7 Strategies Every Nonprofit Should Master in 2017
Last year, I gave you five priorities for success in 2016. I called them “Dive the Five.” This year, I’ve expanded my thinking a bit.
I give you “Seven is Heaven.”
- Create Compelling Annual Giving Offers
- Master Integrated Online Social Fundraising
- Master Major and Legacy Giving
- Master Donor Retention
- Master Donor-Centered Content Marketing
- Embrace Sustainable Business Leadership
- Shift to an Organization-wide Culture of Philanthropy
I promise if you focus on these fundamental areas, you will hear the angels begin to sing and your mission will take wing. Here’s what I mean by focus.
- Prioritize these areas.
- Create written plans for these areas.
- Include goals, measurable objectives, strategies and timelines.
- Assign staff and volunteer responsibility.
- Monitor, measure and evaluate what’s working/not working.
- And don’t get distracted from your task. Persist.
Some of these areas will seem familiar, but the way you employ them may need to be tweaked in order for you to survive and thrive in our digitally revolutionized society. Other skills may be things you’ve thought about or dabbled in, but haven’t really committed to with serious intent and dedicated resources. I’ll delve into each of these seven areas in depth throughout the year on my blog, Clairification. Here’s an explanation as to why these should be your core strategic buckets for 2017 (and if you disagree, or think I’ve missed something critical, please weigh in with your comments below).
1. Create Compelling Annual Giving Offers
Annual giving is the heart of effective, sustainable fundraising: the right ask, at the right time, to the right audience. If your focus over the last several years has drifted towards keeping pace with new technologies, new audiences on various social platforms, and an increasing variety of screens and resolutions, I understand. Growth is important. And you’ve got to stay current. So keep up the good work—and this may be the year to dial it back (a bit) and be sure to renew your focus on the heart of the matter.
Create compelling offers by focusing on your donor’s needs, not your own. What are the benefits to them if they give to you? How can you make their lives more meaningful? How can they feel more in control of their philanthropy? Annual giving comprises both unrestricted and restricted gifts. Donors should be given the option of designating their giving for particular programs that fall within your annual budget. Stop steering your donors away from their passions and towards a middle-of-the-road non-donor-centered strategy that doesn’t excite them.
Embrace strategies that increase loyalty. In her groundbreaking book, "Donor-Centered Fundraising," Penelope Burk exhorted fundraisers to “treat every donor like a major donor.” Before the digital revolution, this was challenging. Today, however, there are great strategies you can use to empower small and mid-range donors and draw them closer to you. In particular, I encourage you to explore (1) monthly giving and (2) DIY peer-to-peer fundraising. Both of these are ways to generated upgraded gifts and re-engage donors who’ve become tired of same-old, generic annual appeal messages. Plus giving more often gives your donor a more frequent pleasure high.
2. Master Integrated Online Social Fundraising
Embrace the trend towards consumerization. Think of this as the “Occupy Internet” movement. Whoever you are and whatever you do, your constituents are likely to be online. We’re all now part of "Generation Connected" (GenC)"—requiring you to develop and master a robust, multichannel online engagement strategy. Forget about the donor pyramid as a model for engagement. Replace it with a vortex model, where folks zip in, out and all around the digital space (as opposed to being neatly shepherded by you up the ladder or down through the marketing funnel). These hierarchical structures are no longer realistic models for donor behavior in our always-connected digital world. It doesn’t work to treat people at “the bottom” as less than those at “the top.” In a digital world, peer-to-peer fundraisers can be worth as much or more to your organization than a major gift donor.
The size of a person’s network and their propensity to use that network matter. The vortex model means reimagining the concept of “lifetime value.” It’s no longer simply a combination of average gifts, future capacity and attrition rates. Now it must encompass factors like those Malcolm Gladwell wrote about in "The Tipping Point." “Connectors”, “Mavens” and “Salesmen” become very desirable constituents.
Folks expect you to know them—rather than the other way around. To raise more money next year, you’ve got to develop an online plan that includes getting to know your current and prospective donors better. That’s why you need to get social. Interact. Ask for feedback. Learn what content your constituencies want. If you don’t know this, you can’t fulfill their wishes.
3. Master Major and Legacy Giving
Eighty percent of the money in the U.S., according to Giving USA, comes from individuals. And of these folks, roughly 10 to 20 percent will provide 80 to 90 percent of an average nonprofit’s annual fundraising. Of all U.S. donors, 12 percent account for the lion’s share of the money raised—88 percent! So embracing major-gift fundraising shouldn’t be controversial. Yet many nonprofits still think major-gift fundraising isn’t for them. In fact, a survey by Bloomerang showed that fewer than 20 percent of charities have even one person specifically designated to pursue and cultivate major donors.
Commit this year to getting your piece of the major gifts pie! Smart nonprofits are investing in my annual "Winning Major Gifts Strategies" e-course to take their efforts to the next level. Investing in major-gift development is a choice, of course. But it’s a schrewd one. There is truly no fundraising strategy that will give you a bigger bang for your buck. Not grants. Not direct mail. Certainly not events.
