Category Archives: Donors

10 Keys for Engaging & Empowering Millennials

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Guest Blog Post By: Scot Chisholm, StayClassy

Of the many trends thatthe 2012 Millennial Impact Report was able to unearth, there was one that was particularly compelling. An overwhelming majority of the millennials surveyed for the report (71%) said they had raised money on behalf of a nonprofit organization. Of those that hadn’t raised money for a nonprofit, about half indicated that they simply hadn’t had the opportunity to do so. That brings the total percentage of surveyed millennials who either have raised money for a nonprofit, or would be willing to, all the way up to 84%. And that’s pretty amazing.

It’s also consistent with the trends we’re seeing at StayClassy on a daily basis across thousands of nonprofit organizations using our platform to raise money. Although people of all ages do engage in online fundraising, there is a persistent bias towards the younger generation. For one reason or another (perhaps comfort level with the Internet and technology) millennials are exceptionally active in the online fundraising space. This means they are an incredibly important audience for any nonprofit looking to build a serious online fundraising program (and they will only get more important as time goes by).

We’ve also been fortunate to get a close up view of a handful of organizations that are incredibly effective at engaging millennials (Invisible Children and Pencils of Promise are a couple good examples) and many other organizations that simply aren’t.

And this got us thinking. What makes the Invisible Children’s of the world stand out? How are they able to consistently rally a younger audience to support their cause, and ultimately, raise millions online?

After pouring over these high performing organizations we came up with a list of ten keys for effectively engaging and empowering an audience of millennials (you can check out a summary of the list below).  Although the list was focused on engagement in general rather than fundraising techniques in particular, many of the tenets we came up with directly support the fundraising trends mentioned in the Millennial Impact Report.

One in particular stood out to me: “Let Millennials Define their own ‘Why’.  This means providing a vehicle for millennials to tell their own personal story as part of your larger organizational story (through a personal fundraising page, a video log, or some other medium).  Doing this allows the individual to internalize why they are supporting your organization and makes them feel more comfortable fundraising on your behalf. It also sets up the fundraising as an expressive, social, and interactive experience.

Suppose I create a fundraising page for a breast cancer organization. When I use that page to explain that my mom had breast cancer and what my personal motivation is, I do that because I care about the cause, but I also do it because I want to share my personal story with my friends and family. This activity is expressive (telling my story) and social (sharing with friends and family) and, ultimately, interactive (commenting and communicating with donors). All of these aspects make the experience of supporting the nonprofit more personal and fulfilling.

Millenials have grown up with immediate technological means of giving and receiving information with a wider audience. Interactive experiences are the norm for us (yes, I’m a millennial too). Giving a static donation feels impersonal and irrelevant. Creating a fundraising page or hosting my own charity event and explaining to my friends why this matters to me, that feels relevant.

These observations dovetail nicely with the findings of the Millennial Impact Report. Remember 71% of surveyed millennials had fundraised for a nonprofit and when they did they stayed close to home. 84% asked friends for donations and 80% asked their extended families for donations. The experience they are gravitating to is a personal one where they can express their individual motivations to support a larger cause with the people they care about (friends and family).

Where we see breakout success is when organizations are able to marry this personal story telling with fundraising.  Peer-to-Peer fundraising pages are a great tool to do this, which is one of the reasons why organizations like Invisible Children have gravitated towards this fundraising technique.

If you’re interested in the full list of the10 keys for engaging a millennial audience you can see a condensed version below, or, you can see the expanded list over here:

10 Keys for Engaging & Empowering Millennials

1. Build instant (and we mean instant) credibility

Millenials are accustomed to using aesthetics as a quick proxy for determining value. If your website is uninspiring, we’ll just click off to something else.

2. Tell us why we should we care

If you can’t effectively show us why you care about this cause, then we won’t care. The easiest way to convince us that we should care is by showing us why you care.

3. Give us a “villain

Millennials are an idealistic bunch; we want to save the world. Give us a chance to express this idealism by clearly painting a picture of who or what we’re up against.

4. State the impossible

Millennials love the impossible. Lay out a challenge that everyone else says can’t be accomplished, and millennials will rally to your call.

