VIDEO How Focus on ROI Can Hobble Your Fundraising
Maths of Fundraising

VIDEO: How Focus on ROI Can Hobble Your Fundraising

I hate to admit it, but a lot of what it takes to be smart about fundraising means doing mathematics.

Not my best subject.

Fortunately, it’s not super-hard math.

And fortunately, we have math geeks like Sean to help us understand.

In this difficult time, we need all the good math we can get.

Check out our discussion on the danger of relying on Return on Investment (ROI) and its even more evil twin, Cost to Raise a Dollar.

Find out what numbers you should and should not be looking at as you try to understand what’s happening with your fundraising.

Whether it’s the math of fundraising or any other topic, it’s best to equip yourself for success. And that’s what you’ll do when you join The Fundraisingology Lab by Moceanic. It’s a true community, the thing we all need most right now — plus all kinds of courses, templates, checklists, and other resources that can help you go to new places as a fundraiser. More information here.

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Whats next for Fundraisers
Crises Fundraising

VIDEO: What’s Next for Fundraisers? We Have Bad News and Good News

You might have heard there’s a post-pandemic “slump” coming for fundraisers.

Is it going to happen? And what can we do about it?

We have two short answers for you:

  1. Yes, a slump in giving is almost sure to happen in the coming months.
  2. But how damaging it is to you is almost entirely up to you!

The health crisis part of COVID-19 is already past in some places (though not even close in others, including the US).

After the health crisis comes the economic crisis. (Of course, the economic crisis was already with us, but it was largely overshadowed by the disease itself.) And here’s the hard part: Fundraising in a recession is difficult.

Find out what you can do to weather this new difficult time that is coming.

It’s not as bad as you think!

We all do the best work when we stand together, especially in hard times. That’s why you should look into The Fundraisingology Lab by Moceanic. It’s a powerful, global community of great fundraisers who support each other. You also get access to tons of tools, tips, courses and more to help you build your fundraising career. Join the waiting list now and you’ll be the first to hear when the doors open again!

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Coronavirus

[VIDEO] What Fundraisers Should Do — and NOT Do — During the COVID-19 Crisis

This is a must-see video for everyone wondering what to do next during the coronavirus crisis.

Today, I speak with long-time colleague Mary Anne Plummer of Exuberance Unlimited about what fundraisers should be doing — and NOT doing:

  • DO keep raising funds.
  • DO keep in touch with donors.
  • DO get back to basics.
  • DO stay on point.

 

  • DON’T spend time or money on activities that don’t directly produce measurable fundraising revenue.
  • DON’T do expensive, fancy direct mail packs.
  • DON’T aim campaigns at Millennials.
  • DON’T keep changing direction.

I hope this useful and fun discussion will help you to do your best in these hard times!

Looking for help through this crisis and beyond? Check out The Fundraisingology Lab. It’s the best training on crisis response and everything else you need as a fundraiser — plus the coolest, most helpful fundraising community in the entire world! Find out how you can join today!

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CoronavirusFundraising

[WEBINAR REPLAY] COVID-19: 5 Steps to Keep Your Fundraising Strong Through the Crisis

These are uncertain times and so much has changed in the last few weeks, but the team and I here at Moceanic are here to help.

I recently ran a free webinar on Facebook, COVID-19: 5 Steps to Keep Your Fundraising Strong Through the Crisis. Watch the replay below and discover how you CAN survive this unexpected crisis:

  • Learn how to avoid a fundraising catastrophe
  • Understand how you can take control of the situation
  • Discover how to recover lost events income
  • Key strategies for crisis and emergency campaigns
  • A free downloadable cheat-sheet: COVID-19 and Your Fundraising
  • Learn from what other fundraisers asked me during this live webinar

Discover how you can connect more with your donors, grow your fundraising income, and master your career. Join The Fundraisingology Lab and you join the thousands of smart fundraisers who are becoming EXTRAORDINARY FUNDRAISERS. Check it out.

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CoronavirusFundraising

COVID-19 and Your Cause

Some bosses are about to cripple their charity’s future with one bad decision around COVID-19.

Make sure your organisation is not one of those victims.

What can your cause expect (or may be experiencing) as COVID-19 spreads around the world? If you aren’t a frontline organisation for example, working with refugees, medical or an international aid organisation you may not have thought about the impact for you yet.

But you won’t escape unscathed.

I’ve identified several key areas where you could be impacted.

