Fraser Green

Fraser Green

Former political campaigner and current fundraising strategist with a knack for understanding how audiences will react to messages.

Fundraising Trend #3: The Fractured Market and How to Reach Them

July 10, 2017

Okay, so I’m going to date myself – in a big way…

I remember getting my first fundraising job with an international development NGO called Plenty Canada back in 1989. That was 28 years ago. My challenge at Plenty was simple: we had to grow our donor file from a mere 500 donors to 5,000. My rationale was pretty simple:

  • We were receiving government funding to the tune of $2 million a year for our projects. This funding was conditional on a 4:1 matching formula. In other words, for every four dollars the government invested in our programs, we had to fundraise for one dollar. So, our annual funding requirement was $500,000.
  • I figured that if we did a good job of stewarding and asking, we could raise about $100 per donor per year on average. That meant we needed 5,000 donors to secure our government funds in the future.
  • I put a proposal together for the Plenty board of directors – and it was pretty simple. I proposed that we reinvest all fundraising ‘profits’ in new donor acquisition until we grew the file to 5,000 donors. The board (somewhat reluctantly) agreed.
  • I then spent a little less than 2 years prospecting my ass off through the mail (with the help of an agency I’d just met called Good Works ;-). Sure enough, before our two years were up, we had 5,000 active donors on our file, and we switched our focus to retaining and upgrading our donors (while doing just enough prospecting to replace attrition).

Could you imagine finding such an easy solution to such a challenge today? Not bloody likely!

Fundraising was simple then because most charities relied pretty much exclusively on direct mail to keep their annual giving machine humming along. It was easy to trade donor lists for fresh names. New donors were easy to find and cheap to bring on board. We had no idea then how hard things were going to get…

WHAT’S HAPPENED? TECHNOLOGY, THAT’S WHAT

Let me start talking about the fractured fundraising marketplace by talking about my dad, me and my daughter Rory, and our media consumption growing up…

  • My dad (a member of the Civic generational cohort) grew up in St. John’s Newfoundland during and just after the Second World War. There was one newspaper in St. John’s (the Telegraph) and there were probably two or three radio stations. TV hadn’t come along yet, and my dad didn’t touch a computer keyboard until he was in his sixties! (He’s a proud Facebook participant now though!) On Saturday nights, my dad’s family would sit in a semi-circle around the radio in the living room – and they’d listen to dramas and variety shows. They would literally sit and look at the radio as they were listening to it! How strange is that?
  • Now I (born right in the middle of the Baby Boom) grew up in a small town in Eastern Ontario in the 1960s. We had two daily newspapers to read, a handful of radio stations to listen to and three TV stations to watch. Mine was the first generation to grow up with television – and we’ve come to be called ‘the TV Generation’. Although I lead a very busy life, I still watch some TV almost every day.
  • My Millennial daughter Rory grew up in an entirely different world. Radio was only for the car on the way to and from school. Even though she had access to hundreds of TV channels, she didn’t watch the tube all that much. Rory’s information and entertainment world was on the internet. While I could phone my friends as a kid, Rory had all sorts of chat options online.

All of these changes in the way we send and receive information happened in the world of fundraising too. Twenty years ago we all did direct mail – and maybe some of us did some phone. Today, the list is almost endless: mail, phone, e-solicitation, door-to-door, direct intercept, DRTV, social media, web fundraising, crowdfunding to name just a handful.

The world today consists of many audiences and no such thing as ‘the public’ anymore. Lots of people don’t watch TV anymore. Believe it or not, there are still people who don’t have social media accounts. Many of us have given up our land line home phones – and some of us have never had them!

Today’s fundraiser must become an expert at reading the virtual dim sum menu of tactical options – and then choose the channels that will yield the greatest return at the most reasonable investment.

MY HINTS AND TIPs FOR REACHING DONORS TODAY

While I can’t even begin to tell you how to navigate today’s complicated landscape, I can offer a few tips and ideas that might get you started down the right path.

  • Don’t waste your valuable dollars ‘broadcasting’ to a wide audience through paid traditional media (like newspapers, radio and TV) unless your brand is already a household name like the Red Cross, World Vision or the Nature Conservancy of Canada.
  • If you’re a health charity (like liver, cancer or Alzheimer), you would probably be wise to start with traditional channels like direct mail. People become more concerned about health issues as we become older.
  • Try to find a common donor investment equation, and apply it to every channel you use. For example, I like to measure the cost of a repeat donor (which is donor acquisition cost divided by the conversion rate from a first to a second gift (expressed as a percentage)). The gross return on that investment is the average gift x the average number of gifts per year (also known as gift frequency) x the life expectancy of the donor (1 divided by (1 minus your attrition rate) expressed as a percentage). Once you have a formula you like and trust, try to use it across every channel so that you can compare apples to apples.
  • Be very clear at the outset as to whether you’re trying to build profile or raise money. I’ve seen lots of failed fundraising campaigns spun as profile-raising victories. In our business, there’s no place for nudging and winking.

Whatever strategy you choose or whatever channels you choose to employ, remember – NOTHING substitutes for a great story told by a great storyteller. Touch the heart. Stir the soul. The money will follow – trust me!

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