5. Let us define our own ‘why?’

For millennials to truly commit to your organization, they will need to internalize the cause and decide why it matters to them personally.  That’s why it’s critical to give millennials a vehicle to tell their own story as part of your larger story.

6. Promote a common purpose

Millennials want to see how their action (or inaction) affects the overall success or failure of the community as it collectively tries to achieve its objective. It’s important to clearly display a collective goal and make it easy to see other people who are part of the community.

7. Be ultra transparent

Millennials grew up with information at their fingertips; they question everything. The importance of demonstrating how donations will be used cannot be understated. And the importance of demonstrating the impact of your work also cannot be understated.

8. Show us progress (any progress)

Millennials want to see your progress in real-time, the same way they consume most of their information on a daily basis. Demonstrate progress through constant communication, make it digestible for your audience, and celebrate this progress as a “win” in a series of many “wins” that will be necessary to achieve your larger objectives.

9. Inspire us with what’s next

It’s important to clearly articulate your next organizational challenge, and lay the foundation for how I might become involved.  What is your latest goal?  To achieve that goal, what type of support do you need from your base and how can I individually help you?

10. Move us to action

It is absolutely critical to give millennials a strong and unified call-to-action across all of your communication channels.  We suggest moving them to an action that goes above and beyond a simple donation, like creating a fundraising page. These types of “asks” allow millennials to personalize the cause, get their friends and family involved, and most importantly, deepen the emotional connection with your organization

 

Time to Join the Donor Revolution

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Originally posted on Philantopic – a blog of opinion and commentary from PHILANTHROPY news digest.

Every $100 in fundraising revenue gained in 2011 was offset by $100 in losses. Every 100 donors gained in 2011 was offset by the loss of 107 other donors. The donor retention rate for the sector in 2011 was 27 percent.

Why are these statistics from a recent survey conducted by the Association of Fundraising Professionals so, well, disappointing? Before I answer that question, let me tell you about an encounter I had with a chief development officer at a national healthcare organization.

I met Mark two years ago at a conference where I was speaking about trends in fundraising. He sat in on my session and approached me after it was over with a question about whether and how fundraising is evolving in response to generational shifts. We stayed in touch over the years, trading ideas and strategies related to multichannel approaches to raising support.

Several months ago, we had a chance to catch up over breakfast in Washington, D.C. After a brief conversation about fundraising performance and how things were going compared to last year, we started talking about his organization’s efforts to acquire new donors. Eventually, he asked me whether I knew of any “tricks” to increase donor headcount. After what seemed like a fruitful forty-five minutes, I changed the topic to donor stewardship. As I started to talk, Mark slumped back in his chair and his facial expression settled into a blank stare. It was clear he wasn’t interested.

Eventually, I stopped and said, “I take it your thing is acquiring new donors?”

“Our board is all about raising more money,” he replied. “My meetings with board members today will be focused on bringing in more donors and diversifying our base of loyal supporters. I don’t have a choice; I need to focus on acquisition. Sure, I could work harder to get our existing donors to give more, but I know the board cares more about me getting new donors to support the organization.”

My curiosity piqued, I asked him: “Do you prefer working on campaigns to acquire new donors or ones that focus on donor retention? Your personal preference, not what the board wants.”

“Fundraising to me is an uphill challenge,” he said. “It’s a challenge at times to figure out the best strategy, the right message, and the optimal way to present an appeal in order to get a positive reaction from a donor. It’s an incredible feeling, though, to crack the code. I get that feeling when a donor upgrades, but I get more excited when I can find a successful way to get a contact to give.”

There it was: the infatuation with donor acquisition, from boards that want an ever-growing donor base to directors of development that love the challenge of coming up with the one message that gets a donor to break out his or her wallet for the first time. And yes, as a former fundraiser, I can tell you that it is exciting when one cracks “the code.”

Unfortunately, donor acquisition and retention stats don’t lie, and what they tell us is that organizations are losing donors as fast, and sometimes faster, than they acquire them. Given that fact, isn’t it time to rethink how we fundraise? Isn’t it time we build development departments that value repeat donors as much as new donors? Isn’t it time for a donor-focused revolution? If you agree, here’s how your organization can be part of it.

