queer ideas

When to choose choice

Choice is becoming a buzzword in fundraising. But just how important is it?

Over the last few years, organisations like Kiva, DonorsChoose and CRUK (with MyProjects) have done rather well by offering people a chance to decide how their donations are used. Kiva, which launched in 2005, has generated over $200 million for people working their way out of poverty. DonorsChoose, which is only two years older, has generated over $77 million for schools in need of teaching materials. And CRUK has over 400 individual fund raising pages and 23 project pages which have raised hundreds of thousands of pounds.

But is choice the key factor that lies behind this level of fundraising success?

There are a number of charities that have built websites around the offer of choice who haven't been quite so successful.

Take FORGE for instance. I wrote a piece about this charity back in 2008 on how they came unstuck when they focused on offering online donor choice as a means to raise funds.

See The Difference, who do some great social networking activity to promote their site, also seem to be struggling (see this post for more thoughts on their approach to fundraising). If you look at their most funded projects on their website, few have generated more than a thousand pounds.

And My Action For Children which generated a massive amount of hits from press advertising and celebrity tweets seems to have converted just a tiny percentage to donors. Sign-ups just one month later have dwindled to a trickle.

I believe the different levels of success seen by the two sets of examples is down to something other than choice.

Kiva is fundamentally different. It asks people to lend - not give. And though a supporting donation is suggested (to fund the work of the KIva organisation) this is discretionary. In effect, you are not giving to charity as you can get your money back. As we've seen in the UK with Lend With Care, this is an offer that people find different and attractive. Add feedback on the impact of your loan and fantastic celebrity and corporate support (most notably that offered by YouTube) and you have a financial success on your hands.

DonorsChoose has also benefitted from celebrity support. But at its heart it offers something very special – great feedback. Though they will accept any size of gift, DonorsChoose prompts donors to give $100 by promising them a feedback pack from the school they help. This pack contains a letter from a teacher along with drawings, thank you notes and photographs from the children who've benefitted from the donor's gift. DonorsChoose encourage schools to get really creative with these packs and see them as so important that if a school fails to provide them to donors they can be excluded from the site. The other stroke of genius of the DonorsChoose model is that they also offer a thank you pack to everyone who gives a closing gift. So if a project has just a few dollars needed to hit target, the donor who makes up the shortfall - even if it really is just ten or twenty dollars – gets a thank you pack as well.

Take a look at CRUK's MyProjects and you see two main types of donation – gifts in memory and gifts in response to personal fundraising pages. In this respect it is not that dissimilar to JustGiving. The most successful of the projects on MyProjects is the Santander staff fundraiser for mobile cancer awareness units. Santander staff have been encouraged to raise money for CRUK with the promise that if they hit a certain target they will be eligible for a trip to Brazil to help renovate a school. MyProjects has simply functioned as an online means for them to run personal fundraising activities (see what I mean about it being just like JustGiving?).

If choice was that important to donors, thousands of tiny niche charities would be doing much better. If someone wanted to offer support for disabled children in London for instance, all they need to do is type those words into Google and they'd be presented with a long list of organisations that would love a donation. And more to the point, they would probably all offer a more rewarding and personal experience of giving than can be had when you donate to the national charities you'd find bidding on those search terms through AdWords.

And here's another example of why I think that choice is only a small part of the route to better fundraising.

I started out my fundraising career at ActionAid (about twenty years ago) where I worked on a product called ProjectAid.

ActionAid raised most of its income through child sponsorship. Supporter feedback and research told us that people loved knowing how their money changed a child's life. It also told us that some people found sponsorship expensive and others found it 'emotionally unattractive'.

We took a few logical steps and the end result was ProjectAid. We'd ask the donor to sign up to a regular gift and every four months we'd send them details of projects in need of funding. They could choose the one they wanted to support and we'd then report back on how work was progressing. I still have the first recruitment piece we ever produced and, as you can see, It's not that far from the 'game changing' ideas of crowd funding that we see today. Just on paper rather than on-line.

