Friday, March 30, 2012

Something look familiar about this ad?

This is the 'article' that Data Monkey referred to in her recent blog (see my previous blog).

It appeared in the most recent Fundraising and Philanthropy magazine; I still recommend subscribing if you are in NZ or Australia, but for other countries I figured not showing you it was unfair!

You may note the style of the ad - ads like this have been around since the early 20th century, and they are still the best layout I reckon; David Ogilvy may be in a better place, but his proven ad ideas are still the best to place in the 21st century.

Thursday, March 29, 2012

Premium v non premium donors

The blogger Data Monkey confessed to being a bit of a cynic following my article about premiums* in Fundraising and Philanthropy magazine.

Much has been written about premium and non premium donors, mostly by people who love them, or by people who hate them.  The bottom line can be summed up by:

Against:   Many people just don't like them - a personal view, shared by a couple of mentors including Uncle Ken Burnett.  This is like many people just don't like face to face.  They argue:
* Average premium donors are not as loyal as non-premium
* They need to be sent premium appeals to give again

Others love them arguing that
* Response rates are huge
* Loyalty is almost by the by - if they only respond to premiums, then send them premiums!

Both sides are kind of right really, but are not mutually exclusive.  For me it comes down to looking into the data.

The solicitation pack, and whether it had a premium in it is only one variable we can use for analysis.  There are lots more variables - such as amount donated, list source, use of credit card, cheque or even cash and age of donor.

What we see is that premium mailings tend to acquire many, many more donors than non premiums.  Our tests have revealed considerable response rate differences:

Here, the premium beat the next best non-premium pack (which did extraordinarily well) by nearly three times.  Even though it cost more, the ROI was nearly twice as good too.  Other charities get similar differences - premiums seem to get two to four times the response rates of non premiums, with ROIs at least 50% better.  

Working closely with one charity (the one represented in the chart above) we have studied how these new donors behaved.  We found that the average premium donor is not as 'good' as non premium, give less, have a slightly lower chance of giving again to non premium appeals than non premium acquired donors but still do give - and of course, there are between two and four times as many of them.

However, when we drilled down we found that donors who donate the same amount to either a premium or a non premium seem to have little else to differentiate them.  For example, about 44% of premium donors who gave $50 had made another gift (to non premium appeals) within 12 months, compared to 47% of non premiums - too close to be significant.  Interestingly their average second year total giving was $91 for non premium and $89 for premium.

So, for this charity at least, $50 donors are more or less the same regardless of whether their original solicitation included a premium or not.  Other charities are getting perfectly satisfactory results from premium acquired donors too, but few have tested premium v non-premium so we aren't in a position to know if this is consistent but I imagine it will be.

We (Pareto staff and clients) have co-written a paper on all of the findings we can share, working title "Pareto Guide to Premium acquisition in Australia" with this kind of information, case studies, data and more.  It is with the designers at the moment, but if you want a copy, just drop me an email.  


* Definition of a 'premium donor': Someone who responds to a mailing which includes an unsolicited 'gift' such as a tote bag, keyring, stationary pack, cards etc.  These are usually great devices for increasing response, but even those that don't respond may use them - they are kind of like viral advocacy for your cause.

For my original article you will need to subscribe to Fundraising and Philanthropy magazine here.  Ask if they have a back copy and they may throw it in with your subscription if they have any left, after all you are a fundraiser and are used to asking...

Wednesday, March 28, 2012

What is face to face / direct dialogue?

I am in Canada for the AFP Conference (which goes to Canada every now and then).  Yes, it is cold.

When most European, SE Asian, Australian, NZ and International fundraisers talk about "Face to face" or "Direct dialogue" fundraising they often mean something different to what  many North Americans mean.

Of course, face to face fundraising technically means anytime someone speaks directly to someone else, soliciting  a gift.  But in most blogs and books written by non North Americans it means "The act of soliciting someone, usually a stranger, for a regular, ongoing gift usually monthly and between $15 and $45 per month."  The people who do the soliciting are usually paid, and more often than not working for a third party agency.

This kind of fundraising has driven huge growth in many countries - driving the growth of "regular" giving (automatic monthly debits).

With regular gifts accounting for as much as a third of individual giving in Australia*, you can see how important face to face (F2F) is when you look at the proportion of new regular givers it acquires, and how much money they give.

The chart below shows growth in regular giving income for 41 charities combined from  Australia and New Zealand.

* Estimate is from Pareto Benchmarking 2011.  The new one is due out in a few weeks.


Monday, March 12, 2012

Great and amusing fundraising presentation

Great and amusing fundraising presentation from a volunteer running the NY Marathon a few years back in aid of the Heart Foundation.

Worth flicking through the 16 pages or so.  It is hard to get humour to work in fundraising, and he has done a good job.  I have asked Inspired Adventures to let me know if he made his target! (The presentation is on their blog, they organise fundraising events like this).

Monday, March 5, 2012

Non fundraisers leap to Aussie fundraisers' defence

A great article on Hootville with very specific advice on what charities should do after the silly story in the 'paper yesterday.

