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Here's why your donors are not coming back

20 September 2016

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 September 20, 2016
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Read part one of this interview with Ellen Bristol and learn how to start looking at your fundraising and measuring it in a different way. What if we measured donor interest, donations and engagement instead of OUR moves toward the donor? Intrigued? Read on.

Mazarine Treyz: Based on what you’ve seen over the last 20 odd years, what’s the number one problem nonprofits have with fundraising?

Ellen Bristol: You know, the conventional answer these days has to do with donor retention. But I have a kind of off the wall answer, and it is inadequate marketing, especially inbound marketing. If you’re not familiar with that term, inbound marketing means all the different marketing techniques. Email, direct mail, search engine optimization on your website, social media marketing, and who knows what’s coming down the pike in terms of technology?

Inbound marketing means toning all that, all those different techniques, to attract to your site people who share an interest in your mission, cause, and/or programs. There’s some real interesting statistics about Facebook. About 90% of all U.S. nonprofits have a Facebook page. But a very tiny percentage of that 90% use it for anything other than saying, here we are. We’re nonprofit X, and come to our event.

So for example, let’s pretend we’re running an autism related nonprofit and our area of expertise is research and direct support. So we ought to be publishing success stories, and little videos. We ought to be publishing the latest research, and why engaging in this or that therapeutic modality has been shown to be favorable. As we do that sort of stuff, we put in all the cool technology. The tech hacks, you know, follow and like and link back to the website. Sign up for the podcast and download the thingamabob. Take advantage of the resource. All this stuff. After a while you know who’s really interested in you. That cuts down fundraising time a gazillion percent, because the people who are declaring their interest are warm leads.

Throughout the sector, we’re not taking advantage of that stuff to the extent that we could be. Now, one linkage here I want to make is that as we figure out who’s the ideal donor, these interviews I mentioned help us to understand donor motivation. We start to hear stuff that we can then build into our messaging. It tells us the voice of the donor.

So instead of saying, oh gee whiz, we have a nice program for children with autism, it says instead, as a parent, I didn’t know where to turn. So your messages say, if your child was recently diagnosed, check these resources out. Oh, there’s a linkage there. We already know many parents of youngsters with this particular condition don’t know where to turn after they get the diagnosis. We could elaborate on that for virtually any cause or mission.

So if we’re sending out the right messages, we’re going to attract the right people. It’s pretty straightforward.

MT: You know, I love hearing that you say this because this actually echoes what I was teaching in a webinar to Meals on Wheels the week before last. It was about how if we think of – for example, Meals on Wheels, we think of people who are homebound getting meals. But a lot of the Meals on Wheels programs around the country are starting to think, how can we be more? How can we become a one-stop for anything senior care related, not just meals? So that’s a thing that people are starting to do in this national movement. How can we be better stewards of not just the money that we have and the programs that we do? But how can we do more and serve more of the people that we serve already? Like what other needs do they have? And we’ll be covering how to set yourself apart in the Nonprofit Leadership Summit.

 

Ellen Bristol:  I recently attended the Giving Institute summer symposium, and I realized that a lot of the major consultancies are starting to understand that simply doing fundraising work for their clients doesn’t meet all the clients’ needs. So it’s exactly like what you were just talking about.

  • Do nonprofits need better internal management systems?
  • Better strategic planning?
  • Better understanding of how to report on the positive results they’re getting?

 

And I’m seeing the same thing happen in community action agencies, and similar movement based organizations. Organizations that represent a movement, not just a local whatever, are really thinking let’s go beyond the traditional and figure out what are the other needs that aren’t being met?

There’s another thing. I think Meals on Wheels is a great example. Meals on Wheels doesn’t just raise money. They don’t just obtain food. They need to recruit a lot of volunteers. So something needs to be in the marketing there that says, what a wonderful experience this is. If you’re looking for a volunteer experience, look no further. And again, it’s outside of the standard, we need volunteers. It goes beyond. Here’s what you get out of it. Here’s how you personally can impact lives.

MT: Yes. It’s something that speaks to people not just in a generalized way, we need this kind of volunteer. But more like, we want to be there for you when you get old and we also want to understand what your motivation is for volunteering and give you more of that experience that you’re looking for.

EB: Precisely. Precisely. Let’s make it a multigenerational effort. Grandma, mom and dad, kids, grandkids. Let’s make it a family tradition, right?

MT: Why do you think we lose 50% of our new donors every year, a lot of our nonprofits?

EB: I have a kind of stupid, simple answer for that. I’m probably going to get in trouble with a lot of the establishment. I think we lose a lot of our donors because we’re not asking our fundraisers to make sure they don’t lose them. This goes back to having performance indicators or targets, because people will do what is expected of them as long as you make those expectations clear. I don’t know how solid these stats are, but we do know that donor retention is somewhere around 50% or less, depending on whose research you read.

Ellen Bristol Quote, Fundraising the SMART Way

There’s also some evidence that client retention in the for profit sector is somewhere between 85% and 95%. What are they doing differently? Well, I can tell you that one of the things they’re doing differently is holding their sales forces accountable for customer retention, and if we say to our development staff, you have to raise this much money.  We want you to acquire a certain proportion of new money and new donors, and we also want to make sure that we’re retaining as many donors as we can. Let’s strive this year to retain 65% of our donors. Let’s strive next year to retain 80% of our donors. Let’s find out why we’re losing donors.

Now, not much we can do about them after they’re dead. Hopefully they gave us some of their estate. But they’re not all going to do that. But honestly, the techniques of donor retention aren’t mysterious as long as we’re telling people, it’s important to us that you stay with us. And we’re telling our own staff and ourselves, let’s hold onto those donors. Let’s establish a performance target for retaining them because the more we retain them, the less work we have to do acquiring new ones.

