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May 2014
 

A few weeks ago, I was invited to lead a discussion on development and fundraising for a group of nonprofit CEOs and Executive Directors here in Boston. Such an amazing group -- The Commonwealth Institute. If you're local to the area, I suggest checking them out.

 

Anyway, they had great questions for me. And as I was answering them, you were on my mind, my dear readers. Because I couldn't help but think that you might have these questions too. 

 

So with their permission, here are their wonderful questions. And, of course, my (hopefully wonderful) answers.  :)

 

As I told the TCI group, you may be frustrated by the number of times that my answer is, "It depends." Unfortunately, these are complicated questions. And there are no quick and easy answers that apply to everyone. But hopefully the factors that go into figuring out the answer will help you crack the code for the specific situation at your organization. 

 

Thank you for reading, and for being a subscriber!

Tina

  




Tina Cincotti

Funding Change

P.S. Next month, one of my all-time, most admired nonprofit heroes is doing a guest column. Can you guess who? Tell me who you think it is!


My answers to questions on staffing, division of labor, individual donors, email vs postal mail... and more! 

  

 

What is the development role of an Executive Director/Chief Executive Officer if you have a strong Development Director?

 

Regardless of the size and quality of your development staff, your organization's Executive Director/Chief Executive Officer is always your chief fundraiser. If you have development staff, this team can make the time the ED/CEO spends fundraising more efficient and effective. But having the best Development Director in the world doesn't mean the boss does less fundraising. In fact, it probably means they do more. 

 

Also, the ED/CEO sets the tone and the pace for the entire organization's fundraising. The rest of the staff and the board will take their cues from the ED/CEO. If she's prioritizing development work and showing leadership around fundraising, the board and other staff will follow her lead and take it seriously as well. If she's not, they won't. So, no matter what, the ED/CEO must do some heavy lifting where development is concerned.

  

 

How is the time of a Development Director and ED/CEO best spent?

 

Here we go with the first "it depends." This one largely depends on the specific strategies of your fundraising program and the skills and experience of your Development Director and ED/CEO. 

 

There are some things, however, that should almost always be done primarily by the ED/CEO. These include: 

(1) "major donor" work (cultivation, solicitation, and stewardship),

(2) motivating and coordinating board members' fundraising efforts (ideally through the board chair and the development committee, and with leadership by the Development Director), and 

(3) setting a positive organizational culture and attitude around fundraising and development with the staff and board. 

 

Beyond those core tasks, it's flexible.

 

 

How long does it take to see a return on effort with individual donor programs?

 

Here we go again -- it depends. And this one really depends. There are many factors that contribute to the strength of a donor program and the amount of money raised through individual giving. 

 

Here are the big ones:

  • The quality of your donor list/prospect pool
  • The amount of time spent cultivating/stewarding the above
  • The quality, type, and frequency of communication with above
  • The size and experience of your fundraising team
  • The engagement of staff outside the development department
  • The engagement of board members and other volunteers
  • The existence and use of an effective data management system 
Put those in a pot and stir, and you have your answer.

 

What are your thoughts about offline/direct mail vs online/email/electronic fundraising? 

 

This one doesn't depend at all! There's lot of talk that direct mail is dead and that we can abandon our paper communications. Don't listen to a word of it.

 

The vast majority of money is still raised offline. Online giving is growing fast, that's true. But it still only made up 6.4% of all giving last year, according to the Blackbaud 2013 Charitable Giving Report (pdf). Even more interesting is that direct mail has become the single biggest driver of online giving. That means people get your letter in their mailbox and then go online to donate. In fact, donors are three times more likely to give online in response to a direct mail appeal than in response to an email appeal. (I was shocked when I read that study by Dunham+Company!) 

 

So a strong development program includes online and offline communications, and gives supporters the opportunity to donate both ways. By receiving a letter and then giving online, that supporter becomes worth more to you. Donors connected to you through multiple points give at least 20% more than donors connected through only one channel (that's the Dunham+Company study again). They also have better conversion rates. And, higher retention rates. So you can't afford not to be fundraising both online and offline.

 

 

How does an organization without a history with an individual get that individual to become a donor?

