How to Talk So Your Board Will Listen

I know just how challenging it can be to deal with a Board of Directors.

As CEO of THD, a fundraising agency that drives strategy and regularly presents program results, I appreciate that attempting to predict what your Board needs to hear from you can be intimidating and frustrating. The stakes are high, and it’s essential that your program is understood in the best possible light.

At the same time, I bring a unique perspective to this important topic, because I’m also the Chairman of the Board of Boyce Thompson Arboretum, Arizona’s oldest botanical garden. These dual roles provide me with some insights that might be of use in helping you navigate your relationship with your own Board of Directors.

Fundraising is different. Tell your Board why.
Boards are passionate and typically composed of very talented members. But their knowledge of fundraising is often elementary.

A survey by The Agitator (reviewed in an August 10th blog post) revealed that, when asked to “rate your CEO’s understanding of and commitment to effective fundraising,” 23% responded that they were “more of a hindrance than a help.”

But are you helping them?

We already know that many of your Board members (including your CEO) aren’t necessarily fundraisers. One is a high tech entrepreneur, another is an accountant, a third is from a big corporate foundation and so on. They’re all over the map and have little experience in your field.

But one thing they do have is opinions.

It’s logical to assume that they’re going to try to fit their professional experience into fundraising. Unfortunately, the dynamics are often totally different. While they may understand their own customer acquisition numbers, they believe that for nonprofits, people should just magically support the mission. They’re emotionally invested and engaged, and it’s hard for them to understand why their commitment doesn’t necessarily translate to a broad pool of donors who are willing to give.

That’s why you need to proactively educate your Board in order to gain legitimacy.

The only way to do that is to sit down with your Board and explain the data that goes into fundraising. Once they see how the numbers work, it’s no longer a question of opinion, it’s a question of facts.

For example, Board members sometimes put too much stock into the opinions of those outside your organization, like watchdog groups. Sound familiar? Educating the Board should often center on an actual ‘fundraising curriculum;’ a series of lessons on what numbers really matter and which mean a whole lot less.

“The insights shared [by THD] help provide our board a more complete understanding of our fundraising work.”
Lori Seader
Director of Development, The Fresh Air Fund

Context is key.
We’re fortunate that fundraising has entered an era when we can easily give our Board the context they need in order to hear you. A number of organizations like Blackbaud provide excellent quarterly benchmarking so that Boards can receive comparative data in terms of how their program is doing. You have to start with the “industry” and then narrow in on the organization on whose Board they serve because that gives them context.

They need to understand that there are really only four ways in which they can raise unrestricted revenue:

  • Acquire more donors
  • Retain more donors
  • Get them to give more often
  • Encourage them to give a larger gift

And because the marketplace has changed dramatically over the past decade, new ways of measuring progress have been developed.

Show them how much the competition has exploded, what it now costs to acquire a new donor, and what the long-term value of a donor can be. Ground them in the metrics of today’s fundraising landscape so that they can understand the challenges and appreciate them.

Provide them with long term impact.
I cannot emphasize this enough: Most Boards think in terms of your fiscal year when it comes to measuring fundraising performance.

They may not be happy with a 2:1 ROI in this fiscal year, but if we could show over a three year time frame or some longer extended period that we’re actually at a 5:1, 6:1, 7:1, they may be more accepting of today’s ROI.

In addition, if you can provide them with concrete examples of how you turned a $10, $12, $30, $50 gift into a five million dollar planned gift, it can elongate and change the perspective that Board member has on the day-to-day or year-to-year work that’s being done.

Even at a very basic level, they have to understand that finding new donors is an expensive proposition which can only be looked at over the long term. Then, when you turn around and start to look at how your existing donors behave, you’re able to really show that the ROI is actually quite good.

Identify a champion.
It’s always valuable to find someone on the Board who appreciates and values fundraising. It really doesn’t matter where they come from as long as they’re open minded and willing to learn. Then they can serve as your advocate in meetings, helping to lay down the foundation of understanding for the development process and the numerics.

If you can find them quickly, they’re going to be a key asset to you when it comes to helping educate their fellow Board members.