Invest in Talent That Understands Donor Stewardship
When hiring development staff, think about asking job candidates a different set of questions. Instead of asking about the largest ask they’ve ever made, or the approaches they use to solicit potential prospects, ask about the retention rate for donors they’ve acquired, the strategies they’ve implemented to enhance those rates, and what they would change in your shop if hired.

Allocate Resources for Donor Retention Programs
Organizations that are serious about donor retention walk the talk, allocating the same amount of resources for donor retention as they do for donor acquisition. Whether it’s for technology upgrades or a series of donor-engagement activities, organizations need to spend money to ensure that donors continue to support your organization and increase their gifts over time.

Track Different Data to Understand Donor Retention
Your organization’s data on donor retention should focus on engagement. What actions do your donors take when you communicate or seek their input? What causes them to move from communication to action? Conduct focus groups, interviews, and other kinds of surveys to get a better understanding of what works to increase your donors’ loyalty to the organization.

Help Your Board See the Light
Donor retention isn’t a staff issue; it’s an organizational priority that should be driven by the board. It’s up to your executive director and development staff to help board members understand the importance of donor retention and why such programs are necessary for long-term success. Ask for a show of hands at your next board meeting to see how many of your board members chose not to support an organization this year that they had supported in the past. Ask those board members why they stopped supporting the organization in question and what it would take to bring them back into the fold. Turn it into a teachable moment that illustrates to other board members why you need their assistance (in the form of leadership, time, and financial support) to improve your organization’s donor retention rate.

It’s been said before that convincing a donor to give is hard, but convincing a donor to keep giving is twice as hard. Ignoring your existing donors poses a huge threat to the stability of your organization. It’s imperative, therefore, that your organization figures out the right balance between its donor acquisition and retention activities. In the words of my friend Mark, “Donors won’t necessarily remember why they gave to your organization in the first place, but they’ll always remember why they stopped giving to it.”

Join me on Twitter to talk about the #donorrevolution.

 

Writing Solicitations for Different Donor Types

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Anytime a nonprofit sends a solicitation several different audience must be taken into consideration. The  best solicitations will segment lists to help take some of these audience considerations into mind. But there is also a notable difference in how people read and respond to communications that your letter must address. Every organization probably has a mix of donors that read the entire letter and some that just skim the highlights.

Fundraisers challenged to do a lot of different things to reach a lot of different audiences. The result is a solicitation that’s becoming cluttered and unfocused. But with an editing eye, you can still achieve all these goals. Before your end of year solicitation goes to print or you hit send on any emails, take another read through and make sure it matches all of the potential reader personalities. I have identified four donor types and editing suggestions to get you started.

 

8 Trends That Will Shape Fundraising

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By Derrick Feldmann (Originally posted on Philantopic – a blog of opinion and commentary from PHILANTHROPY news digest.)

When I was working in development for a nonprofit, I was expected to provide my executive director with annual fundraising goals for my department — goals that were based on donor history, prior-year results, and the likelihood that a certain number of prospects would give for the first time.

In addition to our baseline goal, we always established a stretch goal or modeled a best-case scenario for our efforts. Early in my career we never seemed to hit the stretch goal, in part because I didn’t know our donors that well and because we based our predictions on what the organization needed, rather than on our donors’ willingness to give.

Over time I realized that to make our stretch goal, we had to alter our approach. And so, in addition to market research and data mining, we came up with three questions to help guide our efforts.

  1. What is causing donors to engage with us now?
  2. Which fundraising approaches are still relevant and why?
  3. What forces will influence donor behavior in the future?

In my opinion, these three questions should be the starting point for anyone trying to determine the long-term impact of their fundraising efforts (not to mention the future of fundraising itself). Recently I had a chance to sit down and revisit the questions, and I came up with the following eight trends that I believe will shape the fundraising industry and the relationship between donors and nonprofit organizations in the future.

