Category Archives: General Fundraising

Nonprofit Email Response Rates Down, Twitter Followers Up, Up, Up

roller coasterHave you read the 2013 eNonprofit’s Benchmark Study yet? It’s worth a gander, both for encouragement and for a reality check. The findings (based on data from 55 nonprofits) show that social media audience sizes went through the roof in 2012; in particular, nonprofits’ Twitter followers increased by an average 264%. But typical “open” rates of nonprofit emails went down to about 14%, and response rates dropped precipitously, down to .07% for fundraising appeals. Ouch.

The study’s authors (M+R Strategic Services and NTEN) are careful to note that different types of groups had different experiences, with the biggest drop in email response rates among groups doing international and rights-related work. And we might be able to blame the 2012 elections for sucking up a big share of donations. Also, response rates may also look worse than they should because nonprofits are failing to weed out nonresponsive recipients from their lists.

Nevertheless, I doubt that my email inbox is the only one in the world that’s simply flooded with emails from every nonprofit I’ve ever had contact with. (And once you sign a few petitions at the urging of your Facebook friends, you’ll find that the number of “contacts” starts rising fast.) I start looking for excuses to delete an email without opening it. (“Looks boring. Don’t care as much about that issue as others. Typo in the subject line? Fuggedaboutit.”)

What all of this inevitably means is that your nonprofit needs to work extra hard at making your emails stand out from the rest. Also be sure to include newsletters and other advocacy pieces in the mix of emails you send out — these, according to the study, get opened more than straight fundraising appeals.

For more tips on this topic, see Nolo’s article, “Nonprofit Fundraising Emails: How to Make Them Profitable.”

Smaller Nonprofits: What the Blackbaud Charitable Giving Report Means for You

flowersSmall is powerful, according to the Blackbaud Charitable Giving Report for 2012. The report found that, while charitable giving went up in 2012, the overall 1.7% rise wasn’t evenly distributed among different-sized nonprofits.

Organizations that raise less than $1 million per year saw their contributions jump by an impressive 7.3% in 2012. Compare that with the 2.7% rise in giving to mid-sized groups (those with annual revenues of $1 million to $10 million) and the tepid 0.3% rise in giving to the largest nonprofits (with revenues of $10 million and more).

What accounts for this differential? According to a report in Barron’s Penta Daily, Steve MacLaughlin, director of Blackbaud’s Idea Lab, says that ever since the recession began, the tendency among donors has been to give locally — for example, to a park, arts council, or hospital.  Donors are better able to see both the need for funding and the potential impact of their gift when the group is basically in their own back yard. Another factor may be that smaller nonprofits receive a relatively high percentage of their funding via the Internet, and online giving is growing.

That’s good news for small groups, but how do you capitalize on this? Or, while we’re at it, how can mid-size or larger groups overcome the perception that they’re too big to need help?

Clearly, every group’s communications and marketing materials should be reviewed with an eye to establishing local presence. Donor lists should be segmented to make use of opportunities to gear communications to particular geographical areas or local interests. If your actual offices are physically located near certain donors, that’s worth highlighting. (Sure, they can look at the address line on the letter, but that doesn’t really drive the point home.)

No matter where your main offices are, if your group is serving clients or working on a cause that’s physically near certain donors, make sure they know that, too. Even larger groups can point to their local branch offices or membership groups and opportunities, and explain the important local needs that they serve.

The study also has implications for finding new donors. Has your group fully considered who its neighbors and nearest potential friends are? What about its literal neighbors? Something as simple as holding an open house, to which you invite people from nearby offices and residences, can yield a new list of names for your database, possibly leading to new donors or volunteers.

Just don’t get so wrapped up in grassroots efforts that you forget to attend to the other important part of the equation — making your website an attractive draw, where potential donors find it easy to give, as described in the article, “Your Nonprofit’s Website as a Fundraising Tool.”

After the Event Is Over: Where’s the Follow-Through?

3a47103rDo you know when the real work of a big event begins? Not the day of the gala, but afterwards.

