Articles on Innovative Fundraising Strategies
As part of Small Givings’ commitment to serving the non-profit, schools and churches, civic organizations and clubs, we offer a number of articles on fundraising.
Take a walk on the wild side -
in your donor's shoes
Small Givings, LLC, March 2010
Non-profit and public service organizations can lose perspective about their donors’ reasons for giving. While there is generally little question about a non-profit or community-centered Organization’s focus on the cause or purpose you fulfill, it is often easy to lose perspective when it comes to your donors. The irony is that while you represent your Organization, you are likely also a donor yourself, so it shouldn’t be that much of a stretch to step into the shoes of your donors. Here we look at why people give … and why they don’t.
There are three primary reasons why donors give.
· They have interest in your cause. You are doing work that appeals to the donor, and you have managed to communicate your good work. The appeal can be emotional where you have shown a compelling picture of need such as presenting a graphic picture of starving children. The appeal can be personal where your cause has touched your donor’s life such as a parent being afflicted with the disease that your Organization is seeking to find a cure. The appeal can be to our ‘civic sense’ of supporting our community such as for schools or other community needs. The message here is that you can’t be everything to everybody, and that you must be very effective communicating the purpose you serve.
· They believe their donation will make a difference. The more immediate the impact of a donation, the better this motivation will be served. While there are some causes, such as the American Cancer Society that are in a very long-term effort seeking the cure to cancer and offering support to cancer sufferers and their families; shorter term results can create a stronger drive to contribute. The message here is to offer campaigns, where possible, that focus on shorter term needs rather than general-fund donor development. A strategy may be to break up a larger campaign into smaller goals.
· They believe you will make good use of their money. Donors need to feel that their money is going to be used efficiently and in a transparent manner (disclosed). You need to show that their contributions are not being used for a bureaucratic organization, and that those in need will be receiving their dollars.
On the flip-side of this, there are three primary reasons why donors don’t give (or are reluctant):
· Donors may worry about your Organization’s overhead costs or misuse of money. This is repeated here because it is so important. Fully volunteer organizations don’t suffer from this so much, but larger organizations are always treated with suspicion because of the occasional scandal of jet-setting executives or frivolous off-purpose activities. The message is that individual donors especially are reluctant to have their hard-earned money being wasted, and you need to communicate clearly that their money is being used efficiently.
· They worry that you will not get enough money to fulfill your needs and that you will need more from them. We have all seen those ‘thermometer’ posters showing the progress of fundraising. This can carry a two-sided message because typically we see those thermometers rocket to half-way, then slow way down and creep toward the top until the poster is taken down. The question arises: Was the goal met? Again, it may be better to show completion of smaller goals by breaking it into smaller campaigns.
· They worry that by giving they will be pestered to give more. There are two cases where this worry is the worst. First is that the goal wasn’t met, the second is for a long-term cause. The results, though, are the same with the Organization tempted to ‘go back to the well again’ to get more money from those that have already been generous. The result can be annoyance turning to frustration turning to anger in the worst case. The message should be this: “You were generous and we thank you for your help.” This can be followed by a single, “Thank you, and if you would care to give again …” If they won’t give after one appeal, you will enter annoyance on the next appeal.
What is the message? Simple. It is easy to focus only on your Organization’s needs, and in the frenzy of fundraising it can be even easier to forget about your donors’ concerns. So take a moment to reflect on what drives people and companies to be generous, take a moment to ‘step into their shoes’, and then craft your message and fundraising behaviors to create the greatest appeal.
Small Givings makes giving donations simple for non-profits, civic organizations, churches, schools, and clubs. For more information please see www.smallgivings.com
© 2010, Small Givings, LLC. All rights reserved.
