Jan
15
 Roy C. Jones, CFRE I met this week with two different not-for-profit organizations who were confused about their major gift fundraising strategy. They did not know the difference between “direct response major giving” (DRMG) and traditional major gifts programs. If you fail to realize the differences and which type of major gift program your organization has in place, it could translate into huge losses in revenue in 2012.
Traditional major gift programs focus almost exclusively on community relationships and networking with locally known philanthropists, business leaders, community foundations and family foundations. The vast majority of the 2 million non-profit organizations in the United States use this type of strategy for procuring major gifts. While first time gifts can be very large, it can easily take 24 to 36 months to see a major gift come to fruition.
Direct response major giving (DRMG) may look similar to traditional major gifts programs. Both strategies use face-to-face meetings and relationship building to cultivate a major gift, but there are stark differences.
DRMG reaches out to donors who are already on your direct response donor file. Big donors begin giving to your charity via the Internet, on the phone or in the mail. Their first donation may have only been $25 to $100 but if you cultivate the relationship properly their giving can grow to $1,000, $10,000 and $100,000+.
I compare the DRMG process to “rungs on the ladder”. Once you identify an individual as a donor with capacity, moves management techniques are used to upgrade giving from the bottom rung of the ladder to the top. Donors are upgraded “one rung at a time” as needs are presented at that particular donation level. As donors climb the ladder by making 2 to 3 gifts each year at ascending levels they can be upgraded very quickly to a major donor status. Giving can be upgradedwithin just a few months of cultivation to the $1,000 and $5,000 levels. Then once they reach the $5,000 benchmark they can grow at much faster clips over the next year to $10,000, $25,000 and $50,000 levels.
While traditional major gift programs produce larger first time gifts by cold calling and networking, the trade off is TIME. It can take two or three years to get a major gift this way. Working with existing donors (DRMG) is a much quicker way to procure major gifts. Someone who has been writing you 2 or 3 checks a year for the last 4 or 5 years is much more likely to give you a 5-figure gift than someone who has never supported you before. It really is that simple.
Now for those that understand the differences between the two strategies, I am not saying you cannot do both. If your non-profit is big enough, you can certainly manage two different programs, but remember, they are two different techniques and must be measured seperately.
I work for a direct response fundraising company so my recommendations nearly always focused on harvesting major gifts from our clients’ donor files. I usually advise our clients to spend 80% of their time working on DRMG and only 20% of their time working on traditional major gift tactics. So out of 20 business days a month, never spend more than 4 of them on cold calling and networking. While it sounds obvious, you would be surprised how much time you can chew up cold calling, visiting business lobbies and attending local Rotary Club and Chamber of Commerce meetings. If you are not disciplined, you can go months or even years (if you are new to major gifts) without seeing a major gift.
Direct response major giving (DRMG) produces gifts and produces them quickly. Most charities do not have the time and resources to wait two or three years for a new major gift officer to produce a big gift, regardless of how much it is. Deploying DRMG techniques gets staff and board members producing major gifts much faster and at a much lower risk to the organization.
Of course, any time their are two different approaches, it can breed conflict if the organization does not have a clear process for managing both tracks.
I have seen some non-profits ban major gift officers from calling on people on the charity’s mailing list. If I had a nickle for every time I talked to a charity with a donor file lamenting their inability to find new potential major gift prospects when they are sitting on a donor file of 10,000 to 30,000 supporters. Even conservatively, organizations of this size will easily have 1,000 to 5,000 solid major donor prospects.
As I have audited charity fundraising programs I have been shocked to see the number of them that do not research their donor files and even go so far to prohibit major gift officers from soliciting direct mail donors for a major gift. (Yes, you read that correctly.) Not allowed. Banned from calling on the “low dollar” supporters for a potential major gift.
The problem usually stems from the structure of an organization and when responsibilities for fundraising are managed by two different departments. Annual Giving manages the organization’s direct mail program, special events, telemarketing, and online giving. They’re also responsible for managing the database of supporters. In most organizations, this department raises the lion’s share of the revenue for the organization.
My co-worker, Andrew Olsen, may have best defined the problem, “The Major Gifts department is tasked with identifying, cultivating and securing major gifts in support of the organization. When I say identifying, I literally mean identifying. Major gift officers are expected to essentially build their own major gift pipelines through personal networking efforts. But under no circumstances are they allowed to prospect from the Annual Giving donor file.”
