Dear Fundraisers: The Annual Report Is Yesterday’s News

Posted on May 17, 2013 by Justin Brady

When I headed off to college for the first time, I had no idea what I wanted to study or what kind of career I would pursue after graduation. Like so many other “undecideds,” I took classes from lots of different departments and hoped something would click.

Then, in my junior year, I discovered criminal justice. I had always enjoyed crime novels, detective stories, and hearing about unsolved mysteries, and after I took a few classes in the field, I convinced myself that maybe the law was my calling. Eventually, I marched into my advisor’s office and declared my major: pre-law.

Well, as a pre-law major, I needed to take the LSAT in order to be able to apply to law school. But unlike just about everyone else taking the test, I didn’t bother to study until the night before. Don’t ask me why.

So, I took the test and, thinking I might have done okay (or even a little better than okay), I settled in at home and waited for the results. I checked the mailbox every day for an oversized envelope, and as days turned into weeks, my thoughts ran every which way. Law? What had I been thinking? The second part of the test wasn’t so hard, though, and I’m pretty sure I did okay on the third part. Who knows? And, hey, I do love a good mystery.

Then, one morning, it was there, larger than life. I tore open the envelope and scanned the contents for the only thing that mattered, the score that was going to gain me entry to the best law schools in the country and change my life.

Wow. I blinked and stared harder. Could a person really score that low on the LSAT? It was a pivotal moment for me. I returned to school and wasted yet another month, still with no answers about my future career path.

After I graduated with a degree in criminal justice, I bumped around a bit and eventually found work in a university development office. I loved working with students and alumni, and before long I realized that fundraising was my true calling. To advance my career, I decided to go to graduate school, which meant I needed to take the GRE.

This time I studied every night for two months, and by the time I drove to the local test administering site I was as prepared as I could be. Two hours later, having completed the last section, I clicked the submit button and something interesting happened. A message popped up on the screen: “Would you like to see your unofficial score?”

How was that possible? It had taken a month to get my LSAT scores. I hesitated. Had I prepared well enough? Did I really want to know how I had done right then and there? Maybe I should wait?

After a long pause, I took a deep breath, clicked the “yes” button, and up popped my score. Huge relief. A score to be proud of, even. With the click of a button, I had received instant feedback on my performance, and the world was a beautiful place.

What does all this have to do with annual reports? Well, in case you haven’t noticed, we live in a world where real-time feedback is fast becoming the norm. Whether posting on Facebook and checking three or four times a day to see how many of your friends and acquaintances “liked” your update, to online polls where your vote is instantly aggregated, to comment threads where your thoughts jostle with the thoughts of others, we are rapidly creating a world in which real-time feedback on virtually everything we think, do, and create is the norm. Why is that significant? Because it enables us to make better decisions based on actual performance and achieve our goals more efficiently and with less guesswork.

Of course, the nonprofit sector has its own feedback mechanisms. The typical nonprofit will create an annual report to provide information to its donors about its financial/operational performance and, quite often, how the gifts it received were used to advance its mission over the course of the previous year. Similarly, experienced fundraisers make a point of providing feedback to donors with respect to the impact of their gifts in face-to-face meetings and when making stewardship calls, usually once or twice a year.

But is that enough? As the pace of communications and feedback accelerates, is your nonprofit moving as quickly as it needs to in terms of reporting results to donors?

Take annual reports. In today’s fast-paced world, very few people think the annual report is the answer to providing donors with the kind of timely feedback they want (and increasingly expect). Asking donors to wait a full twelve months to be updated about how their gifts are being used and whether those gifts had an impact is a recipe for losing their interest, if not their support.

Donors want and deserve quicker feedback. They deserve the kind of reporting that helps them understand how the gift they made last week or a month is going to be used to advance the mission or cause. They need to see the impact of their gifts through the eyes and in the words of the people who are benefiting from those gifts.

Nonprofits that whinge about their inability to report impact in a more timely fashion inevitably are the organizations that havechosen not to address the disruptive changes in technology and communications we’ve seen over the last decade and a half. Which is not to say that direct mail is dead or that we should abandon more traditional methods of communication such as the phone call or the personal note. Think of this, instead, as an urgent reminder that the need to report back to your donors in a more real-time fashion using any method at hand is no longer a luxury; it’s a necessity.

Indeed, thanks to the Internet, the ability to communicate with almost anyone, anywhere, in real time demands that we “reframe” our notions of time. And your organization is no exception; it needs to adapt to the changes that are happening all around us and embrace a new feedback and reporting paradigm. The framework below is designed to help you and your colleagues do just that.

Immediate. How can your organization share the impact it had today with respect to its constituents and/or the communities in which it works? Share a photo of a person who was helped by your organization on your social networks and tell your donors, “Thank you. This is [fill in the blank], one of the people you helped today.”

