29 January 2010

Lunchtime post: Responsible non-profits and the SM gold rush

One idea many NPs fall victim to is the reliance on direct-appeal solicitation letters.  We've run into this on our campus - someone gets excited about an idea they have, and their first response to "how are we going to pay for it?" is "with a letter campaign."

In my last post, I said:
...non-profits need to do a better job of targeting their donors.  We are notorious for blanket direct appeals (AKA junk mail) that are poorly written and convey a lack of professionalism.  If I give $10 to a NP and they send me $5 worth of direct appeals, how confident can I be in their management of my gift?  
Let's roll up our sleeves and delve into this.

I don't know about you, but I receive a TON of direct appeals at home.  Just over the past two weeks I amassed a pile from The Smiles Foundation, Better Homes and Gardens, Chase, and even a few of those random coupon booklets that I've never had use for.

Want to know where I put them? Right in the shredder.  And I know I'm not the only one.

This truth is forcing NPs to rethink how they engage their prospect base, which is why you're hearing a lot about social media (SM) in fundraising campaigns.

The trouble with the idea was that, by and large, most efforts to fundraise through SM have produced little dollar support.  In Friday's Talk of the Nation spot, Stacy Palmer, editor of the Chronicle of Philanthropy, said the majority of mid-sized non-profits reported raising less than $100.  

My office has been using social media as extension of our existing fund raising efforts for some smaller causes.  Specifically, I've been coordinating the Facebok fan page for the Marching 110.  After six months of experimentation, we found that it CAN be successful - but only when centered on specific, targeted campaigns with realistic goals.  

Our 110 is famous on campus - students come to watch the band at the football games and then leave after halftime.  They're entertaining, passionate, and a hard-working group of student athletes.  Its alumni base is historically very engaged, though financially there has been a bit of a disconnect.

We developed the fan page as an outlet not only to drive awareness about the band, build community and control our messaging, but also to encourage our fans to support the band financially.  

To supplement our current online giving page, we partnered with Razoo to give our fans the opportunity to use another SM technology to make their gift.  The idea behind Razoo is pretty brilliant - they want to give donors the ability to support and monitor all their philanthropic causes in one place. One great feature they have is the ability to login to their site using Facebook connect.  They also allow donors to remain anonymous (we'll get to that - that's a topic for another post).

There are a few shortcomings the tool has - for example, the progress against goal measurement won't allow you to account for outside funds raised - but by and large we were satisfied with it. With time, my expectation is that more donors will be comfortable with third parties 

Our online campaign with this new approach increased online gifts by four times what we'd been previously doing; but more importantly, our fans' engagement level increased exponentially.  The page now has more than 4,000 fans.

So, let's wrap up with three key takeaways:
  1. Social media isn't THE answer, but it's part of it.  NPs need to think proactively about how they can use these tools to further the mission of their organizations; the trouble with the past is that there were few early adopters and most of us are playing catch up now.  
  2. Don't rely on SM as your ONLY fundraising / stewardship arm - use it to supplement what you are already doing.  
  3. Finally, and most importantly, set realistic goals and expectations.
What are your thoughts?  Feel free to continue the dialog in the comments area.

24 January 2010

Text me, tease me: non-profit edition

Was listening to Science Friday on Talk of the Nation this week, whose opening segment was about the surge of interest in text-to-give campaigns we've seen recently.  This, of course, is the result of the Red Cross' campaign for Haiti.

The interest is certainly understandable - $30 million is no laughable result from a simple text campaign.

Unfortunately, news reports of their success is giving non-profits (NPs) a skewed, unrealistic perspective of text-to-give program success.  I've heard rumblings in our office in interest in this medium, and I know other NPs are facing similar circumstances.  However, there are still some practical and philosophical issues that for the immediate future will prevent these from taking off.


Text-to-give campaigns are traditionally expensive; moreover, 100 percent of the transaction does not reach the NP.  To give you a framework, mGive is one vendor that handles this service.  They charge $399 / month for their 'bronze' package, $.35 per transaction and a 3.5 percent 'successful transaction fee.'

So, let's say someone gives you $5 via text message.  Of that amount, SEVEN PERCENT of their gift doesn't reach your non-profit.  While it doesn't seem like much, if your campaign reaches a similar level of success to that of the Red Cross (and all donors give at the $5 level) that would mean $2.11 million of the $30 million you raised would go toward transaction fees.

Granted, mGive is waiving the Red Cross' transaction fees for this campaign; smaller NPs would have a much more difficult time getting the same.

Our approach to donor data

One of the reasons, I believe, the Red Cross has been so successful with this effort is that they've allowed their donor to remain anonymous, if they so choose.  That means the Red Cross receives their transaction information, but cannot see your billing information, name, etc.  

During the show, the single caller brought up a very valid point - most donors would like the option to remain anonymous so the aren't peppered with follow up pieces.

Admittedly, this is the fault of traditional-minded non-profits that run bad campaigns, for whom "concern that they are able to properly steward the donor" is nothing more than a thinly-veiled spin on their desire to capture as much data as possible so they can persist you.

There are three key points here.

  • The first is despite the increasing level of transparency the internet age has brought, people still want to feel some semblance of privacy.

  • The second is non-profits need to do a better job of targeting their donors.  We are notorious for blanket direct appeals (AKA junk mail) that are poorly written and convey a lack of professionalism.  If I give $10 to a NP and they send me $5 worth of direct appeals, how confident can I be in their management of my gift?  If we improve execution of our appeals, I believe this will be a smaller issue.

  • The third is NPs need to reach a level of comfort with anonymity.  Regardless of your feelings as a NP, there will always be someone that simply wants a one-and-done relationship with your NP.  Again, if we improve the targeting, I think this will be a smaller issue.  But let's wake up people.  Be realistic.

So, why has the Red Cross been so successful despite these obstacles?
  1. The immediacy of the gift
  2. The fundraising event was tied to a very specific cause, with a limited time frame
  3. The ability of donors to remain anonymous
  4. The simplicity of the giving process
  5. The fees were waived for each transaction
In a later post, I'll address point number two, because I believe it is absolutely critical in how NPs approach the use of SM for fundraising.

In conclusion, while the Red Cross campaign has been successful, remember this particular case is the exception and not the rule.  There are still some outstanding obstacles - cost and donor data control - the will prevent text-to-give from becoming mainstream in the immediate future.

11 January 2010

Jim Harrison's Legends of the Fall

Just finished reading Legends of the Fall last night - and have to say I was really impressed.  A friend of mine had recommended I pick it up back in September, and for one reason or another I haven't had the chance to read it since then.

The book consists of three novellas: The Man Who Gave Up His Name, Revenge, and Legends of the Fall.  I was surprised after picking it up that there was more than one story, and even more surprised after finishing that Legends of the Fall was the weakest story among the three.

Harrison does a great job in the book utilizing language to weave together stories with description that could have easily been 300 pages for each story rather than the full book.  The style, as much as the story itself, was totally captivating - at least in the first two stories.

I'm not entirely sure why Legends of the Fall didn't interest me as much, but I had a much more difficult time finishing it.  Admittedly, part of it might have been the timing (I finished the first two novellas over Christmas and have been squeezing Legends in after work).

I think it's weakest point is that the protagonist isn't fully revealed until halfway through the narrative, and at that point you've lost out on his lead-in because you weren't entirely sure it was relevant.  The setting also changes frequently enough that it's much more difficult to picture where he is.

The book as a whole was the kind you keep on a shelf and read it every two years or so - if nothing else, it's a great lesson in how powerfully words can be molded to create a great story.