Olsen says that the Annual Giving staffs have goals, and the Major Gift staffs have goals. Because these are two separate departments, their goals aren’t shared. So what happens is the Annual Giving team is reluctant to “give up donors” because they are counting on the gifts from those donors to hit their income line and help the meet their goals. At the same time, the Major Gifts team desires to move likely major gift donors from the direct response / annual giving program and into a personal cultivation stream in order to solicit a larger gift (which would hit the Major Gift departments’ bottom lines).
Every non-profit or charity needs to understand what type of major gift strategy they are deploying, but most importantly, they need to make sure that every department, every employee, every supporter knows that the donor file is the best place to begin your research for a major gift.
DRMG is the quickest way to procure a major gift if you know how to identify wealth, research propensity of giving and analyze current giving to target your top prospects.
If you are interested in launching, refining and retooling your major gift program I hope you will reach out and give me a call. You can email me at getroyjones@aol.com or call me on my direct line at 434-258-4416.
Go, go, go,
Coach Ro Jo
Jan
1
 Roy C. Jones, CFRE Unlike most people who call themselves “fundraising counsel” I am not one who wastes a lot of time with grandiose vision papers and colorful case statements. Every January I encourage charities to spend more time on practical, actionable events rather than writing beautiful superfluous words about their organization and cause.
Yes, case statements are important, but what has been said has already been said. Do you really think that you will be more creative or more inspired than you were a year ago? Mission case statements do not come down from on high in a way that suddenly moves donors to give more. It just does not work that way.
Remember, donors do not give to case statements… they give to people. More specifically, they give to people who are listening to them and are able to identify needs that touch the donor’s heart.
Spend your time over the next few weeks outlining actionable steps you can take to know your donors better in 2012 than you did in 2011. Better relationships with your donors will always translate into more money for your charity or cause.
Set goals based upon your actual results from 2011. While we all hope that lighting will strike, you have to be realistic. Here are a few New Year’s guidelines for goal setting and planning that will make a HUGE difference on your bottom line in 2012:
- NEWSLETTER. Plan for increases of 3 to 5% – with 6 to 10 issues a year. First and foremost, make sure that everyone, regardless of suppression code, gets your newsletter. If you do not produce a newsletter, start one immediately! In addition, your newsletter should include a “lead letter” that focuses on a need presented in the newsletter and makes a “soft ask” for support. And yes, your newsletter package should have a reply device and reply envelope.
- DIRECT RESPONSE. Plan for increases of 7 to 10% – with 14 to 16 appeals a year. This would be for all of your direct response channels, such as direct mail, telemarketing and digital strategies using your website and social media, do not expect to see gains bigger than 10 percent. Of course, this is contingent upon your attrition rate and the amount you are spending on acquisition in these channels to offset attrition. If you do not do enough new donor acquisition spending, only one thing is certain in direct response fundraising… attrition.
- MIDDLE DONORS. Plan for increases of 10 to 12% – with 10 to 12 appeals a year. Middle donors are donors who began giving to your organization through direct response, but through systematic cultivation, volunteering and event participation have increased their giving past the $100 threshold. Middle donor definitions vary by industry but it can range anywhere from $100 to $5,000. Personally, I like targeting $100 to $999 as the middle donor sweet spot and begin treating any donor with a single gift of $1,000 or more as a major donor. It is critical that you begin encouraging middle donor giving through clubs or giving level recognition. While it is not a driver to get them to give more, it is a tool that keeps them from giving less and renewing more frequently. The communications needs to be different for your middle donors than your standard direct response donors. It should be consistent in the same style and tone from one month to the next. Do not go back and forth between regular donor communications and middle donor communications. Always have a “high value” copy version for your middle donors and major donor prospects.