Fundraising: Build it and they will come ... or not
Making the appeal that carries the call-to-action
Small Givings, LLC, March 2010
Non-profit and public service organizations can find the fundraising ‘call-to-action’ difficult to communicate. We all know of the term ‘call-to-action’ even if we have never heard the term. The most basic version of a call-to-action can be heard on TV commercials that end with, “Call this number and do it today!” While non-profits and civic organizations are not likely to be so pushy, there is a lesson here that can help to create the rise we need in donation appeals. In our case, though, the call-to-action needs to be a little more subliminal, and this can be done by making sure that three ‘appeals’ are heard which produce the needed call-to-action.
The call-to-action is what makes donors go to their computer or get on the phone or take the time for the drive to the fundraiser. There is so much competition for peoples’ money – most of it for very good causes, mind you – that people feel overwhelmed and find it difficult to choose which causes deserve attention. Because you can’t say, “And do it today,” you need a way to reach through the noise to draw donors’ attention.
Here are three rules that your campaigns should consider. Use these as a sort of litmus test to see if you can put yourself in your donor’s shoes to see how you score on these three measures.
Make the relevance ‘touch’ me: Giving is based on emotion, not on intellect. People take interest in those things that have some relevance to their ‘life reference’ which is their experiences, not what they read in a newspaper. If I am an animal lover, homeless causes may not ring. If I am a sports nut, animals may not hit the mark. There seems to be an assumption that because people die of a particular disease that death is the common appeal. But it’s not. If I have an aunt who has had that disease, it will have relevance. If I have seen those cute guide dogs in the grocery store then that may gain relevance, but only if it touched me emotionally. If you are appealing to raise money to send poor kids to summer camp, those people who have children or grandchildren who enjoyed summer camp will be the appeal, not the poor kids. Relevance means thinking about how what you are doing has touched the life experiences of your donors. This is a classic emotional appeal, but appeals for generosity are best done when we can find that emotional basis.
Make me feel like I am making a difference: People consider donations as a sort of investment in a cause. If they feel that the ‘mountain is too big’ then they may feel that their contributions won’t make a difference. You see how long-term campaigns like American Cancer Society use the term, “Your gift is making a difference in the fight against cancer.”I know that my $100 donation cannot be measured as one hundred dollars of cancer cure, but I am led to believe that my money is making a difference in the bigger picture – if I felt my money was not, I would not give. If I am giving to send poor children to summer camp, I may want to know how many kids are being sent, and how much it costs to send a kid. If the appeal is made, “Every $350 sends a child to camp for a week,” then not only has the bar been set for how much I am being asked to contribute, I can also get a sense of how much my money is really helping.
Help me to feel rewarded for my generosity: Remembering that we are making an emotional appeal, the reward wants to be on the same level, and we do not want to do anything that will detract from that reward. While we all naturally feel good about giving, to hear or see results can bring a great sense of satisfaction. “Eighteen children had the chance to go from inner city to inner redwood forest,” virtually assures more generosity – “Kids had good time,” will not. “Six new schools were built with your generosity,” may make a better reward than, “Thank you for your donation.” Notes thanking you for generosity sends thanks. Hounding calls to give more will not promote reward, and may even create regret (hardly the message you want to send).
So next time you are creating your newest donor campaign, use these simple measures to create your call-to-action and to help make sure your campaign will really measure up for success.
Small Givings makes giving donations simple for non-profits, civic organizations, churches, schools, and clubs. For more information please see www.smallgivings.com
© 2010, Small Givings, LLC. All rights reserved.
Small regular givings keep giving to your fundraising efforts
Part 1: Regular small givings as alternative fundraising
Small Givings, LLC, February 2010
Non-profit and public service organizations can find fundraising difficult. Called ‘Development’, Organizations – both large and small – must constantly find ways to gain donations from their members and from the public interested in their cause. In the age of electronic payments, we can look at smaller regular automatic donations as a new method that Organizations need to bring into their Development mix.
Development is often a full-time job with considerable resources used and a constant churn of events, mailings, phone contact, and other time-consuming efforts to gain just a few dollars. Anyone involved in fundraising event planning knows the arduous planning, finding volunteers, implementing the event, and cost accounting that goes into just being able to accept the first check. Then often we find that we missed the mark and that our donation goals go unmet.
