INTERVIEW: Ellen Bristol Fundraising the SMART Way

If you are wondering what to do about your funding in this new funding reality,

WE ARE GOING TO HELP YOU!

The Nonprofit Leadership Summit is coming up this September, and we want to help you get ready to face the funding music.

 

Hey, everybody. Welcome. This is Mazarine Treyz of Wild Woman Fundraising and today I am chatting with Ellen Bristol, the creator of Fundraising the Smart Way, which is also a book, and she will be teaching at our Nonprofit Leadership Summit. I am so looking forward to her session. Thank you so much for being here, Ellen.

EB: Oh, it’s such a pleasure and I’m another wild woman. So I’m very happy to be involved with you, Mazarine.

MT: Thank you, Ellen. I want to learn more about you. Can you tell people a little bit about your background and why they should listen to you about fundraising?

EB: Sure, absolutely. As far as I can tell, we run the only fundraising consultancy in the industry that doesn’t focus on how to do fundraising. We’re not the people you go to to learn how to write a grant or run a campaign or get donor retention. Although your campaigns and your grants and your donor retention and other elements, and your capital campaigns and everything else, are likely to improve significantly because our focus is on how do you create productivity, predictability, and consistency in the way you raise money?

I personally had a 20 year career in corporate sales and when I started Bristol Strategy Group 21 years ago – so now everybody knows how ancient I am. My question was, okay. Now I’m going to be my own boss. Hooray! What’s wrong with sales? That’s where I started, because I was great at it. But I always felt frustrated and I wasn’t quite sure what was wrong. Early in the day, I was fortunate enough to discover the work of the great founders of Total Quality Management, which is better known as Six Sigma and lean manufacturing. I thought, hmm. How come we don’t use those principles? They’re now just referred to as business process management principles.

As I started to formulate my ideas, all of a sudden the nonprofit sector started to show at my door in force. I quickly fell in love with the sector. So I decided to perfect everything we do for the fundraising community. We’re having a blast with this. It’s wonderful.

MT: Wow. So what are some success stories you’ve had with your system?

EB: Well, I’ll share some average results and I’m going to start with the soft and squishy, touchy feely stuff.

First of all, we recognize that morale is not good in most fundraising departments. There’s an awful lot of whining and complaining and the board is not doing its job. Management is nuts and they expect us to do these things and they’re not paying for those things. But underneath all of that with all the research we’ve done, we find there’s a huge amount of anxiety and low morale.

The first result we get is morale and motivation rise immediately during the first session. People start to feel better about the organizations they represent and they start to focus on how excited they are by the mission of the organization they represent. What it means to them personally, because up to now, a lot of them have been walking around saying, oh, help out. We’re broke. We have a tin cup. Quick, give us money because we’re starving. Instead they run around almost immediately and say, this is a great cause and you get to be part of it, you as a donor.

The second thing that happens is donor engagement improves very quickly. Why? One of the things we help our clients do, or sort of laud them to do, is actually call their donors – what a notion – and have conversations with them which have nothing to do with soliciting gifts. In fact, we show them how to call their top most dearly beloved donors and say, can you do me a favor? I need to talk to you. I’d like to know why you give to charity in the first place. Can you tell me something about what makes you the kind of person you are, and what experiences have you had that have turned you into the philanthropist you are?

Invariably, the experience is so positive for both the donor and the development professional. It’s very surprising. Many and many a time, our clients come back and say, guess what the donor said to me? Well, it’s about time you got to know me. When our board members, members of the development community, get a look at some of the questions we teach people to ask, their reluctance to make introductions or even get involved in relationship building also diminishes.

Now, what everybody wants to know is peachy keen.

Are we making more money? The answer is, while morale, motivation, and donor engagement improve immediately, we start to see an upward curve in gift size, acquisition, and retention within six months.

So people do better. So it’s pretty exciting stuff, and the critical thing about fundraising the smart way –  is that it’s evidence based and metrics driven. So we always know what’s happening. We have the data. I mean, not me personally. The client has the data.

Whatever donor management platform is being used, we can help our clients use it better, add a few more refinements to it, and get better data and more interesting data that really reveals, hey, are we doing a better job?

How do you know you’re doing a better job in fundraising?

1. Is the cultivation cycle shortening?
2. Are we spending our scarce and precious fundraising time on highly qualified prospective funders? Or wasting it on people that we can cultivate for the next million years, and if we’re lucky they’ll write us a check for $50 after we’ve bought them tickets to the Superbowl.

 

MT: Your system talks about the Leaky Bucket. What is the leaky bucket?

EB: Well, the leaky bucket assessment for effective fundraising is a very simple nine statement assessment that we launched back in April 2011. It’s a self assessment tool. It measures the level of maturity of nine very fundamental business practices. They’re so fundamental that they are almost invisible. When we had 70 responses, the results didn’t look very good. Most of the respondents were showing that their level of productivity, the maturity of these nine business disciplines, was down around C-. Well, we’ve rolled up the data now when we had 400 responses, 600 responses, 700 responses, and just in the last two weeks when we got to about the 1,100 response, guess what.

