Because It Matters: Avoiding the Not-So-Fab Four

Why do some nonprofit organizations thrive while others, just as worthy, languish in fundraising mediocrity, barely able to raise enough money to keep the doors open?

Sure, the fundraising environment is getting tougher and tougher every day because of increased competition. But even in this climate, organizations can achieve remarkable results and thrive.

Here are four all-too-common roadblocks to effective fundraising. Wrestle with these, and you will be on your way to raising more money.

1. Failure to correctly identify your brand promise
I’m sure you know what your organization does and why it exists, but do you know what you promise your donors when they choose to support you? Your brand promise is the single most important element of your fundraising program because it explains to donors how you are meeting their needs and expectations.

Do you remember the famous branding study completed many years ago at Disneyland? What is the Disneyland brand promise? Is it about amusement rides or movies? Is it about Mickey Mouse? Is it about a clean park? No, the Disneyland brand promise is all about family fun and wholesome entertainment. In essence, Disneyland is selling the benefit of a great time with your family and friends.

What’s your brand promise? For the local human services organization, it may be the satisfaction donors receive when they help feed hungry families or protect and shelter abused children. For the international humanitarian organization, it may be the significance of knowing a life has been saved, the world made a safer place. For a religious organization, it may be spiritual satisfaction.

The point is to remember that donors give because of your cause — your ultimate accomplishments — not because of your organization. Your organization is merely a conduit for your donors’ desire to help others. Nothing more, nothing less.

As fundraising managers, your goal is to solidify the connection in donors’ minds regarding your “promise” and your organization’s identity. Do that by constantly reinforcing the message (through newsletters, appeals, gift acknowledgments, special reports, etc.) about fulfilling the promise to donors. When you do this successfully, you create brand loyalty.

Sadly, far too many fundraising managers fail to recognize this important distinction between what their organization does versus what it accomplishes. Donors give because they desire a specific end result — children being fed, medical services provided, young girls receiving education when it has been previously denied, injustice corrected, the environment protected, and so on.

This focus on end results is so important that you should try this little exercise. Grab a highlighter and your most recent annual report or newsletter. Highlight every reference to your organization’s accomplishments or end results. Surprised? Is your organization talking more about the methodology of your work than about what it’s accomplishing? Are you talking more about your staff, your organization and your processes — or about your end results?

Your donors want to know what their gifts are accomplishing. That’s why they gave in the first place: They wanted to make a difference. Satisfy this donor need by communicating your brand promise consistently and repeatedly, and your fundraising will soar. (Multiple research projects reveal that one of the primary reasons donors stop giving is because they didn’t understand the value or impact of their gifts. They didn’t know they were making a difference.)

2. Failure to achieve message consistency
I’ll tread carefully here, but how many fundraising professionals work in organizations where multiple departments or divisions are creating and communicating different messages? I’ve stopped being amazed by this still common and very foolish practice. Such a silo approach to communications only serves to dilute your message, confuse your donors, and lead to reduced fundraising effectiveness.

There needs to be one consistent and fully integrated message from your organization. Every communication channel — fundraising appeals, newsletters, Web site, public relations efforts, annual reports, major donor efforts — must carry the same core message, the same tone and personality. When this doesn’t happen — and it far too often doesn’t — fundraising successes will be few and far between.

Be bold. Schedule a meeting with the key individuals who communicate for your organization and invite them to join a communications task force to bring consistency to your message. Affirm the importance of each individual’s communication piece — annual report, PR messages, fundraising appeals, the Web — while setting a goal to bring consistency of message across all the various communication channels you use.

There will certainly be resistance to your effort. It will come from those who believe messages for board members, volunteers, advocacy, major donors, community leaders, special VIPs and others need to be different from those messages aimed at general donors. Sometimes, how messages are presented and what information is shared does change depending on the audience, but the core message — the personality of your brand promise — must be the same for everyone. The old marketing and communications vs. fundraising debate will flourish in your first few task force meetings. But stick with it. You’ll soon find common ground.

3. Failure to impassion prospects.
To paraphrase that political rant from the first Clinton-for-president campaign: It’s about the emotions, stupid!

Effective fundraising recognizes the importance of emotions. People give to charities because of emotional identification with your cause. It’s all about emotions, first and foremost.

There are many forces pushing fundraising managers toward more sophisticated, intellectual messaging. Organization founders and CEOs like to think they’re communicating to a sophisticated audience that demands intellectual prowess. Board members want to feel personally proud of what their organization is mailing to constituents and often impose their personal preferences to “protect” their reputations or egos.

