Extreme lengths to prevent swine flu...

In the lift (elevator) to Oxfam offices in Hong Kong...


And it seemed to work...

Bad info hurts charities

An article in an Australian newspaper has caused a bit of a media storm with the Fundraising Institute Australia CEO being interviewed on lots of radio and TV stations.

The article, by journalist Dan Flitton in The Sydney Morning Herald Newspaper has a terrible headline "Charities hand over up to 95% to street marketers" and not much better in sister paper, The Age - "Paying to collect the charity dollar".

The body of the article is not incorrect, but it really doesn't give enough information for potential donors to make a decision and the language is terrible: "... Cornucopia takes a cut - a big cut, up to 95 per cent of the total donation collected in the first year..."

Cornucopia are a fundraising firm that recruit and train staff who represent charities on the street. 'takes a cut' is pretty negative language for what is a paid for service. The 95% fees is not all profit - it goes to pay for transport, training, wages, admin, materials and more.

And of course, the donors stay with the charity for years, will upgrade, do other things and some may eventually leave money in their will. The charity gets a great return with total costs probably closer to 25% over the years.

I very much doubt Dan Flitton is a bad person. He would appear to be genuinely curious but hasn't got all the information. I imagine he would be gutted to know that his article has probably cost charities hundreds of thousands of dollars. Why?

Well, he mentions Amnesty International, Red Cross, Oxfam, MSF and Fred Hollows. Five fantastic charities doing amazing work, and raising millions of (net) dollars from F2F that otherwise wouldn't be there.

It is possible that a few donors will cancel - not many I hope, but some may. But more significantly, some staff within charities will call for their organisation to suspend (I can almost hear the 'until the media storm dies down') - or even stop - doing it.

The consequence, however you look at it, will be a huge loss of money. Ironically, some could still have to pay costs for fundraising activity already committed, but cancelled. So they will be paying money out for nothing - much worse than 25% over four years. Less money for crucial services including life-saving work and a direct consequence of this article and headline.

It won't stop there. Boards and CEOs of charities have not usually the time or inclination to really get to understand more about the intricacies of fundraising techniques and will react badly to this media. Professional fundraisers may have spent hourson research, modelling and contract negotiations only to have it vetoed by concerned boards. The consequence - much, much less money for their cause.

I am not an advocate of fundraise at all costs, but F2F is no worse in effectiveness than any other significant strategic technique - it just looks worse because the cost of staff is out-sourced. There are no other strategic methods that deliver such a huge return for charities over the long term at the same volume.

Transparency for charities is important, but the famous Otto von Bismark quote 'Laws are like sausages, it is better not to see them being made' comes to mind. Not because we should hide fundraising costs, but more because it is so complex to explain. As Peter Singer in 'The Life You Can Save' explains, cost effectiveness of fundraising and admin is NOT a good indicator of the effectiveness of a charity's work.

The volunteer that comes on and says 'I have been doing this for free for 20 years' sounds so much nicer than the backpacker getting paid a little over minimum wage. But there are not enough volunteers to go around; volunteer fundraising simply can't add enough money to come anywhere near to meeting the need.

Comments welcome!

I am really over long letters

Dr Barnardo wrote a four page appeal letter in London in the ‘80s using classic DM techniques – underlining, urgency, dollar handles, specific ask and a clear reference to what YOU the potential donor could do to help.

It was written in spring after a winter which had been ‘the severest and most arduous, so far as work among the children of the poor is concerned.’ He needed to raise £100 a day for food. The letter also brings to the attention of the reader that the ‘unceasing demands upon our resources’ were having an unprecedented impact.

The results of this appeal are not available, but I believe it did well.

A couple of months back, another children’s charity, Starlight, had been hit hard by the recession and they had decided to go public about their plight. They were very honest, acknowledging that part of the reason they were hit so hard was their funding strategy, which relied too much upon events and corporate support.

After reading the press stories about their plight I pulled together an ‘emergency’ appeal to their donors and met up with them. The emergency appeal was developed to demonstrate how I work, but they decided to mail it immediately anyway.

The letter is quite similar in approach to Dr Barnardo’s, except it had a couple of case studies, a cut-out of all the newspaper headlines (cleverly designed to look like it was cut and pasted using scissors and glue and then photocopied), and a rehash of some previous materials.

Whilst it would not win any awards for graphic design beauty, the appeal raised well over target, actually doubling the amount raised from donors last year.

