Net income is more important than cost of fundraising.
- There is no magic pill. It is not easy!
Monday, December 1, 2008
Marcelo is a genius, so make sure you take this opportunity to ask him a question, and flick through others questions.
Although well known for his digital work with charities, he is an amazing innovator beyond digital media and a great communicator.
Don't miss the opportunity to tap his brain. Click here to get to the website.
Saturday, November 29, 2008
Tim Longfoot, then a bluefrog director (now a director of Open) worked with a specialist face-to-face fundraising agency, Gift, and Sense to develop a unique approach to direct dialogue.
Close your eyes and just think for a moment about kids who are deaf and blind. How can you make that positive? It’s a tough cause, and quite difficult to put across in print.
Tim reckoned face-to-face was ideal. ‘Imagine the isolated world of a deaf/blind child…’ says Tim ‘Yet the most amazing things can be done to reach these children, with Sense’s help. Our fundraisers are trained to show this to potential donors in the most dramatic and involving way.’
How did they do this? When a passer-by is prepared to stop and listen, there and then on the pavement the fundraiser will create for them the imaginary silent world of a deaf/blind child. In one hand the fundraiser holds a length of chain, in the other a piece of soft cloth. ‘Touch is crucial communication for a deaf/blind child’ explains Tim. ‘We ask our potential donor to close her or his eyes and grasp the chain in their hand. They imagine the chain is from a child’s swing and can see immediately the pleasure of a child holding such a simple gift; how it reaches in to the child’s silent world. The piece of cloth represents the mother’s sleeve as she adopts the open-armed greeting that for these children symbolises ‘love’. In this simple, involving way people are able to touch and feel what it means to be a child with neither sound nor vision. Often, they are touched by this experience and many willingly agree to help.
Sign up through the SOFII home page and search for Sense to see the whole exhibit.
Thursday, November 27, 2008
Monday, November 24, 2008
It is really hard to know where to start, so I am posting the top ten tips for any organisation considering whether to fundraise, based on an answer I gave on the Resource Alliance's Ask the Guru section.
There is a lot of information, so I am going to blog ten short blogs on each of these points:
- Mission Clarity has already been posted
- Board commitment / understanding
- Trusts and Foundations
- Corporate Fundraising
- Fundraising Events
- The biggest growth is from individuals
- Regular giving / monthly giving / direct debit
- Major donors and legacies
- Non fundraising fundraising
In the meantime, visit Resource Alliance's Ask the Guru section where US fundraiser Jennie Thompson is guru for November - post a question to her now!
Sunday, November 23, 2008
Mission ClarityYou really need to understand your work. Why you are doing what you are doing, prove you are best placed, why are you not collaborating with others? What is your IMPACT or what are your OUTCOMES. Most charities measure outputs, but you really need to understand the actual difference your charity makes.
Outputs are the result the actions you are able to do, for example – distribute 500 mosquito nets. The outcome of your actions is about why. In this case, following distribution of the 500 nets, malaria was reduced in the village from 193 cases per annum to 27.
Before you do anything in terms of fundraising - before you work on a strategy, hire a fundraiser or spend a dollar make sure you take time to have your mission written and understood clearly.
Saturday, November 22, 2008
Ken Burnett, founder of SOFII tells us his 'Essential Foundations of Fundraising' which is a list of 29 'basic principles of our trade' ripped out from his book, Relationship Fundraising.
Here are a few to whet your appetite:
7. Fundraising is about needs as well as achievements. People applaud achievement, but will give to meet a need.
14. You don’t get if you don’t ask. Know whom to ask, how much to ask for, and when.
16. Successful fundraising involves storytelling. Fundraisers have great stories to tell and need to tell them with pace and passion so as to inspire action.
21. Great fundraising is getting great results. If your results are mediocre, your fundraising probably is too.
29. Always say ‘thank you’, properly and often. It’s also a good idea to be brilliant at saying ‘welcome!’.
Ken reckons you should click on his list, print it out and stick it above your monitor. Not a bad idea. Sign up to SOFII and search for 'Essential Foundations' to get the full list.
Relationship Fundraising by Ken Burnett, published © 2002 by Jossey-Bass Inc.
Thursday, November 20, 2008
Just recently I was asked about 'what next' with lottery donors (based on a telephone operation selling lottery tickets over the phone. Here are my top tips.
My top tips on phone-based lotteries: Things are different in different places, but please don’t reject any of these or assume they are your magic pill – just TEST them. One of the best things about lotteries is that they are really easy to test on.
- Double dip. Call your best lottery donors first, then right at the end of the lottery period, shortly before the draw ring them again to offer the extra special chance of another go.
- Automatic entry. Get people on a monthly debit that gets them x number of entries PLUS gets them into an exclusive free annual lottery eligible only to such donors (in most countries you can’t discount ticket prices, but can have another draw). This is effectively Regular Giving for lottery donors.
- Ask for tips. During the lottery, put more emphasis than normal on your mission with your best prospects – and ask for a donation tip. The 3-10% that do become better prospects for RG calls
- Ring to get cash donations. Shortly after a lottery, you can use the phone to ask specifically for a donation. It won’t do as well as a pure lottery call but
a. Creates a donor pool – sorts out ‘donors’ from ‘gamblers’
b. Doesn’t harm subsequent lottery calls (if done well)
c. Another filter for regular giving calls
- Ring to get regular gifts – better long term than cash donations
a. Expect 3-10%; better than cold calling
b. Will INCREASE people’s chance of taking part in a lottery if done well – even on ‘failed sales’
Hope that was useful, if not as funny.
Tuesday, November 18, 2008
In recent years, I have been trying to improve Pareto masterclasses and presentations by introducing 'Made to Stick' techniques into training. Lots of exercises, getting people to write stuff down etc.
However, in Washington this (northern) summer I did a presentation called 'Mythbusters' about fundraising myths with a new spin, I deliberately tried to make it funny. It seemed to work; got great 'marks'*, but also people I spoke to seemed to really take on some of the key points.
