Join Dr. Adrian Sargeant, Director of the Institute for Sustainable Philanthropy, and Barbara O’Reilly, CFRE, Principal of Windmill Hill Consulting, as they talk about a global research study the Institute recently completed that is the first of its kind to look at how development planning contributes to fundraising results.

Full Transcript:

Steven: Okay. All right. Barbara, Adrian, I got 3:00 Eastern. Is it okay if I go ahead and get this party started?

Adrian: Yeah.

Barbara: Yep. Let’s go.

Steven: All right. Awesome. Well, good afternoon, pretty much everyone. If you’re on the West Coast, it’s just barely the afternoon. So welcome. Good afternoon. If you’re watching the recording, I hope you’re having a good day no matter what time it is. We are here to talk about planning. Does it help fundraising success? We’re going to talk about those things. We’ve got some research for you. It’s going to be a fun one. I’m Steven. I’m over here at Bloomerang, and I’ll be moderating today’s discussion as always.

And just a couple of quick housekeeping items. I just want to let you all know that we are recording this session, and we’ll be sending out the slides and the recording. You should already have the slides. I sent those out a few minutes ago, but if you missed them, don’t worry. We’ll get you the slides, the recording, the research, all the goodies. You won’t miss a thing. Just look for an email from me later on today. But most importantly, please feel free to chat in any questions or comments along the way. We’re going to save some time for Q&A. There’s a chat box. There’s a Q&A box. Send it in. We’ll see it no matter what you do. We’d love to hear from you. We’d love for these sessions to be interactive. So don’t be shy. You can also send us a tweet. I’ll keep an eye on Twitter if you’re into that. But we’d love to hear from you. So don’t sit on those hands.

If this is your first Bloomerang webinar, welcome. Special welcome to you newbies. We do these webinars couple times a week now. We love doing them, bring on great guest speakers, totally free, totally educational. If this is your first one, hopefully, it won’t be your last. I don’t think it will be. This will be a good one in particular, but they’re all good.

But if you’re wondering what the heck is Bloomerang, Bloomerang is donor management software. So if you are interested in that, maybe you’re looking to switch sometime soon maybe before the end of the year or into next year, check us out. Go to our website. There’s all kinds of videos you can watch. You can get a real good sense of what we’re all about without really having to get hounded by a salesperson. Who likes that after all? So check us out if you’re interested. Don’t do that right now. At least wait an hour because, wow, I got a couple of rock stars here, two of my favorite people ever, Barbara O’Reilly and Adrian Sargeant. Adrian, Barbara, how’s it going? Are you doing okay?

Barbara: Yeah.

Adrian: Yeah. Very well.

Steven: This is great to have you. Barbara’s in D.C. Adrian normally in England, but he is over in Kansas City. So we’re all kind of aligned on time zones. What can I say about you two? I mean, Adrian, you’ve been an awesome partner to Bloomerang. Your fingerprints are all over the software even. And, Barbara, we’ve collaborated on so many things in the past, spoken together. And this presentation is kind of a result of our recent collaboration. Not that I really did anything, except for, you know, maybe look at a couple of questions. You all did the hard work on this research that you’re going to be talking about.

But if you don’t know Barbara and Adrian, I don’t know how that’s possible. But just in case you don’t know, check out Barbara. She’s over at Windmill Hill Consulting, does a lot of really good work around major gifts, annual funds, campaigns. And Adrian, he’s the director of the Institute for Sustainable Philanthropy. You may have known him from his days at the Lilly Family School of Philanthropy here in Indianapolis in Bloomington. Wow, I mean, talk about rock stars. So I’ve already taken up too much time away from you two. So I’m going to stop sharing my screen. And, Adrian, I think, you’re going first, right? So I’ll let you bring up those beautiful slides. There we go. It looks like it’s working. Okay.

Cool. Take it away, my friend.

Adrian: Great. Well, thank you and thank you for the invitation. It’s always a pleasure to do a project with our friends at Bloomerang. And as you’ve just heard, they have a whole range of different webinars that they run, and they curate some of the finest fundraising material on the web. So as being suggested, check it out and see what else you can participate in. So what I’m going to talk about today is a project that Bloomerang co-sponsored with DonorSearch and Barbara at Windmill Hill, looking at fundraising plans. And we’re going to talk to you about the headline results from that survey. And they’ve given me the job of talking about the statistics, which is always fun for 20 minutes. So I’ll talk about the headline results, and then Barbara will give you more of a sense of what we think that means for professional fundraising practice. So that’s how we’re going to divide the session, and we’ll leave some time for questions at the end.