Technology Trifecta
Increasingly, nonprofits will look at communications and fundraising through the lens of the what I call the “technology trifecta”: Web, mobile, and social media. And as they do, they will test concepts across all three channels to determine the right mix for their own constituencies. Mobile will continue to gain traction as technology and mobile marketing techniques improve. Social media will open the door to better donor communication and stewardship. And the Web will be the go-to place for transparency and donor-interaction tools. Testing and experimentation across all three channels will be key to implementation. Organizations also will need to manage expectations and develop effective donor delivery methods that don’t simply ape other organizations’ tactics. The fundraising “shop” that doesn’t align its marketing efforts with all three channels will have a hard time maintaining its position in the nonprofit marketplace.

Communication Control
Donors will have the ability to control how they receive communications from your organization based on personal preference and interests. Improvements in communications technology also will make it easier for nonprofits to connect with donors who seek specific information about the impact of a gift and/or an organization’s health. In addition, organizations will allocate communication and marketing resources according to donor preference, rather than making assumptions about what donors want based on their content consumption.

Smaller Gifts, More Often
Donors will provide smaller gifts but will give several times over the course of the year. Organizations that provide small, impulsive gifting opportunities will be better positioned to strengthen their relationships with donors. In addition, donors will continue to drive smaller gifts toward projects where tangible results can be demonstrated.

Improved Transaction Times
Organizations will reduce the time between the giving decision and the actual transaction. One-click giving and other impulse-gifting technologies will gain in popularity. Giving will become a quick-and-easy experience that meets individuals’ impulsive need to serve the greater good.

Donors Will Rate Fundraising Appeals
Thanks to the growing popularity of consumer feedback platforms such as TripAdvisor and Yelp, we will see new platforms emerge that allow donors to rate their fund-solicitation experiences and share those ratings and experiences with their friends.

Donor Loyalty Will Reign
Organizations will focus on donor loyalty rather than the size of the gift. Hard to believe, I know, but organizations will spend less time worrying about the transactional donor and will focus more time and energy on the loyal donor who attends activities/events, reads their marketing and communications materials, engages with them on social media platforms, and regularly volunteers. This kind of loyalty also will drive ongoing peer engagement and support from donor networks and force organizations to develop loyalty stewardship programs.

Crowdfunding by Donor Networks
We will see more donor networks comprised of individuals who come together around specific causes, engage in volunteerism, and/or willingly promote the activities of the causes and organizations they support. Increasingly, fundraising staff will have the capability to track these networks as well as other peer groups and use that information to leverage their resources.

Visual Impact Reporting
Organizations will move from annual reports to real-time reporting of their impact in the community. Fundraisers will become more adept at using digital communications technologies and creative design to inform donors about the impact achieved by their dollars. For their part, donors will demand such reporting.

Of course, all these predictions are just that: predictions. And even if some (or all) gain traction over the next few years, they might not affect every organization. Still, I believe that at some point all nonprofit organizations will need to incorporate many of the practices outlined above or face the prospect of falling behind, in both their fundraising and impact. The future of fundraising is about donors wanting easy and accessible opportunities to support, learn, and serve. It’s up to you to get your organization ready for that future.

Why ‘Risk’ is an Unloved Word in Philanthropy

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By Derrick Feldmann (Originally posted on Philantopic – a blog of opinion and commentary from PHILANTHROPY news digest.)

“There are risks and costs to a program of action, but they are far less than the long-range risks and costs of comfortable inaction.”

– John F. Kennedy

Whenever I visit my financial advisor, he almost always gets around to talking about risk. The subject usually comes up when I ask him how I can increase the value of my portfolio. His response is almost always the same. “What’s your tolerance for losing money?” He always has ideas for new investments, but he’s quick to point out that many aren’t “sure bets.” Anyone seeking bigger investment returns in this environment — and lucky enough to have discretionary resources to invest in the first place — has played this game at one point or another.

So why are risky investments something most of us are willing to tolerate in our personal financial lives, but something we avoid like the plague in our philanthropic work?

The answer is simple: We’re afraid to make risky philanthropic investments because we don’t want to “lose” money.

As funders and donors, we’ve grown accustomed to making investments in organizations we know will succeed. They have a history, proven track records, and staff and leadership that can execute. Pressure from boards and other stakeholders who view philanthropic investments only through the lens of success contributes to this predictability. Typically, these stakeholders are most concerned about protecting the corpus and in signing off on decisions that won’t get them into trouble. This isn’t all bad. It ensures, among other things, that people in need will be helped, especially during times when they need it most. But as an investment approach, it does little to encourage innovation.