The highlight for me was seeing guru and friend Mal Warwick bent over double from laughing.
It got me thinking though, so I went on a stand up comedy course to try and improve engagement and learning. Graduation from the course, was a short stand up show at a comedy club, which you can watch if you want.
I can tell you though, if you do do any public speaking this course will help you. Not just for how to contruct funny stories or jokes but also the whole nerves / preparation / bright lights thing. Go on, give it a go.
So, the comedy course graduation was at a comedy club. I was one of five students and there were three 'real' comedians along, and my colleague Justine recorded a video of it.
You can see it here on You Tube if you like and if you do, I hope you enjoy the video. But, please DO NOT WATCH IT if you don't like swearwords - it is classic stand up and has nothing to do with fundraising, charities or social justice and is pretty rude.
(TIP: Press play, then pause and wait two or three minutes for the whole video to 'buffer' before pressing play again).
* For some thoughts about conference scoring, check out this blog.
(c) Pareto Fundraising 2008, All Rights Reserved
Saturday, November 15, 2008
It is a great 'bequest conversion pack' for CCIA. It shows why SOFII is so great for you too; you can download and see the whole pack.
Yes, kids with cancer is a a great proposition, but the same tactics and ideas have worked for other charities just as effectively so don't be afraid of trying.
And the agency that did this piece is truly amazing - they get consistently fantasic results for many Australian, Canadian, New Zealand and Hong Kong charities - check out Pareto Fundraising's website for more information!
To see the whole exhibit, sign up for SOFII and search for CCIA.
Sean Triner (um, director at Pareto Fundraising in case you didn't spot the bias).
Saturday, November 8, 2008
Thursday, November 6, 2008
One of the three courses was actually sales training which we had in-house. More about that later.
Within the book, Black Swan by Nassim Nicholas Taleb, there is this bit about beginners luck. All gamblers - ie people who gamble regularly, and have being doing so for some time - believe in beginners luck. They remember it fondly because, with few exceptions, they seemed to do better when they started.
Nassim explains that this idea that they did better in the early days is probably true. The reason being, those who didn't do well in their first days of gambling are much less likely to be gambling years later than those who did well. If you lost straight away, you would be more likely to give up.
It is almost like natural selection, but actually more 'random' selection.
Now, Pareto Phoneand Pareto Fundraising exist to help charities raise more money and we are pretty damn good at it. And Paul Roberts and I set the up to genuinely help charities. I am very passionate about this, and very keen to help them.
Consequently my sales 'technique' has been very forthright. Very quickly in a relationship with someone from a charity I start telling them how we can help. A poor victim of this approach from UNICEF sat next to me at dinner at IFC two weeks ago, and has probably not recovered since.
I am very passionate about it, and have the evidence to back it up - and when the charity agrees to work with us they find out it was true. I am also impatient, and really believe that by not persuading the charity to make as much money as possible (ie hire Pareto) I am letting the charity's beneficiaries down!
This 'full-on' approach has served us well in that most of the charities we have long term relationships with were brought together with us following such a meeting. So, when looking at the best sales 'technique' it is easy for me to say 'Well, being honest upfront and presenting our credentials / ideas has worked in the past - so this is how we should do it in the future'.
Hopefully you can see the flaw in this thinking. It is identical to the gambler's mistake. The gambler doesn't see that some people didn't have beginners luck - because they are no longer there.
The absence of contrary evidence leads the gambler to the wrong assumption. All the gamblers he or she knows also had beginners luck.
So, for Pareto we don't see all the charities we don't work with - and we don't have the same evidence of how they didn't become partners. So my theory (carrying on doing it the same way) is clearly flawed. Of course the answer is to have more than one approach. Luckily, the new boss of Pareto Fundraising (Martin Paul) is Ying to my Yang so that should be right.
Looking at charities - or other businesses, it is easy to see the same pattern emerging. A charity that has done well from lottery fundraising, or a technique based around corporate fundraising will find it really hard to see what it is not doing.
This is brilliant, mind expanding stuff which is going to have profound impact on my approach and therefore allow me to help more charities (through Pareto companies).
I can't resist though, we do pretty much double charity appeal income within 12 months so if you want... ow, Martin leave me alone!
Check out the book for a better explanation.
Wednesday, November 5, 2008
Wow, good on ya Obama! Gets a personal story into his acceptance speech. The power of the story - it is what I will remember about this moment: the story of that single voter.
We know that in our appeals and mailings - anything where we are trying to get people involved emotionally - we should personalise the story. I was amazed to see the new American President get such a story in his speech.
It is fantastic news that the Republicans have been booted out of the Whitehouse, and likely that we will have a friendly Congress.
Why is this good news? We have a President of the worlds biggest polluter, and the country which - until Bush with his oil pals came along - was leading action on climate change.
Even though McCain was saying some good things about climate change, the fact is that we lost eight crucial years in fighting climate change under his party and he is so disproportionally funded by the biggest polluters he would have struggled to put in real change.
Obama's fundraising income coming from so many people empowers him to make real decisions, and with a friendly congress we can hope he will use this power for tackling climate change.
OK, he will be acting for America but there is little we can do here in Australia about climate change - China and India are not going to swayed by us, but America can really lead the way.
The wars in Iraq and Afghanistan, security issues and the economy are almost irrelevant compared to the long term impact of climate change. This recession would be insignicant compared to what is going to happen to civilisation in a hotter, hungry, less watered world - except the fact that it may effect how much we invest in combatting climate change.
Now is a time we can hope - if America leads the way on climate change (again) our future civilisation has more chance of surviving.
Check out Climate Wars by Gwynne Dyer. Fantastic (but scary) book.
Sean is hoping
Tuesday, November 4, 2008
I finish the course next Saturday and then I do my own stand up show. It will be on 17th November, in Sydney. So, if you are in Australia and nothing else to do except come and take the piss out of me, then please come along!
