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

Make It Transparent

Transparency is important among donors. And more than other generations, Generation X and Millennials like to see proof of their donations being put to good use and the impact they are making toward the organization.

Using social media is a great way to demonstrate transparency. Here are a few ways in which you can do so:

    • Livestreaming and short videos
      Authentic videos or your work in action allow donors and potential donors to get a behind-the-scenes look into your organization. This makes them feel included, and the content can also create empathy.
    • Dollars raised into tangible amounts
      Instead of just stating the dollar amount that was raised, turn it into something tangible that people will understand. For example, donors like to read about how their contributions to the overall goal helped to “give meals to 2,000 people” or the “46 gifts of $100 each provided bedding and hygiene supplies for one month to 46 people.”
    • Visuals
      Everyone likes to look at a great photo. Writing a post may demonstrate transparency and validity, but like the saying goes, “a picture is worth 1,000 words.” Show photos of those you serve as well.

We see many organizations utilizing social media to show transparency and promote their organization, but their posts lack variety. Don’t post the same topics over and over again. For example, if you only post pictures of volunteers packing meals for the homeless or of fundraising events, your audience is going to think that is all your organization does. When you start to post a variety of content throughout a page, you are showing your audience impact and that the organization is making a difference in more ways than just one. It offers more insight into your mission, vision and values.

If there is no variety, you will lose followers, traffic and possibly people being involved with your organization overall. When you post, keep variety in mind. Instead of a volunteer in an assembly line packing meals for the homeless again, post a picture of a family that received one of those meals. Next time, maybe you show a truck full of boxed meals, explaining your distribution. After that, maybe it’s the driver of the truck who is proud to be part of your organization. All of these better tell your story of true impact.

Keeping Donors Loyal

Cost Per Dollar RaisedIn fundraising, it is important to attract new and big donors, and it’s exciting when we do! However, relying solely on a small pool of new and big donors is unsustainable — it costs time, money and other resources. We need to remember the importance of donor loyalty, regardless of the donation size.

A January 2019 article from CallHub said, “According to the Fundraising Effectiveness Project report, only 45.5% of donors make a gift the year after an initial donation. That means nonprofits lose more than half their donors right after their first contribution.” This statistic is an example of the importance of building donor loyalty.

Loyal donors are the people who are going to raise awareness of the organization, spread its message and mission and be advocates for the organization. Put a stewardship plan in place for your donors. This could include many types of “touches.” For example, some donors will have specialized plans while others will be grouped into a plan that you use for other donors. The key is to have a plan, implement it and be sure your donors are at the heart of it.

Invite them to an event, to volunteer or to an opportunity to get “hands-on” with the organization and see their donations in action, allowing them to further their personal connection. The organization needs to make those kinds of friends a priority.

Send them a handwritten note or an email or give them a buzz on the phone. Consider sending them a newsletter, picture from a recent event or some kind of update to keep the donor in the loop and make them feel connected.

Whether it’s a donor who gave yesterday, last month or last year, or a donor who hasn’t given in a couple years, their ongoing support is invaluable. Many donors will give again if they are familiar with or have a connection to the organization. And long-term donors are your best source of planned gifts — usually the largest gifts anyone will ever make. Trust, loyalty and respect can go a long way. Keep the donor relationship active!

Video Continues Trending in 2019

Video ScreenshotIt’s no secret that “going digital” continues to rise and won’t be going away anytime soon, especially in 2019. Though traditional forms of fundraising are far from dead, digital forms of fundraising benefit organizations in more ways than one. These include:

  • Cost less in general
  • Help establish and cultivate relationships
  • Allow the use of videos, which leverages the cause
  • Offer more simplicity overall

One of the biggest patterns already seen in 2019 is the use of digital video over social media platforms for fundraising.

The Chronicle of Philanthropy says livestreaming is the new telethon: People retain 95% of a message when they watch it in video compared to the 10% who read it in text format. DonorBox says, “Video, Video, Video,” is going to be one of the biggest trends in 2019. In addition, DonorBox statistics show marketers who use videos grow their revenue 49% faster than non-video users, and social video generates 1200% more shares than text and images combined.