MT: Right. That makes sense to me. When I was working full time in nonprofits, I never had performance targets. I never had a plan handed out from my boss. I had a boss that said, who yelled at me, and said, ‘Where’s my million dollar grant?’ But I really don’t think he understood fundraising.

EB: Well, what can we say? One of the things I’ve said more than once is there’s a problem out there. We hear the same anecdotes 100 times from 100 different agencies and 100 different nonprofit leaders, hundreds of days. Over and over again, bring and group of fundraising professionals together and you’re going to hear the same complaints over and over again.

The solutions are tactical, but the problems are strategic.

So management strategy has to do with formulating a set of management controls. These are the expectations of the position, and if we find we’re not meeting those expectations, then we sort of have to peel back the onion and figure out why not, as opposed to just firing people. Because it’s rarely solely the responsibility of one individual. There’s a whole system at work in fundraising, starting with the external economy, market trends, technology, changes in communication patterns, fashion, fads, and then what goes on internally.

Anybody around here remember the infamous ice bucket challenge? That was going to solve everybody’s problems. That was a nine day wonder. So I take a pretty disruptive approach to this whole thing.

MT: I’m glad that you do. You know, some people would say that you need to invest in software to help your donors gift again. Is there a software you’d recommend?

EB: I am a big fan of any donor management platform that makes it easy for the user to add custom fields and that has an opportunity management module. Some people will call it a moves management module. So most of the platforms these days are available in a kind of online version, a cloud version.

My recommendation to users is make sure your platform provider makes it easy for you to learn how to use the software properly and modify it to your needs properly, especially so that you can track these vital few performance indicators that I’ve been discussing.

MT:  I think that’s totally reasonable to be platform agnostic. I don’t blame you in the slightest for wanting to just tell people to go do their research. They should.

EB: Yes, they should. When we implement Fundraising the SMART Way for our clients, we provide them with very simple tools based on Excel. All they are is Excel spreadsheets, and we ask people to become accustomed to using these spreadsheets before they try to implement the SMART Way performance indicators and benchmarking tools and so forth into their preferred platform. You can’t go wrong with Excel. Everybody has it. So we give them those tools for free.

MT: What are you teaching at the Nonprofit Leadership Summit in September?

EB: I’m going to be sharing the data we have to demonstrate why there is a need to reinvent the way fundraising is managed. That’s what I refer to as the fundraising revolution. Like you just said in the anecdote you shared with us, Mazarine, about when you worked in fundraising and you didn’t think your boss had really understood fundraising, nor did he provide performance expectations.

There’s a failure to provide those performance expectations and management controls on a fairly widespread basis. It’s rare, out of our 1,100 or so leaky bucket responses, only 3% to 4% of them depending on the data you measured come in at the highly productive level. So after five years, that’s not really very good. It’s terrible, and by the way, the data don’t show any significant differences depending on the revenue level of the nonprofit. We see nonprofits with lousy scores, even when they’re making $20 million a year.

So this is not a problem limited just to the smallest organizations. So I want to talk about a justification for rethinking fundraising as a strategic business function within nonprofit that needs sophisticated management, and I’ll be sharing the data that proves it.

MT: So people who want to improve their results with measurement of their fundraising programs. That’s who should come to your session? Is that what I’m hearing?

EB: Absolutely, and I love the fact that this is a leadership summit because although fundraising professionals should know about these ideas, CEOs, chief development officers, chief operating officers, and members of governing boards are the leadership in the nonprofit sector. They need to do some serious thinking about the need for sophisticated management.

Leadership gets talked about a lot, but I don’t think we’re talking enough about the pragmatic issues of managing for optimal performance.

Ellen Bristol Quote

MT: So when they come to your session, they’ll learn a little bit of how to optimize their management for optimal performance.

EB: Precisely, and if they haven’t taken the leaky bucket ahead of time, they’re all encouraged to do so.

MT: Is that something they can find on your website?

EB: Yes, they can find it right on our homepage, http://www.bristolstrategygroup.com/nonprofit-leakybucket. PS, we also have an assessment for sales.

MT: That is good and important, and maybe people who are attending, I can direct them right there. So you already said http://www.bristolstrategygroup.com is your website. How can people get in touch with you and buy your book?

EB: You can buy it from my website for $27.00, free shipping in the U.S. Just go to http://bristolstrategygroup.com main store. It just says store on the nav bar, and anybody – I’m always a sucker for personal emails. People can call me. My email address is simply Ellen@bristolstrategygroup.com, and my phone number is 786-554-2666.

MT: That is wonderful. Thank you so much, Ellen, for being here today and for helping us understand why we’re not getting the results that we want and why we should work harder to create measurements using Six Sigma or your system to really start to get better fundraising results.

EB: Right. We don’t really have to flog the crew, and we’re not going to get better results if we keep firing our fundraising people. We need to change the way we manage everybody and manage our results so that we can all profit, so we can fulfill our missions.

Ellen Bristol, Nonprofit Leadership Quote

 

MT: Thank you. Thank you so much for being interviewed, Ellen. I’m just so grateful to you. I learned a lot today.

EB: It was a pleasure. Thanks, Mazarine. I can’t wait for the Nonprofit Leadership Summit.

MT: It’s going to be fun.

EB: It’s going to be a blast.

Just 7 days left to join us at the Nonprofit Leadership Summit! It starts on September 27th. Click here to learn more!

Nonprofit Leadership Summit

 

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