I have seven minutes to present my routine. There will three or four of my fellow students and two professional comedians along to save the night too. It is $12 and kicks off at 730pm sharp. At only seven minutes, don't be late or you will miss me as I hope to be up first.
What: I humilate myself as a stand-up comedian
Where: The Roxbury Hotel182 St Johns Rd, Glebe, NSW 2037, (02) 9692 0822. Just off Glebe Point Road.
When: Monday 17 November, 730pm (sharp!)
Check out Comedy at the Rox (we are not listed as this is a private function, invitation only - just mention my name and it will OK to come in ;)
Saturday, November 1, 2008
Bob was pretty funny, if pretty mainstream. But he is being funny now, despite being dead, in his latest campaign for prostate Cancer.
Here he is, pointing out how he doesn't want you to die like him.
Visit SOFII for more on this campaign (search for MM199), and tons more brilliant ideas to nick to make more money for your cause. The Showcase of Fundraising Innovation and Inspiration.
Saturday, October 25, 2008
Check out SOFII for more interesting stuff like this, and loads of practical examples from contemporary fundraising.
Friday, October 24, 2008
Wednesday, October 22, 2008
I have known these guys for quite some time, since they were with bluefrog, another London based agency who I worked with when I was 'charity-side'. bluefrog are well renowned for their innovation and great creative approaches, and thinking about them - and the current economic stuff made me think more about good ideas and where they come from.
My friend Ken Burnett emailed me today about the fact that in times like this, ideas are more important than ever.
"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."
I am going to pick on a couple of good ideas every weekend for a while, and blog them up to remind people to check it out.
Please, take time to sign up for SOFII- it is a charity, it is free and it is bloody useful with tons of ideas there - just for you.
Saturday, October 18, 2008
According to Gwynne Dyer's new book Climate Wars that won't stop us from complete devastation of our civilisation (tip, if you have a child or grand-child under twenty, don't read this book, you will find it difficult to look them in the eye). But he also reckons once we start trying we might make it.
Great, as a donor, to get positive feedback like that. Let us hope there will be more.
Thursday, October 16, 2008
All about fundraising in a recession, it will feature links and information about what is going on. Stay informed and don't commit recession suicide.
Wednesday, October 15, 2008
Well, the most dangerous thing about this time is the decisions made by boards.
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 email us and we will get it to you after some poor person has edited it.
But everyone is agreed. And so are all the experts whose blogs / emails / articles I have read. They all say 'Don't panic, don't hurt yourself'.
Bottom line - what you as a charity do, in reaction to a recession, can be more deadly than what the recession will do on it's own.
If you are reliant upon corporate funding then you are probably most vulnerable. Many of the best corporate donors are (were?) banks. But if you have a sound diverse fundraising strategy, especially if it has lots of regular givers, then you are in the best situation. Don't panic.
Check out what Uncle Mal and Dan Doyle has to say here (US focused, but relevant to us all). Or check out this podcast, again very US but still relevant.
And don't forget if you want my massive rant about the recession, email and ask for it from firstname.lastname@example.org and we will get it to you.
Monday, October 13, 2008
I say a week ‘off’ because, whilst in France, I stayed with a friend, Ken Burnett. You may have heard of Ken from his work and books on fundraising including the essential Relationship Fundraising, which I reckon first came out in about 1893. Over a century later, it is still very relevant and promotes a donor-centred approach to maximising lifetime value; i.e. be nice to your donors and they will give you more money in the long term.
Ken actually has a life beyond fundraising. At his place we spent some time walking around his field. But this time the field is a star of his new book, The Field by the River. This is his first non-fundraising published book—a sort of cross between A Year in Provence and Jed Bartlett’s love for trivia. If you haven’t seen The West Wing don’t worry about that reference. If you did see it, liked Jed and you like nature, you will love ‘The Field’.
During my visit, Ken was obsessed with his ‘score’ or rank on Amazon.co.uk. He was checking it pretty much every hour—as I’m sure you and I would be if we had just had a book published—and it was the main topic of all conversations.
Actually, not all, I exaggerate—just breakfast, morning tea, lunch, dinner, after dinner and a quick check of Amazon before going to bed. To be fair, it was the very first week of sales, I am sure he is not checking every hour this week …
So, what has this got to do with fundraising? And how does it bring in British fundraising stalwarts, Tony Elischer (of Think!) and Tim Hunter (of NSPCC)? Well you didn’t know it was going to bring in Tony and Tim but now you do. They only get tiny cameos though.
At the IoF Convention in the bar (of course) with Tony and Tim talking shop (that’s it for Tim, told you it was a little cameo). Tony brought up the ‘scores’ of my speaking sessions at the Resource Alliance’s shockingly named International Workshop for Resource Mobilisation—IWRM—a couple of months previous, in Malaysia.
I had presented a few sessions in Malaysia that had gone down very well, according to the scores, and Tony ‘ranked’ me—i.e. ‘You came in above blah blah’. Mind you, he did leave himself out of the list—I am sure he did very well too.
And this week I got my ‘scores’ from IoF too. As an egotistical, needy, must-be-loved, ‘please like me’ person this is really important to me, and I hope my mum finds out without me having to tell her. But really, the whole scoring system is seriously flawed.
When Tony first told me about the ‘scores’, I accidentally forgot about my ego and instead got on a soapbox about scoring. (OK, it was still ego—just manifesting itself differently). And here it is.
Conference organisers need an objective way of measuring their speakers’ performances. They really need to be able to get the best speakers back and establish a system of good speakers to build their reputation. Seems obvious.
The problem comes from a conflict between the only real purpose of a fundraising conference—empowering individuals to make more money for their organisations—and the fact that people want to enjoy themselves, be entertained, laugh and learn. If you ask, we will always say learning is our priority. But this is not reflected in the scores.
Basically, most people score emotionally. They will score a speaker higher if they like her or him, they will score higher if they have fun. But worst of all they will score them lower if they disagree with the speaker. The last point presents a huge challenge for any speaker trying to challenge the prevailing paradigm, which of course we need to do if we are to create change.