 

  1. Staff. The obvious one. The rate of infection is so high, we could end up with >40% of the population impacted. Nearly all should recover, but it will have disrupted a lot. Already, some Moceanic members in Italy are stuck away from home or even stuck in another country.
  2. Distribution chain. This was the quickest impact, since the virus spread initially in the world’s biggest manufacturing country.
  3. Fundraising events. This is happening already; today it depends on where you are as to whether you should postpone or cancel an event. Tomorrow may be different. Contingency plans are needed now.
  4. Face-to-Face fundraising programs. Is it responsible to employ teams to meet people in the streets right now? Will they welcome door to door canvassers? Short term… this will save you some cash flow. Long term… you need those donors!
  5. Paying customers. If you are an arts or education organisation, you will come under extra financial pressure.
  6. Beneficiaries. If you work to help groups such as the homeless, extra financial pressure is likely to be piled on as more become sick: and they are often more vulnerable than other groups.
  7. Corporate donors. Travel bans and cancellations are crippling travel businesses. Corporates will renege on donations before they cut exec salaries.
  8. Economic downturn. Huge falls in stock values. 7.1% in Australia yesterday, no recovery so far today. UK, HK, USA… same story. What does this mean for you?
  9. Major donors. May be worried about their investments. Reliance on a few, large gifts, is much scarier than a nice smooth level of income from a large group of smaller donations.

With any of these… the first reaction from many bosses at charities is the wrong one. The most devastating one which will leave your organisation a crippling and ongoing legacy.

If you have to make cuts – and you may have to… don’t cut fundraising. 

Don’t do it. As a fundraiser, fight tooth and nail to make sure the long term future of your organisation is protected.

It is more tempting than cutting services – but will lead to MUCH deeper cuts in services in the future.

What you SHOULD do, right now.

  1. Carry on with your fundraising. Your mailings, your digital campaigns. Spend MORE not less to make more.
  2. Acknowledge, mention and recognise COVID-19 in your copy but never in a way that could disincentivise giving to your cause right now. Eg. “You may be considering not donating because of COVID-19…”
  3. If your fundraising (or ticket sales) is down, or costs are up… This is a rare opportunity to do a financial crisis campaign. You really don’t want to do this often. I’ve worked on these before and have raised an average of a WHOLE YEARS worth of individual donations in one campaign.
  4. If your cause has reserves… this is what they are for. Use reserves before cuts.
  5. Fight tooth and nail to protect – and increase – fundraising investment.
  6. DUMP every activity that has no evidence of having a financial return…

One of the most important things you can do right now to prepare is be part of a strong community of fundraisers. When we have each other — to share advice, to ask questions, to support those hit hardest — we are all better.

That’s why I STRONGLY urge you to check out The Fundraisingology Lab. Discover how you can connect more with your donors, grow your fundraising income, and master your career! Find out more here.

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Fundraising

VIDEO: Fundraiser’s Guide to the Australian Fires — and Other Disasters

The Australian multi-state bushfires are an emergency of mind-boggling proportions.

It calls for response.

And donors around the world are responding.

Emergency fundraising is different. It has its own “rules” and calls for a rather different strategy from normal fundraising. And it has impact on almost everyone, whether you raise funds for the emergency or not.

This emergency has another unfortunate distinctive: Unlike an earthquake a major storm, it is not a quick hit that fades from awareness right away. In fact, the fires are likely to burn for months. That means the urgency to act immediately is lessened. But it also means we will likely struggle with a kind of “donor fatigue” as it comes and goes from the headlines.

Watch the video for more about what you should do in response to an emergency.

Here’s a quick look at what you should be doing:

  • If you are an Australian organisation with work impacted by the fires: This is your time. You should put a lot of effort into your fundraising. Do things right, and you will get new donors, and more revenue from your current donors. But your new donors will have a very low retention rate. See the video for how you can deal with that.
  • If you are an organisation outside Australia with work in the fire areas: This is also your time, but it is likely to fade sooner. Act quickly.
  • If you are an organisation involved in fighting climate change: Because the fires are among the most dramatic signs of climate change, you should emphasise this crisis in your fundraising.
  • If you are an organisation that has nothing to do with the fires: Keep calm and carry on! You may see somewhat lower results to your fundraising efforts — or you may not. But don’t decide for donors that they aren’t interested in your cause too while the fires burn. Cancelling fundraising activities will do far more damage than the fires can. (If you have a lot of donors living in and around fire-affected areas, you may experience more extreme losses of your fundraising.)

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Want extra help dealing with this or any other disaster? Join The Fundraisingology Lab for the best training and most helpful community in our profession!

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Donor Love

Put Donors First, Even When It Seems Like a Pain

I wanted to give a fairly large gift to a charity I admire. And I wanted to put it on my American Express card. You see, I have an annual budget that I like to donate, and I want it to all be on my AMEX card which makes my tax return much easier.

So I asked the charity if I could donate by AMEX …

And they said no.

I asked why, and they had two reasons they didn’t accept AMEX:

  1. AMEX usually charges more than other cards for the merchant fee. This can reduce the value of the donation by 1% to 3%.
  2. AMEX card holders have other cards too. They can use those.

