Thursday, December 10, 2009
Please, if you are a fundraiser, read this and donate now. If today, the donation will be doubled.
This is the most important blog I have ever written about SOFII.
I do hope that you signed up and find the site useful. The revamped site is going to be much more user friendly, and even more useful.
But it won’t last long without funding.
You see, the fact is, SOFII was born from Ken Burnett’s passion for fundraising, with the support of some key friends – including us at Pareto. A bit like many things in new media, it was created as an idea – he just got on with it (good old JFDI attitude).
The plan was to see if it worked, if it was popular and then work out how to fund it.
But now, as a fundraiser, I need your help. Please will you make an urgent donation of $30 by clicking here. I’ve already put in a big chunk, and a couple of close friends have put something in, but there is still lots to go.
And if you make a donation today it will be matched – doubled – by The Big Give*; twice the value right now.
Like you, I care about making the world a better place. That’s why Paul and I set up Pareto, and probably why you work where you do.
Fundraisers have a huge role to play in enabling their organisations to have the maximum possible impact. But fundraising is tough.
SOFII helps fundraisers do their job. Fundraisers like Julia at the Centre for Companion Health, a small fundraising operation based in Brisbane, Australia.
‘When I was first told about the SOFII website site I was sceptical – a free site that shared fundraising initiatives from around the world – is this possible?
‘And then I realised it is possible, very possible, brilliantly possible!’
Julia is one of over seven thousand SOFII subscribers.
‘The SOFII site has an amazing array of top of the class, proven fundraising success stories and a mountain of ideas. To me this site has been gold. I refer to it all the time and wish I had more time to sift through every single document.’
The problem for SOFII is that I need to professionalise the site. I need to make it more friendly, have comments and voting available, and professionally manage the gathering and displaying of exhibits. And this is where I need your help.
Please, join me by making a gift – I am suggesting $30, but don’t forget that every dollar you give will be matched. Click here to donate before the Big Give time limit expires.
Julia has used the site in an incredibly practical way...
‘As a one person fundraiser – I need to be economical and targeted with my fundraising efforts – and this site helps me do this. I have downloaded so many of the examples, then adapted them specifically to our donors and our cause. It is like you get to see the secret recipe for fundraising – but you must add your own unique ingredients.
I have used SOFII for direct mail, donor care, thank you letters, donor surveys, campaign ideas, bequest (legacy) communication and also just for my own personal professional development in learning more about the scope of fundraising.’
Julia is in Australia, but SOFII is helping fundraisers in countries as diverse in fundraising and culture as Nepal, the UK, India, USA, Indonesia, Hong Kong and New Zealand.
Ken’s vision was to keep SOFII free and available to any fundraiser. And it still is. But I need those fundraisers that can help, to help.
Please, as a fellow fundraiser, help keep SOFII alive – and make a donation – grab your credit card, click here now and help fellow fundraisers around the world.
Thank you so much. I really appreciate your time reading this email. And thank you, thank you, thank you for making a gift.
Fundraiser, SOFII user and donor.
PS Julia really loves SOFII. And she is not alone. With the revamp of the site, even more people will be able to use it to help their fundraising activities. Please join me in donating to SOFII here. How much to give? I am suggesting $30 because it is an amount that won’t be missed by most fundraisers earning over $40k a year. And if you give now, it will be doubled*.
PPS If you haven’t signed up to SOFII, please do so here!
Saturday, November 21, 2009
The appeal was put together as an emergency appeal, taking a couple of weeks from start to finish. Yet despite this time frame, staff still managed to make sure that the mail message was integrated with their website – in particular, their home page.
It still amazes me that a charity can run an appeal or campaign through the mail and / or phone which would usually have a message along the lines of:
• Here is a problem, a really, important problem (let’s call it problem x)
• Here is how problem x affected subject y (the case study)
• Here is what we are wanting to do to fix the problem
• We really, really need your help to do this
• This is really, really important
• Please give now to help solve/alleviate problem x
The recipient of the mailing is motivated, excited, maybe even shocked, but really cares. But what if they misplace the mailing? Chances are they go to the website homepage to find out more . And more often than not there is nothing there about the appeal! No mention of subject y, and problem x is loads of clicks away and doesn’t feature in the search engine...
Not a good look. Now, to be fair, in the real world few donors actually give online – so it hasn’t really mattered that much. But things are changing. Our benchmarking report (comparing data from 23 charities) has shown online solicited donations doubled between 2007 and 2008, and this will probably happen again (at last!) in the next 12 months.
But we also noted a marked increase in offline-solicited online donations. In the Starlight example, over $650,000 was donated in response to the appeal – and about 10% of that came in over the web. In other words, those donors received the appeal and instead of sending a cheque through the post, logged in and donated.
There is still an argument to say that including a web-donation option on a response coupon can decrease the total amount raised (because you send people away from an immediate response option), but this theory needs further testing.
Regardless of this argument, most fundraisers I know haven’t tested this, they just automatically include a web donation link.
Now, if you are writing a letter telling people this is the most important thing in the world they can donate to, and then send them to a weblink to donate there is even more of an imperative that the link and your home page reinforce the urgency of the message.
In their most recent campaign about human rights abuses in the Democratic Republic of Congo, Amnesty International asks for ‘an urgent gift today’ to help ‘respond to the cries of thousands of women like Bernadette.’The signatory of this letter is Andrew Philip, an Amnesty researcher.
The response coupon directs me to the Amnesty homepage (in small print),which features thestory in the appeal, though with a different case study. This is great – it is important after all!
The theme is let down slightly with a generic online donation page but at least the communications led me to that point.
But most charities don’t pull this off well, if at all. Just visit the homepage of the charity that next asks you for money and see if what they are asking for is really that important.
It should be easy to amend the homepage a bit, have a separate online donation form, and those with a Facebook and Twitter presence need to reflect the campaign too. For now, it won’t cost much, and keeps the website relevant, helps search engine optimisation and should raise a bit.
But in the future, with more and more people giving online it is going to be absolutely essential.
(Oh, if you do take online donations and get your messaging integrated – please, please, please ensure that your processes for measuring response and allocating to the appropriate campaign are working!)
Check out Amnesty’s website here (though the campaign has now changed), and there is a full Starlight Case Study here, including an entire copy of the mailpack here.
[Every month I write a column 'The Agitator' for Fundraising and Philanthropy magazine and this post is my most recent entry!]
Friday, October 30, 2009
Wednesday, October 28, 2009
The article, by journalist Dan Flitton in The Sydney Morning Herald Newspaper has a terrible headline "Charities hand over up to 95% to street marketers" and not much better in sister paper, The Age - "Paying to collect the charity dollar".