We tested it with a variety of media, but it didn't do that well.

But what was particularly interesting was how donors responded to the offer of choice. Most ended up ticking the 'where the need is greatest' box on the donation form. The product eventually was used as a 'drop ask' for people who were interested in child sponsorship but found the price too high. It was superseded by another product that concentrated on providing good feedback, which in the long run was more effective.

I've been involved in offering choice to donors in a number of different ways over the years and found similar results pretty much every time. Some people do value choice (particularly with causes such as cancer research and with high level gifts), but many others were more interested in hearing about need, impact and what they had done to make a difference. As one donor put it (and I paraphrase)...

"You're the experts on this. I just want to know that my money has helped".

In my experience, that's what charities should be focusing on. As I mentioned in a previous post, choice is only important if it is relevant. If it isn't, it can become a chore and actively turn donors off.

And if you are interested in finding out why, you should probably take a look at this study featured in Neuromarketing on choice fatigue.

If used appropriately, choice can probably enhance your offer, but, using the tried and tested (and tired) golfing analogy, it should be one of a number of clubs in your fundraising bag, rather than a single club that you rely on for the whole game.

How to work with an agency

Very, very few charities train their fundraising staff in how to work with an agency.

One that does is Barnardo's. And I count myself very lucky to have them as a client.

Gill McLellan, who put the training sessions together, has experience working both sides of the fence. Its given her a great perspective on how to get the best from an agency. And I'm pleased to see that she's decided to share her advice with a wider audience on her new blog, best-laid plans.

She's going to be covering eight key areas and kicks off with knowing what you want.

If you work with, or for an agency, I'd strongly suggest that you follow each post.

Forgiveness or permission?

One thing that fundraising isn't short of are rules and regulations (OK, I know that's two, but I'm sure you get the picture).

There are taxation regulations that define what fundraising materials must contain in order to be exempt from VAT.

There are the industry rules and regulations that tell us what fundraisiers must, ought and should do.

There are the brand guidelines that tell us what style of language we can use, what typefaces and colours are acceptable and what pictures should be featured.

There are the unwritten rules that dictate that we should communicate with our donors in a certain way because that's 'how we do it here' or that's what 'our donors like'.

It's not surprising that with all this red tape that we can forget that giving should be a pleasure that brings a little joy into our hearts.

And that's why we should remember that it's often easier to ask for forgiveness than permission.

The strategic importance of valuing your donors

Strategy is a complicated beast at the best of times. Try developing one for a charity and you really start to understand the meaning of the phrase 'a little tricky'.

Most organisational strategies tend to concentrate on how the charity is going to tackle the problem that underpinned its original creation – from ending global poverty or developing a treatment for a disease right through to causes of more limited popularity like restoring a steam train.

Fundraising will be covered, but more often than not it is seen as a support service.

Money is obviously essential, but few people on the delivery end of the operation will find their heart all a flutter when they discover that they need to get involved in a little fundraising.

As a result, income generation becomes a means to an end. It's something people have to do rather than want to do. As long as ratios hold up and targets are hit, people are happy to leave fundraising on the back burner.

I think that is a mistake. And as I'm talking about strategy, I might as well emphasise that I think it's a mistake of strategic proportions.

Elevating fundraising to the core of the organisational strategy can make the difference between a charity being good and great.

Fundraising is tough. And when it is treated as a support service where a few complaints can dictate whether tools like the telephone or direct mail can be used, it can be almost impossible for a fundraiser to do their job effectively.

But when fundraising is part of the very DNA of the charity, where the need for funds is seen as important at every level of the organisation and where fundraising is seen as everyone's responsibility, the coffers are unlocked and money flows in.

That's because decisions are made with the needs of the donor in mind. And that can offer a very strong competitive advantage.

I'm not suggesting that charities should change the mission statements which define their reason for existence. I just don't think that they can drive all the business decisions that a forward-looking charity needs to make.