So what were we about in the study? Well, we were about seeing if we could identify what the link might be between planning, if any, and fundraising success. So if you get involved in planning and you get involved in rigorous planning, and you use different tools and models and frameworks, do you have better outcomes in terms of fundraising success? We also wanted to get a sense of the kinds of planning people do right now. Is it a formal yearly process, or is it something that’s more organic, more reacting to what’s going on in the environment? We then wanted to know a little bit more about the specifics of their planning. So do they do internal and external analysis? And if they do, how do they do it? One of the things I was personally interested in is what do fundraisers mean when they talk about strategy. I mean, people say, “Oh, I’m going to write the fundraising strategy.” What does that mean? But we’re also going to delve into how they implement that strategy afterwards, the utility that they perceive they get from that planning process and anything that kind of mediates the relationship between planning and success. And one of the biggies there to be frank is culture. So we’re going to talk about all of those seven objectives.

Before I get into that though, a little bit of housekeeping. Who did we talk to? About 325 fundraisers. That understates our sample to a degree because those are people who completed the whole thing as you’re about to see. It was quite a big questionnaire. And so there were actually more people that engaged with it than the 325, and I’ve included them in the results where I can. Largely, U.S. and Canada based sample, a little bit of Europe, tiny bit of Australia, but largely the U.S. And a very similar gender split to the profession, 77% female and 23% male. Average age of the participants was about 48. 17% of them hold the CFRE certification. So these are I’d say pretty experienced fundraisers coming from a very wide range of organizations size-wise but also in terms of category of cause. So it’s a nice spread of opinion, I think. So that’s the who.

Let’s dig into the first of these objectives. So is there a link between planning and fundraising success? Well, boy, yes, there’s a link, and I’m going to talk more about that link as we go through the presentation. But some facts that we found that I thought were interesting over the survey is that 72% of fundraisers have a plan. And that’s good news, except that that also means, of course, 28% don’t have a plan, which probably isn’t so good news. Larger organizations, more experienced fundraisers more likely to plan. I guess that’s kind of logical really. And planning is related to success in terms of fundraising income, it’s related to donor retention and loyalty, and it’s also related interestingly to the degree of confidence that fundraisers have that they can achieve their objectives this year. And I’ll talk a bit more about that later because our survey went out after COVID had started. So we looked at kind of pre-COVID confidence, post-COVID confidence.

Having a written plan, the odds of having increased revenue compared to decreased revenue about 148% higher. Second and subsequent year retention is 12% higher when there’s a written plan, and 65% of respondents feel that income will be lower than forecast. Those nonprofits with a fundraising plan expect a 10% lower reduction. So, yes, we’re going to be hurt by COVID, but we’re not going to be hurt as bad because we have a plan that we can rely on to help us out with some of that.

Now, 28% of people don’t have a plan. Why is that? Well, an amalgam of leadership issues, and I believe that’s probably a polite way of putting it, right? But I’ll leave you to mull that. Lack of time, perceptions that the charity is just too small. We’re just too busy, or we don’t have the expertise to be able to do it. And we’ve got some fun quotes from people that you’ll see in the report. “My director refuses to make a written plan. So we just do what we did last year. Our department head doesn’t seem to believe we need one.” Disorganized leadership, “We’re in the middle of a campaign. I’m new to the role, pressured. Seems I’m always on the go, don’t really have the time to sit down and do it, or it’s a bit intimidating.”

What else? My second objective. To identify the forms of planning currently undertaken and the components that go into that. So we kind of measured the degree of formality that was adopted in fundraising plans, and you can see there that four more fundraising plans. These are adjectives. And you can look at the adjectives for informal, the adjectives for formal. And you can see the formal plans seem to be more common in our sector rather than informal plans that morph daily, weekly as changes take place in the environment.

What else did we learn? Well, 62% of respondents have developed nice SMART fundraising objectives. That sounds good, but equally, that means 38% don’t have SMART objectives. That’s not good. 90% developed a plan for the strategies and tactics that would be followed. So they might not always have objectives, but they do have a sense of what they want to do over the course of the year. 76% of folks will have procedures in place to track and control that implementation. Three-quarters of the respondents indicated the plan is updated to respond to circumstances. 74% integrated fundraising planning with the organizational budgeting process. So that’s good news because it means that, you know, we are by and large getting the money that we need to do what is felt necessary in fundraising.

