We All Need Each Other—Why Going Solo Doesn’t Work: Direct Response is Beautiful
Many nonprofit fundraising departments are dualistic in their setup. Usually I find that either they are direct-response driven or annual fund/event/major gift driven. (For simplicity, let's call this annual fund driven.) Both are wonderful—yet deeply flawed if one discipline significantly outweighs the other.
The best development departments are yes/and, rather one or the other.
Here is how I see this get played out on a daily basis. In the annual fund driven shop, whenever I bring up the idea that perhaps instead of mailing to their donors once or twice per year they start with six to eight times per year and create a monthly e-appeal, you would think by the look on the development directors face I had just committed murder.
The very idea that I would suggest that we bombard their donors with appeals, emails and viral campaigns is unconscionable. "We don't want to upset our donors," they tell me. Then, I will retort, "Do you have a need? Do you have all the revenue you need right now? Of course they answer yes, and no they don't have all the revenue they need. "Well, I say, why are you afraid to tell your donors you have a need?"
Then I talk about the fact that if you want your major gift program to expand, you have to cultivate the donors that one day will be part of that major gift program. You can't do that by communicating with them a couple of times per year.
Get over the fear that you are over-communicating to your donors and that they will be upset with you. Donors have life beyond giving once per year. The more times they give to you each year the deeper their commitment to you. The deeper their commitment to you, the greater chance that one day they will be in your major gift program.
Now, let's talk about the direct-response driven shop. There are many nonprofits out there who were birthed through direct mail, telemarketing and print ads. I mean they literally grew up overnight because they started aggressive direct response acquisition campaigns and brought in thousands of donors. That's awesome.
However, over time they realized that in order for them to create more revenue for their programs they had to start developing strategies to move donors up the giving ladder. The answer was a lot more direct response. And for some time that has been working pretty well.
And, for many it continues to work well, maybe not like the "good old days" but still pretty decent. Well, the smart development professionals are now savvy to the fact that they must start major gift programs if they want to survive long-term and keep their fundraising ratios in line.
The problem I find in the direct response driven shop is that they don't want to let go of their donors. There is a mistrust of the major gift team. Plus, because of bad leadership, the direct marketers, being judged by the revenue they bring in, fear their results will start to look bad if their best donors are now on a caseload and out of their program.
I cannot underestimate the number of conversations I've had with the direct response team and the major gift team that were all about protecting their turf.
And, it goes both ways.
The major gift team does not often recognize the good work that the direct response team does. I mean, where do you think your major donors are going to come from? I also know MGO's who will hold on to donors who are not performing for way to long because they don't want to put them back into the regular mail stream.
Folks we have to stop this. We need to realize that to have a really successful, growing major gift program, you need a really strong direct response program. And, the direct marketers and their bosses need to understand that part of their success should be evaluated by how many of their donors move to a major gift caseload.
All boats need to rise together.
Let me give you a quick example of one client of mine that did this right. Back in 2001, while working for The Domain Group, which was one of the largest direct response agencies working with nonprofits at that time, I was the account lead on major national nonprofit charity we just landed.
At that time they had roughly 50,000 donors and brought in about $4 million in revenue in their direct response activities. At that time, they had no major gift team. So, essentially the majority of their donations came from direct response.
What did we do? Because this charity had forward-thinking leadership, we invested heavily into their direct response program (now hold on major gift people, this gets good). We went from nine appeals to 18 appeals, from navel-gazing newsletters to "donor-amazing" newsletters (I just coined that, but you can use it ), where we talked about how donors gift's made a difference and the needs that had to be met. We became incredibly aggressive in new donor acquisition.
Two years into working with this client we started to see donors rise to the top. So much so, they had to hire their first major gift officer. Each year that number started to increase. And, each year, they had to hire more major gift officers.
Where are they now? They have well over 400,000 donors and bring in over $50 million in revenue, and now more than 40 percent of that revenue comes from major donors. Remember, 11 years earlier there was virtually nothing coming from major donors.
What happened? Besides investing heavily into acquiring and cultivating donors, this forward-thinking leadership team realized that engaging donors, moving them up and out of the direct response program would lead to a more robust fundraising program overall. They did it by understanding in order to have a great major gift program they had to have a great direct response program. And, you know what—the major gift program knows this, appreciates this and even uses some of the strategies of the direct response program to cultivate their major donors.
In other words, they appreciate what each brings to the table.
What does this mean for you? No, I'm not advocating you start communicating 40 times per year (although for some of you, perhaps you should). But, I want you to realize that one program cannot be successful without the other. It won't happen overnight. Remember it's taken many years for the nonprofit I highlighted to get to where it is now. But, it had the foresight to do it right.
Even if you're a one-person development shop, appreciating the strengths of both disciplines will help you create a healthy fundraising program that is not dualistic in it's approach, but inclusive.
Remember, we all need each other.
Jeff Schreifels is the principal owner of Veritus Group — an agency that partners with nonprofits to create, build and manage mid-level fundraising, major gifts and planned giving programs. In his 32-plus year career, Jeff has worked with hundreds of nonprofits, helping to raise more than $400 million in revenue.