The most powerful fundraising tool in the world

Understanding donors

The most important asset a fundraising organisation has is its database of supporters. But only if it is actually recording useful information.

Luckily, most organisations record main contact details plus transactions. In other words, you know where someone lives, hopefully you have their phone number and email address and you know how much they donated and when.

Basic analysis of this data can help you predict how likely people are to donate to you and how much. If communications that have been sent are also analysed you can even work out what donors are most likely to respond to, too.

This basic data is crucial for making a basic direct marketing program work. But to make charity direct marketing fly we need to build relationships, and we do that through respecting our donors and their wishes. And we do that by using the most powerful fundraising tool ever – the survey.

The survey - the most powerful tool in fundraising

Achieving many goals 

This multi-function device, used well, will also help corporate, major donors, events, donor retention and bequests. It can even be used for PR purposes, and it usually makes a profit on its own.

These are real surveys, getting really useful information, they are not scientific research and shouldn’t pretend to be. Even so, be honest with the donor – you want their opinion and to be able to communicate better with them, but you can also share their views with the public.

Short term benefits

Our tests have shown that, despite running a survey to get data including a direct ask does not suppress response. In other words, using the survey as an actual fundraising appeal subject works. You should aim to break even but what we have found is that when a survey is sent to donors who have responded to a previous appeal through the post, the survey actually makes a profit.

The Australian Conservation Foundation has been using surveys as an integral part of its donor communications strategy for some time now. Their first survey was mailed to over 25,000 donors and nearly one in four responded – half with a gift. They not only received a ton of useful information but made a $50K ‘profit’ as well.
Information taken from the surveys is then reflected back to the donors in future communications. For example, if a donor is motivated and interested in climate change, but an appeal is about forests then the letter should be personalised to connect the donors concerns with the subject of the appeal.

Important Note:  The sort of surveys I am talking about tell us how to communicate better with individual donors. They are not quantitative research tools!

Medium term

Appeal results and retention can be improved by clever use of survey information, and their completed survey is The Perfect Aide Memoir to take with you with when meeting a major donor. It pretty much tells you what to ask for!

But most charities who use the survey wisely get medium term returns on their regular giving. For example, The Lost Dogs’ Home uses surveys to gather pet names. It has found that this is crucial for building relationships. They include personalisation in appeal letters mentioning the donors pet name:

“Thank you so much Sean, and please give Bilbo an extra cuddle from all of us at The Lost Dogs’ Home!”

But they also use it in phone conversations with donors. When asking donors to increase their monthly gifts, known as ‘upgrade calls’ our caller asks after the health of the donor’s pet. 

The Pareto Phone team compared the upgrade success rate of donors we spoke with where we knew pet name against those where we had no pet name. The results are extraordinary:

Knowing Bilbo – a great way to see the value of listening to donors and reflecting back what you heard in future communications.

And the long term 

Already surveys have proven their worth. You can see how using them for donor care, appeals and upgrades can work really well, and make them a useful part of the mix. But the biggest return comes from bequests. Specifically using surveys to generate bequest (legacy) leads.

The best measure a bequest fundraiser has to monitor their performance is a count of people who have mentioned the charity in their Will. We call these ‘confirmed bequestors.’
By asking the right questions, we can identify these and also bequest ‘prospects’ – i.e. those most likely to become confirmed bequestors.

A well thought through approach ‘burying’ the bequest question in a survey obliterates any other method of bequest marketing I have ever seen.

For example, Australian National Heart Foundation had seven full time equivalent bequest officers working traditional bequest marketing techniques for seven years to get around 1,500 confirmed bequests. A brilliant achievement and potentially worth $75m, producing a huge return on investment.

But a year of surveys with follow up mail and phone acquired another 1,500. The charity now uses a combination of both techniques to drive more bequests.

And the surveys keep working. The Lost Dogs’ Home now has about fifteen (!) percent of key financial supporters who have put the charity in their will.

A word of warning 

Don’t rush out and do surveys without ensuring you can follow them up, record the results and actually use the data in communications with your donors.

It is not as easy as just writing a survey – a good survey needs a great cover letter, it asks questions that help you understand what motivates your donors (avoid questions like ‘how many times they like to be mailed?’), a bequest conversion pack and trained people to follow up leads. And remember, a bequest lead from a survey is only ‘hot’ for a few weeks with conversion success dropping off dramatically the longer you leave it.

Surveys are just part of good donor care.  

Fantastic Donor Care

Everyone talks about stewardship and donor care, but great examples are actually pretty rare. 

But it is actually not that hard to ‘do’ great donor care.  Nor is it that expensive.   

Looked at in another way, NOT doing donor care is expensive. 

One of my favourite pieces of great donor care is a letter I received from the Children’s Cancer Institute nearly ten years ago. Click here and have a read. 

All the coloured text is actually personalised based on my previous transactions.

In my next webinar I will be talking about donor care, along with Fiona McPhee, a New Zealand based fundraiser working for Pareto Fundraising.  Her career has zoomed along from real hands-on customer service within charities, to teaching good donor care. Now she is one of the most experienced (and brilliantly charming) fundraisers around. 

We already have people registered from large and small charities and agencies in New Zealand, across the USA, Canada, Australia, Netherlands, Austria, Belgium, UK and South Africa. 

Click here to watch a recording of my webinar Stewardship: Three Easy Steps To Make Your Mid-value Donors Feel Like The VIPs They Really Are

If you can’t make one of the three time slots on June 30 or July 1 (depends on your Timezone), don’t worry – all registrants will get a copy of the recording, slides and any handouts so you can watch anytime.  It is just US$89 (less than the price of a taxi to and from the airport in Melbourne!) In the session we will be: Looking at a sensible and practical decision ‘flow’ for managing donor care and stewardship with limited resources Dissecting some great donor care examples (like the CCIA one you can read here) Giving you easy and instant tips to improve your causes’ donor care – in a way that will make you more revenue.

See you soon!

Interested in the webinar? Just click here watch the recording.

Sean

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