Most Boards have committees where the lion’s share of the work gets done. One of the most important is the Development Committee, which is typically tasked with fundraising oversight.

It’s important that its members get exposed to all facets of your organization’s fundraising programs, and that they be kept informed of progress on a regular basis. They are your conduit to the rest of the Board – along with other key committees such as the Executive and Finance Committees.

Friends, supporters, and advocates on these committees are going to be a key asset to you when it comes to helping educate their fellow Board members.

Be prepared, be bold, be authoritative.
Boards meet infrequently and have demanding agendas. What they value most is someone who will state his or her case simply, get to the point quickly, and be declarative.

Always have your facts straight and always be prepared to answer the question that you know is going to be asked. Don’t overwhelm them with data – be concise.

I can’t tell you how many times I’ve been in Board meetings and the data is too detailed, too granular and simply overwhelming. Sometimes, we think that the more data, the better, but often it’s just the opposite. Lots of data can obscure what you’re trying to say.

And finally, ask for help. You can turn to an agency partner, someone like us, for a helping hand. We are all invested in your success, and will be happy to help arm you with the information you need in order to get your Board’s support.

ian-sig
Ian Thompson
President/CEO, THD

To continue this conversation with the team at THD, click here.

Flat Budgets, High Expectations: The Fundraiser’s Dilemma

We can’t increase your budget [again]

For most of us in fundraising, doing more with less has been the mantra for years.

Even if your budget is flat, your expenses are going up. Paper, postage, people – they all cost more today than they did five years ago. So a “flat” budget actually means a smaller budget.

At the same time, most nonprofits are expecting growth. And you are on the front lines of delivering increased revenue.

Raising more money in a risk averse climate

In his famous (or infamous, depending on your opinion) 2013 TED talk, Dan Pallotta stated that the nonprofit industry’s intensive focus on overhead – fueled by industry watchdogs and public expectations of frugality – squelches innovation and makes risk a four-letter word.

“When you prohibit failure,” he says, “you kill innovation. If you kill innovation in fundraising, you can’t raise more revenue; if you can’t raise more revenue, you can’t grow; and if you can’t grow, you can’t possibly solve large social problems.”

And yet, it’s the circumstances that we face each and every day.

We’d all love to swing for the fences, throw caution to the winds, boldly go where no fundraiser has gone before. But in today’s fundraising environment, we are more often called upon to minimize risk while searching for opportunities to drive greater revenue.

How can we accomplish both? Let us offer up a few solutions.

Offer assignment modeling

As often as not, when it comes to direct mail, many organizations mail everything to everyone and hope for the best. One of our colleagues calls it the “spray and pray” method of fundraising.

But doesn’t it make more sense to mail an offer to a donor based on what he or she really wants, rather than what you want to mail?

Offer assignment modeling allows you to identify exactly which donors will be most responsive to each of the specific packages and offers you already have in your arsenal – premium vs. non-premium, for example – making your mailings more donor-centric and more effective.

Here’s how offer assignment modeling works.

A fictional example

Based on the model’s guidance (and fictional numbers) 2,100,000 pieces of mail were assigned to less expensive Package Q rather than costly Package R.

 

Migration Chart 2

 

The impact? Campaign expenses go down while revenue goes up.

 

A real life example

One of our clients now uses a THD offer assignment model on a regular basis. So far, the use of this modeling tool has reduced campaign expenses by $240,000 which is helping to contribute an additional $529,000 in annualized net revenue to their program.

 

Offer Assignment Modeling Overview for AARP

 

Event conversion modeling

As you know, most event participants are one and done.

They may choose to run a charity marathon once … maybe even twice, even if they’re really passionate … but they’re certainly not going to do it over and over again. The fact is, they’re a whole lot more interested in the marathon than your charity, so they’ll be easily captivated by the next big event or opportunity.

And the kind and generous people who sponsor them?

They’re even further removed from your mission. Your cause is barely on their radar, because they’re giving to the people who asked them.

With conversion modeling, you use all the available data – plus plenty of added enhancements – on this large (and growing) pool of “warm” prospects to identify people that could become long term financial supporters. That way, you’re effectively mining for direct responsiveness within a sea of people that would otherwise never return to your organization any other way.