- MAJOR DONORS. Plan for increases of 15 to 20% – with 6 to 10 appeals a year. All communications need to be in a “one-to-one” format. Nothing which appears to be mass produced (excluding the newsletter, of course) should be sent to these VIP’s. What does this mean? Real hand addressed letters, actual overnight letters by FedEx or UPS, box packages with appreciation gifts (sometimes called dimensional mail), hand addressed post notes, paper clips, and real photos – even framed. Yes, this is going to cost more per piece. These types of packages can run anywhere from $3 to $5 per piece, but the ROI is HUGE. We have seen response rates as high as 40% and average gifts of over $1,000. Treating your top 100 to 500 donors special is worth the investment. Remember, in researching your top prospects that you are looking for not only wealth, but philanthropic intent. Do they have a history of giving you large donations? Do they have a record of giving to other charities major gifts? Philanthropic intent the key to increasing major donor giving. Do your research. The information is available through wealth overlays and donation recognition to identify and rank you donors from 1 to 100, 250, or 500+. Rank you donors and begin meeting with your best prospects first. Finally, have a moves management plan for each individual target. I encourage folks to have a plan with timeline for each individual donor. Here is a sample of what I have used: Individual Donor Plan – Quadrant Analysis Template. Don’t be afraid to personalize it to your preference, but use it in 2012.
- PLANNED GIFTS. Plan for increases of 20 to 25% – with 2 to 4 appeals a year. Fund raisers should seize the opportunity in 2012 to talk to donors who are probably losing faith in their financial advisers. Trust me when I tell you that estate planning support from not-for-profits is going to explode this year! Donors will work with charities they trust. I suggest a lead generation campaign that takes advantage of when tax savings are top of mind for donors: March – April and Nov – December. A letter or two during these windows will generate a lot of interest. A simple reply device to request a “free” retirement planning information will produce great results. Remember, you are targeting people who are between the ages of 60 to 80. The sweet spot is around 70 years old. If you have not done an age append on your donor file, do it. Finally, remember you are looking for people who have written the most number of checks. Frequency of giving is critical to determining the likelihood that the donor will make a planned gift or name you in their will. You are not looking for BIG check writers or major donors. You are looking for people who are likely between 65 and 75 years of age who have written 10, 25 or 50 or more checks.
Dec
16
 Roy C. Jones, CFRE Congress is examining potential ways to cap, decrease or completely eliminate the tax deduction for charitable giving. This deduction, which has been in place since 1917, allows individuals to receive a deduction in their taxable income for the money they donate to charitable organizations.
These donations are vital to the work of every nonprofit organization in America. I am part of a team that helps raise more than $50 million to organizations helping the homeless and the working poor in metropolitan areas throughout the United States. Theses funds allow us to provide shelter, clothing, meals, rehabilitation and treatment, job training, and other services. Citizens give to charities and receive the deduction. Not-for-profit groups receive the donations and provide the services. As a result, the government doesn’t have to pay for these services.
Everyone wins!
The system works for all. In fact, in a recent poll 70% of individuals opposed the elimination of the charitable deduction, including 62% of people who did not even claim the deduction last year.
The charitable tax deduction is a proven, time-tested incentive that encourages giving. If the current charitable tax deduction is lowered, it’s estimated that the nonprofit sector will lose approximately $4 billion annually in private giving. If the deduction is eliminated, the loss to the nonprofit sector is even higher.
You might assume that people with the most money give away the most money — and you would be correct. Higher income earners account for the majority of individual giving. It is also true that high-income earners are more sensitive to changes in tax incentives.
Many people give to charities because they have big hearts. They’re generous. They believe that giving is “the right thing to do.” Many other people give because they also enjoy the tax incentive of giving. And, of course, many people fall into both camps.
What is important is that they are giving… period.
These are tough times. A record number of Americans are unemployed. The number of people in poverty — many of them children — is at an all- time high. People need help. Nonprofits serving the poor exist to provide that help.
So why are our federally elected officials thinking about cutting or eliminating the charitable tax deduction? They need the money. They need the tax revenue.
The President and the Congress have put themselves between a rock and a hard place by over-spending. But what’s the benefit of shifting resources away from private nonprofits to the federal government? I can’t think of any. Can you?
Does the federal government know best how people should spend their money? Is the federal government more efficient and effective in caring for the needy than charitable organizations? Can the federal government ever do the work of a local social service agency?
Humbly, I think not. Tens of millions of Americans agree. That’s why we give private donations. That’s why we live in the most generous nation in the world.