And so we turn to more continual contact with prospective donors. Unfortunately, that constant contact often frustrates your givers who can feel pestered even when they believe in your cause. Especially in these trying economic times, even the most generous donor can feel pulled between supporting your cause and supporting their own wellbeing. Soon we learn that such constant contact is a poor alternative to event fundraising.
There is an alternative which is gaining more and more acceptance by donors: small, regular givings that come from a donor’s credit card or checking account. The appeal to donors is obvious; it is easier to give smaller donations regularly than a larger amount all at once. Many Organizations have found this fundraising method to be very productive, and donors tend to regard these causes more highly because they feel that they are giving proactively and willingly rather than having donations dragged out of them.
Consider church tithing, for example. We have been steeped in the tradition of giving small donations each week as the plate is passed around. We are already accustomed to that form of giving. Imagine the difference between giving $25 each week instead of $100 each month (or $1,200 each year). What’s more, because of the way the calendar works, $25 each week actually works out to $1,300 each year. The math is simple: smaller equals more!
Now let’s consider this regular giving in the modern age of electronic payments. By setting up smaller automatic regular payments, three things happen. First, your Organization has to only make one appeal to the donor. Second, you now have a reliable source of revenue instead of wondering what each month will yield. Lastly, smaller regular donations are more likely to be ‘forgotten’ by the donor which will provide more long-term donation revenue. There is a fourth effect because this giving can now be enhanced by encouraging giving to multiple campaigns and for special causes with less worry about detracting from your steady giving streams.
Here we have seen that regular small givings is a fine addition to Development. In the second part of the series, we will discuss how to manage regular giving programs.
Small Givings makes giving donations simple for non-profits, civic organizations, churches, schools, and clubs. For more information please see www.smallgivings.com
© 2010, Small Givings, LLC. All rights reserved.
Small regular givings keep giving to your fundraising efforts
Part 2: Managing regular giving programs can be a lot of work (and risk!)
Small Givings, LLC, February 2010
Setting up and managing a regular giving program can be a challenge. In the first part of this series we learned how regular small-giving donor programs can be an excellent addition to your Organization’s fundraising efforts. Fundraising can be improved with regular automatic donations using a donor’s credit card or bank account. In this part we will look at such programs and the challenges in trying to do it yourself.
So let’s assume that people in your Organization see the value in regular automatic donations to your Organization’s cause. It seems so simple. All you need is a way to collect money from people using their credit card or bank account. Once you find that, then all you need is to find some way to put a link on your Organization’s website, and then the dollars will start rolling in. Right?
Wrong. Electronic payments are actually very complicated.
There are a number of things to learn about before you can even get started. First is to understand the term ‘discount’. The first discount is called the interchange fee charged by the banks and credit card companies. The second discount is what other fees or discounts your service provider may take. It may be that the service provider’s discount is well worth their fee. Once you look at the three areas of cost and risk, the best solution may become obvious.
FIRST COST: Discounts. Many people are familiar with PayPal, a payment service that was designed for small-dollar sales of widgets on the Internet. When you subscribe to PayPal, you establish what is called a ‘merchant account’ that ties that merchant account to an email address, and with discounts ranging from about 1.8% to 3.2% depending on exactly how the payment was made (what kind of credit card or with a bank account). PayPal is a ‘raw merchant account’ that lacks important management/reporting features. If you use a payment forwarding service provider there will be additional fees or discounts which can range up to 8% total; this can be well worth it if your service provider offers the services that make your programs run smoothly.
SECOND COST: Giving program management. Regular automatic giving programs have unique costs not seen in any other form of donations. You are now dealing with donors who may have questions about their credit card bill statement, or who want to turn off or change their donations. Then there is the revenue management side of looking at your merchant account statement and making heads or tails of it, knowing what funds were given for what campaigns, and dealing with things like charge-backs and other concerns. Light-weight solutions like PayPal are useless here, and the burden will fall on you. There are no rules of thumb for how much effort is involved, but for larger programs this can easily be a full-time job.
