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Electrifying Results: Fundraising Insights to Move the Needle for Your Nonprofit

Create Hero-Donors with your Fundraising Communications

Create Hero-Donors with your Fundraising CommunicationsWe hear a lot about being donor-centered in fundraising. Typically, it’s in the context of major gifts, emphasizing listening to a donor, uncovering their philanthropic passion and aligning it with a funding opportunity at your organization. While we definitely don’t want to minimize the importance of being donor-centered in major gift solicitations, we challenge you to take a look at donor-centricity through another lens—annual fund appeals and marketing communications.

When writing annual appeals and marketing materials, our first reaction is often to tout how effective our organizations have been at addressing a social issue or how dire the need is for a particular group or service. Both of these are important aspects of creating a case for support, but they are missing a key link—positioning the donor as the hero who makes this important work possible.

Take a look at your past appeals and make a note of every time you mention your organization (or “we”). Now, how many times do you reference your donor, using their names or “you”? Most organizations tend to be heavier on the former. Think about the subtle but important distinction in how a donor interprets “Last year we served 1,000 children in our community” versus “With your support, we were able to serve 1,000 children in our community over the past year.”  The latter empowers the donor, framing him or her as a hero solving a problem.

Donors want the shortest path from their gift to the problem they are trying to address, and our organizations are just the conduit. Talking too much about ourselves, just like in any conversation, can be a turnoff. Whether we admit it or not, we all naturally enjoy being on the receiving end of praise and appreciation.

So next time you’re writing an appeal letter, make a point to brand your donor the hero. Find ways you can interject a simple word—“you”. When donors feel like they are the ones curing disease, educating kids, sheltering the homeless, or creating new and exciting art, they will be more likely to invest in the important work we all do.

Shocking Statistic: In 2018, 39 percent of charities failed to personalize emails with a name, down from 79 percent who failed to do so in 2013 (Dunham+Company).

Don’t Neglect Big Potential in Planned Giving

Don’t Neglect Big Potential in Planned GivingIt’s easy to overlook planned giving. Chances are good that by the time many of the planned gifts you uncover are realized, you will have moved on to another organization (or retirement!). The pressure is on to get dollars in the door now, so that’s where you spend your time. But nonprofits with a strategic, long-term view cannot ignore the planned giving opportunity on the immediate horizon.

In the next 20 years, $30 trillion will be inherited as baby boomers pass their wealth to the next generation.

That’s trillion. With a T. What makes this an even larger opportunity is the fact that only 6 percent of American adults include a charitable bequest in their estate plans, despite an estimated 90 percent who are giving to charity on an annual basis. Closing that gap by even a few percentage points has the potential for tremendous impact on the nonprofit sector.

Building the relationships necessary to secure planned gifts takes time, so if you don’t have a planned giving program, or if it’s been neglected, now is the time to get going. Here’s a few low-cost ideas to implement or revisit:

  • Build relationships with estate planning attorneys and financial planners. These are important gatekeepers in the planned giving process, and being top of mind for them when a client describes their philanthropic intention can be greatly beneficial for both parties.
  • Planned giving can get overwhelming quickly with annuities, trusts and other complicated giving vehicles. The vast majority of gifts will be relatively simple cash gifts from an estate or IRA, so it’s OK to reduce clutter and only focus on those as you start out, or if your resources are limited.
  • Whenever promoting planned giving opportunities, include a specific name and contact info. Would you want to call an 800 number or send an email to an info@ email address to discuss your final wishes?

With an opportunity this large, you can bet other organizations will be having planned giving conversations with your donors if you’re not. So start having the conversations now that could set your organization up for long-term success and sustainability.

Shocking Statistic: 70 percent of Americans do not have up-to-date wills. This stat and others from this post can be explored further in this article from the Stanford Social Innovation Review.

Donors and Dilemmas Post Time’s Up

Donors and Dilemmas Post Time’s UpOver the past year, the public has seen a number of powerful and high profile men brought down by allegations of sexual harassment. The #metoo and Time’s Up campaigns have brought to light issues that haven’t been spoken about for far too long. They will hopefully continue to move the conversation forward and more importantly, bring about real change.

Stepping away from the societal goals of these campaigns, they have also brought to light a question for all nonprofits—how do we react when a donor is accused of sexual harassment or any bad behavior?

The two major issues at hand are: 1) Should you keep the money donated by a disgraced donor; and 2) What should happen to any spaces or programs that are named in recognition of that donor?

The first question is a bit more clear-cut. Unless the money donated was obtained by illegal means, many organizations will choose to keep the gift. After all, why should the beneficiaries of this support suffer for the bad behavior of the donor? Some organizations have chosen to step away from gifts that were committed, but not actually paid yet, likely estimating the probability of actually receiving payments is much lower after accusations arise.