Even the famous miser Ebenezer Scrooge came to know the goodness of generosity. As Charles Dickens wrote, “Scrooge was better than his word.. He became as good a friend, as good a man as the good old City knew, or any other good old city, town, or borough in the good old world.”
Before the President and Congress send nonprofits a lump of coal, they would do well to remember the lesson of Scrooge and preserve the charitable tax deduction.
Nov
28
 If you have not already done so, now is the time for your organization to empower major donors to help you improve your net revenue in 2012.
You can use any major gift in the 4th quarter of 2011 to boost revenues in 2012, but you need to start RIGHT NOW. Remember that the majority of all major gifts happen in 4th quarter and the majority of 4th quarter gifts happen in the last three weeks of the year.
There are three types of matching funds that every charity should be developing as the year winds to an end: Challenge Fund Gifts, Employer Matching Gifts and Individual donor matches.
Challenge Fund Gifts
IT’S NOT TOO LATE. Reach out to your Major Donors who make a gifts to your organization in the 4th quarter and ask them for their permission to use their last gift amount as part of a “challenge fund” to get other donors to match their gift amount. Remember, you are not changing their gift designation. You are simply using their last gift amount as a way to challenge others to give.
Every major donor appreciates it when their contribution can have DOUBLE the impact! It is an excellent way to demonstrate your stewardship and build better relationships with your donors.
I encourage not-for-profit leaders to make the challenge fund request a standard part of their 4th quarter acknowledgement and thank you receipting process. Every donor who makes a 5-figure or 6-figure gift should be called and thanked, of course. When you call to thank them simply ask: “would you be interested in helping us double the impact of your gift?”
Another idea is to add to your receipt letter a reply device a check off box that simply says, “Yes, you have my permission to use my gift amount as a way to challenge others to give. I understand that my name and address will not be disclosed and kept entirely confidential.”
Depending on the size of the challenge fund you create, it can give your organization an excellent mailing opportunity to your regular donors in the Spring of 2012. You will not be sorry that you went to the extra effort to speak with your major donors about your challenge fund. Many organizations see as much as a 100% lift in response with a matching gift challenge added to their mailing.
You are going to be surprised at the number of additional checks that come in through this process. People appreciate the opportunity to double their impact and investment in your organization.
Employer Matching Gifts
You also should immediately mentioning employer matching gift programs in your communications on-line and in the mail. You may even want to do a mailing and E-appeal exclusively on Matching Gifts and asking for the donor to list their company or retirement fund so that you can provide them the paperwork for “doubling their gift”.
Most donors are surprised to learn that they can increase their donation through their employer’s “Matching Gift” program. Retirees are usually entitled to these benefits too. Donors should be encouraged to notify their employer’s human resource department that they support your not-for-profit organization. Joining a Matching Gift program is simple, and allows your donors to direct their contribution and employer to support your organization.
Don’t forget to remind your donors that more than 60% of matching gift companies can match gifts that are up to two years old, so when major gift donors give gifts beyond the single year match limit, you can seek another years match in the subsequent year
A great resource for identifying the companies that offer matching gift benefits is Blackbaud’s Matchfinder service with over 25,000 companies who match employees and retiree gifts.
Individual Matching Gifts
Individual donors to your organization can inspire their family, friends and business associates to support your Mission or ministry by creating your very own “Challenge Gift.” Donors can direct a donation to any one of your programs and then ask others to match the gift – it’s that simple! Initiating a Matching Gift is a wonderful way for a donor to support you while also acknowledging your organization’s great work.
Example of a previous Challenge Gift: A loyal supporter initiated a
Roy C. Jones, CFRE $5,000 Gift Challenge for our ministry to be completed by the end of the fiscal year. They provided $5,000 to be matched by our direct mail donors and an additional $5,000 to be matched by our major donors. The challenge was established in this way to help the ministry, not only provide current donors with a way to have their donation doubled, but to also helps the organization to engage and acquire new donors.
Finally, train your major gift staff and development team how to present the matching gift concept. In addition, you should always try to incentivize your matching gift program:
–Count matching gifts for purposes of gift club totals
–Consider a special club for matching gift donors
–Reward donors in securing matching gifts with printed recognition in donor reports, honor rolls or on your charities web site
Every time a gift comes in during the month of December for $1,000 or more, pick up the phone, thank the donor and then make the case for doubling their impact and doubling your money. IT IS NOT TOO LATE!