Donors want to see firsthand where their money is going and how their donation is going to impact an organization. These days, many people don’t want to be handed a pamphlet with very few images and overkill of text that is going to take time to read. People want additional tools and resources to learn the impact they could possibly make. They want personalization, simplicity and to be talked with, not at.

The ultimate goal? Turn that video viewer into a donor.

Charitable IRA Rollover Presents Opportunity in New Tax Legislation

Charitable IRA RolloverHere we are already, the end of the year push. It seems like just yesterday the new tax legislation was passed and hardly a day went by without some prediction of the impact on the nonprofit sector (including us).

Once we move into 2019 and are able to look back and start dissecting giving data from 2018, we should gain a clearer picture of how donors are reacting to the tax changes. Are taxes really a motivator for giving, and if so, for which groups? Will certain sectors be more affected than others? Will philanthropic giving track with the growth of the economy?

Unfortunately, we won’t have those answers until we can look at the whole of giving in 2018, including the final months, when most donors typically make their gifts. So what can you do to encourage giving by donors who have the potential to make major gifts but are unsure how it will affect their tax situation?

One relatively simple idea, for donors over 70 ½, is the charitable IRA rollover, in which donors can direct all or part of their required IRA distribution directly to a charity. One of the main benefits of this type of gift is that donors don’t even have to worry if they will itemize or not. They simply don’t pay the tax they normally would on the distribution.

Start by segmenting out all your donors over 70 1/2, and see if there are some loyal donors who may be good candidates for this type of gift. With a small enough number of prospects, a simple phone call or visit might suffice. If you have a large number of prospects in this age range, you may even consider planning a targeted direct-mail piece as part of your annual fundraising plan.

Shocking Statistic: According to a Charity Navigator survey, nonprofits receive, on average, 41 percent of their contributions from Thanksgiving to New Year’s.

JJ Watt Provides Another Fundraising Lesson

If JJ Watt is looking for a career once he retires from the NFL, he may want to consider fundraising. About a year ago he raised just over $40 million (with an original goal of $200,000) for Hurricane Harvey relief. And even if the cynic in you discounts that figure as being a wealthy and influential individual with a lot of wealthy friends that your organization could never duplicate, JJ’s efforts provide another lesson, this time in the area of stewardship.

At the end of August, the JJ Watt Foundation released this report detailing the work they have done with the funds they raised. Short and simple, the report does an outstanding job of giving specifics into the impact of the foundation’s work. Also notable is the recognition of other nonprofit partners who received the majority of the funds. Here, JJ is showing how efficiently the funds were used—not to start completely new programs (that may be duplicative), but to utilize the programmatic expertise of other organizations in the area.

Overall, this report demonstrates elements of a great stewardship piece: 1) A thank you; 2) Examples of the impact donated funds have had, providing as much specificity as possible; and 3) Another thank you. JJ and his team earn bonus for alluding to future plans, which says we’re thinking strategically and are still a smart place for you to invest (without a direct ask). Other nice features include a number of pictures of beneficiaries of the Watt Foundation work, a timeline and a well-written, personal note from JJ. If your donor retention rate isn’t where you want it to be, review your stewardship materials to see where you could bolster your thank you, impact reporting and future funding needs.

Shocking Statistic: The work of the JJ Watt Foundation facilitated distribution of 26 million meals to those affected by Hurricane Harvey.

Ten Reasons to Conduct a Feasibility Study

Feasibility Study

A feasibility study provides invaluable feedback for launching a fundraising campaign, yet many organizations still hesitate to invest in this key early step. So if you happen to be wondering whether your organization should just jump into a campaign without a feasibility study, consider the benefits a study can provide.

