pacman used to demonstrate idea of capital campaigns gobbling up annual giving campaign effortsI get this question a lot. The answer lies partially in understanding the role of capital campaigns and annual giving campaigns in your organization. A capital campaign is a one-time investment, often paid over multiple years, to fund an extraordinary need that will propel an organization to a new level. The purpose of an annual giving campaign is to provide ongoing support to help ensure the mission carries forward into the future.

The elements needed for successful capital campaigns include:

  • creating a well-defined, impactful and urgent case for support, 
  • having committed leadership, 
  • creating an environment for capacity giving, 
  • establishing a timeline that allows for success and maintains a campaign schedule, and 
  • mapping a clear financial path to your objective.

These are the same elements needed for a successful annual giving campaign, although rather than bringing donors to true capacity giving one is striving to continue to raise the bar through ongoing cultivation and stewardship.

The reality is, a capital campaign should increase your organization’s visibility, provide the opportunity for you to further cultivate existing donors and attract new donors to your cause. Handled properly, a capital campaign should lead to a better annual giving campaign both during and after your capital campaign.

One of the biggest benefits of combining the two campaigns is that it provides an opportunity to educate your donors on the importance of ongoing, faithful giving as well as the need to give over and above for capital projects that will grow the organization to a new level in its mission. It also helps to maximize organizational resources and establish best practices for the ongoing benefit of the organization. Done properly, your non-profit organization should end up with happier donors and more money.

To learn how to successfully coordinate the activities of a capital campaign and an annual campaign, non-profit organization personnel are invited to join us for our next FREE fundraising training webinar, Drain or Gain? Capital Campaigns, Annual Giving and Your Development Operation. REGISTER NOW for the live webinar on Tuesday, September 23 at 2 pm EDT or contact us for a recorded version of this fundraising training after the event.

Written by Daniel Neel, president, The Fundraising Resource Group. The Fundraising Resource Group helps non-profit organizations across the United States with fundraising feasibility studies, capital campaigns, annual giving campaigns, major gift fundraising, non-profit marketing, fundraising training, and other high-impact, high-return fundraising activities. For more about how we can help your non-profit achieve fundraising success, visit our website at www.thefundraisingresource.com or call 888-522-1492.

Bill Gates ice bucket challengeLike everyone else, in the past several weeks my Facebook feed has been flooded with the ALS ice bucket challenge. Everywhere I turn it seems there is a new blog post or news article about the challenge. At first the news was all “coming up roses” and then the backlash started.

Most of the criticisms (e.g. not everyone taking the challenge is giving; the emphasis is on the donor not the cause) I believe are splitting hairs when you realize that as of August 29 the ALS Association has raised more than $100 million in 30 days (compared with about $2.8 million during the same period a year ago) and that donations to other ALS charities are up as well. Project ALS reports its donations are 50 times what they are normally and ALS TDI says that it has raised $3 million via the ice bucket challenge, half of which will be used to expedite the timeline of a clinical drug trial by two years. Even if the challenge had raised a lot less money it is still an unqualified success in terms of raising awareness for what is considered an orphan disease.

But a blog post by William MacAskill, founder of a non-profit called 80,000 Hours, caught my attention. In them he talks about the ice-bucket challenge as an example of donor-focused philanthropy that he asserts “regards all causes as equal.” He then goes on to state “All people have an equal right to a happy, flourishing life; but some ways of spending money help more people, and help them to a greater extent, than others. This means we need to have a conversation about what the most effective ways of donating are.” He then goes on to lay out a case for why spending $50,000 on malaria nets rather than ALS would “generate five hundred times the positive impact on people’s lives.” He correctly concludes that ultimately it’s up to the donor to decide where they give but it is clear where he stands as part of the effective altruism movement.

Giving is donor-centric; it’s about meeting the donor’s needs as much as it is about giving to a cause.

