If Shakespeare Wrote about Fundraising...

It would be a tragedy!

The Capulets (The DMs)

In the red corner, we have the mass marketing Capulets.  The direct marketeers (DMs).  They look after the majority of donors. 

They deliver mass produced communications, but personalise it a little. And they focus on efficiency as well as volume.  While their salaries aren’t that big, they come with very expensive direct costs for print, postage, agencies, copywriters and more.

They have helped build donor databases and secure ongoing revenue in many nations, especially in the USA, UK, Canada, Australia, New Zealand and just about every western European nation.

You’ll find the Capulets in ‘classic’ charities – charities dealing with humans, animals or the environment. Charities like Greenpeace, Red Cross, Cancer Foundation, Heart Foundation, UNICEF, Amnesty, WWF and local causes. And they are working on raising ongoing revenue. 

A few Capulets manage to land jobs in universities, hospitals and arts organisations where they are granted a desk and computer in a dark basement.  Sometimes a chair too.

Generally they look after donors under a certain monetary value. If they succeed in getting the donors to a higher level, the donors may be taken away from them and passed to the Montagues.

The Montagues (The MDs)

In the blue corner, we find the sworn enemy of the Capulets.  The relationship focused major donor development people (MDs).  They look after the top end of town.

With bigger salaries, but low direct costs the Montagues are Very Important People.  If your charity is going to get $1,000,000 from someone it is more likely to come from the Montagues than the Capulets.

You’ll usually find the Montagues in institutional fundraising organisations, and the bulk of the money they raise is in capital development.  You’ll find them in hospitals, universities and arts organisations. 

Occasionally you might find them in ‘classic’ charities, housed next to the CEO and hobnobbing with star-struck boards.

Neither the Capulets nor the Montagues are better than the other. They both play a part in fundraising – a very, very important part.  I reckon the Montagues (MDs) probably raise more than the Capulets (DMs), but most of that is capital.

The problem is that the Capulets and the Montagues don’t get on very well.  And they don’t have the Prince, Benvolio and the the Friar trying to bridge the gap.

Shakespeare brought the families together by sacrificing Tybalt and Mercutio, Juliet and Romeo.

We also have our sacrifice. The millions of dollars lost to charities because of these six mistakes created by the family feud:

1. Assuming someone who makes a donation over a certain amount wants a personal relationship with someone in the charity.
2. Taking people over a certain dollar value out of the direct marketing program in the hope of forming said relationship.
3. Failing to try and meet some lower value donors who would be worth meeting – e.g. a donor who drops $1000 to a direct mail appeal is probably worth meeting.
4. Trying to maximise volume of mailings and donor databases rather than focusing on the quality of data and the quality of communications. Mailing better communications to ‘better’ doors will make more revenue. Even if the extra unit cost means reducing volume.
5. Spending too much time planning, researching, developing a major donor program, and avoiding actually meeting with potential major donors.
6. Thinking for one moment that a really rich well known stranger who knows someone who is friends with someone on the board is a better prospect than a non-famous donor already on the database who has given $1000.

Just like in Romeo and Juliet, we can see how the story unfolds, but it is easier to avert tragedy.

All you need to do is avoid those six mistakes.

Sean

PS – OK, if Shakespeare had written this, it would have been better than what I have just written, but give me a break for trying a different angle!

PPS – for more information on avoiding those mistakes, please check out my series of webinars and recordings on Mid Value Donors.  The latest of which, I'm holding Thursday and Friday with Tom Ahern, at various times - see details below.

Click here to watch the recording of my webinar with Tom Ahern:'Release the Explosive Generosity LockedInside Your $100+ Donors ... With These Proven Direct Mail Secrets.'

Watch live 9th or 10th of June (various time zones are available) AND you'll also receive the recordings and slides to watch at your leisure. 

Quick Quiz: Who is Most Likely to Give You $5000?

Quiz question: Who is most likely to donate $5000?

Picture this scenario. We have two donors. 

Donor A

Kate (and her husband, Clarke).  In their mid 40's, with two kids.

They donate automatically every month through their credit card.  They sponsor two children, costing them about $1,200 per annum. They've done so for three years. 

Two or three times a year their own kids swap letters with the sponsored children.  They also get regular progress reports on the sponsored children, their families and local community.

Donor B

Margaret, in her late 60's.

She has donated three times in the last four years. Each time was $1,000 in response to direct mail. No donation in year three, but her most recent gift was about nine months ago.

No other correspondence, except for she received a thank you call from our CEO after the most recent $1,000 donation. This is when we started trying to call such donors to say thanks.  She said she liked the work the charity was doing and to '…keep up the good work.'  No other communications.

The ask

We have a mid value donor program, which for us, is trying to raise $100,000 from about 100 people, aiming for an average donation of $5,000.