  1. Flags areas of concern for key donors or influencers. This allows you to address these concerns prior to the campaign and strengthens support from key individuals or groups. Are there pieces of the campaign that key stakeholders view as nonessential to your mission?
  2. Measure board support. While every board has different financial capacities, it’s important that everyone is supportive of the project and campaign. A study allows board members to share concerns they might not otherwise share in a group setting.
  3. Identify leadership gift prospects. Leadership donors can make or break your campaign. A study should verify whether or not those you suspect of being lead donors are supportive, and allow you to adjust your plans accordingly.
  4. Identify leaders and volunteers. You will need volunteers for a variety of roles during a campaign. Do you have people willing to fill those positions? Who do your stakeholders view as influential leaders?
  5. Check for competing campaigns. Even if it’s not public, perhaps another organization is preparing a campaign of its own. Depending on how much your constituencies overlap, this may affect how much can be raised.
  6. Collect organizational feedback. Is your organization well-known in the community? Do people know what the mission is? Is the leadership known and trusted?
  7. Show you have done your homework. Some donors, especially foundations and businesses, might ask if you have conducted a feasibility study before awarding a grant. They want to know a project they are supporting has a high likelihood of success.
  8. Cultivate potential donors. Potential donors will appreciate that they were engaged and asked for their feedback early in the process, increasing your chances of a gift when the time comes to ask for one.
  9. Gauge internal readiness. Do you have the staff and operational resources necessary to undertake a campaign?
  10. Find out how much can actually be raised. You want a campaign goal that is challenging and bold, but also realistic. A sound feasibility study will take all the above factors into account and give you an honest assessment of how much can ultimately be raised.

Shocking Statistic: Charitable giving has historically risen at about one-third the rate of the stock market (The Foundation Center).

Giving USA 2018 Takeaways

The annual release of the Giving USA report always offers interesting insights into who is giving and what they are giving to each year. While the effects of the new tax legislation didn’t take effect until 2018, the 2017 report offers some glimpses into how donors are responding.

Total Giving Grows—Will it Continue?

The good news from the top line is that total giving totaled $410 billion, topping $400 billion for the first time. As usual, this growth mirrored overall growth in the economy, and hovered around 2 percent of GDP.

In years past, it has been pretty easy to estimate total giving as a percentage of GDP, but this will be a key number to watch in next year’s report. If donors chose to give their 2018 gifts at the end of 2017 to ensure deductibility, or if they forgo giving altogether because they won’t experience a tax benefit, growth in giving may fall off pace with total economic growth.

Mega-Gifts Continue to Pace Giving

Despite raising the amount required to qualify as a “mega-gift” from $200 million to $300 million, these gifts still grew from $1.495 billion in 2016 to $4.1 billion in 2017. Even more telling is that just under $3 billion of that figure came from two households donating to their foundations—Michael Dell and Mark Zuckerberg/Priscilla Chan.

Although the definition of a mega-donor likely differs for your constituency, this underscores the importance of relationship building and engagement with those who are able to make the top-level gifts to your organization.

Growth Across the Board, but Signs of Changes on the Horizon

With the exception of international affairs, every sector saw growth in 2017. Religion remains the largest sector at 31 percent of gifts, but donations to foundations saw the largest growth at 15.5 percent (up to 11 percent of total giving). And as giving to foundations continues to grow, likely spurred by tax-incentives, giving from foundations will continue to increase at a higher pace. This will provide some protection from slow economic cycles, but also keeps a large amount of assets, that could otherwise be put to use by nonprofits, in holding.

The second and third fastest growing sectors were the arts and public society benefit organizations at 8.7 and 7.8 percent respectively. It’s possible growth in these areas was driven by the political climate—donors giving to the arts where public funds are being withheld, as well as the rage giving phenomenon fueling public society benefit organizations. This group also includes donor-advised funds, so chances are good it will show strong growth again for 2018.

More information on the Giving USA 2018 report can be found here.

Giving USA 2018: The Annual Report on Philanthropy for the Year 2017. Researched and written by Indiana University Lilly Family School of Philanthropy. Sponsored by Giving USA Foundation, a public service initiative of The Giving Institute. © 2018 Giving USA Foundation™

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.