Now bear in mind a few things:
- Most fundraising conference speakers are not paid and are not professional speakers.
- A large proportion of conference attendees are usually first-timers and people new to fundraising.
- Scores are usually very generous—speakers rarely get the worst possible ranking.
- Session attendance can vary from a dozen to hundreds, so a couple of out-lying scores can have a dramatic impact for some people.
The best learning comes from highly skilled teachers or trainers who really know their stuff, give direct practical information, are willing to adequately prepare before the conference and are engaging and fun. The problem is they are very rare—hence the international conference ‘circuit’ has the same old names cropping up.
So what can we do about it?
Well, we need a paradigm shift about how we ‘score’ at conferences and the decision-making process about how we invite people back.
The organisers of the key fundraising conferences should come together to develop effective and standardised conference evaluation policies and procedures. This includes organisations such as the Institute of Fundraising (UK), Resource Alliance, Association of Fundraising Professionals, Fundraising Institute of Australia, CAF and Fundraising and Philanthropy magazine. Leave egos behind and do what’s right for the fundraising community. They should develop:
- A much more thorough and data-driven approach to the conference and speaker evaluations. The attendees are customers and should be analysed like a charity would analyse its donors.
- A way to gather more data on attendees—before the conference—to find out about their years of experience, area of work, etc. and then analyse it to see who goes to which sessions.
- A process whereby conference organisers can log who came to what session to put post conference feedback in context.
- An evaluation system that has more emphasis on learning outcomes. This means scoring sessions on more than just content and presentation.
- A process that measures ‘scores’ in grades of ten rather than four. Marks out of ten (rather than ‘poor, ok, good, excellent’) create more significant gaps on measures and also make it easier to provide feedback to speakers and conference organisers.
- Evaluation forms that collect more useful written feedback and send this to speakers.
- A process that takes into account attendance numbers when looking at average scores.
- A process for following up all attendees using something like Survey Monkey to ask people what they have done with the learning.
Those are some of my ideas—but I know you have lots of experience as a conference attendee or speaker, so I would very much welcome your views and ideas.
Anyway, when I wrote this, The Field by the River is ‘scoring’: ‘Amazon.co.uk Sales Rank: 3,486 in Books’, the highest I have seen. Oh, Year in Provence is 3,883 and #1 at Amazon was‘Chinese Food made easy’.
When it was about 4,000 I asked Ken what that means in book sales. ‘I have no idea, but it was 7,433 yesterday …’
Bloody typical, no one seems to measure the right thing.
Wednesday, October 8, 2008
On a piece of paper, or open up your word-processor or notes program write down:
- Your favourite charity - not the one you work for
- How you support the charity (eg monthly gift, volunteer, occasional donation)
- Why you support them
Here is an example:
- My favourite Charity: The Sumba Foundation
- How you support: Regular gift from credit card & occasional donation
I went to see them at Christmas last year and met loads of the kids. Before the Sumba Foundation started its work, the infant mortality was about half the kids. ie half of them would die before they get to adulthood, mostly from malaria. It is easily prevented - nets and education, and I was really motivated.
Please take the time to do that, it will be worth it.
Now, back to the blog...It’s a curious thing, but most charities, much of the media and an annoying number of public servants appear to think that the percentage of money raised by charities and spent on actual charitable work is the most important measure of worth available.
So much so, that for some states and nations return on investment (ROI) is one of the key measures that charities need to report on.
But our obsession with ROI damages our ability to make the world a better place, and I have the data to prove it.
When I meet with charity staff and boards, ROI is always an important consideration.
Fundraisers are given a brief that they must grow income by X without the annual cost of fundraising (COF – an inversion of ROI) increasing by more than Y.
ROI can be a useful measure – for example, when a fundraiser is considering tactic A vs tactic B to acquire new donors and there is a limited budget. Provided ROI is considered over several years, measured holistically (ie to include additional gifts, upgrades and bequests), and the rollout/repeat potential is considered, then it can be the best measure.
So why does it make me so angry? Principally, because obsession with ROI above all else harms growth. Too many charities choose the path of slow growth – or even reject otherwise successful strategies – because of their fear of a low ROI.
For example, charity A raises $40,000 from its Christmas appeal to warm donors, at a cost of $10,000 - an ROI of 4. It knows that by increasing the amount of time spent on the DM pack, sending out more information and writing longer, more professional copy (in other words, by spending more money) it could probably increase the donation income to $100,000. But the pack would then cost about $50,000, giving an ROI of just 2.
So the boss says no, and the charity continues the old way, maybe improving income a bit by writing longer copy. Net income, however, is still only about $30K, whereas the more expensive method would have netted $50K. Apart from the fact that the charity has $20k less to spend on services (or fundraising growth) in the immediate term, the decision is greatly flawed in the long term.
Meanwhile, Charity B, which decides to go the more expensive route, is set to benefit from a) higher net income, and b) many more donors. This is not just some hypothetical example. The chart below depicts a real life Australian case study. This charity decided to look at the long-term picture, and not worry about ROI.
The consequence for this charity of the shift in mindset was enormous. You can see that after a number of years, ROI is creeping back up again, but more importantly, the overall amount available for services (ie net income) from Tax 04 to Xmas 07 was $2.08 million. (Charities in Australia usually have two peak times for mailing – Christmas and “tax” – which is mailed around April/May). If they had kept to the old strategy, and experienced a bit of growth, they could have expected to net about $600K.
I repeat: the organization could have raised NET $600K, at an average ROI of 7 or NET of $2.08 million at an average ROI of 2.8. Come on, which result is going to help its beneficiaries more?
So how come so many intelligent people are led astray by ROI? The answer is simple – they are frequently told that this is what is important to donors.
The conspiracy theorist could argue that actually perpetuating the myth does help some charities – but only the really big ones. A shift in strategy for a small charity striving for growth is likely to reduce its ROI, but exactly the same strategy change for a larger one could actually improve its ROI. That’s just a mathematical fact.