We only have the resources to follow up 100 donors and have decided to visit them at their home.  But which donor is most likely to give us $5,000 if we ask?

For a little more context, we know the average five-year-value of a monthly giver who is also a child sponsorship donor is around $2,000. Our average five-year-value of a direct mail donor is about $400.  

So Kate and Clarke, as well as Margaret, are already telling us they are 'better than average' by beating that average soundly within just three years. 

The charts below show average values of donors by 'type,' focusing on how they were acquired in the first place. You can see we are already at the top end with our five-year average.

Five-year value of face to face acquired regular donors. From Pareto Fundraising Benchmarking 2016.

Five year value of cash donors. From Pareto Fundraising Benchmarking 2016.

Cash gifts over $1000 by age. From Pareto Fundraising Benchmarking 2016.

Who is most likely to give us $5,000?

The answer seems obvious.  Surely Kate and Clarke?  They give more, are more reliable and they correspond with their sponsored children.  They seem more committed – more involved.

But on the other hand, they are younger than Margaret and probably arrived at the cost of sponsoring through a discussion process and most likely budgeted for it.  They are likely giving what they think they can afford.

Also, they are likely have less disposable income because of a mortgage, school fees etc. 

Margaret, however, is likely to not have these things and she donated a grand without an intimate relationship.

I would love to speak to them both, but I haven’t the resources.  So I am going to focus on Margaret.

Margaret is most likely to give me a larger one-off gift.

Even without my theorising about budgeting process, mortgages and school fees I would still go for Margaret.  It is her age that seals the deal for me.

The plan

My plan would be to send Margaret a great high value direct mail piece, and am also keen on following her up with a personal visit.

Quiz answer

In reality, you don’t know.  But you have limited resources.

With these limited resources, I would be using my high value cash techniques (direct mail, phone and personal visit) on people like Margaret.  Only when I have tried all the Margaret's, or have budget to spare, would I be aiming for big cash gifts from the Clarke's and Kate's.

Interested in more explosive tips like this one?

Watch the recording of my webinar with Tom Ahern:'Release the Explosive Generosity LockedInside Your $100+ Donors ... With These Proven Direct Mail Secrets.'

Sean 

Sean is always learning

A few years ago I watched a chap called Gavin Coopey do a training session called 'Innovate or Die' at a fundraising conference. In it, he did tons of interactive exercises and showed us some really cool tools for brainstorming.


I loved it, and shortly after, he began work at Pareto Fundraising as a senior consultant (by the way, there are some pretty rigorous recruitment criteria for jobs in Pareto companies, it is not just a matter of doing a good presentation!)

Gavin has presented this session, to great reviews, through Pareto Fundraising masterclass and training sessions, again receiving great reviews.

I love new ideas, and pushing barriers. We need to be constantly learning, testing and proving (or disproving) concepts. We have a few rules at work:
1) Always give advice that is in the long term interest of our clients' beneficiaries.
2) Always do the work 'The Pareto Way' - which means following our established and proven strategies, tactics and ideas
3) If you want to challenge individual tactics within the Pareto Way, you must test them against your own ideas and prove one way or the other.

(I will do another blog or article about what exactly the Pareto Way is, so come back soon!)

This means we can be cautious and innovative at the same time. New staff are taught 'The Pareto Way' but then given the chance and opportunity to challenge their bosses and the founders of the company. We are effectively telling them to prove us wrong.

As well as staff intelligence, agencies like ours have another resource, which in-house teams can never have: A load of clients, also with great ideas and challenges. Again, we work with our clients to challenge the Pareto Way, most clients work with us on testing tactics, constantly trying to improve and change little bits, ideas and big strategies.

Often the first job with a charity is a mail appeal, and with that first mailing we tend to apply all the Pareto Way tactics. The first 'test' or 'trial' is of course to prove to the charity that these tactics work. (Which they always do; if the charity goes for it, we usually at least double their income - the most recent new client saw income lift from about AU$200k to nearly $1m*, nearly five times as much money from the same donors/customers...)

*Aussie, Canadian and US dollars are all about the same at the moment.

But after that first mailing, where do we get our ideas from?

Over the years clients have asked to try new things, and so have our own staff. However, on top of that we still need inspiration for learning, grabbing new ideas.

One option is seminars and conferences - fundraising ones, but also non-fundraising sessions. I got some great ideas at the last couple of conferences I've attended (to share in a future blog). Another good resource is The Showcase of Fundraising Innovation and Inspiration. Email Maxine there for a free id and password.

Of course another great source of ideas is to rip them off others. Keep your commercial direct mail and emails, and donate to loads of charities and spot different things they send you.

Remember, no matter what results you get and what successes you have had, you are always learning.