Fundraising

10 Online Fundraising Insights

A couple weeks ago we released our 2012 Online Marketing Nonprofit Benchmark study. More than a few people have called it a “must-read” and as someone who knows it front-to-back and inside out, I must agree. To whet your whistle, here are just 10 of the interesting insights this bad boy contains:

1. The median growth rate for online fundraising is 15.8%.
2. The median number of online gifts grew by 12.6%.
3. The smallest tier of orgs (less than 10,000 email records) experienced a median of $89,917 in online fundraising.
4. The average online gift for that tier was $105.01.
5. The largest tier of orgs (more than 250,000 email records) experienced a median of $1,993,713 in online fundraising.
6. The average online gift for that tier was $65.49.
7. The percentage of online advocates also making an online donation grew from 6.4 percent in 2010 to 11.9 percent in 2011. 
8. First time donations account for a median 37.27% of online fundraising.
9. Sustained online giving accounts for an average of $25,474 per org.
10. The average online monthly gift amount was $31.96.

Let’s talk about that last one for a second – if the average online monthly gift is $31.96, that means a donor who gives a monthly gift for a full year is worth a whopping $383.52! If you take away one thing from this benchmark, write this one down, you must have monthly giving as an option on your donation form.

For more fundraising goodness, download the full Benchmark study (for free!) or check out our nifty infographic.

Heartbeat of the Nonprofit Industry

While enjoying the spring conference circuit, Convio put our (very patient) camerapeople and me to work. We asked 70 nonprofit pros what they think the biggest challenge facing the sector is. Then we took the answers, identified trends, wrote up the "Heartbeat of the Industry" report and made a YouTube video (because it's 2012 and that's what you do right?).

Watch the video now to see what sector leaders like Kivi Leroux Miller, Amy Sample Ward, John Kenyon, David J. Neff, Darian Heyman and other smart cookies said.

Ritu Sharma, executive director for Social Media for Nonprofits does a lovely job summarizing it all: “This is a very interesting time for nonprofits. Fundraising is always a primary concern, especially as the economy looks to get back on track. But nonprofits have also become hypersensitive to successfully engaging with their supporters and creating awareness for their mission. Many organizations realize that knowing when and how their supporters want to be engaged is critical in this world of information overload.”

What do you think the biggest challenge is? Any ideas for addressing it?

Priming Your Board for Fundraising

When we think about having a strong fundraising board it can be tempting to think about filling your board with lots of big name individuals that you expect to write huge checks. In reality, these people may have no real connection to your cause. And if you are lucky enough that they do, they may be too busy to either commit to board services or worse, they’ll commit and never show up at meetings. 

Too often, eager to fill a vacant seat or secure a well-known name, we fail to clearly articulate expectations of service to prospective board members, or downplay the expectations of service.

“There is no question that orienting new board members to their responsibilities, especially around fundraising, is critical,” says Linda Crompton, BoardSource President and CEO. “In our 2010 Nonprofit Governance Index, BoardSource found that 90% of the boards with a structured orientation process were rated as effective, compared to only 67% of the boards without such a process.”

In addition to a job description, prospective board members should receive a board manual and board contract to help them understand and be successful in their role.

Board Manual

“Board manuals can be a key resource in facilitating the work of a board member. New members should receive a manual when they join the board and be encouraged to use it to track or manage all of their work. A board manual can also be used as the basis for an orientation training session. Board members report higher satisfaction when they participate in a formal, in-person orientation, and reviewing the content of the board manual will ensure that new members are consistently and thoroughly oriented to the work of the board and the organization.” –Greenlights for Nonprofit Success

Templates for organizing your board manual are available through many organizations. For one set of examples, check out the free board resources from our friends at Greenlights for Nonprofit Success.

Board Contract

One of the most critical pieces of content in your board manual is your board contract.  Ideally your contract lays out the following:

• Individual gifts the board member will make
• Fundraising the board member performs on behalf of the organization
• Program attendance
• Committee participation

Don’t forget the signature at the end, and make sure you each get a copy. 