The body of the article is not incorrect, but it really doesn't give enough information for potential donors to make a decision and the language is terrible: "... Cornucopia takes a cut - a big cut, up to 95 per cent of the total donation collected in the first year..."
Cornucopia are a fundraising firm that recruit and train staff who represent charities on the street. 'takes a cut' is pretty negative language for what is a paid for service. The 95% fees is not all profit - it goes to pay for transport, training, wages, admin, materials and more.
And of course, the donors stay with the charity for years, will upgrade, do other things and some may eventually leave money in their will. The charity gets a great return with total costs probably closer to 25% over the years.
I very much doubt Dan Flitton is a bad person. He would appear to be genuinely curious but hasn't got all the information. I imagine he would be gutted to know that his article has probably cost charities hundreds of thousands of dollars. Why?
Well, he mentions Amnesty International, Red Cross, Oxfam, MSF and Fred Hollows. Five fantastic charities doing amazing work, and raising millions of (net) dollars from F2F that otherwise wouldn't be there.
It is possible that a few donors will cancel - not many I hope, but some may. But more significantly, some staff within charities will call for their organisation to suspend (I can almost hear the 'until the media storm dies down') - or even stop - doing it.
The consequence, however you look at it, will be a huge loss of money. Ironically, some could still have to pay costs for fundraising activity already committed, but cancelled. So they will be paying money out for nothing - much worse than 25% over four years. Less money for crucial services including life-saving work and a direct consequence of this article and headline.
It won't stop there. Boards and CEOs of charities have not usually the time or inclination to really get to understand more about the intricacies of fundraising techniques and will react badly to this media. Professional fundraisers may have spent hourson research, modelling and contract negotiations only to have it vetoed by concerned boards. The consequence - much, much less money for their cause.
I am not an advocate of fundraise at all costs, but F2F is no worse in effectiveness than any other significant strategic technique - it just looks worse because the cost of staff is out-sourced. There are no other strategic methods that deliver such a huge return for charities over the long term at the same volume.
Transparency for charities is important, but the famous Otto von Bismark quote 'Laws are like sausages, it is better not to see them being made' comes to mind. Not because we should hide fundraising costs, but more because it is so complex to explain. As Peter Singer in 'The Life You Can Save' explains, cost effectiveness of fundraising and admin is NOT a good indicator of the effectiveness of a charity's work.
The volunteer that comes on and says 'I have been doing this for free for 20 years' sounds so much nicer than the backpacker getting paid a little over minimum wage. But there are not enough volunteers to go around; volunteer fundraising simply can't add enough money to come anywhere near to meeting the need.
Tuesday, October 27, 2009
It was written in spring after a winter which had been ‘the severest and most arduous, so far as work among the children of the poor is concerned.’ He needed to raise £100 a day for food. The letter also brings to the attention of the reader that the ‘unceasing demands upon our resources’ were having an unprecedented impact.
The results of this appeal are not available, but I believe it did well.
A couple of months back, another children’s charity, Starlight, had been hit hard by the recession and they had decided to go public about their plight. They were very honest, acknowledging that part of the reason they were hit so hard was their funding strategy, which relied too much upon events and corporate support.
After reading the press stories about their plight I pulled together an ‘emergency’ appeal to their donors and met up with them. The emergency appeal was developed to demonstrate how I work, but they decided to mail it immediately anyway.
The letter is quite similar in approach to Dr Barnardo’s, except it had a couple of case studies, a cut-out of all the newspaper headlines (cleverly designed to look like it was cut and pasted using scissors and glue and then photocopied), and a rehash of some previous materials.
Whilst it would not win any awards for graphic design beauty, the appeal raised well over target, actually doubling the amount raised from donors last year.
But what interests me is that, at the heart of the appeal, was a four page appeal letter. By the way, the four page letter by Dr Barnardo referred to earlier was written in the 1880s, not the 1980s.
You would think fundraising would have changed a lot between the late 19th century and the new millennium.But when we look at the data of 23 successful fundraising charities willing to share results in a benchmarking cooperative we see that direct mail appeals still raise more than any other method (not including government and bequests).
Despite the rise of other media, hundreds of people will be starting or half-way through organising their Christmas appeal mail-out, with collective expectations of raising millions from generous Australians.
But unfortunately many will still not have learned the lesson from Dr Barnardo – longer letters tend to work better.
I really don’t like long letters, by the way. They are a pain in the butt to write, check copy, get clients approval, print and mail-merge. And someone important at most of our clients doesn’t like them. And I have lost staff with their last words being ‘...there are only so many four page letters I can proof read...!’ Ironically most of those staff are now clients proof reading four page letters. And they don’t look great in my portfolio (though the results do). And I prefer doing digital stuff. And... I think you get the idea.
In focus groups, donors say they hate them too. In Hong Kong, one client ran focus groups which all concluded that donors would be more likely to respond to a pack with a two-sided letter and tear off coupon than a four page pack (actually eight pages – English and Chinese) with lots of additional information. When they tested both approaches in a 50:50 split test, the two pager raised HK$1.5 million (AUD$220,000) – the big pack raised over HK$7.5 million (about AUD$1.1 million)
Longer letters tend to work better - but not because they are long. It is because, to tell a good story with a beginning, middle and end, and ensure the right fundraising tactics (target, what the target is for, deadline, establishing need, demonstrating solution, demonstrating why that charity is best placed to solve etc), it simply takes more words.
Having said that, a dreadful four pager is worse than a good two pager – if a story can be told more quickly then tell it.
As Mal Warwick says: ‘A fundraising letter should be as long as it needs to be...’
Good luck this Christmas.
(This post is a rehash of my agitator article in the electronic edition of the most recent Fundraising and Philanthropy magazine).
A case study on the Starlight appeal, including the whole pack in downloadable form is available here.
And finally, see Dr Barnardo’s 19th century appeal on SOFII here.
Monday, October 19, 2009
His new blog is just as good. Future Fundraising Now. Check it out and subscribe.
Whatever your job in charities is, please, please watch all the Stupid NonProfit Ads on the old blog. And read why they are crap. Especially if you are thinking of running a brilliant advertising campaign in the next few months.
It is essential viewing/reading and if all charity staff watched them, and understood the point then I estimate that maybe $80m to $200m per annum more would be saved or raised.
Which, taking one of the 'costs of saving a life' estimates in Peter Singer's The Life You Save is enough to save the lives of at least 20,000 people.