The naming question becomes a bit more difficult. First, it’s important that you have language in your gift policies and agreements that allows your board to review and revoke naming opportunities under certain circumstances. Every situation is likely to provide a different set of facts and issues, but this allows the board to gather the views of key stakeholders and make a decision. There has been a precedent for removing donor recognition. The University of Iowa and the University of Pennsylvania both removed Steve Wynn’s name from programs and spaces after multiple women accused him of sexual harassment.

Hopefully this is an issue your organization never has to deal with, but it’s important to be prepared (review those agreements and polices). Although cases in Hollywood and Washington receive most of the national attention, it certainly doesn’t mean that small towns or organizations are immune.

Shocking Statistic: The Time’s Up Legal Defense Fund has raised over $21 million from over 20,000 donors.

Changes to Google Ad Grants for Nonprofits

Changes to Google Ad Grants for NonprofitsEvery month, Google provides $10,000 worth of advertising to 35,000 nonprofits around the world. Organizations utilize these ads to attract donors and volunteers, and promote advocacy or community events. Recently, however, Google has announced that it will no longer fund organizations that generate clicks on less than 5 percent of their ads. This number is just below the average click through rate of 6 percent for nonprofits.

Another important factor for nonprofits utilizing Google Ad Grants is a maximum $2 cost-per-click (CPC). CPC rates are determined by a bidding process, where more general terms that would be sought after by more companies or organizations are more expensive than specific, targeted keywords. For example, placing an ad for the search “hospital donation” would be more expensive than “Ophthalmology hospital north Peoria donation.”

Meeting these two requirements can be a difficult needle to thread, and choosing the right keywords is critical. This starts with defining a goal for your ad campaign. Is it to drive volunteers, donations, or get people to show up at an event? Once your goal is defined, you can create a list of keywords that will help drive your desired action (some further research may be required here). And once your campaign is live, it will need tending to. Mainly, which keywords are performing well and what are your click through and CPC rates for certain keywords?

The goal here isn’t to scare you away from applying for a Google Ad Grant—they can certainly add value for many organizations, and the risk of trying it out is basically zero. To be effective though, will take some time and commitment. Like with any new initiative, it should be measured in terms of return and availability of resources, especially time!

Shocking Statistic: The average click through rate for nonprofits in February 2018 was 6 percent (Reuters).

The New 80/20 Rule for Fundraising

The New 80/20 Rule for FundraisingIf you work in fundraising, you have likely encountered the adage that 80 percent of your revenue comes from 20 percent of your donors. This is derived from the Pareto Principle, which can be extrapolated to just about anything—80 percent of traffic accidents are caused by 20 percent of drivers, 80 percent of beer is consumed by 20 percent of the population, etc.  Although the numbers may not always be exact, the theory holds that a relatively small audience is responsible for a disproportionate number of the results in many fields.

It turns out fundraising is a prime example of where the Pareto Principle is played out to an even greater extreme. According to data collected from over 7,000 small to mid-size charities by AFP and the Fundraising Effectiveness Project, 89 percent of giving comes from the top 14 percent of donors (those giving $1,000 or more). Taken even a step further, 76 percent of contributions come from the top 4 percent of donors, those giving $5,000 or more.

In short, 14 percent of donors are going to decide if you meet your annual or campaign goals. Don’t assume you know these donors off the top of your head. Some will likely come to mind, but others may fly under the radar. Pull a list to be sure. You should be building personal relationships and figuring out what motivates these donors and what they want to see from your organization.

If you’re looking at a campaign, assessing the feelings of these donors through a feasibility study is an important step. These are the people who will make or break your campaign, and you don’t want to find out they have concerns after you’ve already launched.

One word of caution. The 14 percent of donors who account for 89 percent of your revenue often start their giving as one of the 86 percent who make up 11 percent of your revenue. While it’s not feasible to have a personal relationship with every one of your donors, you do still need to have proper stewardship systems in place that promptly and thoughtfully thank donors and let them know how their gift is used. With proper stewardship, consistent and increasing gifts will help identify and build your pipeline of major donors.

Shocking Statistic: Thirty percent of $1,000+ donors made a first gift of less than $1,000 (Ben Miller, DonorTrends/AFP).