Nov
20
 I am surprised at the number of blank stares I get these days from not-for-profit leaders when I use the term “LYBUNT”. If there is one thing a fundraising and development professional should be doing in December it should be making a list LYBUNTs “and checking it twice, you have to find out who has been naughty or nice.”
LYBUNT is an acronym that stands for “last year, but unfortunately not this year.” This is a term used frequently in the fundraising world to represent donors who gave your organization money last year but, who have not given you money yet this year. Fundraisers typically target this group of last year’s donors differently than people who haven’t made a gift at all.
A donor in this group is also sometimes referred to as a “low hanging fruit” or a “warm” donor since that individual could be expected to give a gift again. If you are an Executive Director, President, Board member or Director of Development there is not a better use of your time at this time of year than calling and meeting with your top donors from last year, but who have not yet given this year.
Focus on the top 15 – 30 donors who haven’t made a gift yet this year. Integration is the key to getting your calls returned: use in combination emails, voice mails, hand written notes and drop by visits to remind your LYBUNTs not to forget your charity this year. Don’t just make the purpose for the call or visit all about getting the money, use it instead, to build a real friendship with each person. Begin every call, contact or meeting with the words: “We’ve missed you this year.” Find out what’s going on in their lives, and what’s still important to them about the work you’re doing. Then ask them to make a year-end commitment to ensure that important work can continue.
Remember, in most cases the LYBUNT donor thinks that they have made a gift, most certainly within the last year. It is truly an oversight on their part so have a spirit of forgiveness and be as welcoming as possible. For those LYBUNT donors who did not forget to send you a gift, you should never presume that they lapsed because of something your organization did or didn’t do. Many donors stop giving for many reasons we might never know, like big purchases, lifestyle and work changes, and new priorities in their giving plans.
Roy C. Jones, CFRE In the month of December, one thing is for sure… if your donor knows that “you a making a list and checking it twice and that you’ll find out soon who’s naughty or nice” they are going to make sure that there is a gift under the tree at your charitable organization. Merry Christmas!
Nov
14
 I know, on the surface, it seems like “The Grinch” has arrived to steal Christmas by making a statement like this. It is especially egregious if the not-for-profit organization you work for is faith based. However, if you are concerned at all about stewardship, you must have your development team recognize that the last 10 days of December are the biggest financially for the entire year. Many not-for-profits do not get out of the red until the last few days of the year.
You must be there for your donors!
Donation receipts must still be processed within 48 hours. Major donors, especially, need to be called and thanked as soon as their yearend gifts arrive. I am amazed and offended at the number of development departments that simply close down between Christmas and New Years. HUGE MISTAKE!!!
Stay open through the holidays. Have at least a few major gift officers in the office that can be making clean-up calls to donors that haven’t given yet this year and thank you calls to donors who make large year-end contributions. They’ll also be available for those last minute calls from donors who want to make gifts of stocks or other assets before year-end.
It is critical that your donation processing proceed on schedule. Delaying gift processing until after the New Year is a critical mistake. If you are doing things right, more donations will arrive to your not-for-profit’s door during the last week of the year, than the previous 4 to 6 weeks combined. If you delay processing acknowledgement and thank you letters, rest assured, it is going to cost your organization real money in second gifts from the receipting program.
Speed is a critical strategy during the Holidays!
Bottom line, if you include a reply envelop and crank out the thank you within 24 hours of the gift, 1 out of 5 will send a second check. For every 24 hours you delay the receipting… you are going to drop the response rate.
24 hours 20% response rate (for every 100 gifts… that equals 20 extra gifts)
72 hours 15% response rate
120 hours (5 days) 7% response rate
168 hours (7 days) 4% response rate
336 hours (14 days) 1% response rate
Roy C. Jones, CFRE Every receipt must be processed, but if you can use “speed as a strategy” you can create a revenue stream instead of a cost center. If you take off or slack off during the last few weeks of the year you will forfeit critical future revenue and turn your acknowledgement process into a cost center, instead of a huge revenue generator.