And don’t forget to promote legacy giving! Many people want to leave something behind to perpetuate their values and make a mark. They simply don’t quite know the best way to do this. That’s where you come in! Welcome folks to do something meaningful. Something as simple as the message, “Please consider a legacy gift so your values will live on” (on your website, e-news, remit envelope, outer envelopes, annual report honor roll listing, email signatures, etc.) can make a difference.
4. Master Donor Retention
Too many nonprofits have their priorities backwards. Do you spend 80 percent of your time and resources courting the 80 percent of donors who will give you just 20 percent of your funding? Does that make bottom line sense? Honestly, many nonprofits could raise a lot more money in the coming year simply by paying more attention to the donors you already have—and not acquiring a single new supporter. Per the Fundraising Effectiveness Project report, donor retention has been terrible for years. But nonprofits have largely been ignoring the data. It’s as if the sector is closing their eyes to the reality of climate change, choosing to charge forward looking for more sources of non-renewable energy. This is the year to say "no" to this senseless devastation!
It’s more cost-effective to retain a donor than to acquire one. Too many nonprofits are wasting their limited resources running on a treadmill. Donors come in, at great cost to your charity, and then they go right back out again. It’s called “leaky bucket syndrome.” Make this the year you plug up your bucket! Know your retention rates (for first-time donors, ongoing donors, lapsed donors and overall donors), establish specific goals for improvement (by segment) and invest in personal, authentic, gratitude-filled cultivation and stewardship.
5. Master Donor-Centered Content Marketing with Purpose
Content marketing should be oriented to create and keep customers by meeting them where they are and taking them to the next level.
- "Content" means what you have to offer folks that connects them to your mission.
- "Marketing" is how you deliver content.
- "Purpose" is what you hope both you and your audience will reap as a result of your communications efforts.
There's a name for this purposeful content marketing, and it's called “brandraising.” It’s about building awareness of your organization to lift fundraising performance. You don't build awareness for the sake of building awareness. You build it to kick start your fundraising. How? Commit to being useful. That’s what makes content donor-centered. Give folks something they really want or need—solve their problems. Get inside their heads. Speak to their hearts. And don’t guess; do research.
It may seem counterintuitive to not make your marketing about your organization’s needs, but in the end you’re partners. Your relationship with your donors must be reciprocal. Otherwise, no one really gets what they want. There’s just too much competition for folks’ attention for you to come across as self-promotional. Ego-centric content won't get you where you want to go.
6. Embrace Sustainable Business Leadership
Strengthen your board. If it’s too small, or doesn’t have term limits, change your bylaws to ensure you have a steady stream of fresh talent. If you don’t have a board development and/or nominating committee, create one. Assure your board members understand their roles and responsibilities and are passionately engaged with your mission.
Recruit, hire and train the best staff. If you’ve recently recruited, you’ll know that demand for skilled fundraisers is fast outstripping the available supply. Turnover is rampant (average stay duration is 16 months per Penelope Burk's study), partly because it’s the only way folks can get paid what they’re worth. The direct and indirect costs of finding a replacement: $127,650. If money is tight, consider outsourcing, flexible work options, performance bonuses, additional vacation days and so forth. Recent research reveals that every additional training in which you invest yields $37,000! So, no need to be stingy. Why not hire a coach for your executive director or development director this year? If every hour they spend with a guide and mentor results in significantly more money down the line, what have you got to lose?
Put in place the infrastructure you need to fulfill your mission. Take stock of your systems and software and reevaluate. You may have separate systems for your fundraising database, finance and accounting and customers/clients, not to mention additional software for CRM, social media, email marketing, volunteer management, crowdfunding, events and other needs. Today there are many cutting-edge holistic technology platforms, built for the cloud, which can streamline operations, improve donor targeting and reduce costs.
Don’t starve yourself. Resist the starvation cycle perpetuated by the overhead myth. Stop telling people, with pride, that only 10 percent of your resources goes to “overhead.” What’s so great about that? Does it mean you’re losing staff who can make more money elsewhere? Does it mean you have to cut back on programs that might otherwise help more people? For too long donors have learned to “reward” nonprofits who spend as little as possible on operation costs. Yet this deprives organizations of necessary funds for research, development, recruitment, staff development and retention and capacity building. Learn to talk about the positive impact of overhead on results, instead of just apologizing for it. Lead the charge to spend what you need to get the job done.
7. Shift to an Organization-Wide Culture of Philanthropy
You need to become a philanthropy team! Fundraising must stop being seen as a "necessary evil." It must be seen as a good thing—for everyone. After all, the meaning of the word ‘philanthropy’ is ‘love of humankind.’ That’s how you should act toward your current and potential supporters. Philanthropy makes donors feel good, and it makes good things happen. And not just for the development staff.
Shift your thinking—and the culture of your organization—in the direction of gratitude, rather than greediness, toward your donors. "Culture of philanthropy" is the meme du jour, but I find it helpful to think of it as a "customer service" or a “gratitude culture,” because it makes it a bit more actionable. Your organizational culture should fairly burst with gratitude, philanthropy and service.
Ready to get on the pathway to passionate philanthropy this year? Embrace these “seven is heaven” principles and you’ll achieve true fundraising success in 2017. Get everyone—all your stakeholders—to come together around your shared values. The values you enact on a daily basis, and the values your donors cherish. That’s how you’ll create matches made in heaven.