Tuesday, April 23, 2013

Top level information from NZ / Australia benchmarking

The very top level information from benchmarking

In a unique show of camaraderie and mutual support seventy charities across NZ (16) and Australia (54) agreed to pool all their transactional data* and analyse it.  This means that they compared actual donor behaviour – including mutual donors.
With around 2.8million donors giving $836 million in 2012 to these charities there is a huge wealth of information and learning.

The charities that pooled their data

Over the next few months I will share some fascinating insights, ideas and tips based on the data but in the meantime here are some top line facts:

Largest fundraising charities in Australia

Looking beyond the benchmarked charities we looked at the annual reports of top fundraising charities (Australia only).  We found that the largest, World Vision, really dominates the market.  World Vision are also a member of the benchmarking program, having an enormous influence over the giving patterns of the average Australian.
Just short of all fundraising income to the top 50 charities goes to overseas aid.  Australians love helping people less fortunate than themselves in other nations.  Good on ya Aussies!

How Australians and New Zealanders give their gifts

Australians and New Zealanders gave more money to these charities in 2012 than ever before.    From around $365m in 2003 to $836m in 2012 ($637m in 2003 dollar equivalent).
The chart above clearly demonstrates the strength of child sponsorship as a great fundraising ‘product’ However, other regular giving programs and bequests also contribute huge amounts.


If you have any questions you want to know about Australian and NZ fundraising data - ask away!  Attrition, face to face, average donations etc...

I will post lots but your request will move that subject up the priority list.

*Please note – the charities were collaborating by analysing giving patterns and behaviour.  None of them have breached any privacy rules by allowing any other member to identify donors as individuals; ie donors’ personal information is never shared between partners in this exercise.

Sunday, April 21, 2013

My Out of Office - tips for next appeal

Anyone who emailed me whilst I was in the USA at the AFP Conference and a few other meetings would have got this out of office.
I received quite a few follow ups from people who liked it and found it useful so I am posting it in full.  Hopefully it will inspire you to think about how you could use your out of office....
*Please read – this is not an ordinary out of office! Though please note I am back 19 April*
(Well, the next three paragraphs are normal-ish, but the ones below that are more interesting).
Thank you for your email.  I am presenting at the AFP (fundraising) conference in USA, then some consulting and training over there and back to Australia to a series of data benchmarking presentations; should be getting to email in earnest again on the 19th April.
If you need a response before that and are a client, please contact Nicola.long@paretofundraising.com
If you would like to be a client, maybe or definitely, or you want me to speak at your event, please contact Clarke.vincent@paretofundraising.com.
If you really need me SMS me on +61 437 015 333 but try not to wake me in the middle of the night.
OK – now the more interesting stuff…
I can’t go without mentioning books.  I hope that by now that you have read my mini-novel, Haruki the Knife Maker – it is only 99c, in aid of Amnesty, and available in all e-book stores, and only takes 20 minutes to read.
But I also write fundraising stuff too – including a chapter in a new book Global Fundraising: How the World is Changing the Rules of Philanthropy edited by Bernard Ross and Penelope Cagney.  You can get that in p-book form on Amazon.
Now, for you fundraisers – some great tips for your next appeal…
·    Personalise.  Dear Sean is good, but go beyond.  Thank me for my specific actions and give me credit for everything you achieved.
·    Tell me a beautiful story, with a beginning, a middle and an end –and don’t leave me feeling it is now fixed.  There must be a need at the end.
·    Don’t worry about how long it takes to tell me that story AND the points below:
·    Make sure there are frequent and very specific asks, like the examples in the presentation.  The specific ask should be the right amount for me, not a generic ask amount.
·    Take personal responsibility.  Write the letter in first person singular.  Don’t we on your copy.   Remove every ‘we’ replace with ‘you’, ‘my colleagues and I’ or whatever makes sense. 
·    Repeat the specific ask
·    Have a deadline.  This is very important.  Find a reason, overcome barriers but get one. 
·    Every. Single. Time.
·    Repeat the specific ask
·    Build urgency
·    Repeat the specific ask
·    Witness the story (ie “I spoke to Bob today and he said…”)
·    Repeat the specific ask
·    Have a target
·    Repeat the specific ask
·    Summarise in a PS
·    Repeat the specific ask
·    SHOW me the need; not all nice fixed stuff – there has to be something that would be bad if I didn’t give.
·    Repeat the specific ask in the PS, and spell it out – fill in the form with your details, put in the envelope and send to me by…
Don’t worry about the length of the letter, as long as it is good, engaging and emotional.  It is hard to get everything in without using at least 3.5 pages of A4 (including shorter first page with all the header stuff) in point 12 serif font.