You could be harsh here, and say, in other words, Stupid [Charity] Ads are worth taking the mickey out of - but they kill people.
Stop award winning stupid charity ads now!
Friday, October 16, 2009
So they decided to go to their loyal supporters with a strong, honest appeal for help explaining how they got into this situation. And it worked, raising over $600,000 (more than twice as much as a 'normal' appeal at that time of year could be expected to make).
Starlight are so cool, they are letting other charities get hold of their entire package to help inspire others. The pack can be downloaded here, and the full story is here. Oh, by the way, it only took two weeks from idea to mailing this pack.
Sunday, September 20, 2009
A PR / awareness campaign would usually be preceded by one of these polls and then followed with one. The relative impact on awareness would be measured.
One of the most useful methods of measuring the effectiveness of PR and awareness campaigns.
I am not a fan of such campaigns if their objective is to raise money (fundraising tends to work better, and I prefer targeting the 'right' audience,not the 'general public'). However, such campaigns are useful for social marketing (like anti-smoking messages) and this unprompted awareness measure is probably the best metric.
However, I wondered if there is a much cheaper way of achieving the same aim?
Surely, my theory goes, Web Search terms will 'rank' organisations in the same pattern as polling. Using Google Insight, I looked at five charities from the top ten fundraisers to compare the number of searches over time. Red Cross peaked during the Victorian bush fires (Nearly 100% more searches than back in Tsunami times).
But apart from the peaks, the trends do seem to look like what we would expect from awareness polls.
(Click on the picture for a clearer image, or if that doesn't work, click here). Please note 'TOTALS' are not absolute numbers, they are relatives.
Now all I need to do is find some awareness poll data from the past few years and see if there really is a correlation. If there is, and if it can be substantiated by other results, we could be looking at a massive saving on costs for lots of charities measuring their awareness campaigns.
If you work in a charity and willing to share with me a few years of unprompted awareness polling data, please contact me!
Tuesday, September 15, 2009
While there is talk of the economy recovering, it looks like it's going to be a long while yet before things are rosy again. And there are stories of nonprofits cutting costs in different areas, some of this makes sense and some is plain madness.
One area of madness is when it comes to training. I have just got back from the Bridge Conference in the USA, which is jointly run by AFP and DMA, the American equivalents of the FIA and ADMA. According to a friend, who is a USA commercial sponsor of that conference, they were hoping for 1,300 attendees but fell well short.
I was told that many North American conferences are suffering, and a series of workshops in Canada that used to be well attended had to be cancelled this year because of low attendance, the main reason being ‘the recession'.
Just two weeks before the Bridge Conference I was at the ADMA Forum in Sydney, with over 600 attendees - all but 12 from non-charities. Charities are one of the biggest sectors in spend on direct marketing, and at the conference were tons of direct marketing experts sharing results and information, yet hardly anybody from charities attended.
Is it because we think there is nothing to learn from the likes of Priceline, Forrester Research, SBS, Australia Post, ANZ, 3 Mobile, Lavender, Y&R and lots of others I reckon not. I suspect there are many at charities who have never heard of the ADMA Forum, but I also suspect that people at charities didn't go because of the price and tough choices about training opportunities.
Which one should I go to? Australasian Fundraising Forum, Pathways Australia workshops, MDU, FIA conference, Pareto presents, Xponential workshops, ADMA Forum ...?
I often hear charities that employ tens or hundreds of people, with a fundraising team in the double digits (who are responsible for raising millions) pleading poverty.
Guys, don't be tight - it is a false economy! Don't send everyone to everything, but make sure you have people at most of these things. Depending on earlybird/charity/member rates, ADMA Forum costs about $1,500-$2,000, FIA Conference about $1,000 and the Australasian Fundraising Forum about $770.
For all but the smallest of charities these rates should be peanuts - the return will well outweigh the costs. Attending just one event could make - or save - thousands of dollars. This is great value whether helping to develop a strategy, pulling realistic budgets together or even just for ideas on tactics.
Yes, there are books around, and great articles and blogs, consultants and peers. But conferences often provide tons of useful, practical and evidenced ideas you can put into practice. I know many will be cynical (we have all been to rubbish sessions at conferences) and perhaps some people think they won't learn from any of the speakers. I have been in fundraising for nearly two decades and provide training at many of these events, but I cannot think of one conference I have attended and not learned something really useful that could make my charity (and now clients) more money.
The problem is, many charities don't budget for training, or when they do it is minute. A good rule of thumb I tried to push through at my last charity job was to budget for 5%-10% of staff costs. My reasoning was that I would rather have 18 or 19 well trained staff than 20 not. And it could actually save you money in staff retention - people like to be trained and are therefore less likely to leave.
Of course, conferences are not the only training option, but I think conference attendance is a good litmus test of an organisation's attitude to professional development. In-house and on-the-job training is essential, but without external input, these alone will create an internal spiral of sameness, lack of innovation and eventually, termination.
You will notice my nom-du-blog is ‘Sean is always learning'. Because it pays to learn. But sometimes I have to pay to learn too.
(Originally published in Fundraising and Philanthropy Magazine E-Bulletin).
Sunday, August 30, 2009
Fewer people have been killed by snakes in recorded history than cars kill in one month or so.
My sister knows my enthusiasm for the legless wonders and, joined by my parents, bought me a course to learn more about them for my birthday. But I'm going further and becoming a registered snake handler, on call to rescue snakes from my neighbours. As a volunteer for NSW Wildlife charity, WIRES, people will be able to call me to remove venomous snakes from their homes.
But the course was not without a few hairy moments - as this 'rescue' of an angry carpet python shows.
Friday, August 21, 2009
I thoroughly recommend that if you meet this criteria for digital fundraising that you apply for the grant, if you haven't already. DO NOT apply if you don't meet this criteria ; there are more important things to do that will raise you more money
- You have someone responsible for planning and monitoring your online signups
- You have someone with the time to be testing different messages to drive traffic
- You know why you want people to come to your website
- You know where on the website you want them landing
- You have calls to action on every page of your website - even if 'sign up for free newsletter'
- You have a plan to follow them up, very, very fast (you have 30 days or so honeymoon and should be emailing them 2 or 3 times a week in that period, calling them if you are trying to get regular givers with ten days or so) - separate blog coming on this eventually (I learned lots about it at US conference recently)
- You are already on top of your mail program, and are calling top donors to say thank you and remind them about important mailings (there is no doubt that if you are not doing this, you'll make more money than spending the Google Adwords grant)
- You have budget to roll on paying for Google Adwords and other online media if you get it working
- You have someone who absolutely and totally gets how Google Adwords works.