While cancelling Christmas vacations may be a little extreme, taking the time to talk to your staff about how to make sure all the bases are covered is critical. If you do it right, your charity may even have the the money to do something very special for both your employees and donors. Merry Christmas!
Nov
8
Roy C. Jones, CFRE Marketing “pros” know that getting their website and digital footprint in good working order is critical to a successful year-end effort. The best development leaders bear down during the months of November and December to insure that the last week is the most profitable 7-days of the calendar year.
I know some development directors who “swear by” the last week of the year. They contend that reaching their annual goals often comes down to the last few days of the year. Most contend it is often the difference between ending the year in the black or sinking deeper into the red.
Quality control is critical. Does your giving page work 100% of the time? Can it be overloaded with volume which slows or interrupts the gift transaction process? Is your web site optimized so that the proper key words force your website to “pop up” on multiple search engines? Now is the time to test your site and test your site again!
Develop a special Year-End e-mail series. Plan to send a series of three e-mail solicitations throughout the 10 days of December, each building on the momentum and urgency of the last. Time the final e-mail to be delivered on the morning of December 31st, with a subject line of something like, “Last Chance to Give in 2011”.
Invest in Search Engine Marketing (SEM). SEM campaigns will help you reach high-value online donors that are looking for worthy causes to support during the holiday season. These donors tend to give significantly higher average gifts than direct mail acquired donors. And because of that, you’ll frequently be able to acquire donors at a breakeven or better with SEM campaigns.
Most people are shocked to hear that I recommend spending a minimum of 10% of their overall marketing budget on SEM preparing for the last week of the year! That’s right. If you are spending $100,000 annually on (non-staffing) fundraising and development costs at least $10,000 should be ear marked in the 4th quarter for promoting your web site through search engine marketing and digital techniques. And yes, if you are spending $1 million a year on fundraising and marketing costs, then at least $100,000 should be earmarked for 4th quarter search engine marketing.
Here is what you have to remember. The majority of all gifts over $1,000 happen in the 4th quarter and of the 4th quarter gifts the majority of them happen the last 10 days of the year!
As importantly, we are seeing that 17 to 25% of all NEW DONORS during in the 4th quarter give on line after receiving a direct mail acquisition piece. That is right, more and more direct mail donors are using their search engine to check you out before they make a gift and then going right to your transaction page to make their gift.
Search engine marketing, or SEM, is a form of internet marketing that seeks to promote websites by increasing their visibility in search engine result pages (SERPs) through the use of paid placement. Google and Yahoo are the two largest search engines on the internet. It works basically as when a prospect searches a term that an organization has bought their ad and website will appear at the top or on the right hand side of the search.
Currently websites see anywhere from 60% to 90% of their traffic online coming from Search Engines even though they might be promoting their web address to potential prospects. This is just ensuring that your message will be at the top of the list when they do search for relevant terms for your organization.
I cannot tell you why donors do it, but in spite of the fact that a donor prospect is given your website address, they will enter your organization’s name into the Google search engine to both find you and check out what you and others are saying about you on line before making a gift.
A company can have as many search words as they want but an average of 25-40 are recommended at any given time. These words can be purchased by market or region and added or deleted on a daily/weekly basis.
The cost involved works on a bidding system when a prospect takes an action and clicks to your website. The highest priced bid on a word or search term gets put at the top and so on down the page. Once a prospect clicks on your ad the search engine will then charge the amount of the bid for that search to you. So you are not charged by impressions but only by actions.
Through analytical tools we can determine which words are generating the most clicks and optimize to those words as well as recommend like words to increase your conversion. There are daily and overall budget caps in place to ensure that your budget is spread evenly over the campaign window.
Search Engine marketing should be the cornerstone of online advertising and essential to drive traffic to your website. Do not be afraid to make the 4th quarter investment into digital fundraising development. Digital marketing will pay off if you integrate it with your direct mail, major gift, and telefunding fundraising channels!
Nov
1
Roy C. Jones, CFRE It is not too late to identify your top 100 donors and visit them. Share with your major donors the goals you have reached this year and then tell them what you expect next year will look like for your organization. Tell them about the clients you serve, the people you help and the wonderful opportunities they have to make an impact.