What else? Objective three. To identify whether both external and internal audits are conducted. Plans by and large get a snapshot of the external environment. So how well are we doing in relation to that? And also they gather information about the internal environment. How well are we doing? How are different channels performing, different segments of donors, and so on?

People with a written plan, almost two-thirds claim that they conduct an external environmental analysis. And that number is low for those that don’t have a plan. What goes into that external analysis? Well, you can see that 41% of our respondents conduct some kind of market analysis. So they’re looking at data related to the size, growth, trends in the different markets that they’re in. And at a very simple level, that might be the mass fundraising market, the major gift market, the corporate market, the foundation market. And they’re looking at aggregate stats that give them a sense of the changes that are taking place in that.

40% again, would be likely to conduct a SWOT analysis as part of their analysis, and about 30% would do a competitor analysis. Now, I think, that’s a bit low because in our world, you can always steal ideas from somebody who’s got good ones, right? For me, in fundraising, that’s the whole point of a competitor analysis. It’s not understanding their growth and how much money they’re raising. Yes, that’s interesting, but actually, I want to know how they’re doing that and how I can use that knowledge then to inform what I’m doing as a fundraiser. So it would be good to see a little bit more competitor analysis or mystery shopping as you can see on the bottom of this slide.

A little bit of focus on opportunities for collaboration. And then the macro-environment receives relatively little attention. That’s the broad environment that we’re operating in. Change is taking place in the economy, in our social world, and in relation to technology, and so on. I thought that that number there was quite low given that some of these changes can be quite profound, and we need to be, you know, thinking about the implications for fundraising.

On the internal analysis front. We found that people do understandably look back to see how well different forms of fundraising have worked. And an astonishing like 83% of people say, “Yes, we track performance of what we’ve done in the past.” A much lower percentage but still almost two-thirds claim that they assess the performance of their fundraising systems. That might be the system for thanking donors, recognizing donors, or welcoming them into the organization for the first time. 45% looking at fundraising team structure, donor pipeline issues, and the health of the fundraising portfolio. But counting them down. Remember there were seven of these things.

Number four, at number four, to identify the key strategic issues that fundraisers work on and the analytical tools that they use to help them with that. So this is one of the things I was interested in. You know, what do fundraisers mean when they talk about strategy? It’s the broad approach to growth. It’s channel selection and how we use those. It’s setting a budget and the plans that are associated or the actions that are associated with that budget. It’s communication. And interestingly, they get into some detail there about communication design that I would think was more kind of tactical detail, but people it seems worry a lot about the design of their communications, staffing and resources, database, technologies, and so forth, and how we’re going to work with the board. We’ll come back and talk about that again in just a second.

What else? We looked at something called strategic stance as we were interested in strategy. And there are broadly three strategic stances that we looked at. Prospectors who are really kind of market leaders. They’re trying to push growth. They’re ambitiously tracing that . . . tracking and building that growth. They’re identifying new markets, and they’re being innovative in the approach to those markets.

Defenders. They’re more kind of followers. They’re interested in maintaining their position. They’re not really interested in innovation, but after a while when they’ve seen other people do it well, they’ll think about doing that too, right? The only time they really react vigorously is if somebody challenges their position locally and kind of competes head-on with them. But for the rest of the time, you know, they’re really kind of just defending what they’re doing already in fundraising.

Reactors by contrast don’t have a clear strategy for dealing with anything much. They simply react to change in the external environment. They take decisions in an ad hoc way. We found that about a quarter of our sample were prospectors, 70% defenders, and about 8% reactors. Hold that thought because we’ll be back to that and why that matters towards the end of my slot.

So counting down at number five. I feel like I’m in some kind of chart show. To identify how plans are implemented and the regimes in place for that implementation. Well, the scores here, we measured these statements that you can see on seven-point scales, and the mean scores in that right-hand column there are the average score across that seven-point scale. And then just to make things a little easier to interpret, I condensed our original scale down to three, disagree, kind of neutral, agree. And you can see that a lot of effort is spent in tracking the performance of fundraising as it unfolds. 88% pretty much of folks are routinely tracking that performance.

The one number I draw your attention to particularly in this table is the third statement, “We routinely benchmark our performance against others.” And you’ll see that’s a low percentage. So although we routinely track our own performance, we’ve got less of an idea as to how well we’re doing relative to others in the sector. I thought that was interesting.