Nonprofit organizations often put  much energy into an elegant gala, an annual dinner, a silent auction, or some other special event. The event itself may be a roaring success (or maybe not). But then, as Bay Area fundraising consultant Lela DaVia describes it, “the captive audience attending the event is often forgotten in the aftermath of  staff and volunteers recovering from the hard work. If there’s no follow-through, you may have lost a golden opportunity to cultivate current donors and engage new ones who attended.”

A profitable event can, with the correct follow-through, maximize its fundraising potential by fostering new and ongoing donor involvement.  This was a key theme in DaVia’s January, 2013 workshop at the Foundation Center in San Francisco, entitled “A NONPROFIT’S NEW YEAR’S RESOLUTION: IMPROVE DONOR RELATIONS.”

What exactly does effective follow-through involve? In the case of one organization with which DaVia worked, it meant that “after the event, every person in the room was entered into the organization’s database; the guests were segmented into categories; and then they were personally contacted by someone from the organization (ideally a Board member or key volunteer), asking how they learned about the group and inviting participation, for example in the next year’s event-planning efforts.” Sending a follow-up letter or e-mail is another option for communication.

Of course, the organization that holds the event may not have a complete guest list on hand — after all, if a corporation buys a table and invites various employees and their family members to attend, even the ticket-buyer may not know until the last minute who will actually show up. But your group can capture such names by unobtrusive means, such as putting out a guest book, offering a door prize, or holding a contest (in which attendees are quizzed on facts about your organization). You can do all of these to cover all bases.

If this sounds like common sense or something you’ve heard before, remember that it’s still not the way things typically happen. In fact, lack of follow-through was a prime concern expressed by members of DaVia’s workshop audience. In many cases,  despite coming from established nonprofits, and their interest in attending the workshop indicating their organizations’ commitment to professional development, many cited lack of follow-through as a major impediment to their group’s fundraising success. Sometimes the ball got dropped even before the event was over, as in: “We have house parties, but no one is willing to make a clear ask for money.”

Follow-through issues can be compounded when a group brings in a consultant to serve as events planner. The very person who was devoting the most energy to assuring the event’s success must pick up and leave when it’s over, along with a good deal of institutional memory. No matter how great a job the event planner did at creating notebooks or files describing what happened before and during the event and what needs to happen after, the key is  actually reviewing those notebooks to take the next steps. A good new year’s resolution to cultivate those donors from minor to major!

When Organizations Stretch the Meaning of “Nonprofit”

A nonprofit is meant to carry out a charitable, educational, religious, literary, or scientific purpose  — and not to personally benefit its directors, contributors, or other participants — in return for which, the IRS and state tax authorities don’t require it to pay taxes on profits it makes from its activities.

But the issue of what activities are “charitable,” and what constitutes personal gain, make for unending investigations and opinions from the IRS. These can be looked at as either an object lesson in how not to go wrong — or as comfort for nonprofits trying to operate in an above-board fashion, given that some groups are obviously trying to get away with a tax exemption they don’t deserve!

beerRecent cases highlighted in Bruce Hopkins’ Nonprofit Counsel letter, for example, include revocations of tax exemption for:

  •    the parents of a cheerleading squad, who worked at concession stands and used their pay for “scholarships” for their cheerleading children, based directly on how much work they put in. That was too much “private inurement” for the IRS’s taste.
  •    a bar (that’s right, the kind serving alcoholic beverages), which claimed to have been promoting “fellowship among all living beings.” (What were they drinking when they came up with this idea?)
  • a group that, when questioned as to why it hadn’t been filing its annual information returns, claimed that it was the integrated auxiliary of a church — but the church itself had no idea of this supposed arrangement.

The lines aren’t always so brightly drawn, however. To make sure that your group continues to qualify for its tax exemption, see the Nonprofits section of Nolo’s website.

Will Your End-of-Year Fundraising Email Stand Out From the Pack?

Those end-of-year charitable fundraising emails are coming thick and fast. My inbox is full of subject lines like, “Midnight is just hours away,” “Last chance: Gifts doubled,” “Before midnight,” “Really, we mean it this time — last chance to match,” and “Last chance to give in 2012.”

