Four Signs That Your Organization Is Panhandling, Not Fundraising.
A recent survey by the fundraising software company, Convio, found that the two biggest challenges facing nonprofits in 2012 are fundraising and engaging supporters. That’s not surprising. Many small nonprofits are reporting reduced fundraising revenue as well as a general perception of donor fatigue. Yet, others, facing the same challenges, have been able to hold their own.
So, what accounts for the difference? Fundraising philosophy. There are two kinds of approaches to raising money: fundraising and panhandling. Of course, no nonprofit organization deliberately sets out to create a “panhandling” program, but when you look at how some organizations go about raising money, that’s what they’ve done.
Consider a recent New York Times article about a man, Corey Mason, who was blinded by a random, violent attack and now rides the subways asking people to help him support his wife and children. He wears a tin cup on a string around his neck and some people, moved by the sight of his damaged eyes, drop in coins or dollar bills.
Like the initiatives of many small nonprofits, the relationship between Corey and his donors ends the moment the cash hits the cup. They’re responding to a one-time ask for charity without a mechanism or an incentive for furthur involvement. It’s an impersonal transaction instigated by sympathy. And because there’s no ongoing relationship, once the donation happens, everything resets to zero.
That’s panhandling. The difference between panhandling and fundraising can be explained by a single word, relationships. But, building and nurturing relationships with donors is a process that requires a commitment of time, work, and financial investment and many small nonprofits might protest that they don’t have the staff or budget to tackle it. The harsh truth is, they don’t have a choice. Panhandling isn’t a sustainable strategy. In its 2011 study on fundraising effectiveness, The Association of Fundraising Professionals (AFP) found that “for every $6 that organizations raised in new gifts, approximately $5 was lost through donor attrition.” They also report that “it usually costs less to retain and motivate an existing donor than to attract a new one.” Donors in long-term relationships with nonprofits are more likely to give more money, give to a capital campaign, become a sustaining giver, volunteer, recommend a friend, or even offer a bequest.
Below are 4 tips for moving your organization from panhandling to fundraising. Don’t ask if your organization can afford to implement them. The question is, can your organization afford not to?
1. Highlight Donor Impact
In a recent paper on improving fundraising results, Katya Andresen, COO of Network for Good, wrote: “Fundraising is not about what you need. It is about what the donor – through you – can achieve. It’s about giving donors the gift of knowing they changed the world for the better. It’s not about your goals – it’s about your donors’ aims.”
In other words, a donation is an investment. Your donors are investing in the outcomes of a specific and personal act of good. If your ‘ask’ isn’t creating a clear connection between the gift and the outcome, you’re not getting it right.
Here’s a great example from See Your Impact, who gets it very right.
2. Create Relationships
The best advice on creating meaningful donor relationships was given over 2,000 years ago: “If you wish to persuade me, you must think my thoughts, feel my feelings, and speak my words.” -Cicero
Donors are people, not cash machines. If you want donors to be generous and loyal, you need to create a relationship with them. And since they’re going to be footing the bill for the relationship, you need to give them something in return - your sincere interest and attention.
Successful donor messaging is donor-centric. Think of your organization as the conduit that delivers services/programs/goods, paid for by donors. Your messaging should have two main characters, the donor and the end beneficiary and tell your story from the perspective of each of them. But this is just the beginning. If all you do is take their money and disappear, it’s not a relationship. Follow-up is critical. And I’m not just talking about thank-you notes. A study by fundraiser Penelope Burk showed that donors who received a thank-you phone call from a board member within 24 hours of giving, gave 39% more the next time they were solicited. And it doesn’t end there. Show donors their money at work. Keep them engaged with news about the people and programs their donations targeted. And make it personal. Messaging can’t be one-size-fits-all. Segment your email list so that you can customize your message to be meaningful and relevant to each segment.
BTW, Kivi Leroux Miller is a treasure trove of invaluable tips, advice, and examples of how nonprofits should be saying thank-you.
3. Don’t Guess - Use Data
Here’s a little experiment. Cover your eyes and, without peeking, try to walk from your desk to the bathroom. Sure, you’ll get there, but the journey will be longer and more difficult than if you could see where you were going. That’s what’s happening when you conduct fundraising programs without using donor data - you’re groping and stumbling in the dark.
Collecting the data gives you the big picture on your fundraising efforts and analyzing that big picture can give you a roadmap to retaining donors, increasing gift sizes, and even bringing lapsed donors back. Who donated, when did they donate, and how much did they give? Which solicitation brought in donations and which one was a bust? Which donors respond best to general requests and which only give to requests for emergency funding? Which communication channels are most effective with younger donors and which work best with older donors? Which donors haven’t given recently, why did they stop, and what can you do to revive their interest in your organization? If you can’t answer these questions, your fundraising solicitations are just shots in the dark. But if you can answer them, you’ve got the ingredients for a great fundraising roadmap.
4. Use Social Networks
Online social channels are great for engaging with your supporters, but the real value lies beyond that. These channels enable your supporters to become your advocates. Increasingly, people go online for information and the sources for that information are often their friends and peers. James Fowler, a professor of political science at UCSD, has done extensive research on social networks and has found that: “..the indirect effect of a message on a person’s friends is about 3 times larger than the direct effect on the person who received the message in the first place. The more you can get people to deliver the message naturally, the greater this multiplier effect will be.”
Of course, in order to get people to talk about you and share your content, it has to be something that people want to share. Save the Children’s Facebook page is a great example of how to do this. They have nearly 250k fans, but more importantly, their fans are engaged. Their wall posts are brief, friendly, informative, and each one has a compelling photo or video still. Take a look at the like/comment/share stats under each post. Not only have they generated a high volume of “likes” and comments, but every single wall post has been shared, meaning that a fan clicked on the share button to add that post to their own wall. Many of the posts were shared somewhere between 17 and 110 times. But take a look at their March 15th post.
The post had an urgent, direct call to action and a link to a compelling video, and people responded. Not only did 551 people “like” the post, a whopping 348 people shared it with their friends.
ListenIn Pictures, an organization that helps nonprofits tell compelling stories through video, has put together an excellent list of "10 Tips For Creating Contagious Content" for nonprofits. It’s definitely worth a read. Pay special attention to the first tip on the list and use it as a filter when you’re developing social content:
"It’s Not About How Good the Idea Is. It’s About How Shareable It Is."
Donor impact, donor relationships, donor data, and social networks. There’s a theme here: focus on the donor. They aren’t dropping money into your tin cup, they’re investing in the work your organization does. And like any investor, they want to know what their money is doing: who it’s helping, and what impact it has. And most importantly, they want to feel connected to the outcome. That’s fundraising.