I asked around and found out many charities don’t accept AMEX, and for the same reasons.

Actually, there’s also a third reason, and I think it might be the real reason: In order to accept AMEX, someone has to get around to the paperwork, and there are other priorities. Charities are often understaffed, and this just seems a lot of effort for small return.

But let’s take a deeper look at the question, especially from the donors’ point of view:

  • AMEX donors give up to 50% more than non-AMEX donors. This reason alone should get every charity in the world to start taking American Express!
  • Even those AMEX donors who give the same amounts as non-AMEX donors are identifying themselves as higher value prospects.
  • AMEX charge cards usually have no credit limits, reducing bounces.
  • AMEX regular givers give slightly higher monthly donations, and they have much, much higher retention rates.
  • Wealthier people — that is, your best high-donor prospects – tend to use AMEX cards.
  • AMEX holders pay for their cards, so they want to use them.
  • AMEX donors like to keep donations on one card. It’s easier for their tax records.
  • AMEX donors may say that it is fine when you ask for Visa instead, but you are creating a barrier — they wouldn’t have offered AMEX first if they wanted the donation on a different card.
  • Making the case for why you accept AMEX is a useful opener for donor-focused training, it’s a great example of putting donors ahead of administrative needs.

Am I persuading you? Diners should be accepted too — for the same reasons.

But my real point here is not actually that you should take AMEX — I promise I’m not getting paid by them! The point is that a tiny decision — like accepting AMEX or not — tells a lot about how donor-centred an organisation is.

Put donors first.

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Direct MailMaths of Fundraising

Should You Dive into Direct Mail? Here’s What You Need to Know First

You’ve heard the news: Direct Mail is not dead. In fact, it’s still where much of the action is for fundraisers.

Does that mean your organisation should dive into Direct Mail if you are not already doing it?

Maybe.

I’m going to give you some facts and figures that can help you decide whether or not you should fire up a direct mail program. It can be expensive, difficult, and it takes some time to start paying off. 

To get us started, let me give you what might be a startling figure: 0.6%.

That’s six out of a thousand.

Not much, but it’s a pretty average response rate for “cold” direct mail in well developed direct mail markets (like USA, UK, Australia, NZ, Hong Kong). “Cold’ is mailing to people who have never donated in response to mail, to you, before. That includes bought or rented lists, people who are on your database but never donated, attendees of events and anyone else.

For now, 0.6% is what you’ll get, unless or until you know otherwise. Response often ranges up toward 1% and sometimes even higher.

That 0.6% guess will help us calculate the volume of your direct mail program. Which leads us to the second magic number: 200.

You always need at least 200 responses in any test group to be able to statistically compare.

If you can’t afford to mail enough pieces to get 200 responses then the whole thing is pointless. Don’t do it.

To get 200 responses at 0.6% you need to mail 33,000 packs.

If you want to test two packs against each other (which you should be doing) then you have to mail 66,000 packs.

If you can afford to mail that 66,000, you’re on target — so far.

But there’s one other step.

That 66,000 mailing will hopefully get you around 400 new donors. That’s not enough donors for a sustainable direct mail program. Basically, they won’t donate enough to cover the cost of your time, database, processes etc.

For that, you need to get at least 1,000 new donors within your first 12 months. To get that, you need to mail 165,000 packs in the next year. Our third number.

So if you can’t afford that, or you can’t find that many names to mail, don’t invest in direct mail acquisition.

But if you can, here’s the next level: Knowing if it’s not just numerically successful, but also financially viable.

Which brings us to our fourth number, which is your Return On Investment (ROI) from your direct mail — or how much you got back for every dollar you spent. ROI is not a good measure for warm fundraising activities (it is actually destructive) but very useful for acquisition.

You calculate ROI by dividing the total income your donor acquisition brought in by the total cost of producing and mailing it. That should include all costs, including the cost to print and mail, list costs, and the cost of writing, design, strategy, project management, etc.

ROI can improve three ways:

  1. Your cost is low.
  2. Your response is high.
  3. Your average gift is high.

They’re all important, but you should focus most on #2 and #3. Extreme cost cutting often ends up lowering response, so it’s self-defeating. Control those costs, but really work to increase response and average gift.

Any ROI above 1.0 on a volume of 66,000 (meaning you brought in as much as or more than you spent) is practically a miracle. If you are trying direct mail in a country where it isn’t well established, maybe you have a better chance of a miracle: if you can get hold of a good list.

Rare these days. More likely, you’ll get back less than you spend.

An ROI above 0.65 ROI (65¢ for every dollar you spent) is very good. If you get that, it means you should almost certainly keep doing direct mail, and on a larger scale.