- I am sure I've missed something... comments please!
*(They don't say 'nice' their version is slightly, but not much, more complicated).
Charities we noted were sponsoring words when typed in on an Australian IP Australian a couple of months back are below. With a couple of months of results, any feedback guys?
· Leukaemia Foundation
· Saving our World
· Make a Wish
· Reach Out
· Planet Cancer
· Red Cross
· Sick Kids Foundation
· World Vision
· Flying Doctors
· Save the Children
Thursday, August 20, 2009
I recently posted my keynote presentation at ADMA Forum - 'Who Let the Dogs Out' but have just found out that ADMA actually record them too. So you can watch the presentation.. and listen at the same time.
It is 48 minutes of me talking though - so be warned. Click here and then click on my name.
Tuesday, August 18, 2009
Whilst there I was especially astonished at the level of interference by volunteer boards in the day-to-day running of charity business.
In one meeting I got up to have a closer look at the doors to the boardroom. The only explanation for what was happening in the boardrooms was that there must be tiny brain-zapping devices planted about head-height into the door frame.
Whoever put them there was clever - they were invisible to the eye, but, although improbable, they must have been there. Sir Arthur Conan Doyle helped me to this conclusion. "Once you eliminate the impossible, whatever is left, no matter how improbable, it must be the truth."
You see, very powerful, rich, clever business people, would spend the day wheeling and dealing, laying off hundreds of people, hiring loads more, spending millions on marketing, buying a foreign telecommunications company before breakfast, and brokering a deal between China and Australia to buy uranium over lunch.
Then they would go to the charity board meeting, walk through the door with the zapping things and turn into absolute gibbering idiots. They would start arguing about the colour of the logo at the charity ball, who would sit next to who and then give the fundraisers grief for not performing miracles and recruiting tons of donors with no money to spend.
On top of that, they would be scared to actually ask a friend for money for their charity.
In Hong Kong I investigated to see if the same thing was happening there. The answer was yes, but thankfully with a few exceptions (more exceptions than Singapore).
I reflected on my experiences of being a fundraiser and director at my previous (UK) charity employers and my experiences in Australia, New Zealand and Canada. It would appear that these zappers are pretty universal in boardrooms around the world.
So, fellow fundraisers, what are we to do about it?
Well the first thing is to understand why charity boards exist. They are there to govern. Not to manage and certainly not to do.
You may have heard the phrase ‘... in America, it is Give, Get or Get off...' which us Australians (and Brits) used to think was the case for all charities in the USA. Well, news flash - it isn't: most charities over there have board members who refuse to ask for money too. Just get over it. It is not their job to ask - it is yours. Sure, you can try and get some of them to help but don't depend on them.
There is a great book, Tiny Essentials Of An Effective Volunteer Board by Ken Burnett. Buy it. It is cheap, and tiny - and takes about an hour to read. Get all board members to read it and it will revolutionise your charity. Whatever happens, it will revolutionise your career.
Ken thinks there are five key roles for boards:
1. Watchdogs (protect public interest, brand [mission] guardian etc)
2. Strategic oversight (help develop strategy)
3. Hire and fire CEO, including monitoring performance / targets etc
4. Support management
5. Understand and approve finances
That seems sensible enough. What goes wrong though is that many boards have a total lack of understanding about fundraising. Fundraising is like a secret that is on view for everyone to see, but non-fundraisers don't actually know what happens.
The non-fundraising people of the world think charities get money from events, companies and possibly just by magic. They don't really think about it.
They don't know that across the sector, government is the biggest contributor.
They don't know that of non-government net funds only about five to ten per cent comes from companies, and about the same comes from events.
They wouldn't be expected to know that bequests account for about a third of net funds, and that those pesky junk mail letters and cheeky backpackers are dragging in nearly half.
They have no idea how expensive it is, or that everyone doesn't do things for free.
They expect charities to get free advertising, free print and free everything else.
Your board members - no matter how clever they are - don't get this either. How can they do any of the five key roles without understanding fundraising?
Logically, a charity board should comprise people with different areas of expertise enabling them to govern wisely, asking the right questions, setting the right parameters, recruiting the right CEO.
Some charities aim for a wide spectrum of board members, but it is a mystery why they never seem to ask fundraisers to be on their board.
I wondered about this; why don't boards ask fundraisers to go onto boards? Maybe they are worried about having a fundraiser from the competition on the board? What about consultants like me then? I would never want to be a board member of a client, that has a clear conflict of interest, but surely I have something to offer?
I thought maybe it was just me - bolshy, agitating, impatient; mathematician fundraisers with my personality would probably be too much. But I chatted with a few other consultants and senior fundraisers and found I was not alone.
Probably this is self-fulfilling; as I said before, boards in general don't get fundraising, so they don't understand the skills they need.
The solution is obvious. Boards need to be taught the basics and economics of fundraising. The reality. We need a board fundraising induction kit. A couple of years ago, I offered free places for board members accompanying staff to fundraising training courses but got hardly any take ups.
A typical master class nowadays will have less than five per cent of attendees being board members of a charity.
But there is a board management and fundraising kit, and I suggest you put it together for each and every one of your board members now and for every new board member appointed. The kit comprises of:
- two books - Tiny essentials of an effective volunteer board (Ken Burnett), Tiny essentials of fundraising (Neil Sloggie)
- a few other publications (listed at the end)
- a presentation (at least annually) about fundraising, not your fundraising but the sector's
For your presentation, I recommend you nick bits from Givewell's annual report on giving but keep it simple. Although not written for this purpose, my white-paper ‘Ten tips to fundraising in a recession' has a load of useful charts and a good section on why return on investment is the wrong measure for fundraising.
I asked Ken Burnett for his top half dozen tips for effective boards and he sent me 21.Here is a little selection.
The board serves the organisation, not the other way around.
- Make sure everyone fully understands the different roles of the board and the management ‘top team'. Management manages. The board governs. Define the different roles, making clear what governance means.
- Keep the CEO involved (and management team too). Never meet without the CEO, unless in a crisis that involves replacing the CEO.
- Reduce paperwork. Make sure your meetings serve the need of the organisation, not the trustees.
- Get the board's balance right: introduce formal terms of service, retirement policy, gender balance, age, representation from the field, regions, retaining institutional memory etc.
- Run good, enjoyable and informative meetings. Make sure they start and end on time.