Information regarding a non-profit organization’s impact is important. I am not sure being able to compare the impact of my donation if I gave to malaria versus ALS is useful. The truth is, I just lost my younger cousin (and friend) to ALS in May. Knowing that my donation would have five hundred times the impact if I gave to malaria nets instead does not influence my decision to give to ALS. The reality that I think MacAskill may be missing is that giving is donor-centric; it’s about meeting the donor’s needs as much as it is about giving to a cause. People ultimately give to fill a need within themselves and they give from their heart. While facts inform one’s decision, emotion plays a large role in people’s decisions to give to a particular cause. If charitable decisions were made solely based on an ethical hierarchy combined with knowledge of where the money will have the most impact, no money would ever be given to charities related to the arts. On that basis you can never justify donating to an animal shelter or an art museum or a summer camp when there are people in need of food, shelter and medical care. The fact that these non-profits exist and thrive primarily on the basis of individual donations tells you that other factors are in play when people decide where to donate their hard-earned money.

Many of the issues MacAskill raises are thought-provoking and have merit. But as a highly flawed human being, I am going to continue to give to charities that through a combination of emotion and facts touch my heart.

Written by Lee Neel, Vice-President of Marketing, The Fundraising Resource Group. The Fundraising Resource Group helps non-profit organizations across the United States with fundraising feasibility studies, capital campaigns, annual giving campaigns, major gift fundraising, non-profit marketing, fundraising training, and other high-impact, high-return fundraising activities. For more about how we can help your non-profit achieve fundraising success, visit our website at www.thefundraisingresource.com or call 888-522-1492.

Package your budget for major gift fundraising.Overhead is a dirty word. Or at least that is what we have trained donors to believe. But what happens when we look at our budget from a donors eyes? Certainly we are very comfortable at touting the investment in direct program costs and the associated outcomes as a worthy giving exercise, but what really goes into that program and what are the missed opportunities of matching those expenses with the donors’ passions and interests? Also, how do we provide a clear rationale and giving opportunity to grow a donor in their giving to capacity other than asking for major gifts for special non-budget projects? Or (not advised) just saying “I know you can afford to give more so I am asking you to do so?

In-budget items offer a myriad of opportunities for you to meet your donors’ needs to give for things they feel passionately about and to see the impact of their giving. This is why I always encourage the organizations to start looking at their budget from the donor’s perspective (rather than from an accountant’s perspective. P.S. I am a recovering CPA) and to package in-budget items in their annual giving campaign gift proposals. 

Your Budget from a Donor’s Perspective
What do I mean by viewing your budget from a donor’s perspective? We are currently working with a great ape sanctuary. They have incredible programs of care and enrichment that require significant ongoing investment. However, some basic in-budget items include: facilities maintenance, grounds maintenance, electricity, water, food for the animals, medical care for the animals, etc. How do you relate these items to programs and more importantly, how do you package them to meet the passions of donors? Grounds maintenance in and of itself doesn’t sound very appealing. Nor do many of the mundane items that are needed for this effort – shovels, pitchforks, garden hoses and nozzles, hedge rakes, etc. But what the budget calls “grounds maintenance” from a donors perspective is “habitat preservation” as that is literally what all of these items are used for. Sanctuary habitat preservation and enrichment is an important part of their case for support. Electricity is used to heat ape night houses in the winter and to run huge fans that help keep the animals cool in the height of the summer. It is used in the feed room, the clinic, and parts of the sanctuary grounds. The feed room where all the animal food is prepared also requires paper towels, garbage bags, cleaners, etc. These items are as integral to the food program as the food itself. Ditto all the supplies that are needed to maintain the gardens where they grow much of the fresh food the apes eat. These are all program-related costs. And we know the biggest cost in most budgets is personnel cost. How do you ask a donor to give to payroll if we do not show the direct correlation to the intended outcome the donor is seeking in their giving?

An organization that does an excellent job of understanding program costs and packaging them to meet the needs of their donors is World Vision. For example, among the abundance of options they offer donors for giving is a suggested gift of $35 “to provide hope for sexually exploited girls.” How is your donation used? “Your gift will help prevent abuse, and restore physical and spiritual health to rescued girls by providing things like safe shelter, medical care, nutritious food, vocational training, compassionate counseling, and when possible, reintegration with a loving family.” When you look at their website, they offer ways to give by: category of interest (education, orphans & widows, hunger, girls & women, medical care, children, etc.) amount of gift, location (Syria, West Africa, Gaza, India, USA, etc.), and method of giving (1x gift, monthly giving, micro-loan).