Short term. How can your organization share the impact it had this week? Create a page on your Web site that illustrates how your donors’ gifts were put to work over the last seven days and let them know through e-mail or by postcard that you’ve created a page they should bookmark and visit on a regular basis.

Longer term. How can your organization share the impact it had this month? Send a postcard and/or dedicated e-mail at the beginning or end of every month that provides an overview of the impact your organization is creating, making sure to include key statistics and to highlight the impact of your organization’s efforts on real people or in the community.

These are just a few ideas to get you started. The key takeaway is this: Reporting at a twenty-first century pace will help your organization maintain its relevance with donors and keep their passion for your mission/cause fresh and vital. It’s not easy, and it may require an additional investment of time and money. But then, the world shows no sign of slowing down, does it?

And at your next development/communications planning meeting, don’t focus the discussion on whether you should publish your next annual report in print or digital form (or both). Ask instead, “What can we do to report faster?”

Blinded By the ‘Sophisticated Donor’?

Posted on April 18, 2013 by Justin Brady

by Derrick Feldmann

Originally posted on Philanthropy News Digest Blog.

When I started in fundraising, I had almost no experience asking for money. To compensate, I read lots of articles and books about the different approaches and techniques used by successful fundraisers. As I immersed myself in their ways, I started to pay particular attention to an approach that emphasized the importance of communicating to donors the impact their gifts were helping to create.

Many years later, as the head of national fundraising for a K-12 education program, I spent a good deal of my time seeking support from some of the biggest foundations and corporations in the country. My “ask” in these situations invariably included what I thought was a powerful and persuasive presentation that demonstrated to grantmakers how a grant would transform the lives of a certain number of students and ultimately improve a community. Every time I gave my presentation, I would see heads nodding and would sigh with relief, knowing that those present “got it.” Of course, not every presentation resulted in financial support, but even when they didn’t, I usually made new friends who understood and liked what we were doing and were willing to help us build our network of supporters.

I used this method, with its focus on impact, in every fundraising solicitation I made. And I taught my staff to do the same.

One day, a member of the board who planned to ask a friend to donate to our organization before the end of the year called me to review our solicitation script. But as I walked him through it, I could tell something was wrong. He didn’t say anything after I finished, but he clearly was uncomfortable. A week or so later, he called me to report on the meeting and let slip that he hadn’t said any of the things to his friend I’d told him to say. When I asked why, he said, “I’ve known my friend a long time. And I know the only thing that really matters to him is my trust in this organization and the people who run it. I could’ve talked about all that impact stuff, but it wouldn’t have made a difference. So I just told him why I support you and asked him to consider making a gift.”

I told him I appreciated his honesty and filed it away as one person — albeit an important one! — who made a spur-of-the-moment decision.

A couple of months later, I attended a gala event for an organization that a friend served as a board member. Now, I have to admit that attending a fundraising event for another organization is not high on my list of things to do. But I wanted to help my friend.

So I watched as individuals schmoozed, bid on auction items, and generally enjoyed themselves. Then it was time for the “fund the need” portion of the evening, during which everyone in attendance was asked to support the cause by donating whatever they could. As I sat there, my wife (a fundraiser in a former life) turned to me and told me to get out our credit card. I hesitated, then asked, “Why?” Because, she said, it was important to our friend. “How do you know our gift will make a difference?” I replied. “Stop being cheap,” she said.

Then it hit me. Not everyone is a “sophisticated” donor. Not everyone is a professional fundraiser or works for a foundation or corporate giving program. In fact, very few people do. And people who don’t seldom give to a charitable cause or organization because they’re looking to achieve impact or based on a chart of performance metrics; they give because it makes them feel good, or because it’s a worthy cause, or because, like me, they want to help a friend.

As professional fundraisers, we tend to align our methods and appeals with the needs of sophisticated donors. Why? Because they have money to give and it’s what they expect. But in doing so, we sometimes forget about the people who give because it makes them feel good or because they like our mission, our leadership, or the story we have to tell.

What’s a fundraiser to do? Start by thinking about your sophisticated donors and how they may be influencing, subtly or otherwise, your overall fundraising approach:

Board Members
Board members, especially good ones, are by definition sophisticated. They tend to be accomplished individuals who are interested in your work and are more than happy to sit through presentations and engage in serious discussions about all aspects of that work. Since most are expected to dig into their own pockets to support your organization, they also tend to have a keen and very personal interest in your fundraising results. As such, they can exert a disproportionate and even damaging influence on those results. As I like to say to the board members with whom I work, you are not the target audience of an organization’s fundraising appeals; the general public is.

