At the ADMA Forum, I attended a fascinating and useful presentation by Steven Noble, a senior analyst from Forrester Research. His presentation is available here. They want your details in return (which is why I'm not posting it here) which is kind of fair enough - they are research after all.
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.
Showing posts with label fundraising in a recession. Show all posts
Showing posts with label fundraising in a recession. Show all posts
Monday, July 13, 2009
Tuesday, March 31, 2009
Please, work together already!
The opening plenary of the Fundraising Institute Australia (FIA) conference last week featured a selection of stories about donors around the world. It also challenged fundraisers to respond to the global financial cock-up by doing pretty much what they know they should anyway. Three problems were addressed: parochialism, complacency and short-termism.
Looking at parochialism, the need for mergers was discussed. But reluctance to merge could also be part of complacency and short-termism. We all know what we need to do about mergers and federations - but we don't do it.
In two other sessions I heard about mergers and how to deal with the messy federated structures in so many charities. I attended one presented by three sector leaders, Dr Lyn Roberts from National Heart Foundation, Darren Peters formerly of the Australian Paralympics Association, and Gerard Menses from Vision Australia. All talked about the issues they encountered in deciding to bring a bunch of organisations together - especially the problems. But they still went ahead and did it.
It seemed to me that the biggest problems of merging are ego and parochialism, which are very tightly linked. I mean parochialism in a geographical and task context.
Speaking of geography, it's ridiculous to think that because I live just south of the QLD/NSW border I would somehow need different services as a beneficiary, or react differently as a donor to those a few kilometres north. Surely a retired accountant in Sydney has more in common with a retired accountant in Perth than a brickie in Sydney?
And by "task" I mean the kind of crazy, so-called important differences between charities that are really irrelevant. For example, when I worked at Imperial Cancer Research Fund in the UK we were pretty much taught to "knock" our rivals, Cancer Research Campaign, because we funded our own researchers whereas they gave grants. You reckon someone with cancer or a donor gives a toss?
Luckily the two charities got over the ego problems and merged, going from a combined income of about $240 million when I was there, to raising the best part of a billion dollars now (I must add that the increase in income was not a consequence of my leaving!!).
I look around and see tons of charities doing what seems to be the same thing, split only by artificial geographical lines or irrelevant differences.
A recent example from my travels was of two charities that provide camps for kids with certain needs. One runs the camps with trained volunteers, the other with paid professionals. One looks after kids aged x to y, the other y to z.
Hey - how about running camps for kids between ages x and z using professionals and volunteers?
And slashing the costs of 2 x CEOs, 2 x boards, 2 x finance teams, 2 x fundraising teams, 2 x offices etc.
Maybe the current financial crisis finally forces us to face these tough decisions. After all, in the UK nearly half of all mergers were actually rescues of an ailing organisation.
In the US, mergers of not-for-profits are, according to Gerard Menses, running at the same rate as those of for-profits.
He identified that the big merger between agencies helping the vision impaired paid for itself within a couple of years.
So please - dump the egos, parochialism and short termism. We can't afford so many charities doing the same stuff. Donors love mergers. Merge away!
I write a monthly column called 'The Agitator' (not the same as the pretty cool fundraising website of the same name) for an Australian fundraising magazine's e-bulletin. Check out their archives, including this call for mergers on their website. Also Check out the other agitator here).
Looking at parochialism, the need for mergers was discussed. But reluctance to merge could also be part of complacency and short-termism. We all know what we need to do about mergers and federations - but we don't do it.
In two other sessions I heard about mergers and how to deal with the messy federated structures in so many charities. I attended one presented by three sector leaders, Dr Lyn Roberts from National Heart Foundation, Darren Peters formerly of the Australian Paralympics Association, and Gerard Menses from Vision Australia. All talked about the issues they encountered in deciding to bring a bunch of organisations together - especially the problems. But they still went ahead and did it.
It seemed to me that the biggest problems of merging are ego and parochialism, which are very tightly linked. I mean parochialism in a geographical and task context.