Accountability. Again, large numbers here. Yes, we’re held accountable. The board, senior management hold us accountable. Progress against the fundraising plan is a factor in my appraisal. 70% of folks agree with that. So there’s a fair amount of tracking and accountability that’s taking place.

What else? Down to number six now. To identify the utility that fundraisers perceive from planning. And there are some really nice large numbers in this table, right? So 95%. Almost all of our respondents believe that fundraising planning is an immensely valuable process. And there’s learning in that for the organizations, I think, that don’t quite think they’ve got enough time to be able to engage in fundraising planning. People who do it perceive they get a lot of value from it. They also perceive they get a lot of help increasing the effectiveness of their fundraising activities. You can see that down towards the bottom of the table. And they reasonably regularly consult with the plan when they’re taking decisions. So there’s a fair amount of utility lurking in there.

Number seven. You made it through, right? We’re almost there. To identify the impact of organizational culture on the adoption and implementation of planning processes. Well, one of the things that, I think, is interesting in our world is that we know that there is a relationship between the degree to which you’ve achieved a culture of philanthropy in your organization and fundraising performance. And we were interested to revisit that and to look at the impact of culture on performance in our survey, to look at the impact on revenue growth, donor retention and loyalty, and fundraiser confidence.

What do I mean by philanthropic culture? Well, I mean the six things that you can you see in boxes on the left-hand side. And I’m just going to canter through what we mean by those and what we found in our survey. So the first of them is donor centricity really. To what extent do we really focus on the genuine needs of our supporters? We give close attention to the quality of service we provide to our donors. 81% say, “Yes, we do that,” but, of course, that also means that 19% of us do not pay close attention to the quality of service we provide to our donors. That’s a little depressing when you look at it from that perspective. When we plan for our communications, we deliberately plan for how we’re going to make people feel. Almost 80% again would agree with that. We take every opportunity to thank people. The only thing that scored a little lower here is we’re looking for other ways in which people can engage with the cause in kind of a meaningful way, which might add well-being to their relationship.

Philanthropic core. What’s that about? Well, that’s about the extent to which you have philanthropy as a core value of your organization. Is it in your DNA that you are there to be welcoming of and good stewards of philanthropy? There are a number of indicators to the extent to which that’s true. Outside of the fundraising plan, all members of staff in our organization could clearly articulate our case for support. Only 40% say yes to that. Philanthropy is embedded as a core value. In our organization, donor stewardship is seen as everybody’s responsibility. Not so much.

Board support. The other ingredient of a philanthropic culture is having a board that are willing to engage in and be supportive of philanthropy. All board members have made meaningful gifts in the past year to support the work. There is no reason why everybody on the board can’t make a personally meaningful gift to support the work of the organization, right? Notice personally meaningful. For some people, personally meaningful might be $500, $100. For others, it might be $50,000, $5 million, right, personally meaningful gift. It’s not the amount. It’s that fundraisers can go out and talk to others with the backing of the full board, and more than that, think about the message that it sends to fundraisers about how they’re valued and their work is valued when the board support them and buy into that and make a gift. It sends such a critical message. Anyway, so that’s that.

We make it clear to new board members that they’ll be expected to make gifts. We have a process in place for tracking and holding people accountable when they don’t make gifts. Certainly not. Oh, dear.

To what extent is fundraising seen as a profession in the same way that coms or accounting might be seen as a profession? Here the results are okay but not brilliant, right? Fundraisers have regular access to professional development activities. 70%, yes, fundraising is seen as a profession. 65% say, “We have a dedicated budget for professional development activities.” That’s not bad, but the prescription I guess would be could be better.

Do you have a strong emotional and compelling case for support core to a philanthropic culture? 71% say yes. But then when you get into the detail of what would make a good case for support, there’s quite an element there that says that could be improved, right, could be more emotional, could focus more on the why question, and could be more distinctive.

The final one, innovation orientation. If you’re going to have a philanthropic culture, you should be innovating in ways that give donors a better experience. Innovation is part of our underlying culture. Not so much. There’s a coherent set of innovation goals. Definitely not so much. Innovation is a core value. Not so much.

So my last chunk in my presentation is to show you some of the things that I’ve just counted through that relate to those different aspects of performance. So drivers of first-year retention. Philanthropic culture. The stronger the philanthropic culture, the higher will be that first-year donor retention. The greater the extent to which fundraising planning is integrated with organizational budget setting, the degree of formality, and the degree to which fundraisers are held accountable for their plan helps pump first-year retention. Second-year retention, philanthropic culture there again, and not being a reactor. So actually having a strategy in place. Remember we talked about those different strategic groups earlier.