Tax Changes and Giving Trends to Watch in 2018

Tax Changes and Giving Trends to Watch in 2018Much has been written about recent changes to the tax code and how they could affect philanthropy. Many forecast decreases, sometimes in the billions, for charitable giving. There are both positive and negative aspects of the tax bill when it comes to fundraising, and the overall impact will depend on which effects outweigh the others. Here are a few keys to watch:

  • Largest impact on midlevel donors. The largest change to the tax code affecting fundraising is the doubling of the standard deduction. While the deduction for charitable giving remains, the number of people who itemize their taxes, and thus realize the tax benefits of making a donation, is estimated to drop from 30 percent to 5-10 percent. The good news is this likely won’t impact your top-level donors, who will still fall into the 5-10 percent who itemize. It will also have little effect on lower level donors, who will continue to simply take the standard deduction. The largest impact will be felt by those who move from itemizers to taking the standard deduction. Keep an eye on your organization’s gifts falling in the 25th to 75th
  • More volatility in giving. Because of the aforementioned changes to the standard deduction, some donors may choose to concentrate their gifts in one year versus spreading them out over a pledge period. As an example, a donor who wants to make a $50,000 campaign gift may choose to pay the entire gift in one year, itemize their tax return and take the charitable gift deduction in the year the gift is made. Spreading the gift out over five years may not get them to the threshold for itemizing, forcing them to take the standard deduction and thus eliminating the tax benefit of the gift. These changes may also accelerate giving to donor advised funds, encouraging donors to make large contributions to their funds and receiving tax benefits in one year, and simply making distributions from their funds in other years. This effect may create large fluctuations in giving from year to year.
  • Increases in discretionary income. While the decrease in those who itemize their taxes will have some negative effect on charitable giving, it is also estimated that many Americans will see an increase in their take-home pay. Many studies have shown a correlation between discretionary income and charitable giving—how much will donors (and which donors) increase their giving with more dollars in their pocket? Some companies, like Wells Fargo, have also signaled they will increase their philanthropic giving due to the reduction of the corporate tax rate.
  • Changes in the estate tax. One of the less publicized aspects of the new tax plan is the doubling of the estate tax provision (from $5.1 million to $11.2 million for individuals, $22.4 million for couples). This only affects high capacity donors, but is worth discussion as you steward existing estate gifts or ask for new ones

In short, there are pieces of the new tax bill that could both increase and decrease charitable giving. While there seems to be more that would discourage giving, the ultimate question will be how much deductions actually incentivize giving? Although studies have shown this is often relatively low on the list of reasons donors give, the next few years will show how true that actually is.

Shocking Statistic: According to Forbes, the new tax bill will decrease the number of taxable estates from 5,000 to 1,800 in 2018.

Giving Circles and What Donors Want

Giving Circles and What Donors WantAlthough they come in all shapes and sizes, giving circles are broadly defined as a group of people pooling their money and making a donation to a nonprofit organization. According to the Collective Giving Research Group (CGRC), the amount donated by these groups has tripled over the last decade, surpassing $1 billion in grants.

The growth and granting power of giving circles should grab your attention. So should what they might be telling us about what donors want. First, donors want to have a BIG impact. While an individual in a giving circle may only contribute $50 or $100, the group’s gift will be much larger. This shifts a donor’s mindset from thinking their modest gift doesn’t really make a difference, to feeling more like a major donor (with proper acknowledgment, of course).

Second, giving circles show that donors want to see the impact of their gifts. The same CGRC report showed that 84 percent of groups make grants in their local geographic area, preferring smaller, local organizations to larger national groups. This allows often overlooked organizations to take on ambitious projects that otherwise would never get done. And it allows giving circle members to track the progress of their grant—not just formally from the organization itself, but because of the locality it may also be discussed on the news, in board meetings and at holiday parties.

So research what groups may be in your area and find opportunities for impact projects you could pitch to them, based on their typical grant size. And don’t forget that all your donors, no matter the size, want to create big impact and see how their gifts are changing their community for the better.

Finally, from all of us at AMPERAGE Marketing & Fundraising, we wish you and your family, friends and colleagues a happy and joyful holiday season. We look forward to hearing about all the great work your organizations will do in 2018!

Shocking Statistic: Seventy percent of giving circles have a majority of women as members (CGRC).

Campaign Lessons from Disaster Fundraising

Unfortunately, the last few months have seen a string of natural disasters affecting the U.S., Mexico and Caribbean islands. The positive side of these disasters is the outpouring of support, and usually fundraising dollars, that follows to help those who are suffering. While your nonprofit may not receive the national attention hurricanes and earthquakes garner, the campaigns to support those affected provide some important reminders on what can make your campaign successful.