They’re starting to all look alike — and no wonder. The senders have likely run out of creative ideas, given that this inbox-influx represents only the latest in a sustained flow of emails that every nonprofit has been pouring out for the last several weeks. All with good reason, of course: As you’ve heard many times before (including in my blog on “Motivations for Holiday Charitable Giving“) about a third of all donations are made during the final weeks of the year.

But maybe the similarity in subject lines is okay. By now, the readers should have a good idea of what your nonprofit does, and whether they deem it worthy of support (though this is certainly something you want to include convincing information on in the body of the email). If your nonprofit can’t stand out from the pack in this slew of emails, it can at least establish its presence there. That will be handy for the people who are making their final decisions about giving, and thinking, “Hmm, I think X nonprofit should get something from me — maybe there’s an email here with a handy link I can click.” A good part of fundraising is, after all, about making it easy to give.

My one pet peeve is with nonprofits that make it sound like the end of the world is coming, and that anyone who doesn’t give by midnight will lose their chance FOREVER. It’s just a tax deduction, folks. Not all charitable donors itemize their deductions in the first place. Plus, the same nonprofits will be asking for donations again in 2013. Hopefully with a few days’ break on the email front.

Motivations for Holiday Charitable Giving: It’s Not Just the Tax Deductions!

As someone who donates to charity at random times throughout the year, I had always assumed that the end-of-year flood from other donors was due to the need to rack up points with the IRS come next April. Wrong!

As the American Red Cross found in a survey last year, four out five Americans feel that “helping someone less fortunate is an important part of their holiday tradition.” (And we probably all know by now that upwards of a third of all charitable donations are made during the final weeks of the year, so this is more than just talk.)

Well, then. If your nonprofit wasn’t already ramped up for end-of-year appeals, you’ve got one more reason to get energized about it. Of course, you’ve got a lot of competition — every nonprofit in the universe is pumping out appeals of every form, in writing, through email, and via their social networks. But the statistics on end-of-year giving suggest something interesting — that these appeals will actually receive more focused attention from donors than usual.

Instead of acting like I usually do (ripping open the appeal envelope, start tossing bits toward the recycle bin, noticing a catchy line, reading a bit, and then perhaps, miracle of miracles, deciding to make a donation), holiday-season donors are actually starting out with the intention of making a donation. It’s just a matter of to which organizations, and what share of their intended amount will go to each. They may actually set aside time to review all the possibilities. Some families I know actually sit down with the kids, let each person make a case for their favorite causes, and make a joint decision as to which groups they’ll donate to.

How to create the most effective appeals given this unique opportunity? For a helpful rundown of ideas from around the Web, read Ashley Halligan’s article on the Software Advice blog: How Your Nonprofit Can Capture December’s Giving Trend

Has Your Nonprofit Re-Registered in States Where It Solicits Funds?

It’s a problem that lawyers serving nonprofit organizations serving nonprofits see all too often: The nonprofit gets as far as figuring out which states it has been or will be soliciting charitable contributions in, takes the appropriate steps to register in those states, and then forgets that it’s in compliance only for the next 364 days. (For background on the basic requirements, see attorney Stephen Fishman’s article, “Fundraising Registration: Does Your Nonprofit Need to Register?“)

A nonprofit has to remember to re-register in every state where it will be fundraising. (It also, of course, needs to keep an eye on whether it has started raising money in states where it has never registered in the first place). All too often, however, the people who took care of registrations the first time around have left, or institutional memory otherwise fails — and the problem goes unnoticed until the nonprofit receives a “cease and desist” letter from the state in question.

This isn’t necessarily an end-of-year problem — the clock starts ticking whenever you first registered, which may have happened at different times for different states. Nevertheless, with mere months until you have to submit your next Form 990 to the IRS (in which you’ll probably need to name the states where you must register and have indeed registered, depending on which version of the form you fill out), be smart and doublecheck now on your group’s re-registration obligations.

Nolo’s book “Nonprofit Fundraising Registration: The 50-State Guide” can help with this process.

Or, you might want to consult an experienced nonprofit attorney with questions.