This means that if the big charities were to be protective of their turf, banging on about ROI is a good way of preventing smaller organizations from being able to compete.
In the above example, a charity raising $500,000 per appeal who followed the same change in strategy would have seen hardly any change in ROI.
But we keep hearing "ROI (or COF) is important to donors." But who says so? Well, the media, common sense – and even the public. The problem is that this is what people (donors and non-donors) really do think. But it’s not how they behave. The charity above clearly had no problem.
And I have lots of other examples.
The charity probably had to explain the strategy to some major donors, and even the authorities, but its economic basis was so solid that those guys were not going to have a problem with it. Normal donors still gave – and none of my examples hid their COF.
As for the public, they may say ROI (or COF) is really important, but that isn’t reflected in their giving behaviour. The reason they give is because they were asked properly and they care about the cause. People who harp on about the amount of money that goes on administration are normally non-donors; COF is just a good excuse for not giving.
I recall being told about an experiment where a group of people were given real money to donate. They were given choices based on photos, stories about beneficiaries, and pie charts of expenditure. Never were the pie charts a significant factor for choosing which charity to support.
I admit I am not as extreme as Professor Myles McGregor-Lowndes of The Australian Centre for Philanthropy and Non-profit Studies at QUT. During a presentation on accounting for charities (which he managed to make interesting) he called on the Fundraising Institute of Australia to bar charities who bang on about how low their COF is.
But no fundraiser should allow his/her organization’s beneficiaries to suffer because they are bamboozled by the unsubstantiated bollocks that passes for fact when it comes to ROI. Of course, you need to be careful with your funds - I am not suggesting charities go out and take ridiculous risks - just plan strategically.
Don't believe me?
Remember the exercise right at the beginning? Did you write something like this?
- My favourite Charity: The Sumba Foundation
- How you support: Regular gift from credit card & occasional donation
- Why? Their cost of fundraising is really low and I am impressed by their effective admin systems...
Of course not. And do you even know their cost of fundraising?
Donors care about what you do, the impact that you have not how you raise it.
Pareto Fundraising help charities in many ways, not least explaining this in more detail to boards and management. If you want us to help, please email email@example.com.
Canadian Fundraiser published much of this information as an article in May 2008.
Tuesday, October 7, 2008
People (fundraisers) are asking me 'What should we do!?'
For evidence, proof and more detail (a lot more) I have just finished a big, thorough article about it, covering all areas - potential effects, what boards should do, what impact it has had on income to date etc. The article is bloody long and will be a little while more because it is with an editor right now, but it will be essential reading because it gives you what you need to go in and fight the most important battle:
Prevent recession suicide. The most dangerous thing about a recession is charities panicking and making bad decisions that will harm them more than any decline in income as a direct consequence of the actual recession. Cutting budget, reducing acquisition volumes, cutting staff - all of these things are killers for you. Much, much more dangerous than the actual recession.
Puling my big article together, I read a ton of articles, from people I know, such as: Gonzalo Ibarra (Chile, article is in Spanish, he reckons it helps you focus on who your real donors are and that in the massive financial crisis in Argentina they got low rates of attrition and brilliant results). Mal Warwick (USA, DM guru and all round brilliant bloke), who is worried about people cutting back on acquisition and donor care.
And also strangers to me, people like Lisa J. Lehr (a US copywriter) who reckons don't cut back, '...If you're a nonprofit, however, don't make the mistake of thinking that this is the time to cut back on your fundraising efforts. What these gloomy indicators mean is that nonprofits need to increase--not decrease--their fundraising efforts...".
Marc A. Pitman agrees and he wrote a book too, so he must be clever.
All these people - and more - are saying don't cut back. Mal's article includes some big picture data references, but most are telling you this as they are experts.
My article goes a bit further. It has tons of data, explains in detail what to tell the board, management and colleagues and comes up with a ten step plan to protect your charity in a recession. Heavy, but essential reading.
If you want the full article, then please email firstname.lastname@example.org who will send it when it is ready to go!
If you are new to this blog, and are wondering what Pareto Fundraising is, please click here for more information.
Thursday, October 2, 2008
Listening to them on my iPod on the way to a major donor strategy and training session (as one does) I was intrigued to be reminded of the B Ark. It reminded me of major donor fundraisers. Now, if you are a major donor fundraisers then please don’t take offence – I mean the other major donor fundraisers, not you.
The B Ark. If you are familiar with the Douglas Adams’ masterpiece then skip the next three paragraphs.
Basically, the B-Ark was a huge space ship sent from the planet Golgafrincham. It contained about a third of the population of the planet. The story (that people on the B-Ark were told) was that the planet was about to be destroyed. Three arks would be built.
The A-Ark, would have all the great minds, leaders, ideas people and the C-Ark would have the really useful people; carpenters, farmers, plumbers, electricians and the like. The B-Ark, would have hairdressers, TV producers, insurance salesmen, personnel officers, security guards, management consultants, telephone sanitizers and the like.
The other two thirds of the population, of course, did not follow and "led full, rich and happy lives until they were all suddenly wiped out by a virulent disease contracted from a dirty telephone".
Now, major donors. I have met precisely 42 major donor fundraisers. And I must say, many I have met would earn a place on the B Ark. (Not you of course, dear major donor reader). Many major donor fundraisers circulate in this mystery zone of decent salaries and little fundraised income. They get a new job, spend 18 months prospecting for donors, researching and profiling donors, developing a case for support, complaining the board won’t ask (and – gosh – haven’t actually given themselves!) before moving on to repeat the process, on a slightly higher salary, in a new charity.
As a consultant (yes, I would have been on the B Ark too but…) I see many charities and help with their major donor fundraising. And I note the key success factor is not whether they have prospected enough, researched enough, profiled enough – not even whether they have a major donor fundraiser. It is always the same thing:
Whether they asked a rich person for a lot of money.