If you are a fundraiser, you may feel that you have little influence on the board - particularly as to how it is selected and run. If you are right about that, then it means the board needs you more than it knows. Go through the proper channels (usually the CEO) but make sure they know about the help they can get, and that you are only trying to help your beneficiaries.
The books mentioned can be bought from White Lion Press. My white paper is available by emailing Justine.
The Essential Trustee: What You Need to Know (Free - UK)
Ten Basic Responsibilities of Nonprofit Boards (USD$27- USA)
Board Membership with Purpose and Fun (Free - UK)
Facing the Financial Crisis - Ten Smart Things Your Board Can Do Now (Free - USA)
A Process For a Formal Governance Review and Evaluation (Free - UK)
I originally wrote this for Fundraising and Philanthropy Magazine and their monthly e-bulletin.
It's a good fundraising rag - even for those beyond Australia's shores.
Monday, August 17, 2009
Good newsletters are good, but let's face it - there aren't many of them - so stick with personalised letters. Tom Ahern, the world's leading charity newsletter expert disagrees.
Check out my debate with him on Sofii. And below are the slides from a masterclass in Melbourne where we 'proved' newsletters were rubbish - usually.
Monday, August 10, 2009
ADMA, the Australian Direct Marketing Association has invited me along to help judge work for awards beyond charities. I really enjoy this, but it never fails to confuse my commercial counterparts that I only work for charities. Their confusion comes from the fact that they are pretty honest about the fact that they don't charge charities for work, 'they just do it for awards - great for marketing'.
But I won't name them, because I am too, um, polite. (Though Todd Sampson, CEO of Leo Burnett in Sydney said it in front of hundreds of people at the FIA Conference, so happy to name in - and give him respect for honesty.)
Jeff Brooks, creative director at Merkle has no such qualms. His blog, 'Donor Power Blog' is brilliant stuff, and one of my favorite areas he blogs about is 'Stupid Charity Ads'. Here he doesn't mess about and says it like it is - including taking a very unsubtle shot at Todd's agency and their WWF ad.
Check out these 'stupid charity ads' including the 'Leo Burnett edition.'
Friday, August 7, 2009
We also know that it continues to work. Quite often the first time this approach is used will witness a considerable lift in income, especially if tied in with a target, deadline and specified ask amount. We see that the lift tends to stay there for years afterwards too.
Evidence from the commercial world also backs this practise up – check out Dell’s website any time and you will be confronted with something like this:
‘Book now’, ‘Hurry whilst stock lasts’ etc – Holden is running a ‘Holden Owner’s Grant’ which has been ‘extended – limited time only’.
It is a well known sales fact that creating urgency and immediate action increases sales. And charities are no different to companies.
My colleagues and I are big proponents of the deadline / urgent approach – in every call to action. The Obama campaign was notorious for its superb immediate calls to action, and near instant gratification. With political advocacy group Get Up!, campaign urgency is a big factor in their ongoing success. I receive maybe thirty requests a year from Get Up!, usually all urgent – check out this extract from one of their emails ...
The Murray-Darling is at breaking point - literally dying of thirst.
The Murray-Darling Basin accounts for over 40% of Australia's agricultural production and grows almost a third of all our food. It's Australia's food bowl. Could we survive without this mighty river system?
It's time to implement urgent solutions to save it - as things heat up in the coming months, the Coorong Lakes at the Murray's mouth may even dry up completely before summer's end. Click here to help save the Murray-Darling before we turn our nation's food bowl into dust bowl:
Now GetUp! often has real deadlines – legislation, events, court cases, hearings etc – this may make it easier. Yet we frequently manage to get across a sense of urgency in campaigns, even for organisations with long, long lead times such as medical research.
This is done by talking about funding options, missing out on vital research etc. And to ‘create’ deadlines (beyond Jesus’ birthday and the annual tax office visitation) you can use ‘an important meeting ...’ as a deadline. There are always upcoming important meetings where finances are discussed, and money is always needed in the bank for then, so this makes sense.
But, out of a fear of reducing life-time-value, some fundraisers fear these techniques. In a masterclass a fundraiser once said “I am sick of all this urgency – surely the donors must be too?”
Well, firstly, this fear is unfounded – it doesn’t seem to push donors away, even after years of it.
A small proportion might complain, but not enough to worry about. Having said that, if every single communication is ‘urgent, give us money now’ I think (but have no evidence) that you might begin to wear out donors with the same message.
My recommended solution is to balance urgent messaging (which doesn’t always have to have the word ‘urgent’ mentioned) with donor care – communicate occasionally with donors, with no ask for money. Do this twice a year or so, plus some extra emails. Explain the impact of what they donated, update on case studies. I mean beyond newsletters – use direct letters that say thank you and acknowledge the donor for their support.
When the last fundraiser told me they didn’t want to do all this target, deadline and urgency stuff I just asked them if they didn’t need money next week. Of course they did.
The moral of the tale? If you need money next week, don’t be scared to say so.
Every month I write something agitating like this for Fundraising and Philanthropy magazine - for their e-briefing 'The Agitator'. Subscribe to their e-briefing here.
Tuesday, August 4, 2009
Let's get a bit of competition in the Pareto Fantasy League.
I have done it for years, and am still rubbish (last year I did a 'lucky dip' random team and it did better than my painstakingly chosen team) – but it is fun and easy.
Register a 'Fantasy League Classic' team on http://www.fantasyleague.com/Classic/Default.aspx. It costs ten English squids.
You can take hours picking a team, or 5 mins like me - click Lucky Dip and then move a couple around. You must have a goalkeeper, 2 fullbacks, 2 centrebacks, 4 midfielders and 2 strikers. Plus 5 subs.
Once you have set up a team, let me know your team name / registration and I will invite you into our league.
Even for English born Pareto staff, we are NOT making this a requirement of employment, and continued relationships with clients and suppliers is NOT dependent on them putting in a team.
First match is 15 August: Chelsea (booo!!!) v Hull (yaay!!!)
Saturday, August 1, 2009
This should have great implications for charities like The Sumba Foundation - a small but brilliant charity that I want to support but international charges are too high for smaller ongoing regular gifts.
Paypal charges 1.1%+30c per transaction for charities - which is 52c on a $20 a month donation; comparable to local banks.
I notice only a few charities actually accept PayPal, but I expect this to change pretty soon. If you are in a charity, then please accept PayPal online - it makes it easier for the donor to give!
Setting up an account is easy, but make sure it is a "Business type". Registering as a charity is a little more complex though; email PayPal and they give you the instructions.
Saturday, July 25, 2009
Pareto Fundraising's Creative Director, Dan Geaves loves surveys as much as me.