At the same time, you have the opportunity to suppress those event names that aren’t likely to embrace your mission and become direct response gift-givers.

Another real life example

Below are the results of testing a predictive model to select the most productive individuals for a direct mail solicitation – people who had NEVER responded to a direct mail solicitation.

Prospects for the selection came from a variety of events including an annual walk and other community based events. Based on these test results, the model is now in full roll-out for 10 direct mailings a year.

 

selection model

Production efficiencies

Yes, postage and paper costs are increasing. But if your organization can gain some production efficiencies – say, by ganging your appeals with others for greater printing power – you may be able to reduce your per piece costs.

But … and it’s a big but … production savings are finite.

For one client, we did such a great job finding significant, year-over-year production savings that we were able to actually self-fund program growth.

But at some point, even with all the purchasing power in the world, production savings are not sustainable.

One of the best ways to generate short term revenue is also the worst

There are some solutions that we like to call lobster traps – once you walk into them, the door snaps shut behind you and you can never escape.

Take adding appeals, for example.

It’s an extremely attractive option for generating short term revenue. And if you’re given a Sophie’s choice – cut acquisition or add in another appeal – it’s often the best solution.

But once it’s done it can be very difficult to undo. And if revenue expectations increase every year, where does it end? When your renewal file is receiving mail every other week? Every week? It’s a slippery slope that may impact retention rates over the long term.

Investing in the digital channel

Today, snail mail represents more than half of all total fundraising – and nearly 93% of individual donations. It is, despite reports to the contrary, very much alive.

But it’s sure tougher than it used to be. We all know that it costs significantly more to raise a dollar than it did ten years ago. That the nonprofit market place has increased exponentially.

NPOs

And that some of our most reliable supporters (the Matures, born before 1945) aren’t being replaced by younger direct mail responsive donors.

And then there’s digital.

While the digital channel hasn’t replaced direct mail, and probably won’t for many years, there is no doubt that it has changed the landscape of fundraising and donor engagement.

We know that donors who respond in more than one channel have a higher lifetime value. That’s reason enough to invest. Even better, it develops relationships with donors who are engaged, passionate, and most importantly, under the age of 75.

Most organizations continue to seek out ways to effectively monetize digital media beyond email. There have been a few hugely successful viral campaigns (think Ice Bucket) and influencers such as Ashton Kutcher and One Direction have raised tens of thousands through Twitter campaigns.

But those are one-off opportunities that are difficult, if not impossible, to replicate with intent.

What we do know is that digital can be executed quickly, budget can be controlled, and that testing and learning can be done in real time. That it is the fastest growing fundraising channel since, well, direct mail. And that it is the channel of choice for the next generation.

Stake your claim to revenue

stake your claim

There may be revenues that you are indirectly responsible for, and it’s imperative that you stake your claim to them.

One nonprofit organization just rolled out with unique URLs on all DM packages in order to track revenue directly attributable to mail pieces – and quantified more than a million additional dollars in online revenue.

And that doesn’t even begin to capture the long term value of these multi-channel donors, which is far higher than those who give in one channel only.

Looking at organic online revenue is more complex, but it can be done through analytics. For one client we were able to show that 5-8% of their organic new donors received an acquisition mail piece before going online to make their gift.  And that stat was consistent over a 3 year study. Without the mail, those donors may not have been prompted to consider giving to this charity.

You may also want to look at how many people moved from “mass market” to major giving. Or how many of your planned givers came from the mail. It’s all about showing how your revenue has increased even if it hasn’t contributed to your program’s bottom line.

Flat budgets, high expectations – playing to win

the end

To recap, here are just a few ways that you can deliver increased revenue year over year… even when your budget remains flat.

1. Use modeling to target the right people

2. Look for production efficiencies

3. Add appeals or asks – with great caution

4. Invest in digital with your direct mail savings

5. Ensure that you’ve quantified incremental revenue

 

To continue this conversation with THD Click Here

To Make A Long Story Short…

pencils 2“I didn’t have time to write a short letter, so I wrote a long one instead”.

Over the years this quote has been attributed to Mark Twain, T.S Elliot, Churchill, Cicero and others, and rings absolutely true to writing digital fundraising copy today.