Some People Will NEVER Agree to Recurring Donations

I thought I was a statistical outlier in absolutely, categorically refusing to sign up for regular, monthly donations to my favorite charities. To me, the idea sounds too similar to various times when I’ve gotten a free or low-cost magazine or newspaper subscription, only to find that turning off the tap was nigh on impossible.

Apparently, however, I’m not alone in my approach. Blackbaud’s November, 2012 “Donor Perspectives” survey found that among U.S. donors, 19% said that “nothing would compel them to become a regular donor to charities to which they currently make one-off donations.”

That’s a useful thing to know, given how many charities are pushing the idea of recurring donations. And why wouldn’t they, given the possibility of an ongoing income stream from donors who might not otherwise be able to afford such a large amount?

But let’s not go overboard chasing the possibility of recurring donations; for example, by failing to offer other methods of contributing. “Who would be silly enough to do that?” you ask. In fact, I was approached on the street by a volunteer for a major environmental organization who spent a long time trying to talk me into a recurring donation plan and then, when I said I was willing to make a one-time donation only, said they couldn’t do that! That was a waste of both our time.

The survey also reminds us that talking someone into a recurring donation isn’t the end of your interaction with them. Between 20% and 30% of those surveyed said that they’d stopped making recurring donations to at least one organization in the last three years. The most common reason was personal finances, which of course nonprofits can’t do anything about.

But the second most common reason was “a feeling that the charity was not making the best use of its financial resources.” That’s something the nonprofit can certainly do something about. I’ll bet those donors weren’t doing a careful analysis of the groups’ financials and Forms 990. More likely they were simply underwhelmed by the reports they were getting back from the group — or, dare I say, were upset by getting continued appeals for more money. It’s also possible that their expectations from the group in question were heightened, given their feeling that, “I’m paying the bills for this place.” How about making sure to regularly thank the recurring donors, give them specific information on how their recurring donation helps maintain and improve your group’s efforts, and hold off on the followup appeals?

Fundraising Kudos to: Strike Debt

Okay, let’s just all drop our collective jaws at the success of Strike Debt’s recent telethon, which raised money for a project it calls Rolling Jubilee. The group brought in a whopping $293,000 — enough, it figures, to buy $5.9 million in unpaid medical debt obligations off creditors, and thus save a lot of people from bankruptcy. (Around 62% of bankruptcies are caused by medical debts.) The group is calling it a “bailout for the 99 percent.”

Why did the fundraiser work so well? I’m sure much could be said about the organizing, skills, and determination of those running the telethon, but it also sounds like, in the words of the Village Voice, they “struck a nerve.” With the group’s origins in the Occupy movement, it tapped into Americans’ frustration at the crippling nature of debts that arose for reasons beyond their control.

Being able to point donors to the exact way in which their money would be used is an unusual feature of this fundraiser, as well.

Strike Debt is basically acting as the middleman to a person in need — which should be true of many nonprofits, but the link is often harder to demonstrate.

What’s more, donors are getting a “bargain” — their money doesn’t pay off another’s debt dollar for dollar, but is going to buy bad debts on the secondary market, where the creditors are typically willing to sell them off for pennies on the dollar. No wonder this one’s going viral!

 

Let the End-of-Year Fundraising Begin!

I don’t know about you, but it feels like there’s a bit of space in my email inbox left behind now that all the campaign solicitations disappeared. But I’m sure it won’t last long.

Oops, my email inbox is filling up as fast as I write this. Savvy nonprofits are weighing in with subject lines like, “After Election Day: The Future of . . . ” and “What the Election Means for  . . . .”

Smart move on their part: We’re entering the most intense fundraising period of the year, in which the majority of individual donations to nonprofits are made. By grabbing readers’ attention with an email focused on subject matter rather than a need for donations, they are establishing themselves as a credible and valuable source of information. That credibility will prove crucial in the coming weeks, as they will (I’m sure) be coming back to me with requests for money.

If you haven’t planned your fundraising strategy for the coming weeks, here’s Kivi Leroux Miller offers “A Quick End-of-Year-Fundraising Plan” that’s worth reprising.