Speaking of geography, it's ridiculous to think that because I live just south of the QLD/NSW border I would somehow need different services as a beneficiary, or react differently as a donor to those a few kilometres north. Surely a retired accountant in Sydney has more in common with a retired accountant in Perth than a brickie in Sydney?
And by "task" I mean the kind of crazy, so-called important differences between charities that are really irrelevant. For example, when I worked at Imperial Cancer Research Fund in the UK we were pretty much taught to "knock" our rivals, Cancer Research Campaign, because we funded our own researchers whereas they gave grants. You reckon someone with cancer or a donor gives a toss?
Luckily the two charities got over the ego problems and merged, going from a combined income of about $240 million when I was there, to raising the best part of a billion dollars now (I must add that the increase in income was not a consequence of my leaving!!).
I look around and see tons of charities doing what seems to be the same thing, split only by artificial geographical lines or irrelevant differences.
A recent example from my travels was of two charities that provide camps for kids with certain needs. One runs the camps with trained volunteers, the other with paid professionals. One looks after kids aged x to y, the other y to z.
Hey - how about running camps for kids between ages x and z using professionals and volunteers?
And slashing the costs of 2 x CEOs, 2 x boards, 2 x finance teams, 2 x fundraising teams, 2 x offices etc.
Maybe the current financial crisis finally forces us to face these tough decisions. After all, in the UK nearly half of all mergers were actually rescues of an ailing organisation.
In the US, mergers of not-for-profits are, according to Gerard Menses, running at the same rate as those of for-profits.
He identified that the big merger between agencies helping the vision impaired paid for itself within a couple of years.
So please - dump the egos, parochialism and short termism. We can't afford so many charities doing the same stuff. Donors love mergers. Merge away!
I write a monthly column called 'The Agitator' (not the same as the pretty cool fundraising website of the same name) for an Australian fundraising magazine's e-bulletin. Check out their archives, including this call for mergers on their website. Also Check out the other agitator here).
Thursday, October 16, 2008
So much on the recession...
I have decided to create a recession watch blog.
All about fundraising in a recession, it will feature links and information about what is going on. Stay informed and don't commit recession suicide.
All about fundraising in a recession, it will feature links and information about what is going on. Stay informed and don't commit recession suicide.
Wednesday, October 15, 2008
Recession Suicide and The Ten Point Plan to managing fundraising in a recession
Much is being written, and speculated about the potential impact of the economic downturn on fundraising. But what is going to happen?
Well, the most dangerous thing about this time is the decisions made by boards.
Whatever happens, us fundraisers need to help our boards and management making the possibly fatal mistake of cutting fundraising expenditure. I just wrote down a collection of thoughts and information from researching our data sources and what other ‘experts’ are saying about the recession. By the time I finished it was 9,000 words long, with a ton of data and proof but basically it boiled down to one thing:
Don’t commit recession suicide. Whether donations (responses and/or average gifts) go up, down or stay the same the tactical decisions taken by charities will have more influence on the fortunes of the charity than a recession.
If things get worse, you need to spend more to make the same net and net is the key to delivering services. If things get better because of a recession (which is unlikely) it is a great time to spend more money and get great results. If things stay the same, then keep things the same.
Here is my ten point plan for coping with the recession:
The board and management need to understand the data and stop unrealistic expectations
1. Stop using cost of fundraising (COF) as a key measure and concentrate on net income
2. Work like a business, accept reduced short-term growth in service expenditure to gain increased long-term growth. Don’t commit recession suicide.
3. Stop putting off bequest (legacy) marketing every year – it won’t make any difference to your income next year, but the charities who invested in bequest marketing during or after the last recession are in a lot healthier situation than those who didn’t
4. Accept that donors are not cheap
Apply the Pareto principle internally and externally
5. Look at where your money really comes from now, and concentrate efforts on high yield activities like bequests and major donors
6. Look at where growth is coming from for successful charities, and ensure you are getting your slice
Look after your donors
7. Implement proper, well thought out and planned ‘supporter relationship management’ – just think if you had implemented Relationship Fundraising back when the book was written, your donors would be much more likely to stay with you now.
