When I was a kid, the main point of your Halloween costume was to be scary. That’s why we were ghosts, vampires, werewolves, and Richard Nixon.
The kids showing up at my door on Halloween these days seem to have moved on from the scary requirement. They’re all firefighters, ballet dancers, teddy bears, and other decidedly non-scary things.
But here’s the thing: Just because they don’t look scary, doesn’t mean they won’t do scary things. A nurse can still TP your house. Luke Skywalker can graffiti your sidewalk.
There are some non-scary scary things in fundraising too. Things that are perfectly harmless, even very good … but with a hidden potential to really get you. Here are three that you should especially watch out for. They look friendly, but they can cause real problems!
Super High Return on Investment
Yay! We got our highest ROI yet!
Not so fast. It feels good to get big numbers for your hard work, but it might be bad news.
Return on investment (ROI) gives you insight into the efficiency of your fundraising. The problem is, you can artificially inflate ROI — on purpose or by accident – at the expense of net revenue, which is a far more important goal.
There’s a sure-fire formula to get a record-breaking ROI on a fundraising campaign:
- Only contact your most recent donors, say those who’ve given within the last six months.
- Omit all donors who have given less than $100.
ROI will be impressive. Some might think you’re a real genius.
But you’ll have left a lot of revenue on the table. All those less-recent and lower-value donors will give you nothing. They would have generated positive net revenue, but they would have pulled down your overall ROI.
When you get an unusually high ROI, it’s partly a sign that you did very effective fundraising (Yay!). But it might be a sign that you didn’t reach out to enough donors to really maximize the power of your quality work (Boo!). You perhaps should have mailed a wider group of lapsed donors, and other less-involved groups.
Next time you see an amazing ROI in your results, ask yourself if it’s bad news disguised as good news.
Relying on Millennials to Do All the Giving
If you read a lot of fundraising blogs or go to the conferences, you might think there’s a group of people called Millennials who have buckets of money that they really want to give away – if only they can find nonprofits who do things differently from the other nonprofits. (Hint: Cancel everything but online channels!)
Plus, Millennials have a whole lot more years left than the current crop of elderly donors. We have what – six, eight months left with our current donors? Millennials will be with us for decades, with ever-increasing wealth!
That’s what they say, concluding that we could be bringing in so much more revenue if we would just start connecting with these Millennials!
Sounds exciting.
But it’s pretty scary.
Here’s the problem. Fundraising tends to be focused on older people because older people give at a much higher rate than everyone else. And they stay with the organizations they love for much longer. Oh, and older donors are by far the most likely to put a charity in their will.
Compared with older folks, Millennials score low on:
- Dollars given to charity per capita.
- Percentage of income given to charity.
- Repeat giving to any charity — that is, retention.
The way that plays out in fundraising:
- It’s hard to persuade them to give – much lower response rates than you get from older people.
- It’s even harder to persuade them to give again – really poor retention rates.
- It’s hard to find them. Since their participation in philanthropy is lower, there aren’t go-to lists full of philanthropic younger people.
If you go all-out to target Millennials in your fundraising, they will break your heart. And your budget.
It’s not at all that Millennials are somehow less generous or less involved than other generations. Millennials (defined as those born between 1981 and 1986) are amazing people. I know, because I work with and know so many Millennials who are incredible at fundraising. My kids are Millennials, and they are just superb human beings.
But as donors of money, Millennials are a lot like previous generations at young ages – they aren’t part of the charitable giving party in meaningful numbers. Yet.
You personally know Millennials who are incredibly philanthropic. You might even be one of them. But we’re talking a whole generation — big numbers, not the cool people you and I know. The numbers that will drive your fundraising.
Millennials will start being a force in charitable giving in the 2030s when they hit their 50s and 60s. I suspect that may be a new golden age for fundraisers, if only because there are so many of them – they outnumber Boomers, the previous huge demographic “bulge.” That’s not that far off, so it’s not too soon to be thinking about their arrival at the party.
But for now, keep your eyes on those who are already engaged as donors: People who are already old, or approaching being old. A 70-year-old woman in the US has an average life expectancy of nearly 17 more years. She’s going to be around for a while yet. And she may be interested in talking about making a charitable bequest – and those average around $35,000. If you fail to reach her, the loss to short-term and long-term revenue will be extreme.
The Millennials are coming. Just not quite yet.
Having Your Family Tell You How to Do Fundraising
I’m only bringing it up because I so often hear about fundraisers who use their spouses or their mothers as uncompensated one-person focus groups.
But asking your partner or your mom to tell you how effective your fundraising is, is like asking a fish to tell you the chemical make-up of the ocean. The fish actually knows nothing at all about water. And your family member — even when they’re a generous and experienced donor — knows nothing at all about fundraising.
Actually, it’s worse than that. Your family can only give you wrong answers to your questions about fundraising.
Here’s why: When you hand your fundraising to someone close to you and they know you did it and you want to know what they think, you’ve already transformed that message into a magic thing that’s not at all like the fundraising that shows up in their mailbox or inbox. It has become a special thing, admirable — not for its motivational qualities, but because you created it.
Even if your family member has a sharp edge and can be counted on to give out criticism — their criticism will give you more insight into your relationship than it will about the quality of the piece they’re talking about.
By sharing the piece with a family member, you’ve created an abnormal situation. Unless all your direct mail pieces are hand-delivered by the donors’ family members, their experience is not at all like the way real donors encounter your messages – randomly, without introduction, one blip in an ocean of noise.
Suppose your family member knows a lot about fundraising. Even then, they can’t give you meaningful information. Because the difference between that casual, not-really-paying-attention way real donors encounter your stuff and the careful, conscious, focused way they’ll look at it to give you good feedback are radically different.
This is also why basing your own thoughts about fundraising on your sense that you would or wouldn’t respond to it are completely useless. It tells you what you consciously think. Not what you’d really do.
Love your family. But don’t get fundraising advice from them.
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