Connecting with Donor Passions and Interests
Not long ago I was working with a private secondary school on an individual gift proposal for a major gift donor (a couple, actually). The previous year the couple had given a total of $16,000 from a variety of asks including a gala table and ad, sponsorship of a golf tournament, donation to a memorial scholarship fund, etc. The couple clearly cared about and had strong ties with the school and were well known to have significant capacity. The school had just started a Learning Center for students with diagnosed learning disabilities and their daughter was one of the first beneficiaries of the program. The program had literally changed the child’s life and that of the family as well. The program had been built on a grassroots budget and needed additional funding to grow in order to impact more students and families.

Major Gift Fundraising ProposalInstead of asking them for gifts throughout the year, I advised my client to make one giving proposal that would include event tickets, sponsorships etc. The proposal was for $70,500 and included $50,000 to pay for a full-time equivalent added to the staff for the Learning Center in the coming year. Their initial response was that they were surprised they had given only $16,000 the year before. They said it felt like they had given a lot more because of all the asks. They happily agreed to the gift package that met their passions and needs. This allowed the development director to spend the rest of the year continuing to build the relationship by thanking them and showing them the impact of their gift, rather than making more asks.

Using the Gift
One concern I hear often with this approach is the fear of designated giving. It is important to manage this process by having a wide variety of giving opportunities at a range of giving levels as well as an understanding of why and how each opportunity can appeal to donors. I am working with an organization that has a popular prison inmate program that everyone wants to support, to the point that they are now asking donors to consider directing their giving to other programs. Certainly the objective is to generate undesignated gifts for operations. Small gifts are most often given with no strings attached.  However, as donors are challenged to make larger investments, their expectations of the recipient organizations increase proportionately.  It is unrealistic to believe that all major donors to any non-profit organization will give undesignated gifts.  The larger the investment, the greater the expectation of reporting, accountability, and impact. This should not scare you if the budgeted item is one you truly intend to act on. You should welcome someone making that direct investment and knowing that the budgeted item is covered.

Where to Begin
While the anecdote about the $70,000 gift, above, may sound like the exception, it doesn’t have to be. There are many opportunities buried in your budget that may be exactly what floats your donors’ boats such as technology upgrades, advertising and marketing, equipment, etc. The first step, mentioned earlier, is viewing your budget from a different perspective i.e. the eyes of the donor. With your “donor lenses” on, the next step is taking the time and steps to understand what each individual donor may be passionate about and packaging an opportunity that meets their individual needs to make a difference.

Keep in mind that this is a fundraising tool and not intended to replace, in any way, the “official budget” for accounting.  Here are some ways to get started:

1.) A project of this magnitude requires leadership participation and buy-in. Therefore a meeting of key leadership and fundraising personnel should be initiated to establish a list of program categories and sub-categories. These categories should be donor-centered and based on what you do – not accounting categories. For example, for the ape sanctuary, some of the categories could be health, food, shelter, habitat, and enrichment. As you establish and define the program categories, think in terms of the different ways items can be “packaged” to appeal to donors and these become your sub-categories. In the case of World Vision, Disaster Relief is a category and it is subcategorized by location.
2.) Write a detailed definition for each program category so it is clear what each program category is.
3.) Allocate your budget by the established program categories.
4.) Proportionately allocate any remaining unallocated expenses. Understand that the overhead exists to run the programs and fulfill your mission.
5.) Establish specific dollar amounts for each giving opportunity.
6.) For major donor gift proposals, develop individual donor plans that incorporate specific giving opportunities that they care deeply about (you learn this through the discovery process) with dollar amounts and expected outcomes.

Are you successfully packaging your in-budget items for gift proposals in your annual giving campaign? Tell us about it – we’d love to hear from you.

Written by Daniel Neel, President of The Fundraising Resource Group. The Fundraising Resource Group helps non-profit organizations across the United States with fundraising feasibility studies, capital campaigns, annual giving campaigns, major gift fundraising, non-profit marketing, fundraising training, and other high-impact, high-return fundraising activities. For more about how we can help your non-profit achieve fundraising success, visit our website at www.thefundraisingresource.com or call 888-522-1492.

Recently, I read a thought-provoking article on non-profit board member retention by Eugene Fram. In the article, he says:

retaining non-profit board members requires effort“Having served on 12 non-profit boards, ranging from charitable to professional and trade boards, I have collected my share of plaques, certificates and even one Tiffany electric clock! After departing from each board, I or my colleagues’ only contacts included an occasional newsletter, donor request, etc. all boiler plate communications, even those addressed personally.