THIRD COST: Risk. Risk comes mainly from fraud. In a do-it-yourself program, you will be handling donors’ credit card information, and in this modern age of hackers, there is no shortage of stories about hackers draining bank accounts or stealing credit card numbers. Your organization’s risk is as high as $20,000 per event – even if you were not primarily at fault! A payments forwarding service provide should shoulder most of this risk.
ROLL YOUR OWN? Maybe not. As you may see, creating and managing your own regular automatic giving programs may not be the best solution. But have hope! In the third article of this series we will discuss what to look for in a service provider.
Small Givings makes giving donations simple for non-profits, civic organizations, churches, schools, and clubs. For more information please see www.smallgivings.com
© 2010, Small Givings, LLC. All rights reserved.
Small regular givings keep giving to your fundraising efforts
Part 3: Choosing an automatic payment forwarding service
Small Givings, LLC, February 2010
Choosing the right payments forwarding partner is important. In the first two parts of this series we learned that regular automatic small-giving donation programs can help improve your Organization’s fundraising. We also learned that it can be expensive and have huge risk. Here we will discuss what to look for in a payment forwarding service that uses a link on your Organization’s website to direct donors to online payments using credit cards and checking accounts, and which we will call your Payments Partner.
First, let’s consider the most important player here, your givers. Your Payments Partner must have a keen eye on encouraging generosity. One feature to consider is anonymous giving which allows donors to give without fearing that they will be pestered in the future in reward for their generosity. Another important feature is not requiring donors to have accounts and passwords to remember. Ideally, just giving should be all the registration required. You want to make sure that your Payments Partner will do year-end donor receipts. Also, the donor should be able to manage their own giving – cancelling or changing donations – without involving anyone in your Organization!
Once your Payments Partner looks like they understand the donor’s needs, you need to make sure they understand yours. To begin, you want your subscription start to be at no cost, and for your Payments Partner to walk you through the entire subscription process; that is your best chance to learn exactly how the relationship will work, and to make sure their capabilities meet your needs and expectations. You will want your Payments Partner to provide a turn-key website link or banner for simple installation on your website, and to do a test to assure that everything is ‘wired’ together correctly.
You will probably have more than one campaign. Make sure your Payments Partner can provide for donations to different campaigns using a pull-down on their website payment page or some other method, and also make sure that they can provide you with accounting of how much has been contributed to each campaign in an Excel spreadsheet or some other form you can easily use. Limited service providers like PayPal cannot help you here.
There are likely to be legal limitations that your Payments Partner has relative to ‘touching’ your donors – don’t think they are putting you off if that happens (it’s the law!). However, they can provide you email templates, templates for printed ‘take-ones’ and other tools that you can use to promote your individual campaigns. General purpose solutions like PayPal don’t provide these.
Disclosure: Make sure your Payments Partner provides detailed descriptions of costs to you and what you can expect in your net proceeds. Many will charge a monthly fee which is usually to make sure that Organizations are serious, and of course there are the discounts which are often in ranges because of the variation in costs across the different payment methods.
Disclose, disclose, disclose! You must make sure that you or your Payments Partner state exactly what donor money is being used for and how much of their money is actually making it to your Organization. Every payments processor has fees and discounts, and the laws are more about disclosure than the actual fees or discounts themselves. This is a job for your Payments Partner because they always have the most current information on interchange costs.
Now you can look at the total discount. As you can surmise from this discussion, there is a lot to payments processing! All payments processors will take a discount, but what you get for your money varies enormously across payment forwarders. The good news is that a strong Payments Partner can make a big difference in your Organization’s bottom line.
Small Givings makes giving donations simple for non-profits, civic organizations, churches, schools, and clubs. For more information please see www.smallgivings.com
© 2010, Small Givings, LLC. All rights reserved.