Assuming you really need the money, then to run a successful major donor program, you don’t need tons of research, profiles, years of relationships. All of these will help and will have a bearing on the success or the amount you raise, but ultimately the most important thing is that someone asks someone rich for a major gift.
Easy to say, but not that easy to do. In the past months my colleagues and I have conducted about half a dozen training sessions with Australian charities. Those that booked appointments and made asks within days of the training have succeeded. Those that didn’t, are ‘between fundraising successes’.
Now, I am not saying that all the great books and plans and processes by people like Neil Sloggie, Kay Sprinkel-Grace, Karen Osborne and Terry Axelrod et al are wrong.
If you followed them exactly, I am sure you would have success. They have different tactics, some take a long time and all rely on consistent staff, consistent strategy, consistent leadership and consistent follow through. These factors rarely all come together.
Ultimately, they all rely on someone asking someone rich for a lot of money.
I also recognise that for $1m donations, capital appeals etc take time, building relationships take time. But asking is the key. It won’t hurt your chances of getting $1m from rich guys Arthur or Zaphod next year if you get $50k now.
Please, just get on with asking.
Oh, by the way. I am a major donor fundraiser and proud of it.
Pareto Fundraising helps charities with getting over the initial fear of asking - with great degrees of success. See a success story here. Contact email@example.com to see if we can help your charity crack on with major donors.
I originally wrote this about a year ago for the Resource Alliance's Global Connections newsletter.
Wednesday, October 1, 2008
My time is up. I was officially a guru for September, on the Resource Alliance's Ask a Guru section of their website, and I am going to expand on a couple of the questions on my blog into the future.
The questions and answers will remain there, but now it time to pass the baton to Richard Radcliffe, a real guru rather than a fake like me.
So, the next three gurus in Resource Alliance's popular series are:
Richard Radcliffe, October 2008. Recognised as one of the world's leading legacy experts, and a lovely bloke with a strange, very English sense of humour.
Jennie Thompson, November 2008. A leading light in donor communications, a big advocate of a donor-focused approach to fundraising who still bangs on about Relationship Fundraising, which was written by Ken Burnett in the early 90s, and she is still right. Tireless woman, somehow cheats time as she must have 28 hour days and 8 day weeks to achieve everything she does.
Marcelo Iniarra, December 2008. Energy, ideas and pure genius. I think he sold his soul since he started working beyond charities, but he denies it. And he is still trying to drag charities into the 21st Century. Anything to do with technologically driven communications, he is your man. Oh, and he is a rare dude in that he actually made money for charity from online fundraising.
Tuesday, September 30, 2008
I thought I was pretty with it on using computers.
As a member of the first computer generation, I owned a ZX81 when I was 12, bought during the Falklands War, when Thatcher was PM and Britain used to have mines. Getting a program running on my computer then involved typing in something like:
10 PRINT ‘SEAN IS COOL’
20 GOTO 10
Then hitting run. “SEAN IS COOL” would appear across the screen, line by line for ever. Boy, was I cool.
Since then I have been ‘into’ computers. I got a 16k RAM pack for the ZX81 then later a 48k ZX Spectrum, briefly a VIC20, a Commodore Plus 4 then took a Commodore Amiga with me to York Uni in 1988.
And I have always played games on them, and been a little ahead of the game on all things computing. After Uni, along came the Playstation, (then Playstation 2 and 3), XBOX, XBOX360 and most recently the Wii. I got them all, so thought I was pretty much still up on the computing world.
I was using JANET in 1989 and was used to getting information online by the time the internet actually arrived proper. (JANET was the Joint Academic NETwork, a sort of internet for academia, it maybe still exists).
And I was an early adopter of mobile phones and even SMSing. In the early days, you could only SMS within the same network and when most of my friends received a message they had no idea what to do to read or respond. SMS was around for about three years before everyone suddenly twigged – I guess it was the kids getting access to mobiles at the turn of the century that made it so massive.
But despite this, something happened to the next generation (and actually, those just half a generation behind me too) and I missed it. And I just woke up.
In his book ‘The World is Flat’, Thomas Friedman talks about how American Business was asleep and how information technology is flattening the world (actually flattened it, but America is just catching up). Good book, but a good cheat is to catch the video below.
Even after reading the book, it would appear I was still half asleep. A year I would never read a blog. I thought they were pure narcissism full of over inflated, unsubstantiated opinion. Now I know they are but I am an avid reader of several, and contributor to several too.
I still don’t get Twittering & Facebook daily feeling updates – it seems incredibly boring, even more narcissistic and scares me. (Ben Elton wrote a great book, Blind Faith, of a post climate change apocalypse Britain where these social networks have eradicated privacy and Twittering is scarier than the fiction.)
If you don’t know what Twittering is, please stay asleep.
Anyway. I just woke up to the power of blogs. You obviously get blogs, or wouldn’t be reading this, but they offer communication solutions beyond organised opinion columns like Professional Fundraising Magazine’s.
Over the past two months I suddenly got it. A real Eureka! Moment. As well as playing around with this blog I also set up an internal Pareto staff blog, accessible only to our staff.
It was amazing what happened – and how. The first thing was how easy it was. Using Google’s
Blogspot http://www.blogspot.com/ I set the blog up, including inviting relevant people and posting the first blog in about 15 minutes.
The next thing that is amazing is how it took off.
The first article was posted by me on 8 August 2008. Then there were a couple more from me, a couple more from early adopters and by the end of August we had 13 entries. Just over two per week.
September had 52 postings – more than one a day. People have posted results, tests, ideas, videos, piss-takes, inter-office Wii challenges, instruction manuals, commitments to the team, and more. It is blowing away those circular emails, and our internal newsletter is fast becoming redundant (there actually hasn’t been one since the Blog went up, and no one is missing it).
About 60 people have access to the blog, and it is a great communication tool. And so, so easy.