 

First, let's start by determining if this individual is even a prospect to become a donor. You need three things in order for someone to be considered a true prospect (aka - someone you have a realistic shot at getting a gift from in the future). Quick shorthand for these things is ABC. 

  • A is for Ability -- this means that you know they're someone who makes charitable donations; not everyone does. 
  • B is for Belief -- this means that you know they care about your cause; again, not everyone does. 
  • C is for Connection -- this means that you have a connection with the person, or you know someone who does and is willing to facilitate an introduction.

This last one -- the Connection -- is most important. Oprah is a classic example here. We know Oprah is very generous with her wealth. We also know a lot about what she cares about -- some of which may overlap with your mission. But if you don't know Oprah or know someone who knows Oprah -- she's not a prospect. Move on. 

 

The same framework applies to lesser-known people who you want to donate to your organization. If you don't have a connection, your work is to find someone who does. Until you have that, don't waste your time trying to get their attention. 

 

For those you do have a connection with, you have many, many options and you likely know what they are -- send them something in the mail, ask them to meet with you, have your common connection facilitate a meeting, invite them to an event, see if they'd like to volunteer, etc.

 

Regardless, focus on these people. That's where you'll see the best results for your time.

 

 

What are the average time frames for donor giving -- how often can we ask, how often should we expect people to give, and for how long?

 

How often you can expect people to give is directly related to -- how often you ask, the quality of your communications and solicitations, and the contact you have with supporters after they donate. 

 

After someone gives, they should be thanked immediately (genuinely and personally thanked). Later, they should receive an update on the impact of their donation (aka - how their money was spent and what good came as a result). Once you do those two things, you can ask again. The number of times you effectively complete that cycle will determine the number of times you can ask in any given year.

 

The longevity of people's support is something that too few organizations pay attention so I'm glad this was part of the question. Donor retention rates are abysmal. The time spent on donor relations is also abysmal. You don't have to be an expert to realize there's a connection here.
  • Donor retention (the number of donors from one year who also give the next) was 39% in 2013 -- down from 41% the previous year.
  • Only 22.9% of first-time donors gave a second gift -- down from 27%.
  • Only 60.8% of repeat donors (aka - not first-time donors) gave again -- down from 70%.

Donors stop giving for many reasons. Chief among them -- they don't feel connected to organization, and they don't think their gift made a difference. 

 

In other words, your supporters just don't think they're that important to you. Fix that problem and you'll find out exactly how long donors will give to your organization. And it could be forever.

 

 

Why is it bad to pay fundraisers a percentage of what they raise?

 

I get asked this question a lot. And on the surface, it's understandable to think that if you're paying someone to raise money that they could be paid based on how much they bring in. But that assumes development is about a short-term financial transaction. Which it's not. It's about a long-term relationship. 

 

Paying development folks on commission puts them in the position of getting as much money in the door as fast as possible by whatever means necessary if they want to get paid. 

 

It doesn't prioritize a long-term relationship. It doesn't recognize the importance of having the right person ask for the right amount at the right time in the right way. It doesn't appreciate the lifetime value of your supporters. And it opens the organization up to raising money in unscrupulous ways. 

 

Also, for what it's worth, the Association of Fundraising Professionals, the standard-bearer for professionalism in fundraising for the last fifty years, explicitly prohibits paying on commission as part of their code of conduct

 

 

So -- those were their questions. What are your questions? Send me an email and let me know!

 

 

 

Tina's pic

Want to read more...?
 
 
There's tons more expert advice in past issues of this newsletter onlineSo if you're a new subscriber or want a refresher, check out my archive. 

 

You'll find no-nonsense advice on how to write for better results, what an effective website looks like, ways to improve your fundraising appeals, how to make "thank you" calls... you name it, it's probably there. And if it's not, let me know -- maybe I'll cover that next!
 

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Who is this email from, anyway? 


That's me! 

A fund development expert with a passion for social change, Funding Change founder Tina Cincotti gives grassroots groups the skills, tools, training, and confidence they need to raise more money from their supporters.

 

She specializes in building individual donor programs; improving donor relations and donor communications; writing newsletters, annual reports, and solicitations; coaching staff new to development; and motivating boards to be more engaged in fundraising.   

 

Are you looking for consulting, coaching, or training help? Let's talk!   

 

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