Thursday, April 18, 2013

Pareto Benchmarking report released

Seventy charities came together to share information to improve their fundraising. Many attended presentations of the data in Melbourne and Sydney this week and more will attend in Wellington on Monday and Auckland on Tuesday.

The photo was taken in Sydney with over 120 fundraisers gathered to find out what is happening to giving in Australia and New Zealand.

Most of what we learned was good news. More money from more people than ever before was donated to the 70 charities, and the majority of charities have enjoyed decent growth over the past two years.

Some top level notes from the session:

- online solicited donations still not significant source of donors or income

- swapping is fantastic, with no indicators of donor fatigue etc BUT
let's look at the long term impact

- direct mail acquired donors - the biggest growth area and we know it increased yet again in 2013. Band wagon is being jumped on!

- face to face still rules the roost for new automatics regular donors growing more than 10% from 2011-2012

- the five year value of non-face to face acquired regular givers is much, much more than face to face so charities should be prepared to accept much higher acquisition cost. A direct mail acquired donor will give an average of 51 times their initial monthly donation, where as an average face to face acquired donor would give 29 times their initial monthly donation.

- we knew credit card donors are better prospects for regular giving than cheque donors, but it turns out they are better bequest prospects too!

- nearly all contributions from a person who comes in as a regular giver will be their regular gifts

- nearly all contributions from a cash donor source will be cash, though over five years bequests and regular gifts add a significant portion

- for the first time we are seeing income directly related to the bequest 'pledge rates' - could be enough to start benchmarking that next year. Charities with higher pledge rates of bequests will make more bequest income

- biggest key to success in bequest pledges seems to be being Victorian! Top four were Australian charities based in that state. But really it is having a certain type of program - the 'one page legacy program' which relies on direct mail and phone to drive pledges. Type of charity is not necessarily key.

- second gift rates, payment type, average donations and more are useful - but ratios are really really useful

- older donors are better. Get the best response rates, retention and total giving. Except for face to face, forget younger donors; there are easier ways to help your beneficiaries

- your donors are almost certainly going to be giving to other charities. For example, 60% of all Australian donors who gave a gift in 2012 and were acquired by direct mail, gave to one of the other 53 charities! The figure was about 15% from face to face acquired regular givers.

Charts and more information to come after the New Zealand presentations next week.


Wednesday, April 17, 2013

OMG Older People are on Social Media - Drop the Direct Mail Program!

Do you really KNOW who is on social media?

A recent blog by guest blogger George Crankovic on Future Fundraising Now (best fundraising blog in the world) brought to my attention a report from Pew Research about who is on social media. 
Titled Do you think you know who's on social media? the blog pointed out that older people who are online are on social media more than you may imagine.

I quote from George’s blog:
“But now for the unexpected findings:
  • 52% of Internet users between 50 to 64 are on social media.
  • 32% of Internet users age 65 and up are on social media."

Check this out (from Pew's excellently constructed and helpful website)

This use of social media by older people may well be unexpected, but what does it mean?

A couple of problems with this kind of research –

1. It is opinion and not transactional.  Looking at the scale of the research, and Pew’s credentials it is almost certainly statistically accurate in reflecting what people SAY but it is still not based on actual usage data; it is just what people said they did.  This is inherently flawed.

2. What is ‘on social media’?

They decided someone was ‘on social media’ if they answered affirmatively to a question like “Do you ever...use a social networking site like Facebook, LinkedIn or Google Plus?”

There were six questions like that.  Answering that you ever use is a reasonable definition of being 'on social media' but it gives no indication of their involvement.  This will vary enormously by age, gender, education, job, real world social network and more.

My friend John Lepp in Canada accounts for perhaps as many updates from friends as all my other friends added together but he and my someone like my mum are both defined as the being ‘on social media’.

Mum may use Facebook for looking at photos of grand kids once a year, and nothing else.

Everyone is different, but you can rest assured that the average older social media user (mum) has a different level of engagement from the average younger user (John).