But what interests me is that, at the heart of the appeal, was a four page appeal letter. By the way, the four page letter by Dr Barnardo referred to earlier was written in the 1880s, not the 1980s.

You would think fundraising would have changed a lot between the late 19th century and the new millennium.But when we look at the data of 23 successful fundraising charities willing to share results in a benchmarking cooperative we see that direct mail appeals still raise more than any other method (not including government and bequests).

Despite the rise of other media, hundreds of people will be starting or half-way through organising their Christmas appeal mail-out, with collective expectations of raising millions from generous Australians.

But unfortunately many will still not have learned the lesson from Dr Barnardo – longer letters tend to work better.

I really don’t like long letters, by the way. They are a pain in the butt to write, check copy, get clients approval, print and mail-merge. And someone important at most of our clients doesn’t like them. And I have lost staff with their last words being ‘...there are only so many four page letters I can proof read...!’ Ironically most of those staff are now clients proof reading four page letters. And they don’t look great in my portfolio (though the results do). And I prefer doing digital stuff. And... I think you get the idea.

In focus groups, donors say they hate them too. In Hong Kong, one client ran focus groups which all concluded that donors would be more likely to respond to a pack with a two-sided letter and tear off coupon than a four page pack (actually eight pages – English and Chinese) with lots of additional information. When they tested both approaches in a 50:50 split test, the two pager raised HK$1.5 million (AUD$220,000) – the big pack raised over HK$7.5 million (about AUD$1.1 million)

Longer letters tend to work better - but not because they are long. It is because, to tell a good story with a beginning, middle and end, and ensure the right fundraising tactics (target, what the target is for, deadline, establishing need, demonstrating solution, demonstrating why that charity is best placed to solve etc), it simply takes more words.

Having said that, a dreadful four pager is worse than a good two pager – if a story can be told more quickly then tell it.

As Mal Warwick says: ‘A fundraising letter should be as long as it needs to be...’

Good luck this Christmas.

(This post is a rehash of my agitator article in the electronic edition of the most recent Fundraising and Philanthropy magazine).

A case study on the Starlight appeal, including the whole pack in downloadable form is available here.

And finally, see Dr Barnardo’s 19th century appeal on SOFII here.

The best fundraising blog on earth

Jeff Brooks has moved employers which means Donor Power Blog has not been updated since mid September. (It is still worth trawling through the archives though - a pretty damn good overview of fundraising in there - especially Stupid Charity Ads.

His new blog is just as good. Future Fundraising Now. Check it out and subscribe.

Whatever your job in charities is, please, please watch all the Stupid NonProfit Ads on the old blog. And read why they are crap. Especially if you are thinking of running a brilliant advertising campaign in the next few months.

It is essential viewing/reading and if all charity staff watched them, and understood the point then I estimate that maybe $80m to $200m per annum more would be saved or raised.

Which, taking one of the 'costs of saving a life' estimates in Peter Singer's The Life You Save is enough to save the lives of at least 20,000 people.

You could be harsh here, and say, in other words, Stupid [Charity] Ads are worth taking the mickey out of - but they kill people.

Stop award winning stupid charity ads now!

Sean

Call that a crisis? This is a crisis...

Starlight, the Australian childrens charity, were hit hard by the global financial crisis. Their fundraising had been reliant on corporate and events fundraising and these areas turned out to be especially vulnerable.

So they decided to go to their loyal supporters with a strong, honest appeal for help explaining how they got into this situation. And it worked, raising over $600,000 (more than twice as much as a 'normal' appeal at that time of year could be expected to make).

Starlight are so cool, they are letting other charities get hold of their entire package to help inspire others. The pack can be downloaded here, and the full story is here. Oh, by the way, it only took two weeks from idea to mailing this pack.

Sean

Google as a cheap market research tool

For years I have been involved in getting information about 'awareness' levels for charities. This would be done through polling 1,089 people (give or take) and asking them to name ten charities. This would give us an 'umprompted awareness' measure.

A PR / awareness campaign would usually be preceded by one of these polls and then followed with one. The relative impact on awareness would be measured.

One of the most useful methods of measuring the effectiveness of PR and awareness campaigns.

I am not a fan of such campaigns if their objective is to raise money (fundraising tends to work better, and I prefer targeting the 'right' audience,not the 'general public'). However, such campaigns are useful for social marketing (like anti-smoking messages) and this unprompted awareness measure is probably the best metric.