Since then I have set up another private blog for charities involved in Pareto Benchmarking, and more recently we have started using it for our Masterclass / training sessions. The Resource Alliance asked Jan Chisholm (Pareto Fundraising Australia’s CEO) and myself to work on a new style of Masterclass for the IFC.
This Masterclass includes real data information from a charity, and affords participants the opportunity to look at data and interpret, plan and then look again at what happened to the data.
This is all pretty complex, so what we decided to do was to actually use a blog to get the briefing across. It is semi-private, in that anyone can look but only members can comment or post. Check out http://paretoifc08.blogspot.com/.
I thought I was a tech-head, but I was falling behind. If you are behind, and have a responsibility for marketing your business or charity – please, wake up!
Monday, September 22, 2008
Many years ago it was a big argument in the UK. I remember going to board and senior management meetings where people were trying to tell me how to do my job. They would say things like “... well I would never make a gift if I received a phone call at home, probably when I am in the bath ...”
Putting aside the fact that I must have a lot of very clean colleagues, I am so glad that I managed to convince them that this was a load of nonsense – squillions of pounds later they got it.
I know the argument has raged in Australia too, but I thought it was over. Surely no one would be daft enough to think that using the phone would damage relationships with donors?
Badly made calls, churn and burn calls and rare “shady” calls can damage relationships, but the majority of calls made to donors these days are done by professional fundraisers; trained people who work hard to understand and maintain the long-term relationship with the donor.
And yet the negative approach to telephone fundraising continues. A couple of months ago at a masterclass in Sydney I had one fundraiser telling me they wanted to use the phone to talk to her supporters about becoming regular givers but their board wouldn’t allow it. The reason was the same, a board member had said, “If I got a call like that,I wouldn’t respond ...” Aaarrggghh!
It reminded me of a friend (who will remain nameless) who got a job at a large-ish charity a few years ago.
This friend is a pretty damn good fundraiser, and knows her stuff. The new employer had tons of donors and a decent regular giving program. What is the first thing she wants to do? Of course – a phone campaign to upgrade (increase the monthly gift).
With agencies and in-house teams succeeding in getting 40-60% of donors to upgrade, and getting an increase in the amount by 40-60% as well, you end up with between 16% and 36% increase in regular giving income from those you talk to! Wow! And that is annual income. We also know that people who upgrade are more likely to upgrade again.
My charity fundraising friend pulled together a great proposal.
The response from her boss? “I don’t work in the kind of organisation that bothers its donors at home.” She refused to even read the proposal.
Our friends at The Lost Dogs’ Home have proved the importance of great phone calls and great customer care. They have a terrific retention rate, but they also spend time and care finding out about their donors’ views of animals, and even their pets’ names.
This intimacy pays off with great phone calls that are really good chats between animal lovers, often around the donor’s pet.
Now, if you think I am being negative, I am positively sweet compared to my mate John Burns. I asked him for a quote and this is what he sent:
“I'm morally opposed to fundraisers imposing their outdated morals on their charities to the detriment of their beneficiaries. A more supreme example of ignorant arrogance might be hard to find…”
Please don’t knock stuff back for unsubstantiated reasons. Get the facts, don’t rely on anecdotes, and above all – put it to the test.
This blog is based on an article I wrote for Fundraising and Philanthropy Magazine, in Australia. For more information about fantastic quality phone calls for your donors please talk to me or firstname.lastname@example.org. www.paretophone.com
Thanks! Sean Triner
Monday, September 15, 2008
But what about fundraising in Germany? and France? Canada? Anyone tell me about any other great publications from other countries?
I play a naughty trick, ensuring that the training finishes an hour ahead of schedule and then making the attendees actually call some donors to say thank you, and make some appointments.
I have found that this helps build confidence and get some momentum going.
Anyway, as time was ticking along one of the callers got into a conversation with a lovely donor.
At first he agreed to an appointment, then when he thought about it more, he decided it was too difficult. But our Amnesty International Canada colleague was charming, involving and listened well. By the end he had agreed to make a donation there and then of $10,000. His previous largest gift was $1,000.
What a great bloke. The amount he gave was exactly 10x previous largest gift - and also the amount the training had said we should ask for.
The training session was a bespoke version of my "Hitch-Hiker's Guide to major donors" session which has been presented at various conferences around the world, most recently in London at the IOF, and soon (by Jan Chisholm, Pareto Fundraising CEO) at the AFP in New Orleans in March.
The presentation is below and an article explaining a bit more will be posted on this blog this week!
Sunday, September 7, 2008
I have recently returned from the SAFRG conference in India, and went straight to the Australasian Fundraising Forum.
In India I did the closing plenary, and in Australia the opening - they were both based on the same presentation which is below. Best thing is to play it through whilst listening to Lean On Me (Bill Withers), Mad World (Gary Jules), What a Wonderful World (Louis Armstrong), Beautiful Day (U2).
Saturday, September 6, 2008
In 1966, before most of the buzz-phrases you and I know and love existed, companies in the USA gave a whopping 0.9 per cent of their profit away to good causes. This is according to Giving USA. Generous, huh?
Forty years on, and of course the percentage must be much higher now, right? I mean, what with the monumental shift in public attitudes towards corporate responsibility and ethics and all that – things have just got to have changed out of all recognition, haven’t they?
Ok, then, take a shot. Just how much more of their profit do you think US companies give away now? Don’t cheat by taking a peek at the end of the article. Instead, write down the figure you reckon and see just how close you get.
Exciting game, isn’t it? I think so. You see, corporate philanthropy is one of my favourite subjects. Corporate fundraising is so darn cool – it adds kudos, awareness, involvement and, of course, money to charity coffers. It’s a win-win ‘love-fest’ for all involved – where no one goes home empty-handed.
Or is it?
Well, actually, to some extent the answer is yes, there are loads of great examples. Looking at Australian charities, I checked out a few websites of those I know do well from corporates. NRMA Careflight do well (a roadside assistance/insurance company associating with a rescue helicopter charity), Westpac (a bank) give a nice slice of cash to Mission Australia (a welfare charity) and Canteen (young people living with cancer) do alright out of Toyota, Qantas and others.