8. Ensure you are using the right tactics for fundraising – number of mailings, personalisation, length of letters, actually asking for money in your appeals, telephoning to upgrade regular givers; any of these things not done right will cost you much, much more than any impact of a recession.
Get more donors
9. Regular givers are still the best bet in most countries right now; they are expensive and it may take you two years to recover costs but, guess what; that is life in fundraising
10. Understand the implied life time value of such donors – plan long term
Oh, if you are a glutton for punishment and want all the 9,000 words, charts and tables which you can nick stuff from to impress your board then just email us and we will get it to you after some poor person has edited it.
Well, the most dangerous thing about this time is the decisions made by boards.
Whatever happens, us fundraisers need to help our boards and management making the possibly fatal mistake of cutting fundraising expenditure. I just wrote down a collection of thoughts and information from researching our data sources and what other ‘experts’ are saying about the recession. By the time I finished it was 9,000 words long, with a ton of data and proof but basically it boiled down to one thing:
Don’t commit recession suicide. Whether donations (responses and/or average gifts) go up, down or stay the same the tactical decisions taken by charities will have more influence on the fortunes of the charity than a recession.
If things get worse, you need to spend more to make the same net and net is the key to delivering services. If things get better because of a recession (which is unlikely) it is a great time to spend more money and get great results. If things stay the same, then keep things the same.
Here is my ten point plan for coping with the recession:
The board and management need to understand the data and stop unrealistic expectations
1. Stop using cost of fundraising (COF) as a key measure and concentrate on net income
2. Work like a business, accept reduced short-term growth in service expenditure to gain increased long-term growth. Don’t commit recession suicide.
3. Stop putting off bequest (legacy) marketing every year – it won’t make any difference to your income next year, but the charities who invested in bequest marketing during or after the last recession are in a lot healthier situation than those who didn’t
4. Accept that donors are not cheap
Apply the Pareto principle internally and externally
5. Look at where your money really comes from now, and concentrate efforts on high yield activities like bequests and major donors
6. Look at where growth is coming from for successful charities, and ensure you are getting your slice
Look after your donors
7. Implement proper, well thought out and planned ‘supporter relationship management’ – just think if you had implemented Relationship Fundraising back when the book was written, your donors would be much more likely to stay with you now.
8. Ensure you are using the right tactics for fundraising – number of mailings, personalisation, length of letters, actually asking for money in your appeals, telephoning to upgrade regular givers; any of these things not done right will cost you much, much more than any impact of a recession.
Get more donors
9. Regular givers are still the best bet in most countries right now; they are expensive and it may take you two years to recover costs but, guess what; that is life in fundraising
10. Understand the implied life time value of such donors – plan long term
Oh, if you are a glutton for punishment and want all the 9,000 words, charts and tables which you can nick stuff from to impress your board then just email us and we will get it to you after some poor person has edited it.
Postcard from IFC: More on the recession
The big thing most people are talking about here at the IFC is the recession.
But everyone is agreed. And so are all the experts whose blogs / emails / articles I have read. They all say 'Don't panic, don't hurt yourself'.
Bottom line - what you as a charity do, in reaction to a recession, can be more deadly than what the recession will do on it's own.
If you are reliant upon corporate funding then you are probably most vulnerable. Many of the best corporate donors are (were?) banks. But if you have a sound diverse fundraising strategy, especially if it has lots of regular givers, then you are in the best situation. Don't panic.
Check out what Uncle Mal and Dan Doyle has to say here (US focused, but relevant to us all). Or check out this podcast, again very US but still relevant.
And don't forget if you want my massive rant about the recession, email and ask for it from canyouhelp@paretofundraising.com and we will get it to you.
But everyone is agreed. And so are all the experts whose blogs / emails / articles I have read. They all say 'Don't panic, don't hurt yourself'.
Bottom line - what you as a charity do, in reaction to a recession, can be more deadly than what the recession will do on it's own.
If you are reliant upon corporate funding then you are probably most vulnerable. Many of the best corporate donors are (were?) banks. But if you have a sound diverse fundraising strategy, especially if it has lots of regular givers, then you are in the best situation. Don't panic.