And on this point, we can probably take a few leads from organisations who have successfully identified a competitive advantage and exploited it.

Hyundai in the USA, for example, have seen that the recession isn't necessarily a good thing for car sales and have recognised this in their marketing strategy. They now offer assurance with all new sales. In short, if you lose your job within twelve months of buying a new car, you can hand it back for a refund.

Hyundai have identified that their customers have a need for peace of mind and supplied it. As a brand attribute, it's incredibly authentic. It's not just a promise. It's a guarantee.

So what can charities learn from this?

To answer that question, I suggest you take a look at a paper published by David J. Collis and Michael G. Rukstad in the Harvard Business Review, Can You Say What Your Strategy Is? (PDF) In it they debunk some of the myths about strategies needing to be complicated to be successful. They actually say that if you can't articulate a strategy in less than 35 words it is probably holding you back as few staff will understand what it is or how it relates to them.

But more importantly for us, they talk about competitive advantage and the importance of identifying the strategic sweet spot of a company – the place where it can meet customers' needs in a way that rivals can't, don't or won't. I've recreated their chart below, obviously replacing the customer with the donor.

In a crowded charity market, the identification of this strategic sweet spot can be difficult. I've written before about research where donors have struggled to identify the difference between charities with similar aims.

So what should you do?

As the chart suggests, you should look at what your donors actually need from you and identify how you can deliver what they are looking for.

All the evidence points us in one direction – that donors want to know more about how their gifts are making a difference.

If we ignore what donors need, they disappear almost as fast as we can bring them on board. We're like the fundraising equivalent of a competitor on It's A Knockout trying to fill a bucket with a massive hole in the the bottom. A load of effort for not much reward.

This is what we tackle by changing our strategic view of donors. Few charities are set up to effectively engage and involve supporters. Feeding back on how gifts have been used is rarely seen as a core task. As a result, information gathering can be incredibly disruptive to day to day work and soon finds itself way down the priority list.

And that dramatically holds fundraising back.

By building the needs of the donor into a strategy we effectively agree to open the doors of our charity to our supporters. And by delivering on this promise – through demonstrating their individual impact –  we ensure they sit down and stay.

And that's when a strategy really starts to pay dividends.

Create great appeals using T.R.U.T.H

There's a handy mnemonic that's taught to trainee journalists to help them identify a good story.

Journalists, just like fundraisers, can't just write about what interests them, they have to focus on what will interest their readers.

As a result, the mnemonic works for us as well. When creating your next appeal, try assessing the story you choose to build it around by asking yourself if it answers the TRUTH test...

Topical – is it about something that is of current importance?

Relevant – is there an angle that you can use to make the story relevant to the donor? Can you relate the story to the donor by reminding them what they have done in the past?

Unusual – does it contain an interesting approach or present a new solution to tackling a problem?

Tension – does the story have an uncertain outcome that requires intervention by the donor to create a positive ending? Is there a clearly defined goal to reach or obstacle to overcome?

Human interest - does it focus on people rather than statistics?

The fundraiser's wristband

Wear this at all times and consult it before making any decisions.

The idiot's guide to fundraising

Are your donors simply paying spectators?

There's a great video on Social Hallucinations produced by David Gauntlet from Making is Connecting.

David looks at everyday creativity and writes about seeing a cultural shift - from a sit back and be told one to a making and doing one.

So what's this got to do with fundraising?

Quite a lot.

Something that we repeatedly find people mention in our research at Bluefrog is a sense of disappointment with charities. They enter into a relationship with an organisation in the hope that they are going to be an active part of something good. What they receive is a stream of communications talking about what the charity is doing and requests for money.

Disillusioned and unengaged, they soon stop their support (This behaviour is often incorrectly described as lapsing).

But when people can actively do something more than sit back and give, they create cultural capital that benefits them as much as the charities they support.

An example of this is craftivism.