Here is his very uesful presentation about them - some very useful statistics in there.
An article about using surveys (and more) is going out in our next Pareto Talk e-newsletter. To sign up to receive it, click here.
Wednesday, July 22, 2009
Read what I have to say about it in 'The Hitch-Hikers Guide to Major Donor Fundraising' - and below is the presentation to go with it, presented at DMAW Bridge Conference.
Tuesday, July 21, 2009
He also told us that the more fields of information that you capture, the lower your response rate, so to generate maximum response rate just ask for email address. Makes sense - BUT we know that calling people on their mobile phone is much, much more effective in converting them to donors, especially regular (monthly) donors.
But what is the optimum point? Charities and companies worldwide are investing in exploring these ideas, but rarely coordinated even amongst their own sites.
Even when tested, in many of the case studies I saw at IWRM and then at ADMA Forum there was no joined up thinking between the initial test and the final sale.
The initial sign up rate when capturing data is not the point - the number of sales is the point - but testing is long winded and expensive.
Chatting to people from different INGOs (International Non Governmental Organisations eg UNICEF, Plan, Oxfam, Greenpeace, Amnesty) in different countries I see some amazing tests but again, no joined up thinking.
For example, Greenfam USA may be testing one thing, for a cost of $50k and Greenfam UK testing another for the same price, Greenfam Brasil another and so on.
Surely a better approach would be a team effort, pooling resources and testing joined up thinking in a tech savvy country, with a small but rich population, high Internet penetration and in a language used in more countries than any other?
Having a multi-national team enables 24 hour project development, doubling the speed at which progress can be made (I know, in theory it should treble speed but in practice, hand overs etc slow things down). Back end could be done in cheaper countries - any online test can be done anywhere of course.
The lessons learned can then be rolled out and tested. Of course, some practical differences between countries will emerge but as World Vision have shown with their international rollouts of successful products, these differences are cheaper to iron out than everyone just doing their own thing.
We are managing to do this at Pareto - with our international offices working together with areas of speciality in different countries. It is hard work to get it going, but we can see the advantages already.
And the country rope for these tests? Australia. WSPA did it - come on the rest of you!
Oh, and for all those non-INGOs grumbling that this blog is useless for them, make friends with INGO staff and find out their results and I promise to publish whatever I can get permission to publish.
So check in anytime until then. After that, I will neaten it up a bit.
Monday, July 20, 2009
Before I set up Pareto Fundraising with Paul Roberts, I was fundraising and marketing director at Mind, a UK mental health charity. While I was there, I introduced face-to-face fundraising, which brought in hundreds of thousands of pounds.
Although it wasn't cheap my argument was simple: the return from face-to-face (F2F) activities was better than the amount the money would earn in the bank. (By face-to-face, I mean the practice of asking people for small monthly regular gifts on the street, at events and door-to-door).
Even over five years, F2F does well to make a return of more than 3:1 and it can take nearly two years to break-even. But it still hammers investment returns in the best bull market.
Other methods of recruiting new regular givers, like direct mail or online, give a superior return on investment over five years but income is harder to earn and can rarely match the volume of F2F.
I recently met with staff at a charity in New Zealand. The rather innovative finance director said that what they needed to do was to sell their property and free capital to invest in F2F. She was serious, and the CEO nodded in agreement. Her argument was the same as mine when I was at Mind - the return from F2F would be better than just leaving the money invested in property.
As well as yielding more, the risk is very low too. Now they will need to have some serious conversations with an F2F supplier and their board.
This enlightened attitude to reserves is unusual - for many companies as well as charities.
I heard of one charity cutting services and laying off people despite having very substantial reserves ‘for a rainy day' - enough to keep services going for years. It made me wonder: ‘What are reserves for anyway?'
Chatting to a few charities, I uncovered several reasons for maintaining reserves. The first two below seemed the most frequent:
1) Endowment / income generation
2) Safety net (rainy day)
3) Saving for defined future plans
4) Saving for undefined future plans
5) Protecting their independence (e.g. if government slashes funds they can carry on)
6) Meeting long-term commitments (endowed chairs at unis, specific projects, legal requirements)
7) Covering an amount sufficient to remain legally solvent and pay out all commitments upon wind-up
8) Tiding them over between events
I then asked the lovely researchers at Givewell how much charities had in reserve. (In a moment of fundraising excellence, they pointed out that if I upgraded my subscription they could send me their compiled investment report. Genius - they got my upgrade.)
The Givewell analysis of hundreds of 2008 annual reports shows that 202 non-hospital charities have investments of more than $500,000. Nearly $5 billon is invested, with another $1.5 billion held in cash.
Some of these reserves are big - the largest are held by St Vincent de Paul Society in NSW and the two Australian Salvation Armies. Between them, they reported just over $700 million in non-cash investments with three-quarters of that tied up in their properties.
Let's look at the endowment / income generation motive for keeping reserves. Many charities - especially schools, universities and hospitals - will run a capital campaign to build up a reserve fund to use as an endowment.
According to Wikipedia, "A financial endowment is a transfer of money or property donated to an institution, usually with the stipulation that it be invested, and the principal remain intact in perpetuity or for a defined time period. This allows for the donation to have a much greater impact over a longer period of time than if it were spent all at once."
Put simply, I donate $1 million and the charity invests it wisely and spends the investment returns, but leaves $1 million in the bank. Over 20 years, it draws an average return of say 10% per annum. In other words, my donation provides $2 million for services. So it has a greater impact.
This is all very sound. And as a policy, it prevents charities from falling into the trap of doing as much work as they possibly can now, at the expense of their ability to provide more services in the future. The problem from my point of view is the interpretation of how it can be invested.
I would argue that the last few decades have shown that shrewd investment in fundraising - especially direct marketing, bequests and regular giving - is still following the spirit of the endowment. If that charity had invested my $1 million in regular givers just 10 years ago, they'd have raised nearly $10 million for services - a much better return than the market cash rate.
One argument against this avenue is that fundraising is not as safe as the market. But that depends. Money invested in cash would have perhaps yielded an average of 2.5% per annum very safely. But it would take the best part of a century - if it ever happened - for my $1 millon to be worth more than if the charity had spent it straight away.
This is due to low returns and inflation. A more aggressive approach may have averaged better returns, but not over the past year, and still not as good as yields from regular giving.
Fundraising could have gained a much higher return. However for success many things would have had to be in place already, such as skilled staff, strategy, good creative, a well-managed database, infrastructure like computers, and so on.
For consistent results, the best option, as always, is a balanced portfolio with some investments in fundraising and some in cash, property, shares etc.
