Fundraising and Marketing
Back to Basics
While this may seem like a “tried and true” strategy, 2016 will be the year that many fundraisers and development officers go back to some marketing basics—telling a good story, having a strong call to action and learning through testing. While the last few years may have seen more of a focus on keeping pace with new technologies, new audiences on various social platforms and an increasing variety of screens and resolutions, less focus has been placed on the right ask, at the right time, to the right audience. The industry has been racing to gather, integrate and organize data, and may now finally be poised to leverage that data in a way that impacts outcomes and drives campaigns.
—Miriam Kagan, senior principal, Kimbia
Metrics: Re-evaluating File Size
We will hopefully see the beginning of the end for retention rate and file size as metrics. The Fundraising Effectiveness Project reports that retention rates are up from a 2012 trough. However, this is likely masking that donor files have fewer new donors on file as a percentage of the overall file. Thus, they are retaining better only because they are working to keep easier-to-retain donors. Overall retention rate masks these changes of file demographics—it would be better to look at retention rates by lifecycle segment (in basic new, second gift, lapsed reactivated, and multiyear buckets to start).
Similarly, file size masks the value of donors in the file. Would you rather have a person who 11 months ago gave $5 for the first time or a person who gives $100 every year, but last gave 13 months ago? A traditional 12-month file size will include the former and exclude the latter. A new look at file size will start with how many people can be profitably communicated to and continue into realms of cross/multi/omnichannel value of a donor.
—Nick Ellinger, vice president of strategic outreach, Mothers Against Drunk Driving
Retention Over Acquisition
Donor retention has been terrible for years. But nonprofits have largely been ignoring the data. With so much competition for donors today, and so much competition just for attention, it’s never been more important to make authentic connections with your supporters that will cement your relationships with them. This is perhaps the topic about which I’m most passionate. I just hate to see nonprofits wasting their limited resources running on a treadmill. We’re all about the work ethic in this country. We need to shift to a “work smart” ethic. And it’s not smart to be doing a lot of expensive donor acquisition, then losing eight out of 10 new donors. It’s more cost-effective to retain a donor than to acquire one. So nonprofits must know their retention rates, establish specific goals for improvement and invest in personal, authentic, gratitude-filled cultivation and stewardship.
—Claire Axelrad, J.D., CFRE, principal, Clairification
Email Marketing for Bequests
Did you know bequests account for as much as one third of fundraising revenues in the U.K. and Australia, but only 8 percent of fundraising revenues in the U.S.? Few nonprofits are utilizing the cost-effective method of email to promote bequests, even though a prime target for bequests, Baby Boomers, are highly digitally connected. A recent survey showed that the No. 1 reason Boomers arranged for a bequest to an organization was that they received “a communication from a charity.” We think nonprofits have the opportunity to use low-cost email marketing techniques to expand this proven source of revenue within their organization.
—Jett Winders, vice president of strategic services, Charity Dynamics
Emphasis on Monthly Giving
Europe is way ahead of us. They’ve been concentrating on sustainer programs as a primary fundraising vehicle for years. Some U.S.-based charities have followed suit and see the long-term value in this reliable revenue stream. It can be an expensive undertaking, usually done with telemarketing and more recently DRTV. Digital is also quickly becoming a huge driver of monthly sustainers as organizations leverage technology for enabling on-the-spot asks. In 2016, more nonprofits will be making the investment in sustainer programs and will build out the case in support of monthly giving. DRTV will also grow as a sustainer channel, as barriers to entry continue to decrease.
—Angela Struebing, president, CDR Fundraising Group
The Complex Fundraising Portfolio
In response to organizational demands for continued fundraising revenue growth, nonprofits roll out more programs. Assemble the integrated (360
degree) donor-data view (CRM or integrated marketing database) and leverage it to evaluate historical cross-program success, and selectively cross-market at scale across programs. Test into the right media mix (online and offline marketing) what works for each program combination.
—Jeff Patrick, chief strategy officer and vice president, nonprofit, Merkle
Multichannel Versus Integrated Marketing
There is a common misconception that if you fundraise through multiple channels (email, mail, TV, phone, social) you have an integrated program. Not so much. A program is only integrated if you have coordinated images, messages and offers on various platforms. In 2016 nonprofits will become more truly integrated, coordinating more campaigns in multiple places—and they’ll in turn experience the positive results. Technology and data collection is paving the way for this, as we can knowingly target people on multiple platforms.