And an example of craftivism is Save the Children's Knit One, Save One campaign. This generated over half a million knitted hats for newborn babies in developing countries. It was also responsible for generating 50,000 messages that were delivered to Gordon Brown encouraging him to do more to help prevent deaths among children.

Save the Children isn't unique. When you think about it, there are a number of examples of this type of engagement already offered by charities.

Child sponsorship provides donors with an opportunity to write (and receive letters). Kiva enables people to help set-up new businesses (and see how they are performing). Care International offers supporters the chance to send advice and good wishes along with educational materials to school children in developing countries.

Organisations that fill the gap between giving cash and full-time volunteering are benefiting from the desire people have to create and connect. It doesn't matter if this is done on-line or off-line, but by giving people the chance to create change rather than simply be paying spectators, we offer them a welcome opportunity to add meaning to their world AND move it in the direction many of us would like.

That's the sort of approach that drives real engagement. It's an idea that I find really exciting. If you've got a few minutes to spare, you should really watch this video.

What should you do with newly recruited Haiti emergency donors?

There have been a number of posts in the blogosphere offering advice about what charities should do with donors recruited in response to Haitian earthquake appeals.

Traditionally, emergency donors are very hard to retain, often only surfacing during the next high-profile disaster.

So any advice on how to improve conversion rates is useful stuff.

Jeff Brooks and Steven Screen dedicate a whole podcast to fundraising around the Haiti earthquake. You can download this via itunes or by clicking here.

Jonathan Grapsas, recommends making the second ask very quickly. His colleague, Sean Triner, wrote a piece for Fundraising and Philanthropy Australia a few months ago that looks specifically at the issue of converting emergency donors. As well as advocating speed, Sean details a five point disaster conversion plan that is well worth implementing.

He refers to the advice of Leo Orland from Australian fundraising agency, Robejohn. Leo also sees speed as essential, recommending donors are thanked immediately. At the same time they should be promised feedback and told when to expect it. Excellent advice.

But I think it is useful to look at what exactly we should be saying in these communications.

With conversion, content really is king and developing the right strategy shouldn't be left to chance.

I've been doing some research on what strategies were used following the tsunami emergency in 2004 to see if there are any lessons to be learned. I've found a great piece by Tom Pope that looks at a number of US organisations and how they approached the loyalty building process. It's a long article so I'm highlighting the key points of each strategy and the results. You should definitely read it in its entirety here as it contains loads of interesting information. Additional material comes from Fundraising Success magazine.

International Rescue Committee (IRC)

Tsunami strategy

• Focused on the organisation rather than the emergency.
• Rather than create a tsunami based emergency recruitment pack, they used a long-standing control pack that focused on work in Sudan.
• They added an additional tsunami focused insert in the pack.
• New recruits were thanked and welcomed to the IRC.
• Feedback was provided by monthly online and DM communications.

Follow up appeals

• Tsunami donors were thanked for supporting the IRC's tsunami relief work and showed how their money had been used before new work was covered).
  
• Non-tsunami donors received the standard communication without the tsunami focused thanks and feedback.

Results (based on response to one DM appeal based on work in Sierra Leone)

• 8.6% response for the tsunami donors
• 4.6% response for non-tsunami donors

CARE USA

Tsunami strategy

• Focused on CARE's wider mission to fight poverty.
  
• New emergency donors were sent "preference cards" so they could control subsequent communications.
• Welcome materials with the message about CARE's wider mission were also used.
• Feedback was provided after 100 days and again at 6 months.

Follow up appeals

• Communications were focused on "Poverty is the silent tsunami".
• The strategy was to "...gain support for any poverty that makes people susceptible to a crisis".

Results (partial year communications only)

• Previous retention rates for emergency donors stood at 22% (compared to 42% for non-emergency donors).
  
• 8% of tsunami donors had made second gift against an expected rate of 9-10% at the same stage in the appeal cycle.
• Predicted 22% normal emergency retention rate would not be achieved.
  