Inboxes are cluttered, difficult places to navigate, so how do we rise above the noise?

Timing, segmentation, personalization, great offers and great stories to be sure, but we all know that already.

What else?

In M&R’s most recent annual benchmarking study, there are a couple of data points that really stood out for us here at THD.

  • Email attributable revenue, up 25%
  • Email fundraising page completion rates, up 3% (nice job on those responsive forms!)

All great news, but how is this possible when open rates, click through rates and response rates all declined during the same time period? M&R posits volume (more people, more sends) as key factor, and that’s hard to argue against– but is there more?

Is it purely volume or is it a sign that the role of email in the conversion process is changing?

There are more organizations competing for share of mind and share of wallet than ever before. And they are doing so through more channels – email, direct mail, telemarketing, display, search, social, video, native, et al.

The donor is bombarded as a result of all the “multi”, “cross”, “pan”, whatever-you-want-to-call-it-today, channel approach — and they are self-selecting not just the organization but their preferred conversion channel.

That carefully timed and versioned email you’re sending is becoming the final trigger to convert the donor after they have been engaged with your message in so many other channels. Could it be that this is why response rates are down, but revenue is up?  Are your other channels simply teeing up the best donors to respond to your email – and if so, what does THAT mean?

For one thing, let’s start with the premise that fewer and fewer people have the time or interest to read a letter style email.

Also, with all those other channels helping support the campaign narrative, do you really need to say that much? Particularly if we acknowledge that a longer form approach won’t hold the attention of your audience (this is broad strokes of course – through testing you can learn the best approach for your various audience segments).

So, it’s time to start viewing your approach to email more like digital display advertising. Bright, vibrant images that “win the inbox” and the preview panel.  Start looking for ways to dial back copy. Let a headline, an image and a call to action finish the job that all the other work you’ve been doing started.

This is particularly important in mobile, where more than half your audience is opening those emails. Don’t make them scroll and read – give them a compelling visual experience that will drive to action.

Facebook paid $1 billion for Instagram and recently Mark Zuckerberg said he thought Facebook would be mostly video in 5 years. We live in a visual time.

Every day, we all receive dozens of appeals from worthy organizations with incredible stories to tell, but those stories get lost in the sameness of the layouts and paragraph after paragraph of copy. Take this shift as an opportunity to be creative and differentiate your brand visually.

How to Write to a Donor

penDo you remember your first “real” job?

Mine was selling encyclopedias door to door. (Note to readers under 30: “Encyclopedias” are 30-volume sets of books that have information about a lot of stuff. Think “Wikipedia” with better pictures, fewer editing errors, and a 4-figure price tag.)

As part of the training, they had us memorize and practice a sales pitch, then sent us out to the field. Most of the new guys did great. I was the Hindenburg, Apollo 13 and Hurricane Katrina rolled into a massive ball of hopeless disaster. Zero sales the first day, zero the second, zero the third, etc. After a week of wasting perfectly good sales leads on me, my sales manager accompanied me on a call. We went to a home, I did the pitch flawlessly, but … no sale. As soon as we left, I asked the sales manager, “So? What did I do wrong?”

He said, “You lost that sale in the first 3 minutes. You never engaged them, never asked them about themselves. Your pitch sounded canned, because it WAS canned. They thought, ‘he doesn’t care about me, why should they buy something from him?’”

Oh. So sales isn’t a one-way street. It’s matching what the prospect needs with what you can offer.

Which brings me to this blog post. If I am going to engage you, I need to give you worthwhile information on something you care about. Unfortunately, the only thing I know about you is – well, that you’re reading this post. So I’m going to start with an assumption:

If you’re reading this, I am going to assume you fit into one of two categories: 1) you write fundraising direct mail copy, or 2) you review copy someone else has written.

Two principles to keep in mind

I have just demonstrated my first principle of DM copywriting – envision your target audience.

“But,” you say, “That may not be an accurate assumption. Anyone could be reading this blog.”

That’s true. But I still think this is the right approach. Why? Because you should write to the people who might respond, not the entire world (my second principle).

