Families and Friends and Peers ... Oh My!!!

The art of fundraising has evolved greatly over the years. This evolution is due to many changes — changes in the marketplace, changes in donors, introduction of new channels and much more. One such strategy is peer-to-peer fundraising, and no, I'm not talking about a run, walk or other event strategy. And the volunteers are not board members. This strategy has been around forever and has gone through a lot of shifts but continues to be a fantastic source of new donors, new volunteers and bottom-line revenue for organizations.

I had a chance to talk with Kimberly Haywood, who is vice president of direct-response fundraising for the March of Dimes. I also interviewed Ken Dawson, president of Eleventy Marketing Group and one of the industry's top experts on this strategy. We talked about current programs, changes they have seen and where they think all of this is heading.

Below are their thoughts on the successes (and challenges) with this strategy, how it benefits organizations and the evolution that has occurred over the years.

Navigating off the Napkin: How long has March of Dimes used a targeted residential/peer-to-peer fundraising strategy?
Kim Haywood: Our roots actually go back to January 1950, when Mothers March started as a door-to-door grassroots canvas appeal to help raise funds in the fight against polio. Back then it was mothers (and fathers) marching to every house that had a porch light turned on in the neighborhood collecting donations dollar by dollar. In the early '90s, March of Dimes started engaging professional telemarketers to really help expand the recruitment of our neighborhood volunteer base.

NON: How would you describe the evolution from "targeted residential" to "peer to peer"?
Ken Dawson: I believe that the primary driver in this change has been the relative strength of soliciting a close group of "peers" for fundraising as opposed to the heavily acquisition-based residential campaigns. Simply put, the ROI of soliciting pure prospects to become a volunteer and ask their neighbors to donate has dropped over time. This is because of several factors:

• Economic downturn dramatically and instantly impacted return rates and giving rates.
• The housing crisis decreased neighborhood stability. The length of residence was a strong indicator of likelihood to both volunteer and give, and was impacted by greater turnover and empty homes in neighborhoods.
• Nonprofits were also adjusting their budgets and, in some cases, cutting other channels that were also affecting the names available for programs like this.

True peer to peer, where the participant has a true relationship with a possible donor, transcends proximity and most economic factors and has led to more stability in the returns and ROI.

KH: At MOD, we're seeing it's not just about the traditional neighborhood list we give every volunteer. Social fundraising, reaching beyond your neighbors into your social sphere has changed the traditional model.

NON: What is the perceived (or actual) value of the volunteers who raise money for MOD through this program? What is the value of the donors they bring into the organization?
KH: Our analysis has shown that 93 percent of our neighborhood volunteers have taken multiple actions with our organization, and as every marketer knows, constituents who engage in multiple programs have higher retention rates and overall value. The vast majority of them (79 percent) also make personal donations in addition to raising funds within the neighborhood. The donors generated from each campaign are warm prospects and fed into future direct-response campaigns. In 2012, more than 230,000 donors originally acquired through Mothers March gave more than $6.7 million to other direct-response initiatives but didn't participate in Mothers March.

NON: Have you all considered it as an acquisition strategy for the organization, or are other goals involved?
KH: When we began, it wasn't viewed as an acquisition effort at all — although I know many organizations did with regard to their campaigns. But really it is an acquisition strategy that for us has always made good, up-front revenue. The number of donors generated through each volunteer is significant. We recently did some analysis that showed since 2006, we acquired almost 360,000 Mothers March donors who have lifetime giving through last year of $11.3 million.

NON: How have metrics shifted over the last five years with this strategy? Is measuring success the same today as it was five years ago?
KD: We have seen large shifts in both the metrics and how these programs are valued within a nonprofit. Historically, these peer-to-peer programs were completely in a silo and measured for their unique ability to reactivate deeply lapsed audiences, acquire completely new donors, and at the same time, deliver significant gross and net income to the organization. As some programs came under pressure, those organizations have studied the lifetime value of the peer-to-peer acquired donors and have discovered that they have provided more overall value, and net, to the organization than DM-acquired donors. This has led to increased investment in some areas of these programs in order to bring in new names to the organization, and an increased focus on breaking down the silo walls and building cultivation strategies to embrace the new donors and cross-channel integrate.