If the ROI is below this your direct mail is probably not viable. The ongoing donors will not likely cover their cost over many years.

Let’s summarize those BIG 4 direct mail acquisition numbers:

  • Response rate: around 0.6% or higher.
  • 200 (or better yet, 400 total responses, which means mailing about 66,000 to start.)
  • 1,000 new donors in your first 12 months. That means mailing about 165,000 packs in that first year.
  • ROI: if it’s 0.65, great; if it’s 0.40 to 0.65 it might work; if it’s under 0.40, there are likely better options for you.

That’s a good start. Once you establish that you have a viable program, you need to track some other things you can’t measure until a year later:

  • Second gift rate: how many of your new donors go on to give again within 12 months. Only 35%-50% of donors ever give a second gift.
  • Annual giving: add up how much they gave in 12 months since they came on board. This is how you’ll move from losing money to making it.
  • Monthly gift conversion. Encouraging your new donors to become monthly donors is one of the keys to success. PLEASE call all new donors and ask them to be a monthly giver within weeks of their initial donation.
  • Any donors who give more than twice the average donation: call them immediately, thank, and call them again a few weeks later asking for that second gift.
  • Estimate the 5-year ROI using some basic modelling.

You also should keep track of these other long-term things:

  • Donor response to a survey: send a supporter connection survey. That’s the best way to upgrade donors to their highest possible level.
  • Bequest commitments.
  • Volunteers (if that is important to your organisation).
  • Cross selling to donors if there are other ways to support your mission beyond donating.

Sounds hard work. Why bother?

Direct mail is still far and away the BEST source of major donors and bequests. Like 5-10 times better than anything else.

If you have a great, integrated program with the direct marketing team, marketing-communications and major donor/bequest people working together: it can beat everything else in the long term! It is just hard!

In fact, it’s so hard, I’d say don’t do direct mail acquisition AT ALL unless…

  • You are only mailing locals, swapped lists or a well-defined “tribe”
  • You hire a professional direct marketing fundraising agency (not an advertising agency) with a good reputation.
  • You have superb integration with major donor and bequest people willing to follow up these mid value and bequest leads.
  • You have puppies. (Just kidding. But only a little; puppies are probably the most effective subject for fundraising – even if you aren’t an animal charity, squeeze some in!)
  • Don’t make it up. Learn. If you are serious about investing – even if you meet the criteria above, PLEASE talk to me about how I can help through our one-to-one coaching. You’ll easily cover the investment in savings and have a more informed view!

I hope this helps you make the decision about diving into direct mail acquisition. It’s not for the faint of heart! But it can power the funding of your organisation like nothing else!

Before you embark on a new or revised donor acquisition strategy – even before you begin to look at the budget – please talk to us! We have tons of tools, data and helpful advice that will make it so much easier. Use this link  to book a free call with Sean. He’ll give you some very valuable free advice on the direction you should probably go, and will show you how we can help you more through our Coaching+ program.

Related posts about direct mail fundraising:

 

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Maths of Fundraising

VIDEO: How Much Do You Cost?

Too often we treat the time of fundraising professionals like you as if it’s a free resource.

But it’s not at all free. In fact, it’s the most precious and irreplaceable resource you have. And when you put a dollar value on your time, you’ll have good answers to questions you may have struggled with before:

  • Should I be working on that event we’re doing?
  • Should we outsource something I’ve been doing?
  • Is now the time to hire a new person?
  • Is it better for me to spend my time doing activity A, or activity B?

The formula gives you straightforward, no-ambiguity answers to questions like these. Because the second you put a real value on your time, the light will shine on those questions. And you’ll find that your time is treated with the respect it deserves!

The formula is easy. You can do it in your head. And watch how it guides your thinking and strategy! Watch the video!

Discover how you can connect more with your donors, grow your fundraising income, and master your career. Join The Fundraisingology Lab and you join the thousands of smart fundraisers who are becoming EXTRAORDINARY FUNDRAISERS. Check it out.

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Fundraising

VIDEO: 6 Big Tips for Big Campaigns

Want to make an important direct mail campaign stronger?

Sean and I have six big tips that can really super-charge response:

  1. Mail in a stand-out envelope — bigger, more colourful, not the usual!
  2. Use a matching gift offer.
  3. Enhance the pack in as many ways as possible: Longer letter, bigger reply device, as many lift pieces as you can think of!
  4. Call your donors before they get the mail — or after.
  5. Use email and mail together, make it into an “event.”
  6. Repetition! Send several emails. Send a follow-up direct mail. Maybe even send the original pack again!

Want to learn more about what really works in direct mail? Uncover all of the amazing best practices of direct mail fundraising in our course 7 Steps To Creating Record-Smashing Direct Mail. It’s available for all members of The Fundraisingology Lab.

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