You Asked—Fundraising Questions Answered

Last week, David Gunn from Salsa Labs and I presented a webinar hosted by NonProfit PRO. The title was, “Fundraising Acquisition: How to Grow Your List and Engage New Supporters.” (You can access the recording of the webinarhere.)

Several questions were submitted before and during the webinar. Given that if one person asks, there are probably others wondering the same thing, I’ll provide my opinion on some of those questions over the next few weeks.

What do you mean by the source of the donor? Every donor comes to you by some means—they attend an event, they respond to a direct mail appeal, they click on your banner ad, etc. Whatever triggered that first gift (well, as best as you can tell, based on their action of returning a response form, clicking, showing up or whatever) is their source. And yes, some will simply send in a gift in their own envelope so you have no idea what the trigger was; these are sourced as “white mail,” or whatever term your organization uses to signify “we have no idea.”

The source matters because different sources have different retention rates, attract donors with different levels of knowledge about your organization, even move the donor to give based on different feelings and emotions. Some sources acquire more new donors, but they may not be as “sticky” because it was more emotion-based—a knee-jerk reaction, if you will (for example, a donation in response to an emotional ask related to a natural disaster).

If you acquire a large number of donors from a single source, you may want to talk to them differently in the first few mailings. You may stop re-soliciting them sooner because your history shows that donors from Source X have a low second-gift rate, while donors from Source Y have much greater second-gift and retention rates. Knowing the source of a donor can help you make decisions and refine your communication based on habits of donors from a single source.

How do I make our cause a “sexy” cause for donor giving?Some causes are tougher; you can’t use cute kids and puppies to tug at the heartstrings. But you can tell a compelling story about someone whose life has really been improved. You can help your donors engage their hearts and their heads in understanding the problem and the great solution you offer. You can show them the value you offer for their gift. You can help them put themselves in the picture and find a connection either with someone being helped or someone doing the helping. We can waste time being jealous of people with compelling logos like World Wildlife Fund (a panda is a tough act to top) or great causes, but it’s far better to invest that time digging out the great stories and photos that will make your cause resonate with donors.

What are the best strategies to inspire a subscriber, who may already feel they are “supporting the cause” through social media likes/shares to make that first financial donation? I have no easy answers; some people will never make that switch. But others will, if you give them a compelling reason to donate. Make sure your content on your social media is regularly updated, well-written and interesting to read, and don’t hesitate to occasionally ask for a donation and include a link to your website. But you have to make the case, “Your support on Facebook matters to us, but right now, we urgently need friends like you to help up meet our goal of raising $X for [compelling program info]. Will you go the extra mile today and help with a donation? Just $5 will bring us closer (etc.).”

No promises—as I said, some people will never, ever give. Try from time to time, but make sure you are investing in other means of donor acquisition. A couple of old sayings fit well here: “Don’t put all your eggs in one basket,” especially if that “basket” is social media, which often is a good source for fans but not donors, and “you (often) get what you paid for” when it comes to free means of acquisition.

Are buying (renting) mailing lists still a cost-effective way to acquire new members/donors? If you’re defining “cost effective” as “break-even or better,” renting mailing lists hasn’t always met that criterion for a long time. However, using modeling to select people who have a higher likelihood of donating remains a way to improve results and reach potential supporters. Coupling a modeled list with a package that you have been testing and perfecting increases your likelihood of success.

Direct mail acquisition will more likely fail if you keep changing your package instead of testing and refining the one that proves to be the best at acquiring donors, or if you just rent the cheapest list of names you can. Choosing a list broker who will work with you to find the best possible rental lists will lower the odds of failure. Look into modeling if you aren’t already using it. And generally avoid free lists; there’s a reason they are free.

There are a lot of ways to acquire new donors, but it’s hard to get in front of a large potential donor audience over and over again without investing in something mass like direct mail. Just be prepared: Breaking even may take 12 to 18 months. But if you are acquiring and retaining donors who give again and again, it’s worth it. If you are only acquiring donors who give once and never give again, it may not be. Bottom line: You have to spend money to raise money. And then, do it again and again.

What is the No. 1 priority for fundraising dollars? Well, that depends. What is the goal of your nonprofit in terms of fundraising? Is it to build a base of donors to cultivate for major or planned gifts? Is it to have a loyal base of donors who volunteer as well as give? Is it to raise as much money possible in the shortest time possible? Is it to build a cadre of donors who are incredibly loyal?

If you are starting from scratch or rebuilding a decimated donor file, make sure you build your solid foundation first. That’s usually something that involves a lot of donors giving smaller amounts more often—in other words, something that will provide a steady cash flow. This is often direct mail and e-appeals, newsletters (that inform and raise money) and hopefully a loyal monthly donor program. Once you have a foundation that is strong enough to allow you to keep going month after month, meeting obligations and having impact, you can start adding the additional stories to your fundraising structure—major gifts, planned giving, social media, etc.

Sound backwards to you? Well, I’ve found that unless you have that steady flow of income, it’s hard to start something new and be able to stick with it long enough to allow it to mature and become a wonderful source of income. And, without that steady source of income, it’s hard to expend a lot of resources on things that are nice but aren’t bringing in money. Having 10,000 friends on Facebook is great, but unless you have donors as well, you won’t be able to thrive, let alone survive.

I’m sure if you asked these same questions to 10 other fundraisers, you’d get 10 different sets of answers. This old dog knows that one of the challenges in fundraising is that it’s not formulaic; one size does not fit all. But I also know that you have to spend money to raise money—and that often means focusing on the hard, un-sexy parts of fundraising until you have a solid enough base to add in some of the more exciting, transformational efforts. There really is no shortcut to growing the funding base of a nonprofit; it is hard work and you’ll fail from time to time, but the rewards of growing a loyal donor file—and of finding that next great fundraising tool for your nonprofit—can be great.

Originally published in NonProfit Pro.

Author: PJBarden

With a professional career in strategic fundraising that spans more than 35 years, Pamela brings a wealth of experience and knowledge to working with nonprofit organizations. She specializes in writing fundraising copy, grant proposals, P.R. materials, instructional articles and blog entries, as well as developing and executing fundraising strategy for her clients. Pamela is a Certified Fundraising Executive (CFRE); an instructor for UCLA Extension School’s Fundraising Certification Program and the University of La Verne, College of Business and Public Management; a frequent webinar speaker; and author of two online courses for UCLA Extension. Pamela earned a Doctorate of Business Administration in 2015; her doctoral project (dissertation) was entitled “Nonprofit Organizations’ Awareness of and Preparation for Legislation, Regulation, and Increasing Scrutiny.” She is a past winner of a Gold Award for Fundraising Excellence and an ECHO Award from DMA; recipient of a Distinguished Instructors Award from UCLA Extension; a weekly columnist for NonprofitPRO (formerly Fundraising Success); and a monthly contributor to Blackbaud’s blog, npEngage.

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