KH: The core metrics have always remained the same, but we have new analytics that help measure the breadth and depth of the volunteer's total performance, not only within the campaign but across our entire portfolio of direct-response initiatives. This helps us prove the value of the campaign and investment. Through analytics, we found that almost 100,000 Mothers March donors who came onto the file 15+ years ago gave $2.6 million last year. That's a loyal, committed group of donors whose original entry point was Mothers March.

NON: For many years, telemarketing was the primary channel used to recruit and follow up with volunteers. How has the introduction of online engagement changed things for you all?
KH: For our Mothers March campaign, it's still the primary channel, but we're always testing and learning. Part of that is a concentrated focus on the collection of e-mail addresses, and a new focus in the future will be collection of mobile numbers.

KD: The telemarketing channel was the primary choice for participant recruitment and performed exponentially better than other offline channels for many years. Unfortunately, the universe is relatively finite and the demographic targets are older audiences. This flourished for many years until we reached a saturation point where we did start to see diminishing returns. I believe that the telemarketing channel will still be the primary driver for the more traditional participants. But the industry is also focused on grooming the millennials, who are comfortable with both using online tools and asking peers for support, to pick up the next generation of peer-to-peer growth through online.

NON: What advice do you have for an organization that is considering peer to peer as a new strategy?
KH: I think it’s important that they understand programs such as Mothers March aren’t one dimensional. Investing in a P2P campaign is a way to accomplish many goals: revenue generation, new donor acquisition and multi-channel involvement. It’s definitely a way to bring new donors on the file. As mentioned above, almost 100,000 Mothers March donors who came onto the file 15+ years ago gave $2.6 million just last year. We have a lot of rich history surrounding our Mothers March campaign, so for smaller organizations without as much brand identity, I would say to have a more long term tolerance for success.

KD: Here are the items that are on my list for organizations thinking about this strategy.

• The key is to think of this as a way to acquire and engage donors for future involvement with the brand. The long-term value of these constituents and their impact cannot be measured in silo.
• Don't expect a commitment to fulfill without a well-conceived touch strategy to keep them on track and motivated. Just because someone says "I will volunteer" on the phone or online doesn't mean they won't be distracted through everyday life. A successful P2P program has a well-thought-out and planned strategy to stay in touch with their volunteers through the process.
• This program is unique, and the strategy is unique. Make sure you don't repurpose other creative and messaging and expect it to resonate with prospective donors. This is a no-no with so many strategies.
• It is imperative to understand you are running a complex marketing program that includes full integration of all channels. This applies not only to the recruitment of a volunteer but then also crafting a completely different campaign within that environment to solicit funds from the peer group. You are truly running a multilevel campaign within a campaign.

NON: What do you predict for the future of this strategy for fundraisers?
KH: I wish we had a crystal ball! With all fundraising events that have a long history, there are always new challenges, but the priorities remain the same: maximizing volunteer donations, driving multichannel involvement and increasing overall lifetime value. We need to be smart about how we budget with this strategy (as with all strategies) and how we reach our volunteers. I do believe we will see even greater synergies with digital and mobile strategies in the future.

In summary
Since the days when March of Dimes volunteers literally went door to door, there are lots of changes that have occurred. And, with the rise of social media and online sharing over the past decade, it has become quicker, easier and more convenient for peers to share information about the causes they support. With stats like the ones provided above, this strategy is clearly still running strong as a way to bring more volunteers and donors into the organization.

As an industry, peer-to-peer strategies (excluding events) bring in nearly 4 million volunteers per year, accounting for nearly $75 million in revenue each year. What's even better news? You don't have to be a large organization to make it work with the options offered today in multichannel. Are you leveraging your constituents and their peers?