Don’t get me wrong — it’s important to write clearly and with integrity. It’s important to share factual information and give perspective. It’s crucial to meet the knowledge expectations of your donors. But if you write only to their heads, you won’t raise as much money. Why? Because people give from their hearts.

So, first, communicate to your donors’ hearts, rouse their emotions, and you will be more successful than ever. You do this most effectively when you tell stories about lives being changed, about the negative consequences of some particular event or circumstance being overcome.

You might want to repeat the highlighting exercise described earlier, but this time highlight emotion-evoking words, phrases, and stories. Are you touching your donors’ hearts? Are you providing emotional motivation for your donor to give?

Some folks might be thinking, “Oh, that only applies to human-services organizations that deal with emotional issues, but not to my organization.” Not true. Whether you work for an environmental or animal-protection group, a public-policy think-tank, an arts organization or a public radio or television station, you will be more successful in your fundraising efforts if you communicate to your donors’ hearts. Every organization has an emotional hook upon which to base its communication efforts. Find yours.

4. Failure to understand the metrics of fundraising
Finally, successful nonprofit organization brand and marketing management requires a keen understanding of the basic metrics of fundraising. No, you don’t need to be a rocket scientist or renowned mathematician. But you should understand the relationship between investment in new donor acquisition, the cost of ongoing donor cultivation efforts, and the revenue you will raise.

Sadly, many nonprofit fundraising managers don’t plan beyond the current financial year. These dear souls are so consumed by the tyranny of the urgent that they fail to marshal the power of financial forecasting to make their case for more aggressive donor acquisition efforts. Instead, they end up running on the “raise more money” treadmill with little understanding of how to get off.

The metrics of fundraising are crucial to your overall success. Here are a few steps to take to get a solid handle on where you stand today.

First, recognize that there are three levels of fundraising analytics. In priority order they are: (1) overall donor file performance (e.g., general donors, monthly givers, major donors, etc.), (2) program area performance (e.g., appeals, newsletters, gift receipts, etc.), and then (3) individual campaign efforts (e.g., March appeal package, summer acquisition campaign, etc.). Most organizations pay attention only to individual campaign efforts. All the talk is about the latest appeal or major donor special event. But, to sustain long-term growth and secure your organization’s financial future, the most important metric to watch is the strength or weakness of your overall donor file.

And, when assessing the strength of your donor file, pay closest attention to what I call the Donor Loyalty Factor™. That’s the percentage of current donors who keep giving into the next year. You should aim for a Donor Loyalty Factor between 55 percent and 65 percent — even higher for some organizations. If you aren’t achieving this level of donor loyalty, there’s something wrong with the way you’re communicating your brand promise.

Higher donor loyalty is the engine that will drive your net revenue to higher levels. Higher donor loyalty will make your job more productive and help you win those never-ending arguments about allocation of limited resources for fundraising.

Second, you should clearly understand your cost to acquire a new donor by each of the various acquisition media you use and the long-term value of each new donor. For example, if you use direct mail to acquire new donors, you might have a gross cost of acquisition of $31 and a long-term value of $380 per donor. Right away, you can see the value of using direct mail to acquire new donors. Develop these metrics for each method of acquisition you use, such as print, free-standing newspaper or magazine inserts, radio or television, or the Internet, to name a few. You’ll be armed with valuable information that will help convince your manager and CEO that investing in acquisition will propel your organization forward.

Third, rank each of your fundraising programs by return-on-investment (ROI), from highest to lowest. Your table should show the total expenses, the gross revenue you expect to raise and the resulting net revenue. A robust and effective fundraising program will include multiple program areas — appeals, newsletters, gift receipts, pledge program, high-end and major donor program, affirmation efforts for select donors, and new donor acquisition. Your knowledge of what each program is producing in terms of net revenue will help you prioritize your work and “sell” your efforts within your organization.

These are simple steps to get a handle on the metrics of fundraising for your organization. When it comes time to debate how budgets will be allocated, you’ll be armed with the basics to make your case.

Timothy Burgess is co-founder of the Domain Group, an international direct marketing and communications agency exclusively serving nonprofit organizations in North America and Europe. He has 26 years of fundraising and marketing experience. He can be reached by e-mail at tim.burgess@thedomaingroup.com or by phone at 206-834-1480.