"99% of nonprofit CEOs we’ve met fear an unscrupulous, unfair, unexpected media hikacking. Only 1% ever experience such a thing. One such CEO is Fundraising Institute of Australia’s Rob Edwards...

Read the whole article here....Especially if you are an Australian charity worker thinking what to do next; Hootville give you a great guide.

New line of attack on charities

A journalist attended the recent FIA conference at the Gold Coast and wrote lots of stuff about charities and how they do their fundraising.

To be honest, he is bloody good at his job - he has managed to get front page of one of Australia's best selling tabloids and syndicate the story across the nation and it has been picked up by other media.

It is easy to knock him, or accuse him of doing a hatchet job, ignoring the good stuff and spinning amazing stories out of nothing - but that after all, is his job.  And he will be looking for the next angle.

But our bosses will be worried, some charities are specifically named (but not really accused of anything) and it is easy to panic and do something silly.  Some donors will maybe get a little worried about it, but overall it shouldn't make much difference to our ability to fundraise - unless we do something daft in response.

The very worst things we can do, as a sector, are give any credence to the nonsense printed, or give the press examples of conflict between charities which will act as an accelerant.  Approaching the journo or his employers is not going to help.  He is, after all, not stupid - he knows that his story is completely out of context, but it is a great career boost.

Please, charity media departments, think it through before you release your media statements but don't add any credence to what he wrote by saying things like:
* We would never pay professional fundraisers to work for us (kind of cuts future options for you)
* We only target people already supporting us (where will you get new supporters?)
* Apologizing for salaries
* Undermining fundraising techniques that you may not use, but others do very succesfully.
Put up a public statement, complain to the newspaper and talk to your key stakeholders; defend your good practice but do not knock other charities - even if just by implication.

The two areas specifically attacked were bequests and face to face.  Here are some facts you can use when talking to people - even if you don't use these methods.  The data is taken from looking at 41 Australian and New Zealand charities in the Pareto Benchmarking program.

* About half of all individual donations from 2001-2011 came from bequests
* In 2011 bequests accounted for about a third - because other methods are growing
* Regular giving is one of those areas growing (also accounts for about a third of individual donations) and by far and away the largest source of regular givers is face to face
* Generally speaking, people don't give unless asked, and asking costs money

All the way through - focus on the outcome; start with a case study "Little David had cancer but...." and then point out how many little David's were helped as a consequence of your fundraising.

And don't knock Richard's training techniques (he got attacked for making jokes about raising money from the dead): It is well established that shock, unexpected comments and humour improve learning.  If any of you know nurses, care assistants and ambulance workers you will know they deal with stressful situations with humour which is appropriate at the time but sounds terrible when re-told out of  context.

For a great summary of the story, don't bother looking at the paper - there is a brilliant summary from fundraising database supplier AppiChar 'Journalist targets Australian population with Dumb Story'.

"Charities target the elderly and dying for bequest dollars.
In a shocking turn of events, it was discovered via the undercover reporting ...that organisations across Australia, many providing some of the most important services to the country were:
  • Taking a strategic view of their funding requirements
  • Doing everything they can to make sure they tell their story in the most efficient manner to the right people in order for those people to make an informed choice about the money they spend
  • Were sharing knowledge on best practise to help make sure they weren’t wasting time and money..."
Read the rest here.

Thursday, March 1, 2012

The cost of fundraising question

Dan Pallotta presented a great, energetic and motivating session today arguing that charities are put on an unfair playing field for competing for people's hearts, minds and wallets. He argues that we pay our people too little, aren't allowed to advertise (fundraise) by spending money, can't take a long term view and must not take a risk, since failure of a campaign in the charity world is not acceptable. None of these restrictions apply to companies.

The issue of most interest to the fundraising conference attendees seems to be cost of fundraising. The simplicity of the question 'how much of my dollar goes straight to the cause?' is tempting and easy for journalists to pick up on. If a lot of thought is not put into it, it is a fair enough question. But it doesn't take emuch thought or information to realize it is practically irrelevant.

A more important question is 'what impact will my donation have?' But the answer to that is not simple. Fundraising is not simple, nor is it fair. It is easier for certain causes to make money than others. Think kids with cancer versus rehabilating young offenders.

Dan was advocating a public program to establish 'overhead' as a good thing - after all, a charity with really low overhead is less likely than one with a higher overhead to have correctly trained and paid staff, proper legal advice, computers, Licences software, accountants, HR policies, outcome measurements etc. Doing things right costs money.

Explaining this to the public will be hard, and maybe we should take it on (despite the huge overhead burden it would add to our costs!) But we need to get our own houses in order first.

Within our own sector, there are many, many board members, finance people and CEOs plus a not insignificant number of fundraisers who buy into the simplicity of the cost of fundraising myth. Dan showed one charity proudly displaying then fact that 100% of your donation goes to the cause.

According to a local radio station, the Lord Mayor of Melbourne recently came out and said F2F should be banned in Melbourne. He is the chair of a large fundraising organisation and he doesn't get it. How can inform the public when our own leaders are so badly informed?

Before we try to explain this issue to the public we need to make sure these non-fundraising bosses of fundraising organisations really understand it.

Disaster Fundraising Guide download it here