Check out what Uncle Mal and Dan Doyle has to say here (US focused, but relevant to us all). Or check out this podcast, again very US but still relevant.
And don't forget if you want my massive rant about the recession, email and ask for it from canyouhelp@paretofundraising.com and we will get it to you.
Tuesday, October 7, 2008
Fundraising in a recession
Well the market keeps getting bleaker. Ouch. Lots is being said about what should be done about fundraising during tough times.
People (fundraisers) are asking me 'What should we do!?'
For evidence, proof and more detail (a lot more) I have just finished a big, thorough article about it, covering all areas - potential effects, what boards should do, what impact it has had on income to date etc. The article is bloody long and will be a little while more because it is with an editor right now, but it will be essential reading because it gives you what you need to go in and fight the most important battle:
Prevent recession suicide. The most dangerous thing about a recession is charities panicking and making bad decisions that will harm them more than any decline in income as a direct consequence of the actual recession. Cutting budget, reducing acquisition volumes, cutting staff - all of these things are killers for you. Much, much more dangerous than the actual recession.
Puling my big article together, I read a ton of articles, from people I know, such as: Gonzalo Ibarra (Chile, article is in Spanish, he reckons it helps you focus on who your real donors are and that in the massive financial crisis in Argentina they got low rates of attrition and brilliant results). Mal Warwick (USA, DM guru and all round brilliant bloke), who is worried about people cutting back on acquisition and donor care.
And also strangers to me, people like Lisa J. Lehr (a US copywriter) who reckons don't cut back, '...If you're a nonprofit, however, don't make the mistake of thinking that this is the time to cut back on your fundraising efforts. What these gloomy indicators mean is that nonprofits need to increase--not decrease--their fundraising efforts...".
Marc A. Pitman agrees and he wrote a book too, so he must be clever.
All these people - and more - are saying don't cut back. Mal's article includes some big picture data references, but most are telling you this as they are experts.
My article goes a bit further. It has tons of data, explains in detail what to tell the board, management and colleagues and comes up with a ten step plan to protect your charity in a recession. Heavy, but essential reading.
If you want the full article, then please email rob.novotny@paretofundraising.com who will send it when it is ready to go!
If you are new to this blog, and are wondering what Pareto Fundraising is, please click here for more information.
Sean
People (fundraisers) are asking me 'What should we do!?'
For evidence, proof and more detail (a lot more) I have just finished a big, thorough article about it, covering all areas - potential effects, what boards should do, what impact it has had on income to date etc. The article is bloody long and will be a little while more because it is with an editor right now, but it will be essential reading because it gives you what you need to go in and fight the most important battle:
Prevent recession suicide. The most dangerous thing about a recession is charities panicking and making bad decisions that will harm them more than any decline in income as a direct consequence of the actual recession. Cutting budget, reducing acquisition volumes, cutting staff - all of these things are killers for you. Much, much more dangerous than the actual recession.
Puling my big article together, I read a ton of articles, from people I know, such as: Gonzalo Ibarra (Chile, article is in Spanish, he reckons it helps you focus on who your real donors are and that in the massive financial crisis in Argentina they got low rates of attrition and brilliant results). Mal Warwick (USA, DM guru and all round brilliant bloke), who is worried about people cutting back on acquisition and donor care.
And also strangers to me, people like Lisa J. Lehr (a US copywriter) who reckons don't cut back, '...If you're a nonprofit, however, don't make the mistake of thinking that this is the time to cut back on your fundraising efforts. What these gloomy indicators mean is that nonprofits need to increase--not decrease--their fundraising efforts...".
Marc A. Pitman agrees and he wrote a book too, so he must be clever.
All these people - and more - are saying don't cut back. Mal's article includes some big picture data references, but most are telling you this as they are experts.
My article goes a bit further. It has tons of data, explains in detail what to tell the board, management and colleagues and comes up with a ten step plan to protect your charity in a recession. Heavy, but essential reading.
If you want the full article, then please email rob.novotny@paretofundraising.com who will send it when it is ready to go!
If you are new to this blog, and are wondering what Pareto Fundraising is, please click here for more information.
Sean
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