Fundraising planning integrated with organizational budget setting again. Having a written plan again. And interestingly this time, the extent to which senior management are more involved in the creation of that plan. Have you experienced this past year revenue increase as against decrease? If you’ve experienced increase, the extent to which you have a fundraising culture will drive that increase. The extent to which, interestingly, you focus on an external analysis in your planning process. That too improves the likelihood you’ll see growth. Having a written plan, not being a reactor, accountability, right? It’s getting a bit boring now, isn’t it? Similar things.

The last element we looked at was fundraiser confidence, and we measured confidence how people felt before the pandemic, after the pandemic. Interestingly, people are anticipating quite a decrease in their income now, and you can see that reflected in the confidence levels that people have for being able to achieve their goals. That’s dropped massively since the unfolding of the COVID-19 crisis.

What is it that drives post-COVID confidence? Having a philanthropic culture, not being a reactor, having fundraising planning integrated with organizational budget setting, monitoring and control, and I guess you might expect this after the crisis but revisiting that plan on a regular basis. And that is all I want to say, except the more astute amongst you will have recognized that there’s a real pattern in there of the things that seem to drive fundraising success. Notably, I think, having a philanthropic culture, but that’s me. Those are the headlines. Handing over to Barbara for what that means.

Barbara: Thank you, Adrian. Okay. You’re always a tough act to follow, I have to say. Okay. Hopefully, you all can see this. So I have to just throw in a little bit of props. This has been . . . it was a great deal of fun to be able to partner with Adrian and his team at the Institute and with Steven and the Bloomerang team and with the DonorSearch folks to really dig into this research and to pull it all together.

I am not kidding when I say this. Adrian is a tough act to follow because he’s got such a depth of experience in research knowledge. These findings are really fascinating because it did start with a question of . . . you know, we have this anecdotal knowledge or belief that fundraising plans . . . having a fundraising plan leads to fundraising success, but we didn’t have the data to really back that up. We also though . . . I think what was surprising as Steven and Adrian and I and Sarah from DonorSearch were sort of digging into the findings, it was actually fascinating to see how that full picture of all these other components that Adrian just walked us through are all equally as important as having that written plan. My job for this part of the presentation is to sort of take Adrian’s findings and distill it down into how to make this work in your own organizations.

Okay. I sort of break it down into these four areas. Obviously, the research report and a user’s guide that I wrote are going to go into more detail around this. These are the headlines that I’ve pulled out, the fundraising culture, how you tell your story, your mindset for innovation, and the role of the board. These were the things that we heard consistently especially in those last few slides of Adrian’s that were the drivers and the ingredients to greater retention, whether it was first-time donor retention or repeat retention. So I want to dig into that a little bit more.

Going back to Adrian’s possible model, these are the areas that we’re going to dig into, the donor centricity and the philanthropic core. We totally throw this word philanthropic culture around a lot. I want us to be thinking about this in the context of how we view fundraising, right? So there was the slide that Adrian was talking about around do people know how we tell our story. Do they see a role for themselves? How they view fundraising as a whole as an activity? Who fundraises? What our organizational mindset is towards that fundraising strategy, and is fundraising viewed as a cost center or a revenue center? That right there underscores how much investment the organization leadership is going to be putting into their own development capacity.

So how we view fundraising. Do we view it like this, which is we don’t pay attention really to who our donors are . . . who they are as people? We view them sort of as an automatic reaction of we have to send out a letter. Somebody’s going to write a check or make an online contribution. They’re transactional. We ask. They get. We might send a thank you maybe. 10% of them probably will not sent that, 10%, you’re not paying attention to the donor needs, or probably not sending out those thank yous. But is that the old-fashioned mindset of we send something out then something comes back of that . . . is that the way we view fundraising, or are we viewing this in the context of we are viewing our investors as donors, as investors, as partners? We want to get to know who they are. We want to understand what drives their giving, what might make them stop giving to us, where can we improve the experience for them.

Who fundraises? So this is where the roles . . . when you articulate this in that development plan, who will be involved in what kinds of donor outreach? And, I think, about fundraising as donor engagement overall. So, when you’re mapping out particular goals for your annual giving or your large gift giving or your planned giving or your board, board goals fundraising goals should be in there. Who are the key people within your organization that need to be part of that donor engagement?