And according to a Giving Australia report, companies said they gave AUS$ 2.2 billion in money in 2003/04 and a further AUS$ 1.1 billion in goods and services. Isn’t that wonderful?
Well – I’m not so sure it is. In fact, before you rush off to embrace your nearest corporate CEO, ask yourself this: if corporations are so generous, then where’s the bloody cash? One thing’s for sure, if you take the time to look at the annual reports of the top 20 charities, you won’t find much evidence of large amounts of money being given away by commercial organisations.
My cautionary words about corporate fundraising are not unique. Back in the early 1990s a guy called Stephen Lee had a few things to say about the topic. At the time he was the boss at the Institute of Charity Fundraising Managers, the then name of the UK’s Institute of Fundraising, the British equivalent of North America’s AFP, the Association of Fundraising Professionals. Now he is a very clever academic fundraising guru working at Henley Business School in the UK.
Anyway, Stephen told a story about the UK’s ‘One Per Cent’ club, a club supposedly made up of commercial organisations who give away one per cent of profit. It was a hilarious story, because the club members didn’t actually meet a key part of the membership criteria – giving one per cent of profit away! He stood up and called for charities to refuse corporate donations until companies stopped taking the mickey out of the whole corporate/community partnership business.
His point was that, in the deal between commercial companies and charities, the companies were the winners. Charities rarely knew how to fight for a good deal and ended up being nothing but a big pair of rose-tinted specs for the company. Charities jump through hoops to get a corporate deal and then get paraded like an unfaithful footballer’s pretty wife. Yes they get some jewels – but at what cost?
My point is not quite the same. I want to be more pragmatic. There is money out there – and it can be a lot, but charities need to be much more realistic about their expectations of corporate fundraising.
Let’s look at the facts. Nearly all donated corporate money comes from very few companies and goes to very few charities – most of which are well-known brands – UNICEF, WWF for example – or well-established hospitals, universities, etc.
Now look at the big, growing charities – they are growing from regular giving or government grants, not from corporate donations.
Before pursuing corporate fundraising as a provider of growth in your fundraising strategy you really need to answer these questions. Is corporate fundraising a good use of your limited resources? Can you realistically compete with the big brands, NSPCC, UNICEF, Careflight, Cancer Council and Mission Australia? Is your brand something that will help corporates sell more of whatever it is they exist to sell? Is it even your job to know the answer to that last question and, if so, why would you be any better at it than them?
One Australian company, Cavill and Co has been working with charities and corporates for many years, trying to marry up relationships. In their vision and values statement they hit the nail on the head, ‘... not for profits [need] to adopt an attitude of abundance and forge equitable partnerships with corporations ...’ Of course, my favourite word there is equitable.
The sponsors really do treat the charity’s staff, and therefore the charity, with very little respect. They expect the whole deal to be about how grateful the charity should be, not about an equal partnership.
Let me tell you a true story about a friend of mine who works for a charity that gets a lot of money from companies. My friend doesn’t want to be named so we’ll call him Erik. Erik was really excited about being appointed to a new job with this charity, and especially about the blue chip companies that were plastered all over the charity’s events material, and in the annual report.
But Erik has had a nightmare. The sponsors really do treat the charity’s staff, and therefore the charity, with very little respect. They expect the whole deal to be about how grateful the charity should be, not about an equal partnership. The companies rarely respect their end of the deal – nor acknowledge the benefits the charity brings to their public image.
Erik grew more and more disillusioned, and one day decided to do a simple bit of maths, income divided by staff time. And that’s when the penny dropped. The figures were clear. Despite basking in glory, his corporate fundraising staff were bringing in much less revenue than their contemporaries in other areas of fundraising in other charities Erik had worked with; areas such as major gifts, bequests and direct marketing.
At some of my recent masterclasses in Canada I asked the attending charities to send me their income by fundraising area divided by staff time per area. Suffice to say, from those who completed the homework, corporate fundraising came out pretty darned badly.
Doing it properlyI am not all doom and gloom. My company, Pareto Fundraising, is frequently engaged by charities to work on their corporate fundraising programmes. So does this mean I am a hypocrite? No, I am not saying reject corporate fundraising out of hand – merely challenging you to measure it properly, look at the returns, and accept the fact that for most charities it is flogging a dead horse.
And if you do go the corporate route, do it properly. If you hire a dedicated member of staff, ensure that whoever it is can ‘close the deal.’ Give him or her tight, fast targets and drop ‘em like hot rocks if results are not coming through. You will know in three months.
Don’t be fobbed off with ‘I’m doing research’, or ‘I’m working on our case for support’. Corporate fundraisers need to be out of the office – at the companies’ offices – more than in the charity’s. Ensure that you have indices that prove sales in the making, and hold them to tough sales targets within 12 months.
Your corporate fundraising programme needs to be strict from the start – you need to understand the value of your own brand, understand why they are supporting you, don’t accept partnerships unless standards are met, create a new internal code of practice and most importantly, don’t devote more energy and resources to this area than income from it deserves.
So, let’s finish with a comment about corporate philanthropy in the country for which we have the most data, the USA. And please don’t think, ‘Ah, but it is different here’. It isn’t.
The most generous country in the world, and home to some of the most successful and largest companies in the world, the USA is the nation that invented the ‘triple bottom line’ and to some extent ‘corporate social responsibility’.
What was your guess for how much US companies gave – as a percentage of profit – in 2006?
Forty years of change and the percentage of profit US corporates give has gone up from 0.9 per cent in 1966 to 0.7 per cent in 2006. Oops, did I say up?
Pareto Fundraising can help you with your fundraising strategy. Although our offices are in Hong Kong, Toronto, Brisbane, Sydney, Melbourne and Wanaka we deliver strategic advice and consulting worldwide.
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This information also appeared in F&P magazine and is also on SOFII - The Showcase of Fundraising Innovationand Inspiration.