If the Pareto principle holds true, then 80% of social media activity will involve just 20% of people ‘on social media’.  In fact, I would bet that >64% of activity is conducted by perhaps <4 areto="" font="" of="" squared="" users.="">

Even if the numbers are not an exact 80/20 split, there is no doubt that the majority of activity will be conducted by a minority of registered users.  After all, 50% of my activity seems to be just one friend, John, and I doubt that is unique to me!

Generally speaking, charities have failed to achieve expectations from fundraising on social media.  

I think that there are four reasons for this:

1.     Charity expectations are huge because big stats like these released by Pew are exciting and overwhelming
2.     I believe younger people are much more involved in social media that older people (OK, belief is worse research method than even opinion surveys but come on, what do you think?)
3.     In all metrics on giving, older people in any 'type' of fundraising are better givers - better average donations and retention rates etc.
4.     Charities think it is free or cheap to fundraise on social media, when in fact it needs a program in place like any other advertising media

If you ever see mind blowing data like this, be really careful with how you interpret it. Ask the questions – ‘what does that actually mean?’ ‘How was this research conducted?’ and ‘What about my donors?’.

You are not going to be revolutionising your fundraising by using social media with your older donors for another ten years or so.  Don't get distracted by amazing 'data' about social media... yet.  Stick to what you know works, and look out for case studies of how people have made social media make more money for their cause.


Monday, April 8, 2013

Donor Fatigue Fatigue

Please let me tell you a story.

One day, the fundraiser (I will call him Bill) of a small state based charity asked a consultant (Ulrika) to help his charity with their tax time  direct mail appeal to mailed in May.

“Of course” said Ulrika.  After all, she had helped them before and it had worked well.  She had written an appeal that raised more than any appeal before from the 3,000 or so previous donors.  However, they had not done another appeal with her for a couple of years after that because the fundraiser changed and they embarked on another strategy.

Bill explained that the other strategy (focused on building awareness) hadn’t really done much, and their money was low.  However, they had sent a Christmas appeal in November and it had done well.

“Great” said Ulrika – “that means that there are enough donors still with us, so we should be able to do well with the tax appeal.”

“Oh no!” said Bill.  “The May appeal will be mailed to new people; we are worried that we have bothered our current donors a bit too much and there is donor fatigue.  After all, the Christmas appeal didn’t do quite as well as the Christmas before – even though we only mailed them once in between.”

Ulrika was quiet for a bit.  Oh dear, she was thinking, where do I start?

Can you spot the flaws in Bill’s approach?

Right now I am in San Diego a the AFP conference, with maybe 5,000 predominately American, fundraisers.  Chatting to people made me realise that Bill is not alone in misunderstanding a very basic and fundamental, unbreakable 'truth' of direct marketing.  The truth is the recency, frequency, value rule (also known as RFV or RFM where the M stands for Monetary value).

RFV is a mathematical rule that gives you three clues about the likelihood of a positive response from a donor who is mailed.

Recency - the more recent a donor donated, the more likely they are to donate again.  

The chart below shows this in action on a warm appeal - this is real data.  {By warm appeal, I mean an appeal sent to people who had donated before).  Although it is broken into years, the rule holds true over months too.

Frequency - the more times a person has donated, the more likely they are to donate again. The chart below is from the same data as the one above, and just looking at those who have donated just once, and those that have donated more than once. 

Recency and frequency work hand in hand with the fact that charities that mail more frequently - if they are mailing good stuff - have better 'life time value rates'.

Value - the value of a previous gift gives you the best clue as to the potential value of the next gift.  But even high value donors still follow the recency and frequency rules.

The process of acquiring a donor (getting them to give for the first time) is expensive, so charity must maximise the life time value of a donor.  

Bill is falling for ‘common sense’ over ‘reality’.  He thinks that most donors don’t like to be bothered too much asking them for money.  They probably tell him that too.  But the reality kicks in with a little direct marketing concept that works across all products, not just charities.

Look at the data, don't make assumptions based on feelings.  Generally speaking, mailing more frequently than once a year will INCREASE donor loyalty, not decrease.  A charity like Bill's with 3,000 donors should be mailing perhaps at least four and probably six times a year.

Donor fatigue fatigue is when you get tired of people thinking that they have donor fatigue when it simply isn't the case.

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