And it helps them to identify. So you might say, “We want to grow our mid-level giving program, and we want to grow it from here to there. And we want to ensure that we’ve got personal touch points from our board members, or we want to have our mid-level giving society, whatever it might be, have some sort of engagement and involvement with or conversation with our program staff to get to know our work a little bit more deeply.” So it’s identifying the many different ways that people within the organization can be involved in creating that welcoming hospital sort of environment for your donors.

Adrian talked about the mindset, the defenders and the prospectors, and what was interesting. So remember the defenders, I think, he said it was about the 70% of people in the survey said that they felt that they were defenders that they were maintaining the status quo. They might make some small incremental tweaks towards effectiveness or efficiency, but they are going to just keep going as they’ve been going. And the prospectors are the ones, I think, Adrian said about 26% of them. They’re the ones who are always looking for the new ideas. They’re looking and trying to maybe a little bit of the shiny object syndrome. They’re trying to innovate in some different ways.

Generally, though, the consistency of the plan is by setting those goals. Financially, the other targets that we’ll talk about is being able to find that middle ground of sort of sticking to the plan that is . . . that you’ve outlined but having that courage to test. And I’m going to talk about that testing and iterating in a little bit. But it’s figuring out that mindset so that . . . you know, the way we’ve always done it is I call it death by six words. We can’t maintain the status quo, and in a year like this, the status quo has been completely upended. So this is the year . . . this is the moment where we’ve got to free frame our mindset.

So how do you put this piece of it into your own development plan? So you’ve got to map out your fiscal year. Think about your channels, your segments, your calendar, and the goals. And then from there, identify those activities that you’re going to do to reach those goals. And who is going to be involved? Are there communication pieces where you want to profile donors, you want to bring in program staff, you want to have a board member be a part of some sort of communication? Identify all of those, so it goes into your development plan as that overall sort of roadmap, and look for ways to test and iterate. And again, I’ll talk about that in a second.

So we go to the case quality. And this is your big bold vision, right? I have so often worked with organizations when they will say, “We need to raise more money,” and I say, “Okay. Tell me what you need to raise more money for. What’s your why?” That’s the question that every organization must be answering when they’re developing out their case. What’s the big bold vision? It has to be bigger than you as an organization, and you have to be thinking about it in the terms of what do you need to realize that.

I like Simon Sinek’s “Start with Why.” I’m a huge fan of him generally. I really found that this book resonated because it helps us to reframe the way we tell our own organizational stories. What he talks about in a nutshell is that the what and how . . . when we talk about our organizations, and I bet if you stopped . . . if I met you on the street, and we were in a non-COVID world, and I said, “Tell me about wherever you work,” you would tell me about what you do and you would tell me about how you do it. That is factored in and processed by one part of our brain. But the why is processed by a different part of our brain, and, in fact, the why is the bigger purpose. It’s the cause, the belief. It’s, in fact, processed by the part of our brain that makes decisions.

I know we think we’re rational people, but the part of our brain that is . . . controls our emotions also processes the why question is also the part that makes decisions. So we’ve got to remember that our case is grounded in why. Why is this problem urgent? Why are we as an organization best positioned? Why should I as a donor care? How will I know that you as an organization have made a difference? And that goes to sort of the tracking and the program evaluation that organizations in general, you know, are best to be doing. But these are core questions that help to support that overarching why.

So in a year like this, everybody’s why is being tested and redefined. Your why now has to be in context of everything this year has been throwing at us. And it’s so unusual because in my 25 plus years in this business, every organization, every nonprofit has been affected in some way shape or form by what’s happening this year, everything that’s going on. So it’s okay. And every donor though, frankly, has been affected as well. So it’s okay to reframe your why in the context of what’s different now in light of the coronavirus, in light of the urgent calls for social justice. We’ve got a contentious election in less than five days away. What’s your why in the context of all of this? What are you learning? What are you doing more of? What are you changing because of the increased needs and demands for your programs and your services? And how does that change into the why . . . your program delivery? So what do you need to do more of or pivot from to address everything that is now before you? So you see this cadence, right? Your why is now put in a very different light. Your why becomes the how. It leads into the how you will do what your why is.

And then the donor piece of it. How can I help? What does this all mean for you as an organization for your short-term, long-term sustainability? And where can the donors join you on that journey? This all now becomes part of your fundraising ask. And I’ll say that donors are waiting for this. They want to know how you’re doing as an organization, how your staff are doing, how those you serve are doing. They want to know what’s happening financially to you or, you know, what you’re thinking for the next year because we’re not out of this, right? We are looking at 2021 for the duration of this. So share with them these stories and be authentic and vulnerable with them to say, “These are things that we don’t know, or gosh, we’re facing these challenges, but we’re going to try to problem-solve through this. We want you to join us.”