The past year has been pretty bad for investments, with no net growth thanks to the financial crisis. But over the past decade, the market (especially in property) has served charities well.
Then again, traditional ‘safe' investments have performed poorly compared to growth in sustainable income for charities that used reserves to invest in regular giving - and not just in the last year.
Exploring annual reports, we can see that Australia for UNHCR, Seeing Eye Dogs Australia, The Stroke Foundation, CanTeen, Surf Life Saving and Save the Children in NZ have all grown their fundraising income well over 50% in the past two years. The revenue of the first three organisations has more than doubled over those two years.
Although The Stroke Foundation has proved that good old-fashioned mass-cash direct mail can still work, most of the growth came from regular giving - and most of that from F2F.
Interestingly, the biggest factor in growth from regular giving and direct marketing is not the type of charity, brand awareness, age, product or geography - it is how much was spent. There is always a learning curve, but after that the return is based on investment levels. Spend more, get more.
The next time your acquisition budget is slashed or non-existent, push the barrier. Check what reserves your charity has, including property - and reframe your acquisition case as an investment decision. Work with the finance director / treasurer to scenario-plan, check what returns have occurred from investments and also what is planned.
That finance director in New Zealand was spot on. Provided they can line up an F2F supplier, make tests work, recruit a staff member to manage the new donor relationships and get the appropriate systems in place, they should sell their property. There is absolutely no sense in not doing so.
A few last words of caution though.
Pete Thomas, director fundraising and marketing for Amnesty International Australia, pointed out to me that "the predictability of pledge income [regular giving] does mean that the level of reserves does not have to be as great as it may be if we relied on events or mail. But even an organisation with predictable pledge income can be hit by fire, database meltdown, large scandal, government intervention, strike, legal action etc. which can interrupt income flow and thus our ability to do our life-saving work."
In essence, then, every charity should keep some cash reserves.
But stop and think hard if your reason for doing that is ‘keeping money aside for a rainy day'. Charity bosses - it is raining outside right now. Please make sure your paradigm recognises that.
Every month I write something agitating like this for Fundraising and Philanthropy magazine - for their e-briefing 'The Agitator'. Subscribe to their e-briefing here.
Thanks to Margaret Harlow from Givewell for going well past the call of duty to help with the reserves research.
Wednesday, July 15, 2009
So, if you are in America, you can come along - and I can reserve you front row seats at my presentation!
One critism though, and this was disappointing - the email requires me to fill in my details, including my session title, session times and topic. This will supress take up, and could have been easy to deal with since DMAW will have all that information on file - it is easy to personalise emails these days. Hey, maybe I was in a test / control group and the others were personalised?
Either way. good stuff American DM & Fundraising people; thanks.
Here is the email:
Dear Sean Triner,
The attendee list is growing for the 4th Annual Bridge to Integrated Marketing & Fundraising Conference and, fortunately, we have not experienced a significant decline in registrations like other organizations. There is so much value in this conference that even in a down economy, we expect nonprofits and direct marketing agencies will choose to spend precious professional development funds here.
You can help us continue to reach potential attendees and expand your own professional impact at the same time. What better way to reconnect with customers, donors, and colleagues than for YOU to invite them to have a front row seat at your own presentation! Whether they choose to attend or not, they will be impressed by your expertise, recognition, and warmth in inviting them.
Here is the draft of an invitation e-mail that we promised to send to you so that you can edit and then send it out. Please send this to everyone in your address book. Yes, even your Mom should know that you are speaking at this conference! Cultivation of donors, customers, vendors and colleagues can only result in positive reflection on you don’t miss this opportunity to invite others to join you at the Bridge Conference. We all know that the survivors of economic hard times are poised for greatness when the economy improves.
I wanted to share an exciting opportunity I have this summer. I was selected as part of a small number of experts to present at the 4th Annual Bridge to Integrated Marketing & Fundraising Conference, an event that brings together fundraising and marketing professionals from all over the world.
I will be presenting on [insert topic] at [insert time] on [insert day of week and date]. This subject is important to all of us right now because [insert reason]. I invite you to join me at this rich educational conference to learn more about this and other issues, helping each of us to do our jobs more effectively.
You can register for the conference by clicking here. If you are unable to attend, you can look at the website to see if there are helpful resources for you there, or I can tell you about my presentation afterward.
Either way, this is a welcome opportunity to connect with you. I look forward to hearing from you soon and hope to see you in person at the conference.
Kristin McCurry and Lisa Boccia
Bridge Conference Co-chairs
P.S. Don’t forget, if you would like to connect to your potential audience we have a variety of social networking tools available exclusively to speakers to connect them with Bridge Conference attendees. Just send a message to Dawn Smith and we will have one of our volunteer social networking and technology wizards reach out to you.
Monday, July 13, 2009
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.
Thursday, July 9, 2009
Last time I went to ADMA Forum, I was not impressed and have not sent any Pareto people or been along since. This time they gave me a free ticket since I was presenting. The presentation went well (at least I enjoyed it, and got a few laughs - hope that the audience learned something too!) but within the presentation I asked who was from a charity.
About 600 people were attending the conference, and my presso was the only thing on so most were there - but only about a dozen hands went up. But I wasn't surprised because of the lack of enthusiasm the Australian fundraisers I know had for ADMA Forum.
It is a shame. Because there was tons to learn - more for charity direct marketeers than any other conference I have attended in Australia for years.
I was so impressed that I have asked if I can help ADMA to get more charities along to the next one. I am starting now - charity direct marketeers (including events & face to face fundraisers) - start thinking of a way to blag some money in your budget to get along next year.
Specific tips and learnings that I picked up from the Forum this time around to come.
Wednesday, July 8, 2009
I told them about The Lost Dogs' Home and how they used a really pure, back to basics approach to direct marketing to connect with their key customers and increase their fundraising income by nearly ten times in five years.
Tuesday, July 7, 2009
The reason often given is something like 'Indians don't like talking about death...' This is easily countered by the fact that nor to Brits, Americans and Australians where bequest 'marketing' is more established.
But a fundraiser from Indonesia challenged me with a much more practical problem. She asked whether bequest marketing could actually work in Muslim countries since 'Muslims were required to give their money to their family.'
That would bring bequest marketing to a halt. So I went and found out what I could.
I checked with the President of Dee Why Mosque in Sydney. He told me that "Muslims must leave two-thirds of their estate to their family...the last third should go to good causes." On further pressing, he said that the good cause money would be better spent on "Human charities, good causes" and perfectly reasonably for a man in his position preferred Muslim causes.