—Angela Struebing, president, CDR Fundraising Group
Addressable Media
Nonprofits will be able to add advertising to their direct marketing mix. This had started with Facebook’s Custom Audience, but with the advent of Google’s addressability solution, nonprofits will be able to not only upload, target and get value from their own lists, but also use lookalike lists as an acquisition strategy across multiple platforms (and thus get around the concern of being dependent on an unreliable source). While interruption marketing isn’t anything new, the ability to use it to lift other channels while paying for only the leads you want is, and puts this opportunity now within the reach of the nonprofit budget. As providers like DirecTV and Hulu expand their addressability solutions, this trend will only expand.
—Nick Ellinger, vice president of strategic outreach, Mothers Against Drunk Driving
One-to-One Major-Gift Fundraising
This is the most traditional, tried-and-true strategy, and it works like gangbusters! Eighty percent of all giving in the U.S. comes from individuals. And of these folks, roughly 20 percent will provide 80 percent of a nonprofit’s annual fundraising, on average. So this shouldn’t be controversial. Yet many nonprofits think major-gift fundraising isn’t for them. A 2015 survey by Bloomerang, a donor software provider, shows we’re losing money and/or building shaky foundations with these strategies. Two-thirds of all household charity in the U.S. comes from the top 3 percent of U.S. households. It simply makes sense to follow the money. Commit this year to getting your piece of the pie!
—Claire Axelrad, J.D., CFRE, principal, Clairification
List Management
Email is still the workhorse of any digital program. However, in 2016, getting into your constituents’ inboxes will be more difficult than ever before. The largest email client providers are working diligently to ensure that their customers are only receiving email that their customers are actively interested in and engaged with. All other email is being delivered to junk folders, clutter files, promotion tabs or not at all.
Organizations that don’t proactively clean their lists will and keep their constituents engaged through relevant content will continue to see decreasing engagement rates. Much has been made about the death of email. However, in 2016, email revenue growth is possible if you can conquer the email deliverability issue through strong list hygiene; micro-segmentation; and personalized, dynamic content.
—Adam Ruff, chief digital strategist, The Harrington Agency
Content Marketing
Marketing is how you deliver content. In our digitally revolutionized world, you must include a robust online (email, Internet and social media) strategy. Content marketing will become the primary way folks become aware of you—it should be oriented to create and keep customers (buyers, subscribers, donors, volunteers, etc.) and also to create customers who create other customers—advocates, ambassadors and influencers. For this to happen, you must give folks something they really want or need; solve their problems. And you must make it easy for them to share your content with others.
—Claire Axelrad, J.D., CFRE, principal, Clairification
Micro Campaigns
In 2016, organizations will run hyper-focused micro-campaigns. As the long arms of crowdfunding are stretching even deeper into the nonprofit sector, smart organizations will use the model to move activists to donors, generate upgraded gifts and re-engage donors who have become tired of the universal annual appeal. These small, targeted campaigns will allow organizations to illustrate specifically what donors are funding and be precise in the donors’ impact—especially in a time when donors have become weary of general pleas for money. In addition, it also allows lower-dollar donors to feel that they have contributed more to an organization. Organizations who can move past the fear of restricted giving and into this new model will unlock a new revenue source.
—Jessica Harrington, president, The Harrington Agency
More Access and Reporting
Expect increased demand for online access to activity and balances in named endowment funds. They are getting this from their brokers and expect the same for the funds entrusted to foundations. Also, expect increased performance reporting requirements for grants, not just how much money we spent but what is the measurable impact achieved.
—Peter Stam, president, AccuFund
Working Smarter
The trend of needing to work smarter, rather than harder, will continue, requiring org-anizations to do more with the donors they have, rather than relying on filling attrition, or filling the top of the funnel, yet failing to fix holes in the leaky bucket below. Fewer, higher-value donors can easily surpass the long-term net revenue of a larger volume of lower-value donors without constantly churning a file, or requiring the larger acquisition investments to mail more. Part of this is using data to isolate and cherry-pick individual donors to communicate with, rather than using broad strokes.
Another imperative is understanding that donors garnered from different channels/response mechanisms do, in fact, have different values. A large file of direct mail donors driving smaller gifts complements a smaller file of digital or TV donors giving larger gifts. Quickly identifying those who can be upgraded to middle- or major-donors, or those who can become monthly sustainers, will drive more revenue sooner, as opposed to waiting for our own in-house data to tell us an individual has fallen into a qualified “bucket” in two or three years.
—Kevin White, senior vice president of media insights and integration, Russ Reid