How to put this into your own development plan is think about the calls to action. Calls to action are likely going to be the same, but there are probably some ones that are going to be new. How can you inspire your donors to do something for you? So you might be brainstorming with your team on all the different ways to reshape your storytelling, the calls to action that you want to ensure are permeating through all of your communications. Ensure that your activities and the timeline are implemented through multi-channel or omnichannel, whichever term you want to use, so that you are meeting your donors wherever they are.

What’s fascinating is some of the research I’ve been watching from the early days of the pandemic where, of course, we’ve seen online giving surge, Facebook, you know, giving, Facebook fundraisers record levels. Majority of people have been on their devices significantly more than ever before. They are still going to their mailbox to check their mail. They still have a phone. So we’ve got to be thinking about all the ways that we can connect with and engage our donors with that story.

All right. So innovation. This is one of the other pieces that I found particularly interesting in the research. And we often think about this as, you know, sort of fancy, you know, inventions, and, you know, feels, you know, 22nd century now, and it feels sort of out from space, right? But think about even this year alone. We have seen innovations in technology, in medical research. Nonprofits have been embracing changes at a record speed this year because of the pandemic and the resulting work from home sort of force that we’ve now . . . that we’re in.

But what does innovation really mean? Again, kind of like culture, it’s one of those . . . can feel vague. Here are the buzzwords, right? I am a huge fan of the podcast “How I Work” that’s hosted by the founder of Inventium, Amantha Imber. I’m a little bit obsessed with that podcast, I will admit. They’re an innovation consultant, and what they define innovation is change that adds value, so quite simply. It can be incremental. It can be disruptive. So incremental could be just making those little nuances, you know, doing your evaluation that Adrian was talking about in his slides. You know, doing a little check, “Are we moving or making progress? Where do we need to make slight tweaks to our work?” could be disruptive like the digital camera was to photography. Could be that severe of a disruption. But the reality is that innovation is any kind of change, whether it’s incremental or disruptive, that comes from testing and iterating.

So in fundraising, we talk about this as . . . I translate this as we’ve got to resist the inertia and that mindset of, “We’ve always fundraised like that.” And you saw that in Adrian’s slides as well around mindset and sort of culture. Take a hard look and use data, and we’ll talk about data in a second, and really look at, “Where can we do things differently?” Now, COVID-19 has shifted everything. So what you might do is look at . . . if you can spare a little bit of time, catch your breath from this whirlwind of a year, and do a little analysis. Where have you had to do things differently fundraising wise? What changes or what noticeable trends have you been seeing in your own donors giving patterns? Maybe you’ve seen a surge of first-time donors. That’s worth noting. Maybe you’ve seen some . . .

I know from Bloomerang’s research earlier in the pandemic, they spotted an increase in lapsed reactivation, lapsed donors who are coming back to the organizations they formally supported. So take a look at that. Use the comparison against, you know, the good old days pre-COVID of 2019 and figure out, “How do we implement those changes for the future?”

Be like Picasso. So Picasso said, “Good artists copy. Great artists steal.” And I think that’s a really important quote to keep in mind. So the mystery shopping that Adrian was talking about in one of his slides. Get a sense of what are your peers doing? Where are there some good innovation, good outreach donor stewardship, donor communications, approaches that you might think that might be working for you? Build innovation into your budget.

So my friend who I know is on this webinar today is the chief development officer at a performing arts organization, and he has for his team a fail fund. What the whole idea is, and it was inspiring when I first heard it, it was one of those little light bulb moments for me, was that they built into their fundraising budget . . . their expense budget, so I don’t know, a certain amount, maybe 5,000, 10,000, something like that, where his team had the bandwidth. They had the freedom to try something different. So that could be trying a new segmentation approach, maybe a new acquisition approach. It could be testing some new technology. It might be using some sort of automation that will help to improve the quickness of communication with your donors. It could be testing out a giving society that you want to roll out, for example.

But the idea is that allow yourself a little bit of that financial cushion, maybe it’s only a couple thousand dollars, to be able to do test and fail. Failure is okay because from failure, comes learning. At least it should come . . . learning should come from that. So the idea is that if you can test appeal styles or language or timing or type of outreach, your involvement of boards and program staff, all of those. If some things don’t work, learn from it, why didn’t it work, and then build in that regular cycle of testing and iterating. That’s where innovation really comes from. Allow yourself and encourage your team and your executive leaders and your board to embrace that failure is okay. And you’re going to learn from it.

