Too clever by half

I was recently reviewing the results of a direct marketing fundraising campaign together with the creative and to be blunt it wasn’t pretty. When we stripped it all away, not only was the creative not pulling in the response, but it was working against the success of the fundraising campaign.

Why?  Because too many ego-centric creative solutions are conceptual and distort the proposition. Time and again I have worked with prima dona planners and creatives who add ‘clever ideas’ and gimmicks into the pack only for it to bomb. I used to work with a planner (in title only) who just couldn’t get it — it’s about the results remember.

So, with a plain letter, a clear and compelling offer, a simple reply device and reply envelope we beat the so-called creative solution. It was cheaper which also added to a better ROI, gained more money, more repsonse and more of the charity’s mandate was fulfilled.

Sometimes being too creative is being too clever by half. Be clear and direct about what you want the donor to do and how you want them to respond.

What does ‘major’ mean?

I am often asked ‘what is your definition of ‘major’?’ in reference to developing a major donor programme.

The way that charities usually define it is by a specific amount; “any donor who gives over £1,000″ for example. There are a number of problems with this approach. Firstly, it excludes any donor who gives regular amounts cumulatively below that level. So, a donor who gives £300 per month is a more likely candidate but would be missed on the ‘largest gift’ cut. There is another problem with this approach.

What if there are 500 donors who have given £1,000+ and there is only 1 major donor fundraiser? It is not possible to adequately devote the time and attention to developing a personal relationship with all 500 donors. They require further qualification.

I have always found the best approach to start with the largest donors cut by largest AND cume giving and work down. Incidentally most direct marketing reports start from lowest to highest so you need to request an upside down report. Then it is important to run at least 3 or 4 years’ data to look for patterns. In most reports that I view there are large annual gaps — the result of a lack of ongoing donor relationship building. This is especially the case where charities build their major donor programmes on events, dinners, and Balls. It is very rare to find many donors from these events who turn out to be consistent, worthwhile, engaged and committed donors.

When you have identified your caseload, you will find that there will be approximately 100 donors on there that are capable of being managed by each full-time fundraiser. That is how I define ‘major’,  by the available internal resource. So, 2 full-time MD fundraisers will give us 200 donors by definition.

In addition to those donors who are qualified, I would also have a further 20% of unqualified that will come onto the caseload once they have been qualified. But remember, the donors on your caseload are actual donors who have given – by cume value. They are not prospective donors that have been screeened by a wealth overlay. Those donors will remain on a prospect list.

So start to look at your definition in more of a multi-dimensional way than simply by single largest gift and always focus on those donors who can be cultivated to give on more than a one-off gift basis.

New money or old?

Charities need to start waking up to the necessity of investing in long-term major donor relationships with existing donors instead of running after new ones. At the risk of using that hackneyed expression involving fruit, why would you get a ladder and climb to the most difficult, dangerous and out of reach part of the tree when you could pick the ripe fruit from the lower branches? It just doesn’t make any sense.

So, in the same way, why do so many charities put their efforts into finding new major donors and not spend their money and energy in cultivating existing donors? Rather than do major donor events or hold dinners or create major donor ‘clubs’ most of which are either directed at uncovering new donors or speaking to a group all at once, why not concentrate on developing one-to-one individual relationships with each donor? By figuring out what their interests are and how they want to interract with your charity, the returns will be greater and donors will most likely give on an annual basis for a number of years.

In my experience approximately 80% or more of a major donor caseload originates from the direct marketing pool and those donors when cultivated give increasingly large amounts. Very many of these donors start giving at relatively low amounts, even as low as £50, but over time they will become investors in your cause. These donors are much more likely to give and to continue to give than wealthy donors from a prospect list who may have the ability to give but have little or no propensity for doing so.

One charity file I recently analysed had 500,000 donors on the direct marketing file and fewer than 200 major donors. Their answer: go to the City to try and find new donors! What about developing all of the potential donors that are hiding in that large dm file first? When that has been exhausted then go and look for new ones.

How much should I be spending per new donor?

So, there we were in the meeting today talking about which was the best channel for recruiting new donors. Mail is the solid tested route, but should we go for a single gift or a regular bank transfer? And everyone tells me that on-the-page  advertising only recruits emergency donors. And what about inserts, and DRTV, and F2F or telephone?

Where do you start and how do you know which channel is the most effective for recruitng new donors?

The answer will be based on a number of factors but primarily the cost of acquisition at the front end, and the value of the donor over their life with the charity. So, although the cost of recruiting a donor on £15 per month direct debit might be £200, the return from that donor might be greater than a single cash donor who only costs £40 to acquire.

Don’t only focus on the cost — look also at the longer term return before making your decision.

Development

What is the definition of ‘development’? I have been working with a ‘development’ NGO client this week and the CEO asked me and I must admit that I struggled.

He told me that the best definition he had come across was ’security’. There are villages in the middle of DR Congo that are not touched by the war, that are not involved in tribal conflict, who are living sustainable and secure lives. They are as ‘developed’ as any developed economy.