Board members are your most committed volunteers. By providing them with excellent training and clear expectations, you are showing that you value them as exactly that.

What Natural Gas and Email Have in Common

Confession time: when I am not thinking about everything fundraising, I am a part-time energy economy dork. Meaning, I spend a lot of time thinking about carbon consumption, energy mix, whether it will be resource scarcity or technological progress that might one day wean humanity from carbon…

As a direct marketer, I’ve spent a large portion of my career in traditional marketing (Direct Mail (DM), Telemarketing (TM), and a little direct response TV). Early on, my inner tree hugger had to reconcile the millions of trees that it took to get DM campaigns with 5% response rates out the door with the cold reality that it was this sort of marketing that was the lifeline of many organizations’ revenue.  I secretly hoped that at least those other 95% recycled….And I couldn't help but draw parallels in my mind about marketing channel mix and energy. 

In my mind, the comparison works this way:
DM=oil
TM=coal
DRTV=Nuclear
Email= Natural gas
Mobile, social, geolocation= solar, wind, geothermal

In the energy marketplace, coal and gas are still king. Get rid of either one of these and most of our houses won't have electricity, most of our cars won't drive.   Over the years, both energy sources have become more efficient—gas mileage for cars has improved, coal power plants have been forced to implement all sorts of clean coal technology, but we may at some point run out of both while complete non-reliance is years, and likely decades away.  Sure, there are the outliers: people living “off the grid”, whole villages in Africa using solar cookers, but largely, we all sigh and agree that while progress is made toward other forms of energy, coal and oil are in our lives. 

Starting to sound pretty familiar? So direct mail and telemarketing  (offline) for the large part rule the roost. Perhaps not the cleanest or most glamorous, but they power the revenue engine.  And sure, there are also the nuclear believers—folks who've made DRTV work on a sustainable basis, but like the Frances of the world, they tend to be the outliers in the traditional revenue power equation.

And then there is the current energy industry darling, email, ahem, I mean natural gas…. The cleaner, cheaper,  newer kid on the block, with the potential to replace some of the older sources, and in some instances, doing so quickly.  It is also the one folks who are used to coal and gas are most comfortable with. Traditional marketers have for the large part embraced email as part of their marketing mix and are recognizing this channel as increasingly the driver of growth in revenue, donors, and reach for organizations. 

What about solar, wind, and hydrogen?  They are the energy gold rushes of the modern century, with folks thinking there are millions to be made, but turning out to be more complicated, slower to take off, and requiring huge economies of scale.  And the reality of these industries is even they will never be truly independent--we need to account for what might happen on non-windy days, or cloudy ones. Under the right circumstances (disaster fundraising for example) there is money to be made, and the technologies are evolving, but for most organizations they still constitute a very small percentage of the revenue mix and are mainly a constituent engagement tool for now.

How do countries (and organizations) approach energy (channel) mix in an environment that seems more in flux than ever? I am not going to claim to have the answer, especially because for the largest countries (organizations), this is the more difficult to navigate with so many stakeholders involved.   But a few thoughts:

• A wholesale abandonment of investment in the sources powering the economy isn't the way to go in the hope that the other sources will become scalable “soon enough.” From a direct marketing perspective, this means to me that if DM and TM are a large chunk of your revenue, some level of investment and maintenance has to continue.  Many organizations learned this the hard way during the acquisition cuts of 2008-2009 trying to save money during the economic downturn. Organizations are still digging out from the impact this had on their houseflies and the lasting impact on their revenue.
• Invest at a faster rate in the new channels and allow for the learning curves. New technology is going to be more expensive. Campaigns aren't going to work like you thought they would.  But, if reliance on a source whose growth potential is diminishing is not the goal, then not only must programs, but also channels diversify at a faster rate than might be comfortable.  I am not saying jump into say mobile head-first, spend a lot of money, and hope something happens. In fact, the strategist in me would kick you if you did. But plan for the investment you will have to make in these channels and the systems and technologies that will be required to support them.
• To reinforce the two points above, "conservation" alone is not the solution. As a colleague put it: "you can't conserve your way into infinity with energy plans, just like you can't cut all marketing to 'save' money. It will in fact do the opposite. Ultimately, for both, you have to expand the options not reduce them to continue to grow."
• You don't have to keep up with the Joneses. Try to stop looking at what your neighbor is doing. I mean, if she just installed some solar panels, go on over there and find out what they are, but think about whether they are right for you before rushing to install them. Maybe the city is planning to install them for you anyway?  Or maybe your house isn't facing in the right direction. Maybe you are a great candidate for geothermal heating!  The best example I can think of this is the rush to “communities” a few years back where lots of folks invested in “closed” communities, only to have it turn out that folks were elsewhere, say Facebook, and had no desire or impetus to join others. And most organizations that spent money developing their own have had to let go of those and focus on herding their sheep in someone else's social pastures.