Most importantly, do not be afraid to tell them if you are in “the red” as you approach year end. Major donors are investors in your organization and want to know the real deal as it relates to the finances of the organization. As a matter of fact, major donors expect to be “insiders”. Most would truly be upset to find out that you were struggling to make ends meet at year-end without asking for their help.
If you are an executive director or president of a charity or not for profit group, do not fall into the trap of telling your BIG donors only the good news. Don’t get me wrong there is a place for the “good news”… that is what your newsletter and annual report should do. In addition, your website should be updated daily with the good news, great testimonies from those who have been help by your organizations.
However, in your meetings donors need to be TOLD THE TRUTH about your needs and the challenges you are facing. You should boldly lay out the problems you are confronting and the cost to solve them.
The fact is that the one person you do not want to “put on a happy face” for is your major donor. Major donors want to hear from their “friend” who is on the front lines fighting for their cause. They want to know what your needs are. They want to know the problems you face. They want you to be honest with them about what you really need and how fast you need it. I am not saying your appeals and donor meeting need to be “doom and gloom” but I am saying that you must present needs, challenges and problems.
Maybe 100 people is too many to do on your own… reach out to board members, senior staff and a few major donors who have done their part this year and ask for help. Build a group of 10 people who will each commit to meet with ten donors before year’s end. A “ten for ten” campaign could literally have a dramatic impact on your finances by December 31st.
Each major donor should be asked to make a year-end commitment. One of my clients did this last year added $1 million to their bottom line in just the final quarter of the year!
Oct
16
Roy C. Jones, CFRE Like many professionals in the fundraising industry, I am a nut about making lists and reminders about our fundraising programs and the things that should not be overlooked. About this time every year my Outlook reminder flag goes off every morning with the question, “Have you mailed your monthly donors the best appeal of 2011?”
It doesn’t matter whether you call it a pledge program, recurring gift program, monthly giving program, sustainer program or preauthorized gift program it is the same technique and, as you know, they all add up to a huge additional revenue stream for every organization or charity.
People sign up for pre-authorized programs because it makes it easy to support their favorite charity, while NOT getting bombarded with direct mail and email. However, just because you have pledged to reduce the amount of mail the donor receives does not mean that you never mail them. Most monthly donors expect a year end appeal so that they can make a special gift above and beyond their monthly gift.
As a matter of fact, I truly believe it is poor stewardship to not have presented you most compelling need of the year to your monthly donors. Monthly giving is so successful because it focuses on how the donor wishes to give. Over the last 30 years I have never talked to a monthly donor who would want to be excluded from the most significant campaign of the year. As a matter of fact, sustainers are more likely to get upset with the organization for excluding them than they are for sending them an additional piece of mail.
There are huge advantages to reaching out to your sustainers before the end of the year. Target Analytics released a study last year highlighting just some of the advantages in have monthly donors and keeping them engaged in your key projects:
- Monthly sustainers give significantly more per year than single gift donors
- Monthly sustainers have higher retention rates than single gift donors.
- The majority of sustainers continue as sustainers when they renew each year.
- The higher retention rates from sustainers result in much higher loyalty over the long term.
- Monthly sustainers account for 10% of the donor population, contributing 21% of all charitable income in the industry.
- Multi-year sustainers give on average 9 gifts per year compared to a multi-year single gift donor that gives on average 1.6 gifts per year. Note: 9 gifts out of 12 per year equal a 75% fulfillment rate.
A recurring donations program will dramatically increase the lifetime value of your donors while reducing your cost of fundraising. It takes time, patience and tenacity but most importantly it is recognizing that monthly donors are YOUR MOST COMMITTED SUPPORTERS. These special people need to be given the opportunity each and every year to take part in your organizations most critical projects.
The most amazing part about doing a year-end appeal to your monthly donors is that you will likely see a 300% to 500% lift in response compared to your regular donors. If you do it correctly seeing a 10%, 15% 20% or even a 25% response rate is not unprecedented.
So go ahead, write your monthly donors. I can promise you they are waiting to hear directly from you before the year’s end.
Oct
11
Roy C. Jones, CFRE It’s that time again. The 4th quarter has arrived. By any metric or system of measurement in fund development the last week of the year is by far the most profitable week for any not-for-profit organization. I often refer to this week as “golden week”.