“But, but, but …”

This is painful for the person paying the bills. “I’m paying good money to reach 100% of the mailing list! I want to talk to them all!” I get that, and I sympathize. No-one likes to knowingly waste money.

But, think about the arithmetic of direct mail. What would be a great response rate for your mailing? 2%? 4%? TEN percent? If you got a 10% response rate, people would be turning backflips and swigging champagne (OK, maybe not the champagne … and, at my age, maybe not the backflips either. But you’d all be pretty happy, right?)

The flip side of response rate and why it matters

The thing is, a 10% response rate means a 90% NON response rate. The huge majority of your target audience is not going to respond. How depressing! Actually, it’s sort of liberating, because, as a writer, my advice is: forget about them. There is nothing you can do or say or show that will convince them to respond. They are “no’s.”

Conversely (and happily!), there are a small percentage of people who will respond to anything. You could scrawl “send money” on the back of an old shopping list and a check would be on its way. They’ve completely internalized your mission, they love you, and they just need a reminder to give – the idea behind “collection plate” DM. These folks are “yes’s.”

The sweet spot for the writer

But, for a writer, neither of these are your REAL audience. Instead, write to the “maybe’s.” These are the people who might respond if you say the right things to them. If I’m back selling encyclopedias, these folks haven’t slammed the door in my face, but they haven’t called in an unsolicited order either. They’ve invited me into their home, but told me they only have a few minutes.

That’s your audience.

“But,” the bill payer from a few paragraphs back protests, “What’s the HARM in creating messages for everyone? Why not at least TRY??” The answer is, it can sabotage your mailing: the less specific your message, the less it will appeal to the REAL audience, the maybes. Stated another way, you’d have to reduce the effectiveness of your message to the people who might respond, in an effort to appeal to people who won’t respond anyway. When you say it like that, it’s an easy call.

OK. What next? “What” next.

So that’s the “who.” Let’s talk about the “what.” As in, WHAT should we say in our mailing? There are, roughly, four things you have to answer for a prospect before they send you a check. I will describe them in my next post. Stay tuned!

Your Flux Capacitor Needs Service

Flux Capacitor
Today is October 21st, 2015.

It’s the late Dizzy Gillespie’s 98th birthday, Kim Kardashian’s 35th, and THD’s own Sherri Mayer and Cris Parisi are celebrating today.

The USS Constitution “Old Ironsides” was launched on this day in 1797, cement was patented in 1824, Thomas Edison invented the lightbulb in 1879… and in 1985 Christopher Lloyd and Michael J. Fox traveled through time in a Delorean.

As Marty and Doc, they got their hands on enough plutonium to generate a charge of 1.21 gigawatts and set the date to October 21st, 2015.

The movie, released in 1989, made some pretty bold and surprisingly accurate predictions.

Some have come true…

Flat screen TVs, drones, 3D, Holograms? Check.

Artificial Intelligence? Hello IBM Watson.

Some seem close…

Hoverboards? Getting close, thanks to Lexus. Flying cars? Not so much, but probably only off by a decade or so. They also predicted fax machines on every corner… whoops!

All this got us thinking about, well, 1985 and what we, as fundraisers, might have predicted.

“My fundraising program won’t survive – my donors are dying!”

Here we are in 2015 and charitable giving is at an all-time high. Your audience has shifted, sure, but a huge number of baby boomers are just entering the most charitable stage of their lives.

“I just added an 800# into my last direct mail piece! My fundraising practice is REALLY integrated now!”

None of us could have predicted that “integration” would grow to include such an incredible, ever-evolving mix of channels. Or that good ol’ direct mail – whose demise has been forecast for decades – would continue to thrive as a cost-effective part of your marketing mix.

“My brand? What do you mean, my brand?”

In 1985 we were organizations. Not “brands” with stories, unique voices and instantly recognizable wristbands, clothing lines… or ice buckets.

Fundraising databases were stored on mainframe computers that covered the area of several football fields. Imagine telling someone in 1985 they would be in a “cloud”.

In 1985 “Omnichannel” was likely to be a new venture brought to you by Ted Turner. “Cross Channel” was a swim from England to France. A “viral” campaign was something you probably wanted to avoid. And “mobile” was… well, moving.

What hasn’t changed?