Many of my colleagues are highly talented people with continuing interest in the organization. I am certain they would have welcomed an invitation to participate in the future growth of the non-profit. Boards are responsible for making certain that talent is maintained at a high level. It is time that programs for retaining or reengaging talented former board members are taken seriously by non-profit boards.”

I have served on several non-profit boards and also served as a volunteer for extended time frames (years) for a number of non-profit organizations over the years and what he said resonated with me. Only once (when I was moving to a different state) was it obvious why I was disengaging with the organization. Never once was I asked to continue to support the organization other than via boiler plate communications. Just as interesting to me, never once was I asked why I was discontinuing my level of involvement.

In one instance I was serving on a board and had been extremely involved as the marketing chair handling communications outreach efforts for events and securing the donation of a free website from a professional design firm and oversaw the entire content/design/build process. I was eligible for a second term but chose not to serve. No one asked why.

Many companies have their HR department conduct exit interviews when a person leaves to find out why they are leaving. Some kind of exit interview process with long-term, involved volunteers on any level may prove enlightening. In my case, most volunteer positions I have left are due to poor management of processes or lack of organization within the non-profit that left me feeling my volunteer efforts (and those of others) were not being properly supported.

Eugene Fram’s point and focus is even a more important one. Often times it seems organizations can lose sight of the fact that board members are major gift donors (whether of money or time or hopefully, both) and as such, the cultivation of those relationships should not end when their board service ends. The onus for continuing the relationship should not fall on the ex-board member or volunteer just because they have been highly proactive in their involvement in the past; there comes a point where the non-profit likely needs to step up its game and actively find ways to continue to involve these people in a meaningful manner.

In his article, How Does Your Non-Profit Retain Termed-Out Board Members?, Fram offers a number of valuable suggestions on how non-profit organizations can continue to engage these important donors and supporters of their organizations. Among them:

Create an Advisory Board – Include termed-out board members in an advisory board to the CEO and/or Board Chair. Fram suggest his group of 15 to 20 people should include select former board members plus others from the community or industry that meet three or four times a year. 

Form an “Alumni Group” – Major companies frequently have and support a networking group of former employees who gather on an occasional basis. I remain active in such a group with a company I worked for 25 years ago and wish some of the other companies I worked for had supported this kind of activity. Fram suggest that “Non-profits could improve on this model by also offering occasional short conferences, 1.5 days maximum, for former board directors related to the mission of the non-profit.”

Continued Direct Contact – Fram suggests board members and the CEO can keep former directors engaged via three or four informal contacts a year.

You can read Eugene Fram’s article in its entirety as it first appeared in The Huffington Post on May, 28, 2014. Eugene Fram is a Professor Emeritus, Saunders College of Business, Rochester Institute of Technology, and author of Policy vs. Paper Clips: How using the Corporate Model makes a nonprofit board more Effective and Efficient.

Written by Lee Neel, Vice-President of Marketing, The Fundraising Resource Group. The Fundraising Resource Group helps non-profit organizations across the United States with fundraising feasibility studies, capital campaigns, annual giving campaigns, major gift fundraising, non-profit marketing, fundraising training, and other high-impact, high-return fundraising activities. For more about how we can help your non-profit achieve fundraising success, visit our website at www.thefundraisingresource.com or call 888-522-1492.

I can remember exactly where I was and what I was doing the day I realized the Internet wasn’t a fad. Even back then computers were an everyday part of my professional career. But websites? Email? Banking and shopping online? Never! Today, not only do I believe the greatest invention of my lifetime is online banking, but the power of the Internet for business is undeniable.

So pigs are flying. If your non-profit organization does not have a comprehensive, integrated online strategy for giving, you are way behind. I am no Atticus Finch, but I am confident I can make my case for why online giving is a rising star of non-profit fundraising. I will approach my argument in two parts. First, I will make the case for online giving, NOW. Second, I will provide some practical ways you can get started or enhance your online giving.

Part 1 – Making the Case
First, it is important to understand the shifting generational demographics. Blackbaud’s report, The Next Generation of American Giving, outlines basic giving information for each of the four actively participating generations. It is no surprise that Boomers represent the largest portion of giving in both number of donors (51 million) and percentage of total individual giving (43%). After all, Boomers represent the largest segment of the population and are at an age where they are moving toward retirement or are in the sweet spot of their earning years. But it would be a mistake to ignore the growth trends of both Gen X and Gen Y.