I also checked with a lawyer, Haisam Farache, after his website, "Islamic Wills" was brought to my attention by bequest expert Christiana Stergiou.
Haisam confirmed that Muslims are indeed required to leave two-thirds to family and the other third can go to any good cause, human, Muslim or other.
Of course, this is looking at local law - it is possible that legal authorities in different countries may apply restrictions differently, but this would be a state/national legal issue and not a religious or cultural requirement.
If there are any other religions or cultures that make bequest fundraising impossible, please let me know!
Sunday, July 5, 2009
An organisation has 20,000 donors. It has a limited budget, but a tough target. Provided it is not mailing it's donors too often (which many think would be over 30 times a year, so this is not likely) then it would make more money mailing the top 20% of donors (4,000) at least twice, and then just mailing as many of the next 16,000 that budget allows.
In other words:
Mail 20,000 donors at a cost of, say, $20,000. ($1 per pack)
Top 4,000 with a better pack costing $6,000 ($1.50 per pack)
Mail those 4,000 again with a reminder pack costing $6,000 again
Use remaining $8,000 to mail the 'best' of the remaining 16,000 donors with a cheaper - say just 8,000 at $1 per pack.
In the end, only 12,000 of the 20,000 donors are mailed BUT you will make more money.
Thursday, July 2, 2009
Everything red is personalised information, and there are several variables not used for this donor that could have thanked him for his pledged legacy, extra gifts, specific letters to CCIA and more.
I have also posted the Amex letter - quite cute; handwritten font envelope, stamped and 'from the desk of Pierre Beckert'. I have no idea who Pierre is, and nor does Google, but much more effective in making me feel special* than their regular glossy newsletter / magazine.
And here is the Amex one...
By the way, I know AMEX Platinum is expensive, but with the free travel insurance and free return flight it works out good value... OK, OK, I'm a pretentious mug.
Saturday, June 27, 2009
The session was a discussion entitled 'Can Philanthrocapitalism Save the World?', with four people representing Philanthrocapitalism (new word for big capitalists giving money, eg Bill Gates).
Chaired by the CEO of Resource Alliance, Lyndall Stein the four each made a short speech, pretty much agreeing with each other that the answer was no, not alone. But all agreed 'Philanthrocapitalism' (PC) was good.
Rory Tolentino, previous chair of the Ayala Foundation in the Philippines, was the last speaker who kind of agreed with the others.
But after a discussion about PCs needing to work and help create societal change, rather than just throwing money at the problem Rory piped up again.
She starting by talking about 'the elephant in the room' and went on to say '...but when it comes to transforming society it requires steps uncomfortable to Philanthrocapitalists... for example, looking at the distribution of wealth...what we need is a revolution...without bloodshed but we do need revolution.'
I gotta say, I was bowled over. A call for revolution - a member of the board of the Resource Alliance pointing out that philanthropy was pretty much wallpapering over the cracks.
Personally, I will still continue to wallpaper but I did feel pretty challenged - it is hard to argue against her point!
As well as Rory, the panel consisted of:
- Rohini Nilekani, an Indian woman representing Infosys - which brands itself as an ethical capitalist company and had donated the venue.
- Elizabeth Edwards, from Australia and CEO of The Myer Foundation and Sidney Myer Fund.
- Pesh Framjee, head of the non profit unit at accountants Horwarth Clark Whitehill in the UK.
Friday, June 26, 2009
Gurpreet Kaur, the author of this letter, had never written a fundraising letter before. She works at International Federation for Red Cross and Red Cresecent Societies. Along with 13 other fundraisers from seven other charities she went on a crash course on how to write a direct mail letter in one day.
This is her first draft - and it is brilliant. It needs a bit of editing but is still pretty darn good. I think this could be the start of a new way of running fundraising conference workshops...
Thursday, June 25, 2009
We ran a one day workshop at the International Workshop for Resource Mobilisation (basically, THE international fundraising conference for the Global South).
Charities from S Korea, Thailand, Kenya, Indonesia and India worked together to produce the main element for a direct mail pack - the letter.
Right at the end, participants read their letters out to unanimous approval. They were amazing.
I am going to get some of the letters up on this blog when they email them to me, so check this out later.
A lot of preparation, including a webinar, templates and the charities preparing case studies has occurred, but today we actually plunge in and train people to pull together a pack.
The webinar explained how important stories are, and how to go about getting your story.
You can watch the Webinar until the end of the month by downloading this file.
We thought this was a brand new approach to training at a conference, but apparantly a USA conference tried this 20 years ago. So this will be the first time with charities from the global south!
Watch this space - chances are we may be falling flat on our faces...
Wednesday, June 24, 2009
He deduced that 80% of the land of Italy was owned by just 20% of the population.
Put another way, a minority of inputs is usually reponsible for the majority of outcomes in a data-set.
On a social justice level, less than 10% of the world's population own over 90% of wealth. Less than 20% of the population have access to over 80% of the world's food, medicine, computer power and more. Our businesses are trying to do a bit to change that.
On the other hand, from a marketing point of view, 80% of your trade usually comes from just 20% of your customers. On larger data sets it seems to get really close to 80/20. We compared data from 23 charities in Australia and together, 80% of their income came from just 19.4% of their donors.
This got me thinking - on a large enough data set, would the principle work twice?
So, if 20% of my donors give 80% of funds, would 20% of those donors give 80% of that money.
For example, I raise $1,000,000 from 10,000 donors.
$800,000 comes from 2,000 donors.
But does at least $640,000 (80% of $800,000) come from 400 or less donors (20% of 2,000)?
The answer, across most of the charities I have worked with is yes. I imagine this will apply to many non-charities too.
This is very, very important. It means that much more than half (80% of 80% = 64%) of a typical charities donations will come from just 4% of donors (20% of 20% = 4%).
I call this Pareto Squared..
To see this in action, look at this blog which tells you how to boost your mailing income by applying this principle post mailing.
Thursday, May 21, 2009
We are so lucky to be in Australia. The floods in Brazil a few weeks ago forced a quarter of a million people to be evacuated and killed dozens. Burma and Bangladesh are also recent disaster zones but over the past century China has lost millions of people to floods. They have suffered seven that have killed over 100,000 people. One, in 1931, killed over 3.5m - not much less than the current population of New Zealand.
Really, we have not a lot to complain about here.
The road to the coast
The 'main' road to our nearest town, Lismore
Our drive. (If you look carefully, the whiteish blob on the right of the road, on the grass is the bum of a koala, called Justine).