However, I wondered if there is a much cheaper way of achieving the same aim?

Surely, my theory goes, Web Search terms will 'rank' organisations in the same pattern as polling. Using Google Insight, I looked at five charities from the top ten fundraisers to compare the number of searches over time. Red Cross peaked during the Victorian bush fires (Nearly 100% more searches than back in Tsunami times).

But apart from the peaks, the trends do seem to look like what we would expect from awareness polls.

(Click on the picture for a clearer image, or if that doesn't work, click here). Please note 'TOTALS' are not absolute numbers, they are relatives.

Now all I need to do is find some awareness poll data from the past few years and see if there really is a correlation. If there is, and if it can be substantiated by other results, we could be looking at a massive saving on costs for lots of charities measuring their awareness campaigns.

If you work in a charity and willing to share with me a few years of unprompted awareness polling data, please contact me!

Sean

Now is not the time to be tight on professional development

Over the past couple of months I have been to a ton of workshops to learn. To learn about marketing, fundraising, communications and Twitter. I'll tell you more about Twitter and other social networking experiments another time, today I want to talk about learning.

While there is talk of the economy recovering, it looks like it's going to be a long while yet before things are rosy again. And there are stories of nonprofits cutting costs in different areas, some of this makes sense and some is plain madness.

One area of madness is when it comes to training. I have just got back from the Bridge Conference in the USA, which is jointly run by AFP and DMA, the American equivalents of the FIA and ADMA. According to a friend, who is a USA commercial sponsor of that conference, they were hoping for 1,300 attendees but fell well short.

I was told that many North American conferences are suffering, and a series of workshops in Canada that used to be well attended had to be cancelled this year because of low attendance, the main reason being ‘the recession'.

Just two weeks before the Bridge Conference I was at the ADMA Forum in Sydney, with over 600 attendees - all but 12 from non-charities. Charities are one of the biggest sectors in spend on direct marketing, and at the conference were tons of direct marketing experts sharing results and information, yet hardly anybody from charities attended.

Is it because we think there is nothing to learn from the likes of Priceline, Forrester Research, SBS, Australia Post, ANZ, 3 Mobile, Lavender, Y&R and lots of others I reckon not. I suspect there are many at charities who have never heard of the ADMA Forum, but I also suspect that people at charities didn't go because of the price and tough choices about training opportunities.
Which one should I go to? Australasian Fundraising Forum, Pathways Australia workshops, MDU, FIA conference, Pareto presents, Xponential workshops, ADMA Forum ...?

I often hear charities that employ tens or hundreds of people, with a fundraising team in the double digits (who are responsible for raising millions) pleading poverty.

Guys, don't be tight - it is a false economy! Don't send everyone to everything, but make sure you have people at most of these things. Depending on earlybird/charity/member rates, ADMA Forum costs about $1,500-$2,000, FIA Conference about $1,000 and the Australasian Fundraising Forum about $770.

For all but the smallest of charities these rates should be peanuts - the return will well outweigh the costs. Attending just one event could make - or save - thousands of dollars. This is great value whether helping to develop a strategy, pulling realistic budgets together or even just for ideas on tactics.

Yes, there are books around, and great articles and blogs, consultants and peers. But conferences often provide tons of useful, practical and evidenced ideas you can put into practice. I know many will be cynical (we have all been to rubbish sessions at conferences) and perhaps some people think they won't learn from any of the speakers. I have been in fundraising for nearly two decades and provide training at many of these events, but I cannot think of one conference I have attended and not learned something really useful that could make my charity (and now clients) more money.

The problem is, many charities don't budget for training, or when they do it is minute. A good rule of thumb I tried to push through at my last charity job was to budget for 5%-10% of staff costs. My reasoning was that I would rather have 18 or 19 well trained staff than 20 not. And it could actually save you money in staff retention - people like to be trained and are therefore less likely to leave.

Of course, conferences are not the only training option, but I think conference attendance is a good litmus test of an organisation's attitude to professional development. In-house and on-the-job training is essential, but without external input, these alone will create an internal spiral of sameness, lack of innovation and eventually, termination.

You will notice my nom-du-blog is ‘Sean is always learning'. Because it pays to learn. But sometimes I have to pay to learn too.

Sean

(Originally published in Fundraising and Philanthropy Magazine E-Bulletin).