While both Matures and Boomers say they plan to hold the line on their current giving levels with some modest increases, Gens Y and X say they plan to increase their giving over the next twelve months by 21% and 18% respectively.

American giving by generation

Source: The Next Generation of American Giving – Blackbaud

Relative to communication behaviors and preferences:

  • 85% of Americans are online,
  • 61% send and receive email at least occasionally,
  • over 51% bank online,
  • only 40% of individuals below the age of 65 prefer to receive information by mail, and
  • from 2007 to 2012, mail volume dropped by more than 25%.

 How does all of this relate to giving? Before you think I have gone off the rails, I recognize that direct mail still dominates in sheer volume of giving, representing almost 80% of all gifts received. However: 

  • average revenue per new donor who joined online was 2x’s that of those who joined by mail,
  • online giving still only represents about 6.4% of total fundraising according to the Blackbaud Charitable Giving Report of 2013, but, while overall fundraising is growing at less than 1%, online giving is increasing by almost 14%.

For the first time, more Boomers gave online (42%) than in response to direct mail (40%) during the past two years.

Perhaps the biggest indication of the changing winds is, for the first time, more Boomers gave online (42%) than in response to direct mail (40%) during the past two years.

What conclusions can we draw from this barrage of data? Let me paraphrase a few that Blackbaud poses in their findings:

  1. Seventy-seven million Boomers are likely to be the dominant source of donations for the next decade, but there are things organizations should do to attract younger supporters.
  2. It’s not just about tweaking tactics. Many of the biggest impediments to effective multi-channel fundraising are organizational and political.
  3. Don’t phase out direct mail yet, but have a “succession plan.” It is declining as the dominant source of direct marketing income, and there is no indication the trend will reverse.

Part 2 – Making the Change
I am no expert in online marketing. I am a fundraising consultant who works to help my clients maximize their return and create an integrated, donor-centric fundraising mindset. I try to pay attention – and gather good resources who are experts around me – to help my clients stay ahead.  With that in mind, I will share a few thoughts on how your organization can either get started or enhance your online presence.Funnel graph showing the steps to converting an online website visitor to a donor.

There are three primary variables to pay attention to in order to exponentially grow online giving:

Web Traffic x Conversion Rate x Amount Raised = Exponential Online Giving

Your website is a potential donor acquisition funnel if you:

  • can be found,
  • make a compelling argument for why they should stay,
  • have specific and intentional paths to become a participant,
  • create a meaningful and easy giving experience.

Website Traffic
Considerations:

Do you have a written multichannel marketing plan that “cross-pollinates” your online and offline marketing efforts? And a documented content strategy? Are you willing to invest a part of your marketing budget for online fundraising activity? The online portion of your marketing plan is about considering all the different ways people might come to your site – through search engines, social media, your blog, email blasts, advertising, etc. – and developing a strategic plan to optimize the platforms that have the most potential.

Is your website designed with search engine optimization (SEO) in mind or is it a cyber “ghost ship?” If you can’t be found through an online search for specific keywords related to your mission, the only people who are finding you are the ones who already know you exist.

Understand that social media is not a stand-alone and separate element of your marketing effort; it helps drive traffic to your website. By design, the best websites have content growth and change. Search engines “like” dynamic content and depth of content but just as importantly, new and original content is valuable and gives people a reason to visit your site over and over again. This is one of the reasons why blogs are now the rule rather than the exception.

An Aberdeen Group/Hubspot study shows that content marketing costs 62% less than traditional marketing and generates greater results in leads, conversions, growth, and money raised.

Suggestions:

  • Have a written multichannel marketing strategy for fundraising.
  • Measure your online traffic through Google Analytics or similar tools and appropriately benchmark those results.
  • When building a website choose a marketing firm that has in-depth expertise in website design, SEO and online marketing because all three are critical. If your website is less than 3-years-old and you’re budget doesn’t allow for a redesign, there are often improvements that can be made that will help in the meantime.
  • Invest in expertise in online donor acquisition and retention. With a recent client, we recommended beginning to limit some mail acquisition activities and re-invest a portion of those funds in online marketing.

