Pirates and Pioneers

 

The New Normal

Spoiler Alert: I have no idea what that means. 

Some quick facts about international development charities (This research was done by Charity Law):

  • Represents about $1.9 billion in revenue (69% of that goes to 34 large charities)
  • 41% of their revenue comes from donors; 31% comes from government
  • 40% have a side business (thrift stores, gifts, etc.) which is about 10% of revenues
  • 87% have less that $1 million in revenue
  • 46% have paid staff
  • About 10% of donation revenue in Canada goes to international development  (Imagine Canada)

Each nonprofit sector has a unique place in Canada… I’m using the stats from international charities. Hospitals and educational institutes have similar stats, but each sector is slightly different.

Charity Law suggests: “… almost 9 in 10 international charities are operating on revenues of less than $1 million per year with little or no paid staff. [Their] efforts should focus both on improving fundraising capacity and improving government support.” 

This past month I have been coaching a young, enthusiastic, mission-minded young woman. A MIT grad, she’s bright, innovative and entrepreneurial. With a few government grants and a fee system, she built a nonprofit to provide African teachers hands on, practical tools to engage young students in STEMM: Science, Technology, Engineering, Math and Medicine. And the program took off. Now, to really thrive, she needs a larger investment. She’s stuck. 

There is so much need… and not enough government support. 

Hmmm – heard that somewhere before?

This last week, after a few back and forth conversations about getting serious about fundraising, she took a leap into the abyss and met with potential donors. A first for her.  It took courage. 

I just heard from her and guess what? The reception was warm and enthusiastic. 

You and I, fundraising professionals, aren’t the least bit surprised. Because that’s what we do. We know that there are many people out there who are waiting to have a chance to impact change. And charities are holding that opportunity in their hand. Some have their palms wide open, sharing the opportunity with anyone who will listen. Others’ hold is tightfisted in clasped palms (I don’t know why). 

Here’s the thing.

Fundraising isn’t magic. It’s a strategy. 

Fundraising isn’t one-off events. It’s a deliberate growth of donors and potential donors. 

Fundraising isn’t going anywhere. Generosity lies at the core of our humanity and well-being. 

Successful charities refuse to put fundraising off to the side. They build a business plan—let’s call it an investment strategy for growth – but it’s a business plan. They know their numbers… they have the data at their fingertips to analyze success. They understand the basic business principles of raising funds – and it doesn’t lie in having a gala. They know the importance of a variety of customers at different payment levels… oops, let me rephrase that, they know the importance of a variety of donors at a variety of giving levels.  They don’t put them into different clubs with different levels of treatments… they thank every donor earnestly AND (this is a huge one) regularly share the need with them. Most of all, they know their mission and are focused on accomplishing it – but they KNOW that the only way to success is in partnership with real people. They do not take those people for granted. 

Here are some basic mistakes people make: 

1. We need a younger donor base. We are going to change our brand and our colours in order to attract the 20 – 35 year old. 

(Oh my… I think I could leave me job and move to a warmer climate if I had $100 for everytime I’ve heard that.) You need new donors. To achieve a growing donor base, you need to understand the data in your current data base. If your donors are in their 70’s and 80’s, you’ve got a problem. If your average donor age has hovered around 60 or 65 for the past 20 years, call me. I want to know what you did – because that is ideal. Engage young people – for sure, but don’t underestimate your older donors.

2. Choose your list carefully. Don’t mail people who don’t give. 

A hundred years ago, in my early years in the nonprofit world, Readers Digest shared their segmentation model with charities. It is a complex algorithm that shows astounding success for organization that have 1 million plus donors. One little problem, charities attempted to use the modelling structure on donor bases of 5,000; 10,000, 30,000. Here’s the reality. Mail deep, mail often. Direct mail is about mass. You don’t pick who gives, you do everything you can to invite the people who know you to give. The smaller you are the more important it is to mail deep. Not all donors will give every time. But if you don’t ask them, they will simply vanish. We’ve seen successful growth at 60 months deep… and no less than 36 months. 

3. Collect reams of data and never look at it.

OK… I have a bend toward overstatement. I like to think of it as a fine sense of irony. But here it is. By simply entering the donor’s name, address, gift date, gift size and what the gift was given for, you have the enhanced power to make good decisions. My heart breaks when we do an analysis of a donor data base and we discover that 80% of donors have never given a 2nd gift. And when we look a little deeper we discover they have never been asked. Why is that? So I’m a curious sort and I ask them why they didn’t ask them again… and, brace yourself, here is the answer…. We didn’t know if they wanted to give again. Yeah, Apple is going to get rich by never offering a customer a new model (one that’s pretty much like the one in their pocket, in fact). Data matters. Don’t complicate it. Analyze it. Use it.

4. Invite donors to “join the movement” or give to general funds. 

Once upon a time that may have worked. I don’t know. I’ve studied some charities in the 1870’s who already were offering distinct dollar handles for their offers – those charities are still around so I think they are on to something. Here’s the thing, people want to know what the money is going to do. That’s one reason why holiday gift programs are so successful. They shout out: “Hey, if you have $20 here’s what you can do…” Specificity leads to accountability. But, you tell me, (and I’ve heard this a million times) we need general, undesignated funds to keep our charity running. Then, I tell you, you’re not building your offers in a way that reflects the actual cost. Paying for your staff, your computers, your software and your trips (and other organizational costs) is a part of the cost of your program. Build it in. One of the problems with the inability to build an offer, from the donor perspective, is they wonder if you actually know the impact of the dollars you give. The fundraiser’s toolkit includes the ability to build an offer and stand by it. 

I may have taken over Rick Mercer’s little alleyway (now that he no longer rants).

Raising funds for an organization is not an afterthought, it is vital to the health of the charity. Why are there 90,000 charities in Canada that raise under a million dollars? They hesitate to apply a budget to their fundraising.

Post COVID? 

I think some charities will fade away. They will not be able to sustain themselves in the new environment. 

But others with thrive. Because: 

  • They have a plan
  • They invest in that plan

But most of all, they have a cause, they tell people about the cause – but more than that, they ask others to come alongside and join them in doing a good thing. 

A friend of mine raised $5,000 in just a few days. She is not a fundraiser, but was passionate about the cause. I asked her how she did it. She looked at me and shrugged: “I just asked.” 

Gift Opportunity: Send us five years of data and give us one hour of your time…. And we’ll talk about building a plan:

Barefoot Creative
250 Woolwich Street South, Unit 1, Breslau, ON   N0B 1M0

519-571-5058
info@barefootcreative.com

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