  1. Leadership is key. Perhaps the biggest fundraising story out of the recent disasters was the success of JJ Watt’s campaign to raise relief funds for Houston. Watt had all the traits you want in a campaign leader, including:
    • Being well-respected. Watt is viewed as one of the best players in the NFL and is free from scandal.
    • Watt’s “celebrity” status gives him access to a group of high-capacity donors. He also has millions of followers on social media.
    • Passion and communication. Watt was consistently posting videos to say thank you to all those who supported the campaign and why it was important.
    • Skin in the game. He made a large gift of his own, setting the bar for others to follow.
  2. Success begets success. People want to be part of a winner, and the more people that got involved with Watt’s campaign, the more positive momentum was created. Once the ball gets rolling, no one wants to be one of the few who don’t support a cause. Watt’s campaign raised over $37 million…with an initial goal of $200,000.
  3. Crowdfunding is a powerful tool, and not just for small gifts. Somewhat overlooked in Watt’s campaign is the fact that he wasn’t steering people to give to an established organization, but rather a crowdfunding campaign he set up. These campaigns can be a powerful tool to provide updates to specific groups, like a workplace or professional association, on fundraising progress. A successful crowdfunding campaign requires items one and two on this list as well.
  4. Credibility is important. Many charities were featured in the press as suggested organizations to direct funds to, and oftentimes those were the highest-rated charities from watchdog sites. Recent disasters also renewed the debate about the Red Cross and how effective they are in using donor funds. A thank you is no longer enough—donors want follow-up and need to hear how their gift is being put to work in an effective way.

Although there may be some adjustments, these fundamentals can set your campaign up for success, no matter the cause.

Shocking Statistic:  JJ Watt’s crowdfunding campaign raised over $37 million from 209,417 donors, and was shared over a half million times on Facebook.

Tips on Going Live with Facebook

Tips on Going Live with FacebookWhen it comes to telling the story of your organization, few, if any, mediums are able to capture emotion and impact the way video does. While there will always be a place for professionally produced videos, new channels like Facebook Live provide a more informal option for communicating with supporters.

Facebook Live can give supporters and fans a more immediate, in-the-moment, snapshot of what is happening with your organization. It could be a short thank you for a special gift, the announcement of a fundraising milestone or an update on construction progress. Even outside of fundraising, Facebook Live can be used to give your followers a “behind-the-scenes look” at your organization or utilized for a Q&A around a new program or event. Here are a few tips for getting started with Facebook Live:

  • Have a plan.

Even though the benefit of Facebook Live is spontaneity and being in the moment, you don’t want to completely wing it, especially if you are interviewing someone. Be sure interviewees are aware of discussion topics beforehand so they are able to think about their responses.

  • Do a test-run.

If you’re planning to use Facebook Live for a big event, like a press conference or campaign kickoff, consider testing a different broadcast beforehand. Like any new technology, there’s always a bit of a learning curve, so work the kinks out before your bigger event. Facebook offers some tips for nonprofits here.

  • Promote.

Don’t forget to tell your followers about your planned live event in the weeks and days prior to it. Just like networks need to promote sitcoms and football games, you need to remind people when your event is and why they should tune in.

If you’re set up to accept donations through Facebook, you can also add a donate button to your live video stream (instructions here). So start brainstorming opportunities to share your story with a live video. Look at what you post regularly to Facebook and find places where you could share a video message versus just text.

Shocking Statistic: According to Facebook, live videos are viewed 3 times longer than non-live videos.

Don’t Abandon Direct Mail

Don't Abandon Direct MailStrategizing about direct mail can sometimes feel like plugging holes on a sinking ship. You fix one leak (low response rates), and another springs up somewhere else (lower average gift). With the ever-growing number of communication channels, it’s often tempting to just jump ship to the next new thing.

Despite being written off for years, direct mail is still an important piece of your fundraising arsenal. One of the benefits of direct mail is the ability to test new ideas, and the following are some insights we’ve picked up over the summer:

Takeaway: Yes, you should still be sending direct mail. Donors are more likely to read direct mail than email, and they think it does a better job telling a story and conveying facts. There are distinct differences between age groups—consider asking your donors which communication channels they prefer when they give their first gift.

Takeaway: Donors like a well-designed piece—you need to meet a certain standard for professionalism. But they can tell what’s expensive to make, and that can be a turnoff. So don’t go overboard with extras like heavy cardstock and gold trim.

Takeaway: This tackles the age-old question regarding how many direct mail appeals you should send each year. In general, small organizations tend to under ask and larger organizations over ask. Instead of a one size-fits-all solution, Roger Craver offers some thought provoking questions to discern what makes sense for your organization.

The bottom line is direct mail can still be effective, but there isn’t an out-of-the-box solution that works for every organization. And we haven’t even gotten into who you should be mailing to, which is just as important. Don’t be afraid to test and experiment to find out what is most effective for your audience.

Shocking Statistic: A recent study by Grey Matter Research and Opinions 4 Good found more donors (38 percent) believe direct mail is better at telling a touching story, versus 23 percent who thought email was more effective.