Foundations
Given the number of organizations seeking their support, foundations really do have limited resources. Which is why many of them, especially larger ones, evaluate their grant investments on a regular basis to identify high-performing nonprofits with a proven ability to execute. They also are staffed (again, the larger ones) with program officers who have particular agendas of their own. Many nonprofits seeking foundation support get into trouble when, against their better judgment, they agree to alter, expand, or create programs to serve a foundation’s goals rather than their own.

Major Donors
Some fundraisers will try to replicate the conversations they have with major donors when “pitching” a member of the general public. That almost never works, for obvious reasons: Jane Doe doesn’t have the resources, philanthropic experience, or big-picture mindset that a major donor typically has. Even more problematic is trying to approach a potential $1,000 donor in the same way you might approach a $100,000 donor. Don’t assume the former (or even the latter) cares about organizational effectiveness or is familiar with any of the well-known charity rating systems out there. Indeed, studies show that fewer than 22 percent of all donors will check a charity’s ratings before making a gift.

Don’t get me wrong: Sophisticated donors and the fundraising approaches that resonate with them are important and should be reviewed and revised on a regular basis. But development professionals also need to realize that not every donor is willing to invest as much time and thought in their giving as are wealthy individuals and big grantmaking organizations. If you remain mindful of that fact and allocate your resources accordingly, I’m pretty confident you’ll soon realize improved returns on your investment in fundraising.

It’s Time To Start Talking About Overhead

Posted on March 18, 2013 by Justin Brady

My response to Dan Pallotta’s TED Talk: The way we think about charity is dead wrong.

A new TED Talk is making the rounds and stirring up conversation on a much dreaded nonprofit topic: fundraising for overhead. Dan Pallotta, author of Charity Case and president of Advertising for Humanity, makes the case that until the philanthropy community stops fearing investing in fundraising and talent we will never truly bring charities to scale and create the change we work towards.

The Issue

Pallotta argues that investing in the human capital and strategies like advertising that prove successful in forprofits would bring radical change to the sector, but there is a stigma about investing in nonprofits that stops this from happening. The result he claims is despite decades of research into cancer or programs to lower the homeless, no actual declines in these issues are occurring.

Consider these stats:

Facing the Dilemma

As any fundraiser knows, talking to a donor about investing in staff or marketing isn’t an easy sell. They want to know their dollars are making a difference. We as fundraisers need to challenge ourselves to prove that investing in those areas will make a substantially larger difference.

Even Pallotta’s own nonprofits struggled with this dilemma. Following a new model of event fundraising, his events for aids and breast cancer research capitalized on peer fundraising by investing in traditional advertising channels to raise awareness. He started his breast cancer walk with an investment of $350,000. Overhead adverse donors would argue that they would want the $350,000 to go to the services. But Pallotta believed that rather than hiring one top researcher for $350,000 the startup capital should be invested in fundraising. The result was that in five years the $350,000 investment turned into $194 million.

That would be a pretty major success in the business world. However, in the nonprofit would it was frowned upon. The media put the races under fire for spending so much money on overhead costs and sponsors pulled out of the race. Ultimately, a cultural shift needs to happen where corporations, foundations and philanthropists start allowing nonprofits to operate more like businesses and invest in talent and fundraising.

What we can do about it

Like me, you probably are thinking this issue is too big to change on your own. And it totally is. But each individual nonprofit can play a role in creating this shift by building their own case for investing in overhead and proving that it will make a difference, instead of running away from the topic in fear.

A quick way to start would be to take 19 minutes out of your next board meeting and show this video. It’s not enough for us as fundraisers to know the issue exists; we need to work together to open our stakeholder’s eyes.

Watch The Ted Talk Video Now

2013 Millennial Impact Research Needs You!

Posted on February 20, 2013 by Justin Brady

Since, 2010 we have been researching Millennial behavior to challenge assumptions and discover ways to involve this new generation of leaders. Over three years we have found this generation willing and excited to give of their time, talents and treasure when they are inspired and provided with meaningful opportunities.

Organizations big and small are taking note and starting to plan to be more inclusive of this generation. They understand the return for the future is worth it. In 2013, Achieve has big plans to continue this research and engage nonprofit leaders in new ways to further expand their knowledge and ideas of how to reach Millennials.

But first we need your help!

Please share our 2013 Millennial Impact Survey to your nonprofits networks (and if you are of the Millennial generation take it yourself!). The more people we reach, the better the data we will have to share with you. Include it in your newsletter, tweet it out, post it on Facebook – anything you can do helps.

Survey link: https://www.research.net/s/misurvey13

Sample message to get you started:

Were you born between 1979-1984? Then congrats you are a Millennial. We want to know how you are making an impact.
Are you a millennial? Share what you love about nonprofits and your biggest pet peeves in our survey.
What change do you want to see in the nonprofit sector? Tell us how you connect, involve and give. Become a part of the impact – take our survey now:

The survey closes March 8.

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