• Adam Hicks, Vice President of marketing and communications thought their approach had improved retention...

"If we weren't doing those things, the responses would be much less".

Catholic Relief Services (CRS)

Tsunami strategy

• Followup communications told the donor "about the organisation as a whole".

Follow up appeals

• CRS had no online programme, so emergency donors were converted to a DM communication stream.
• Communications were revamped. They included:

1. A reminder for donors telling them how generous they were
2. Reports on how money had been used
3. Thank you calls (using a combination of live operator and taped messages).

Results

• 8% of tsunami donors made a second gift against a 'normal' rate of 32% - 33%.
• Second gifts were high with an average of $150 or more.
• Best responders were originally recruited from the web or through unsolicited postal donations.

American Red Cross

No detailed analysis but..

Steve Denne, Vice President for development operations says online donors were opting out at a far lower rate than in previous emergencies.

"They are staying connected with email communications with us more than in the past".

Direct Relief International (DRI)

No detailed analysis but...

41.000 were recruited at the time of the tsunami. Mainly from TV reports. Donors were given access to the standard communications programme of an online newsletter updated on a bi-weekly basis.

No second appeal results but things look positive. Many corporate donors came back to support work surrounding Hurricane Katrina. Over $2.3 million was received without any marketing support.

Strategy to convert online donors was to bond them to the organisation through...

"...direct mail, online strategies and reporting back quickly to them, an in the same way they reached you...when you ask them for a gift, you have to give a compelling story about why the gift is needed, and you have to recognise their help."

Oxfam Canada

Tsunami strategy

Created a separate monthly giving programme that focused on converting emergency donors by highlighting three emergency issues faced by the organisation – immediate response, reconstruction and emergency preparedness.

Follow up appeals

• One month after giving donors received a feedback postcard.
• After two months donors received an in-depth newsletter focusing on Oxfam's response to the crisis.
• After four months donors received a request for a regular gift...

1. Donors who gave via the web were emailed.
2. Donors who gave via the telephone were called.
3. Donors who gave via the web were called.

Results (conversion to regular gift)

• Emailed web supporters - 0.2%
• Telephone supporters who were called - 7.5%
• Web supporters who were called - 13%

So what does all this mean?

One of the ongoing themes of this blog is the concept of donor needs. By answering them, we can build loyalty and raise more money. 

One incredibly important need is for personal growth - in part, this means to reaffirm a donor's self-image. This can be answered by showing them exactly what they helped achieve. This seems to be what the IRC did.

All things weren't equal for charities or their donors, but the IRC found that more emergency donors responded to their first warm appeal than those who were recruited at other times. With an 85% uplift, that's quite astounding.

Other charities that chose to lead communications by telling new donors about the wider work of the organisation didn't do so well.

That's because donors care more about what THEY have personally done, rather than what a charity is doing.

Donors give through charities. Not to them.

It's far too soon to see how donors who have given to Haiti will convert to regular support, but some early data shows that it doesn't seem it will be any easier this time around.

The American Red Cross has done fantastically with their Haiti text donations. $26 million had been raised by Thursday the 21st of January. But only about 5% of those people gave the Red Cross permission to contact them again.

As for my recommendations? You know your donors better than anyone and will probably have your own programmes and tests results to draw on. But, for what it's worth, this is what I would do.

• Thank donors quickly.
• Ask donors what they want and how they want it.
• Update regularly with a focus on what the donor has done.
• concentrate on the benefit to a small number of individuals rather than recounting statistics about tonnes of aid delivered (there's a great piece on the power of small numbers over big ones here via @jeffbrooks)
• Use the web where possible, but make sure your emails are being opened.
• Use highly personal direct mail communications
• Show the donor you know who they are. Remind them of the value of their gift and what it has done in Haiti.
• In all future appeals, continue to write about what the donor has done rather than what you, as an organisation, have achieved.
• Use the telephone to convert donors to regular giving.
• Be creative in how you engage donors. If people aren't interested in setting up a regular gift for general work, offer them alternatives...