Conversion Rate
Considerations

What percentage of your website visitors take action upon visiting (such as leaving their name and email address)? For those who go to your website donation page, what percentage follow through with a donation? According to the most recent Online Marketing Benchmark Study for Nonprofits, the median conversion rate for providing an email address is 2.04% of unique visitors. Even if a visitor finds their way to your donation page, only 15% give according to the 2014 M & R Benchmark Study.

Getting people to your website is only part of the equation; conversions is another. A conversion is a desired action such as providing an email address, requesting information or making a donation. If your site is not designed with conversion paths in mind, you are looking at a significant missed opportunity. If a web designer doesn’t ask you for a prioritized list of desired conversions, find a new designer who does.

Chart showing what a conversion is for a non-profit organization.

The most effective donations pages answer three questions at a glance: Where am I? What am I doing here? Why should I do it? They visually show the impact of donating. They are uncluttered, focused and eliminate extraneous pathways off the page. The best advice I can give is test, test, test.

Suggestions:

  • Make a list of desired conversions for your website and prioritize them. Using this list as the measuring stick, how does your site measure up? If it doesn’t measure up well and your site is more than 3-years-old, it may be time to start thinking about a new site.
  • Have you A/B tested your donations page? Untested donations pages convert less than the 15% median.
  • Look at other nonprofit websites, particularly those of larger organizations such as World Vision, ASPCA and Audubon. Analyze their designs based on conversions and compare them with your site.

Amount Raised
Considerations:

Do you know what your average one-time online gift is? How about how many of those first time donors are giving again the next year, or the next? How fast is your online giving growing compared to other giving channels? If you haven’t done this kind of research, you’re likely to be surprised.

Online donors giving a one-time gift average about $136 compared to between $30 and $50 for a one-time mail gift. Monthly sustaining donors are retained at about 70% to 80% compared to 30% to 50% for one time givers. Sustainers average about $31 per month or over $360 annually. Unfortunately only about 15% of online giving on average comes from monthly sustaining donors. Can you say “opportunity?” Here are some suggestions.

Chart showing rate of growth for various giving channels.

Source: Nonprofit Research Collaborative

Suggestions:

  • Branded donations pages result in 6X more dollars raised than unbranded. Simply hanging out a “Give Here” sign is not sufficient.
  • There is no one-size-fits-all formula for creating donation pages that work, but there are some “best practices.” Testing will help you determine what works best.
  • Providing a rationale for gift stream levels gives the donor a better idea how their giving at certain levels will make a difference.
  • Branding and marketing your monthly sustaining giving program and making it prominent and simple to join will increase participation.
  • Recurring donors give more and are more loyal. Consider making recurring gifts a bigger priority than one-time gifts when designing your site and creating conversion paths. Minnesota Public Radio made monthly giving the default on their donations page which resulted in sustainers becoming 60% of their revenue.
  • Try creative ideas. One organization made their donation page the home page on December 31st to make it easier for year-end givers.

Final Thoughts
Online giving is increasingly a more important piece of a strategic, integrated development plan. Large nonprofits such as the American Cancer Society are already redirecting significant portions of their budget out of direct mail donor acquisition efforts into other channels. It remains your responsibility to understand donor motivations for giving, deepen the relationships, and grow donors seamlessly to their maximum level of giving using a multi-channel approach.

Flying PigLet me conclude by saying there is way too much too cover in one article. To dive in deeper, contact the Fundraising Resource Group and ask for a link to our free webinar, Flying Pigs: The Case for Online Giving Now; there are visual examples and much more on the subject of donations pages, monthly giving and other specific ideas. (By the way, we are not in the website design or online marketing business so this is not a sales pitch!)

My advice if you choose to ignore online giving is, watch out for flying pigs.

Written by Daniel Neel, President of The Fundraising Resource Group. This article was first published in the July 2014 issue of Dimensions magazine, a publication of the National Catholic Development Conference.

The Fundraising Resource Group helps non-profit organizations across the United States with fundraising feasibility studies, capital campaigns, annual giving campaigns, major gift fundraising, non-profit marketing, fundraising training, and other high-impact, high-return fundraising activities. For more about how we can help your non-profit achieve fundraising success, visit our website at www.thefundraisingresource.com or call 888-522-1492.