Think about your own work for a minute and ask yourself the following questions:

  • What is the riskiest grant we ever made?
  • What was our motivation for making that grant?
  • How many times have we given a grant to an organization that didn’t have a track record of success?
  • How much money are we willing to set aside to fund riskier initiatives?

If you’re like a lot of program officers, it may not be easy to think of a grant you made that could be classified as “risky.” But you need look no further than your own personal giving for examples of risky philanthropic investments. Indeed, we make these kinds of investments every time we support a friend, colleague, or family member in a run/walk/race for a medical cause or cure. As a country, we invest more than $20 billion a year to find cures for diseases such as cancer, Alzheimer’s, and stroke. And those investments are “risky” because there’s very little measurable return on our donations short of a cure or significant new discovery. But we choose to fund this type of research anyway, knowing that most failures in the lab bring us closer to the ultimate goal.

Unfortunately, many problems today — whether social, environmental, or economic — are every bit as large and complicated as finding the cure for cancer. And the only way we’re going to solve them is to take our approach to medical research and apply it to other areas. In other words, we need funders and individual donors who are truly willing to embrace risk and invest significant dollars in potential solutions that may not yield immediate results but get us closer to our ultimate objective, even if it’s only by demonstrating what doesn’t work.

Here are four things I believe philanthropy can and should do in order to embrace more risk.

Emulate the founders. On the road to building great fortunes, the founders of some of the biggest foundations in the country took risk almost every day of their professional and business lives. Whether they played a leading role in forging the modern steel or oil industry, made it easy for people to use a computer or reap the benefits of globalized supply chains, or created online social networks that connected the world, our greatest entrepreneurs and philanthropists were great risk-takers who never lost sight of their objective: To deliver the most value to the greatest number of consumers. That’s precisely the kind of entrepreneurial spirit we need today as we look to provide and fund solutions to the most intractable problems affecting our communities.

Set aside funds for riskier ventures. If foundations were for-profit companies and had to compete in the marketplace, they almost certainly would rush to set up research and development arms with a mandate to innovate, develop new programs and initiatives, and evaluate how existing programs and initiatives were performing. But as endowed tax-exempt entities, foundations rarely have to compete and so have little incentive to set aside funds to invest in anything other than proven organizations and concepts. Now, I get that foundations and donors can’t fund every risky investment and innovation that comes along. But I’m convinced that they can and should begin to pool and earmark funds for investments in organizations and concepts that don’t have a track record of success but do have potential to bring about dramatic change in our communities.

Ask new questions. Donors and foundations need to start asking new questions when a risky investment presents itself. Instead of the historical “proven impact” questions typically posed during the proposal and due-diligence stages, funders should focus on questions designed to help them understand the level of risk involved in the proposed idea or solution. Questions like:

  • Why is this a risky concept/approach?
  • Why is your approach to the problem better than existing approaches?
  • What’s the worst that could happen if you fail?
  • Even if you fail, what do you hope to learn from the approach you’re proposing?
  • Who are the experts/mentors you look to for guidance in your work and what do they have to say about the approach/concept?
  • If the approach/concept demonstrates success, how do you plan to sustain it?

Foster new learning environments. As a funder, you have a tremendous opportunity to be transparent about grants and programs that worked — as well as those that didn’t. Here’s your chance to create a learning opportunity — indeed, a learning community — for social entrepreneurs and innovators. Share your knowledge about the grants you made, the internal reports that tracked the progress of those grants, and why the investments you made did, or did not, succeed. Take it a step further and create a forum on your Web site where grantees can come together and learn from each other about what worked and didn’t. At a minimum, it will help them think about new approaches to their existing work and perhaps lead to new ideas that you may want to support in the future.

There you have it. Let’s create a philanthropic marketplace where risk is celebrated, not avoided, and serves to bring us closer to solving some of the biggest challenges we face. History invariably shows that if we give good ideas a platform and a chance to succeed, they will. The sooner we get over our aversion to risk and instead support those individuals and organizations willing to think outside the box, the sooner we’ll prove history right.