Bottom Line:  Not everyone (or organization) has the same access to, or need of, the various fuel types (channel types).  So it is important to understand what is necessary and achievable within your own environment, and not rushing to be a fast follower just because everyone else is doing it.  In the end, it will take a blending of each to establish energy (fundraising) equilibrium, and the recipe could be quite different from one nation (organization) to the next.

A marathon fundraising effort

Given that yesterday, 23 April, was both St George’s Day and Shakespeare’s birthday, it seems pretty appropriate to have a post from across the pond on this week’s Connection Café.

But while St George’s Day parades have been happening in some parts of England over the weekend, another significant event in the UK calendar took place on Sunday - the London Marathon, the largest individual fundraising event on the planet. Over the last 31 years this event has raised more than £500m for hundreds of charities and is now viewed on television in more than 150 countries.

Thanks to inheriting bad knees and limping my way through half marathons, I am full of admiration for the 37,500 runners who completed the gruelling 26.2 miles across London to cross the finish line on The Mall.

While it’s great to see the professional athletes coming through, the highlight for me, as I’m sure it is for many others, is to see the outrageous costumes and awe-inspiring personal challenges people take on each year.  This year’s new feats entering the Guinness World Records include fastest time dressed as a dairy product, the fastest marathon on stilts and the fastest person in a two-person pantomime costume (all done in times that I couldn’t even get close to)!

But amidst the fun, there was also sadness, with the tragic death of one of the runners, Claire Squires. It is both heartening and humbling to hear of the donations that have been made to her personal fundraising page since – at last count nearly £250,000 and rising – most of the donations from complete strangers. To me, this just highlights the changing nature of fundraising today. Through the rise of online and peer-to-peer fundraising platforms, it is now so easy for anyone to donate to an individual, even if they don’t know them, simply through being inspired by their story. Hopefully this tribute fund in Claire’s name will provide some comfort to her family in the months and years ahead and make a huge difference to her chosen charity, The Samaritans.

But after a day of tragedy, joy, inspiration, challenges and triumphs, what of the other London Marathon participants?

Having taken part in many fundraising events over the year, I have often been surprised by the lack of follow-up from the charities I have raised money for, aside from the thank you on the day. After recovering from the initial exhaustion, straight after an event would have been a great time to get me to sign-up for a follow-up event, while the feelings of euphoria and achievement were still fresh in mind (and before the pain of the day after sets in!). And in the ongoing weeks and months, there would have been the perfect opportunity to start developing a relationship with me as an ongoing supporter, via social media and through email updates. After all, I’d already shown my interest in the charity’s cause by signing up to the event and raising money for them. That’s not even mentioning the potential of reaching those people in my network who had sponsored me. Letting me and my network know how the money raised from the event had been put to use would have been a great way of keeping us engaged. Instead, I have been allowed to drift away and been drawn into supporting other charities.

So, while it may be tempting to just pack up the last of the banners and T-shirts and have a well-deserved break after a busy weekend, I hope that for the charities represented on Sunday, this year’s London Marathon will be the start of some fantastic long term supporter relationships and not just a one-off event.