In 2012, public charities raised $316 billion. Unfortunately, it wasn’t enough. Many nonprofits are struggling to make a more meaningful impact on their communities.
To make matters worse, fundraising has become more complicated.
Members of the Greatest Generation are five times more likely to donate in the mail than Gen Y. Gen Y is eight times more likely than the Greatest Generation to donate via social media. Baby Boomers and Generation X’s donation behavior falls between these extremes. And for many NPOs, maintaining fundraising effectiveness among traditional donors while cultivating new, younger donors is mission critical.
Obviously, successful fundraising is no longer “one size fits all.” Yet, based on the hundreds of NPOs we support, there are certain steps that are almost always key to driving fundraising success. We call these steps “The New Path to Prosperity.”
Today, we’re happy to quickly share the nine steps in “The New Path to Prosperity” because we know that, when it comes to fundraising, failure is not an option.
Step 1: Prepare Projections with Precision
Effective fundraising can be costly. But not fundraising well can cost more.
To better prosper, most nonprofits need greater predictability in the returns from their fundraising investments – so they better serve their communities.
Today’s more precise projections often factor in enhanced use of progressive data strategies, cost-effective production measures, prudent digital approaches, breakthrough creative and leading-edge technologies – all to net more dollars and balance short-term fundraising needs with long-term sustainability requirements.
Step 2: Use Data Decisively
For many nonprofits, donor attrition is rising every year while the direct mail prospect universe is falling. NPOs are also contenting with donors who are spending more time online but donating less online than offline.
To counteract these circumstances, in “The New Path to Prosperity,” advanced data/analytical techniques are often required. These often include the following:
- Profiling and donor file audits
- Acquisition models
- Attrition models
- Leveraging big data
- Linking data to creative messaging and imagery
- Sophisticated segmentation
- Channel preference decisioning
Step 3: Plan to Prosper
We often hear from nonprofits that are struggling to sustain direct mail results, frustrated by their digital donations, and dabbling with social media with little success.
As a result, “The New Path to Prosperity” often requires a rebalancing of communication investments. Low-performing activities are minimized. Dollars are redeployed based on advanced analytics and optimization. Annual fundraising plans optimize individual activities and benefit from the synergistic effect of well-coordinated communications. Smarter, data-driven acquisition and reactivation mail combined with more digital retention marketing is often a key part of successful fundraising plans.
Step 4: Communicate Creatively
Obviously, generating consistent contributions depends on an emotional engagement from donors. Today, emotional engagement can be substantiated by rigorous testing and a myriad of analytic techniques. Although every nonprofit is different and testing is always helpful, one important thought for 2014 is this: Be more visual than verbal. This includes providing highly relevant, engaging pictures and video for website, email, display advertising and social media distribution and consumption – all of which can drive dramatic increases in clicks and conversion.
Step 5: Resonate with Relevancy
The age of big data and advanced digital technology means that each fundraising communication can be more personalized and relevant. In “The New Path to Prosperity,” relevancy is a requirement.
Advanced data solutions in combination with 21st century technology – including leading-edge, one-to-one digital print capability – should be carefully evaluated. Many NPOs are seeing 25% or better lifts from digital printing.
Step 6: Mail and More
“The New Path to Prosperity” better balances direct mail investments (which remain essential for donor acquisition and reactivating lapsed donors) with highly relevant, engaging digital retention strategies.
There is no hard and fast rule with regards to offline/online investment allocations. What is important is deploying multichannel communication with solid testing/learning with visual and targeted messaging for acquisition, retention and reactivation programs. Also, you should consider use of direct mail to drive online activity with pURLs, QR codes and NFC with landing pages and the ability to share on social media.
Step 7: Give to Get
Premiums can be costly. Some donors wonder why nonprofits spend on labels or pens or holiday cards. But the answer is simple. This tried-and-true technique still works. Rigorous testing proves it. Premiums stand out and can serve as wonderful reminders of your cause. But most importantly, they usually help raise more money and can pay for themselves many times over. Many nonprofits are even profiting from a second gift conversion strategy, providing the second gift to new donors promptly, and driving dramatically increases in their list of repeat givers.
Step 8: Reap What You Sow
To state the obvious, efficient donation handling, response management and fiscal responsibility are more important than ever in today’s new, challenging environment. One important consideration is to make sure your response management firm has all the data available at the transaction and program level for real-time customer service and reporting.
Step 9: Iterate Incessantly
In “The New Path to Prosperity,” the end is always a new beginning. You leverage your victories. You learn from your defeats. You iterate endlessly. And your community benefits.
While we don’t profess to have all the answers, at Innovairre, we’re lucky to be supporting more than 500 nonprofits around the world. We will be sharing more of what we’re learning on this blog, so stay tuned. “The New Path to Prosperity” is not a static document, but a growing body of knowledge that we are committed to sharing. If you want to contribute to this thinking, please let us know.
$316 billion raised in 2012 is a lot of money, but we’re committed to doing more to help more nonprofits around the world succeed in their missions. I hope you feel the same way.
– Don McKenzie is the President & Chief Growth Officer at Innovairre, which supports more than 500 nonprofit organizations around the world. Don can be reached at DonM@Innovairre.com.