HAPPY NEW YEAR! Now, let’s get down to business. Before we dive in headfirst into this year, I wanted to look back at the last 365 days in fundraising.
I think we can all agree that it was an odd one when it comes to direct mail results. From the Good Works perspective, 2015 was one of the hardest to predict in terms of revenue and response. From our clients’ perspective, there’s an equal amount of head scratching.
What is going on?
First, there are a lot of external factors which individually may not have an impact, but together, certainly do. There are also some clear internal factors that we see with many of our clients.
ON THE OUTSIDE
The Election: Much of 2015 was spent in election mode. Now, historically, people who are involved in electoral politics are not particularly good donors to charity. So elections usually don’t have much impact on charitable revenue. But this was different. There’s no hard proof, but we suspect that the extra mailbox clutter and the laser-like focus on politics are bound to have had a negative impact on direct mail results.
Crises and Disasters: Starting with the massive earthquake in Nepal in April, and continuing with the refugee crisis in Syria, 2015 saw a steady stream of crises and disasters globally. This was unlike prior years, where crises tended to ebb and flow. And we know that when disasters happen, donors divert their giving to causes involved in emergency response.
Macroeconomic Factors: Don’t run away. This is important stuff, even if we fundraisers often ignore economics. In this report, Target Analytics (a division of Blackbaud) found that when income (represented by GDP), wealth, and tax policy are trending negatively, so is giving. So how are those factors doing?
- GDP: Canada’s GDP shrank in the first five months of 2015, and then expanded slowly. Experts tell us that things are turning around, but they warn us to be cautious. Much of the decline in GDP is related to slumping oil prices and our weak dollar, and there’s no sign of those improving.
- Wealth: More bad news here – Canada’s stock market was one of the worst performing in the world in 2015. We should proceed with caution in our revenue projections for 2016. Fundraisers, if you keep an eye on only one thing, I’d make it this.
- Tax Policy: Given the big changes in our political system, we’re going to leave this one for future commentary. Our only recommendation would be to watch closely.
- And a bonus factor – Food Bank Use: It’s a strong sign that unemployment is high, people are struggling, and there isn’t a lot of room for donations. Food Banks Canada showed that in the last 10 years, only Newfoundland and Labrador saw a decrease in food bank use. In 2015, food bank use in Alberta alone skyrocketed nearly 25%.
LOOK WITHIN YOURSELF
There’s not a whole lot we can do about those factors. All we can do is watch them and adjust our expectations accordingly. But we can control internal factors that impact fundraising.
- Stewardship and cultivation: You’ve heard us talk about it before, and you’ll hear us talk about it again. You need treat your donors with love and attention. This is more important than ever because if you lose a donor, you’re unlikely to get them back.
- Make it easy to give: When’s the last time you pretended you were a donor and tried to make a gift through your organization’s website? How easy was it? Now try it on your mobile device. The time is now to do a website audit and improve your giving process.
- Get rid of the silos: Nowadays, donors receive mail from you, read it, put it down, and hop online to give. Your donors may not be giving via direct mail, but they’re likely still giving to you – and the direct mail they receive still influences their gifts. Many charities are still looking at direct mail results in isolation. That needs to change (and let us know if you need help figuring out how to tie online revenue to your direct mail campaigns).
- The right hand isn’t talking to the left: Do you have an overall communications calendar for your organization? You need one. Imagine yourself as your donor. In just a single day you get a year-end mailing, an appeal to buy lottery tickets, a newsletter, and a thank you/receipt for your last gift (not to mention mailings from other charities). Yes, it happens. Why? Because there isn’t a master communications calendar.
- Prioritize monthly and planned giving: Monthly donors have annual retention rates of 90%+, and their average annual gifts add up to 3 to 5 times more than your average one-time-donor. We need to convert donors to monthly giving, renew lapsed monthly donors, follow up on expired credit cards, and make our monthly donors feel loved. And let’s not forget planned giving, whose programs are often the first cut when times are tight when, in fact, they offer salvation.
For most charities, 2015 wasn’t a great year for direct mail revenue. You’re likely seeing less-than-ideal results, particularly from the first 6 months. Lots of this is due to external factors, but some of it can be mitigated by things you can manage. Now is the time to make those changes.
Need help? Have comments? Think we missed something? Let’s talk.
This post was written by Leah Eustace, ACFRE, former Principal and Chief Idea Goddess at Good Works and originally appeared at the Hilborn.
Image credit: jeff_golden on Flickr via Creative Commons.