Marketing “pros” know that once the Christmas appeal is in the mail that it is NOT the time to “take a break” and relax until January.
The best development leaders bear down during the month of December to insure that the last week is the most profitable 7-days of the calendar year.
I know some development directors who “swear by” the last week of the year. They contend that reaching their annual goals often comes down to the last few days of the year. Most contend it is often the difference between ending the year in the black or sinking deeper into the red.
The best executives strategically plan for a “yearend balance-the-books” appeal and reach out to their best donors for one last year-end gift. Be cynical if you want, but if your 2011 was like most not-for-profit organizations you are behind in achieving your financial goals. You have had to make some tough decisions this year and the fact is that unless a few of your best donors step up to make just one last yearend gift you may be forced to cut vital services and programs. Let me be blunt… sometimes the truth works!
Now is the time to be direct with our best donors. Tell them that fundraising has been slow and you need their help so that you do not have to cut vital programs in 2012.
To repeat a phrase that I used to tell political candidates… “a real crisis is a terrible thing to waste.”
Take immediate steps to insure that your ministry or charity can have an extra “payday” in 2011. Do not delay. Look at every revenue stream you have and see if you can make one last appeal to remind donors and supporters that it is not too late to impact 2011. The gift they make could be the difference between your organization continuing vital service or being force to turn those in dire need away.
Here are just a few suggestions for maximizing your cash flow during the “Golden Week” – last week of the calendar year:
- Major Donor Letter. Send a hand addressed, multi-stamped, first class letter to your major donors telling them of the “year end crisis” you are faced with. Include a reply envelop with live stamped first class postage. This tells the donor that this is not some “fund raising ploy”. The challenges you face are real or you would not have gone to the expense of writing them and sending it first class. I have seen many organizations do a 10 to 20 percent response rate during the last 10 days of the year. REMEMBER, EVEN IN THIS TOUGH ECONOMY THERE ARE DONORS WHO MUST MAKE A YEAR END DONATION OR END UP PAYING “UNCLE SAM” ON APRIL 15.
- E-mail Blast. Send a “year end, balance the books” appeal to every email address you have. I suggest sending at least 3 different appeals in your email campaign during the last 10 days of the year. Sure, you will get a few complaints, but to most of your supporters they understand the importance of ending the year in the black, not red. Most who take the time to see your emails, and as importantly, notice that you have emailed multiple times the last week of the year, know that the challenges you face at year end are real.
- Direct Mail Letter to Regular Donors. Now is the time to send that “Urgent Gram” to your regular (those that give under $1,000) direct mail donors. If you ever had a “real reason” to send that year-end crisis appeal 2011 is the year to do it. Trust me, it is worth squeezing in one last pay day. Push your January appeal out a week or so later and create a hole in your mail schedule so that the Monday after Christmas your “year-end” appeal is in home.
- Do not forget your monthly donors. Your sustainer file should be mailed the year end appeal too. If you have your sustainers coded for a “limited mail or no mail” do not forget to create a flag so they are forced into your select for the mailing. In addition, your monthly donors who have an HPC (highest previous contribution) of $1,000+ should get a phone call thanking them for their support and asking them to make a “sacrificial year end gift”.
- Search Engine Marketing. The last week of the year sees a HUGE spike in major donors cruising the internet looking for a local charity to make that last gift to for the year-end income tax deduction. Beg, borrow or barter for your organization… sink another $500 to $1,000 into SEM. Search Engine Marketing will pay for itself. There is no doubt that during the last week of the year you will reap large rewards and a huge number of new donors at the major gift level.
- Earned Media. Sure you are exhausted… you have had that special Thanksgiving push and you had a very big Christmas push, but trust me… do just a little bit more. Hold a press conference with a local celebrity or politician reminding your community that YOUR CHARITY is the group to consider making a year-end gift to. Think of creative ways to get the media on site at your ministry or charity during this week. Remember, the last week of the year is the “slowest news” of the year. The media is frantic to find content and stories to write, film and broadcast about.
Do not quit! Finish strong! The last week of the year is not the time to “take off” or relax. Your year could literally be turned around by a single major gift. Keep telling yourself that “it just takes one gift” to literally change your world. Work hard. Finish strong and take advantage of the “GOLDEN WEEK” in fundraising.
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