1. Consider setting up an emergency fund. Gifts to this will be used for reconstruction and for the next disaster. Feedback on the impact of the donor's actions will build loyalty. From there, conversion to non-earmarked forms of giving will be easier. (I've worked on programmes like this in the UK and they are effective).
   

2. If you have donors giving via direct debit who give to your emergency appeals, consider asking them if they would be willing to have a gift automatically added to their monthly gift the next time a disaster strikes.

Many donors who have given to Haiti might be making their first significant gift to any charity, if we show them the impact of their action and make the experience rewarding, we will do more than raise more money for one emergency.

We will expand the universe of people who give to charity, increasing the effectiveness of the whole sector.

And that can only be good for everyone.

And finally, this approach isn't just suitable for emergency donors. The same basic strategy can be used to convert all new recruits.

Do you suffer from fundraising myopia?

Kimberley of Kimberley's Comments put up a post last week that got me thinking. She recounts a story of traveling in India. Hot and thirsty, she stopped for a drink of pomegranate juice.

Fast forward to a freezing cold day in Canada and the thoughts of the sweltering August day come flooding back. Kimberley is soon to be found sitting at the kitchen table carefully extracting pomegranate seeds one by one. She carefully squeezes the seeds and re-creates the taste of last summer.

Her husband (who is a chef) thinks she's wasting her time and recommends she puts the fruit through a juicer. But the taste wasn't the same. The bitter skin made it undrinkable.

Patience, determination and detail beat speed and mechanisation to create a sweeter, more satisfying product.

Kimberley points out that applying the same values to our fundraising can make the experience of giving far more satisfying for our donors.

I have to agree with her. But there was something else I took from her story.

And it relates to one of the basics of successful marketing.

It comes from a paper called Marketing Myopia, published by Theodore Levitt back in the 1960s.

In it, he looks at industries that died because they failed to adapt in the face of new technology. The most famous example is the American railway system which declined, as Levitt argues, because they defined their business too narrowly – from the perspective of trains and not from their customer's perspective of efficient, fast and comfortable transport. Road and air vehicles ended up taking most of their business.

In Levitt's words, the rail bosses were product oriented instead of customer oriented.

The other analogy that explains this concept is related to drills. If a customer buys a 10mm drill bit, what he or she actually wants is a 10mm hole.

But that analysis isn't really deep enough. Most people want a hole so they can join wood or metal. So the drill bit manufacturer is actually in the business of sticking things together. Suddenly his competitors are no longer just drill bit manufacturers. They are also companies that make adhesives, welding equipment, staples, clamps and perhaps one day, laser guns.

When I read her blog, I saw that Kimberley's focus had been on getting the liquid into a glass. If she had looked at just drinking pomegranate juice, she might have tackled the problem of extracting it in a completely different way.

And it's the same when we look at fundraising. When someone gives to a charity, what are they actually doing? What are they 'buying'?

The web has spawned many new charities that are growing at a tremedous rate at a time when other established organisations are struggling. Non-profits like DonorsChoose, Kiva and Charity:Water are bringing donors much closer to the people they are helping. As a result, they are putting traditional charities to shame.

The people who set these charities up are not experienced fundraisers. But they seem to have an innate understanding of what donors want and have used the web to supply it. Their success has perhaps been down to the fact that they haven't looked at traditional charity models and copied them. They have looked at supplying what donors want – inspiration, self-affirming feedback and evidence of what has been achieved in a way that works.

The big traditional charities will have to increase their focus on donors needs if they are to continue to compete. But whilst they slowly move into a new way of working, the smaller charities like I CAN, Child's i and BullyingUK will lead the way and reap the rewards on engaging in work that really is donor oriented.

And if you are interested in the way I eat pomegranates, I've made a short video to show you how to do it. No juicers, knives or sophisticated fruit mashing equipment is required (thanks to Peter for the tip).