Americans continue to be among the most generous people on earth. They might lend their support differently than they did in 1985, but their ability to feel compassion – and act on it – remains the same.

Say what you want about the impact of modern technology on our lives. But no one can challenge the fact that it has provided us with new and innovative ways to support the things that mean something to us.

It’s an exciting time to be a fundraiser! Imagine what we’ll have accomplished when Marty and Doc land in 2045, in their fully electric, self-navigating Google Delorean.

BTW, the movie also predicted the Cubs would win the World Series in 2015. As of this writing…

Social Media Advice… From Winston Churchill

winston-churchill_1202859c

“It’s a riddle, wrapped in a mystery, inside an enigma.”

Ok, he didn’t say that about social media, but… he said it.

Social has become second nature to all of us. As much a part of our daily lives as getting our morning coffee. In fact, ask yourself, what comes first in the morning? Getting that coffee or checking your feeds?

So does anyone else see the irony in how much talking we do in the non profit world about how to use social?

The bad news? Ol’ Winny was right. Social isn’t easy, it takes resources, careful thought and planning.

The good news? I’m not going to give you yet another case study in all the things we’ve done right in social under the headline of “Look how easy it is…”

Instead, I’d like to share a couple reasonably simple, useful tools that you can take advantage of today. Tools that can in fact make things just a little bit easier for you.

Let’s start with Facebook.

In late August Facebook introduced a new “Donate Now” call to action option for ads and pages. All NPOs should have this CTA appearing on their cover photo but that’s really just the first step. More significantly you’ll be able to test multiple CTAs including “Donate Now.” With this extra flexibility you’ll be able to design your posts to align with the CTA and hopefully improve conversions. You’ll no longer be forced to use “Learn More” as the CTA in an appeal post.

Facebook has also begun testing lead gen ads that will allow people to subscribe in stream – without needing to click through to your site. Any time you are trying to acquire new leads, simplicity and minimizing the number of clicks is key. So between Facebook’s ability to target and this kind of seamless experience, it’s hard not to be excited about this.

Finally, while it’s not necessarily new, it’s worth spending some time getting familiar with Facebook custom audiences. We all know that changes in Facebook’s algorithm have made it hard to rely on organic reach so combining some tried and true segmentation strategy with a small investment tailoring posts to your constituents could go a long way.

#WhatsNewWithTwitter

Twitter’s lead gen cards aren’t new but may be new to you as they have flown a bit under the radar. Like those being tested by Facebook, Twitter offers these custom tweets that allow you to collect email addresses within the tweet. Twitter offers targeting and the ability to promote to constituent lookalike audiences like Facebook as well. On a cost per conversion basis it’s worth testing as part of your acquisition strategy.

Just a couple weeks ago Twitter announced it had lifted the restriction on characters in direct messages. This won’t have any impact on the way you currently post to Twitter but it could have a profound impact on how you engage key influencers. Instead of a short note thanking someone for their support and asking for more, you now have the ability to send a more personalized note and make an impact at first contact. A relatively small functional change in the grand scheme of things but a large opportunity for you.

#Donate

Finally, remember when mobile giving was supposed to change the way people give? Ultimately it was done in by limits on gift sizes and the carriers taking too large a share of each gift. It seems, however, that a new startup might have developed a platform that could be what text2give aspired to be.

GoodWorld has a program that makes it fairly simple to give to a participating charity using just a #. How does it work? The first (and probably hardest) step is that donors will have to sign up and register a credit card with GoodWorld. If someone attempts #donate and they aren’t registered, GoodWorld will send them a link.

Once registered, all they need to do is go to your Facebook or Twitter page, enter #donate followed by the amount they want to give. Simple as that.

Yes, there are some fees per transaction (4.8% to GoodWorld and 2.2% to the donor’s credit card company) but they aren’t excessive. As an NPO, to participate you can register at http://goodworld.me.

Since I started with a quote from Sir Winston, I thought I’d close with one that’s apropos as well:

“Never, never, never give up.”

Keep testing, keep learning and find what works for YOU. Social is not a one size fits all platform.

BTW, our blog is new so follow us for more fundraising news, insights and advice from deceased world leaders.