MT: What?

EB: The shape of the curve is identical to what it was when we had 70 responses. We’ve had this data analyzed by data scientists and researchers of significantly more sophistication than I have. The study is considered to be statistically reliable, and what we’re seeing is that there’s an awful lot of soft money being lost. It complements AFP’s excellent Fundraising Effectiveness Project, and it shows that even though 2015 was the biggest giving year ever in American history, there’s still a huge amount of loss dripping out of those buckets. Now another reason we created this leaky bucket is that I had had the idea for fundraising the smart way. I started to pull it together as courseware, and then I realized, you know, somebody’s going to ask me if there’s any basis in fact for this stuff.

So I thought, gee whiz, I better go out and collect the data. So the data now tells us that

1. Productivity,
2. Consistency,
3. Predictability,
4. The metrics that drive desired results tend to be missing throughout our sector!

 

This is in spite of the brave, courageous, effortful, hard working development professionals that are out there, which is most of them. They’re working against the tide, so to speak, because their organizational failings or shortcomings that actually prevent the best performance.

So now we’ve got both how to determine that productivity is lacking, and mechanisms for plugging the leaks in your fundraising bucket. That’s what fundraising the smart way is all about.

MT: So the leaks are donors not coming back?

EB: The leaks are things like a failure to have a documented ideal donor profile that includes capacity plus motivation. We’ve found that nearly 3/4 of our respondents either lack any kind of donor profile, or just have a kind of preference for who we should go after. There’s nothing documented at all.

You’re missing these 7 things-AND it’s KILLING your fundraising.

More than 80% of nonprofits have

1. No donor profiles that include capacity plus motivation,
2. No target,
3. No expectations,
4. No instructions to the staff for acquiring donors,
5. No systems for retaining donors, or
6. No instructions for upgrading donors!

There’s an axiom in management that says, if you can’t measure it, you can’t manage it.

Another one that says what you measure is what you get.

So if we’re not telling our folks, use this profiling criteria, and we’re not saying, try and bring in X% new donors. Here’s your target, Y number of new donors, X number of retained donors. Well, then we haven’t told them to do that, so they do the best they can…

MT: Right. But they don’t really know what they’re supposed to be doing.

EB: They don’t really know what they’re supposed to be doing, so their plan is oh, gee, what do I have to do today? And their measurement at the end of the week is, gee whiz, I’m not sure what I did but I sure am tired.

Those are not really optimal ways to get extraordinary performance out of your team. Even if your team is made up of ordinary people, you should be able to get extraordinary performance, and they’ll feel better when they have these guidelines. They’ll enjoy it more.

MT: Wow. So what are some key principles of the fundraising the smart way system?

EB: Right. Well, I’m going to give you a super duper oversimplification of it. There’s two chunks.

One is creating a rigorous benchmark for funder selection. Two is building the ideal donor profile.

The funder selection strategy means understanding how to attract to your organization donors that match the ideal donor profile in terms of motivations. Capacity comes later.

Most nonprofits that do have a donor profile emphasize giving capacity. Let’s go after the rich folks in town, which as we both know, can backfire. Everybody is going to pursue Bill Gates, Oprah Winfrey, and whoever is the rich person in your neighborhood.

But what we really need to do is build out a scoring mechanism. We actually call it the SMART Way Prospect Score Card, that includes donor motivation, capacity, and even danger signs. We build that profile uniquely for every organization. Actually, the organization builds it. We take them through the donor scoring process, and it allows them to rank their current funders based on two things.

1. Their potential for lifetime donor value and

2. Return on effort that would be invested by the development officer.

 

So if it’s somebody with great matches to your ideal donor’s motivation, and high capacity and low danger signs, then you, the development officer, are justified in spending a lot of your scarce and precious fundraising time on that individual.

But if they have high motivation, low capacity, and a few danger signs, by all means get their money. But take it through less costly channels, such as direct appeal campaigns, online giving, and crowdfunding.

Now, the second half of the SMART Way model pays attention to the way you manage your opportunity pipeline, which is this invaluable checklist of gift opportunities that are in the process somewhere along the arc of cultivation. They’re in the process of being cultivated, and in order to make it make sense, we broke up the arc of cultivation into five stages that lead to the gift. Then there are a few stages after that.

So we can figure out, how far along have we gotten?

The third piece is a whole bunch of simple, easy to understand metrics such as in any given month, how many of our prospects or retained donors should have achieved – you know, what’s our target for achieving certain stages in the opportunity pipeline? It’s similar to most management. We even call our opportunity stages donor moves. It’s extremely simplified, because our donor moves describe the donor’s giving process, rather than our gift acquisition process, which can vary dramatically depending on the type of funder, the relationship we have with the funder, and the size of the funder’s gift.

So having some clarity about whom to pursue and how well we’re doing and what reminders we can give ourselves and our team, that follow up is needed. It takes a lot of complexity and uncertainty out of fundraising. So we get better results.

Learn more from Ellen Bristol at the Nonprofit Leadership Summit Sept 18, 20 and 22nd, 2017.