All right. Adrian talked about the internal analysis. And I want to just give you a few metrics that I feel like are probably useful to share. Trends. So your own internal analysis should be what have you been doing over the last two to three years. Now, again, 2020 is going to be the whole anomaly, but go back a couple of years. What have your trend lines been? Where can you easily build? Where are the gaps? Especially, where are your biggest risks? So, if you have been more heavily dependent on one revenue source over the others, you better figure out how to balance that out. Unfortunately, this year might be the year that’s too late to figure that out, but it’s still important to keep in your line of sight.

Donor retention. This is a huge problem. I’m going to get on my soapbox for a second. This is a huge problem in our sector. We are terrible at keeping donors. I think the national average is about 44% in the for-profit world. In the commercial world, it would be that would put a company out of business. So we’ve got to be really focusing on how much we can keep our donors and keep them around for longer.

Average gifts. So this is a good metrics to be tracking. And if you’ve got a functioning really powerful database, it should be able to track all of these things for you pretty easily. But an average gift helps to sort of see in addition to how many donors are you keeping, are the donors you have are they starting to increase their giving a little bit more.

And then how much actually does it cost to raise that dollar? I am not encouraging you to use this as an excuse or as justification for scaling back your costs for fundraising because going back to that culture slide in the beginning of my section is fundraising viewed as a cost center or a revenue center. And in a year like this, I can assure you that our for-profit colleagues are maintaining their sales teams because they know that this is . . . that team is going to drive revenue as we get through this difficult time. It has to be the same with for our fundraisers. Our fundraisers have to be preserved and held on to because they are the ones who are holding those donor relationships.

External analysis. So Adrian talked a little bit about that. I think he said about 30% of survey participants said that they do market analysis. This is just a good barometer. Again, do this once a year as you’re building out your plan. What are national trends? Who are our peers, and what are they doing in terms of their fundraising? Are there changes that we need to be thinking about that might affect us?

A SWOT, same purpose. You don’t need to do this all the time. But that calibration of where our strengths are. Where are opportunities? And where are the weaknesses and threats that we have to then build our development plan around?

Okay. So how do we put this into action? Well, you know, allow yourself that space to push through inertia. Encourage that culture of failure. Take a temperature check of all your metrics and let your metrics drive you. I always encourage clients when I’m working with them on development plans to put those metrics in. So we have that baseline of where they are and then where do we want to grow to. And I actually encourage them to share those metrics with their boards so that the boards can see that fundraising is not just how much money is raised but then all those other pieces below the surface around how many donors we’re keeping, whether they’re upgrading their giving, is the file size growing. All those things help to inform whether or not you’re going to be positioned to raise money. And guess what? It all goes into how you’re engaging your donors, how you’re planning your fundraising overall.

All right. So back to our boards. And this could be a whole session unto itself, but I want to just share why they’re so critical to this philanthropic culture. So Penelope Burk asked in her studies, in her research around donor-centered fundraising. She asked, “If you received a phone call from a board member within days of making your gift, how would that influence your giving?” And what they found was 93% said they would give again. 84%, make a larger gift. 74% would continue to give indefinitely, right? And again, I think, we’re all a little bit burned with polls these days. These polls, these numbers, you know, the huge variance between people say they’re going to do and what they actually do, but these are pretty significant. So it shows that the power of the board of the volunteer leader picking up the phone, leaving a voicemail is really, really important to setting that message of hospitality and of appreciation for the donors.

I just love this quote from Jim Collins’s book, “Good to Great.” “Get the right people on the bus, the wrong people off, and the right people in the right seats.” And that is very much the case for boards. And when we think about their own roles in fundraising, it comes down to six. And so these are the seats that they could be sitting in. They might sit in a couple of these, but fundraising isn’t just about asking for money. And so when you feel that you’re getting resistance from your board, walk them through all the ways that they can be involved in creating a positive and welcoming donor experience. Make it required though. When I’m doing board trainings, I say donor and steward are the two non-negotiables. Those are two things that every board member needs to be doing. Because, again, it’s part of their fiduciary responsibility, but it’s part of their leadership role.

So you set expectations from the beginning about what you need them to do in fundraising. Be really clear. Articulate all those roles. Figure out where they can best feel comfortable playing a role in. Let them get to know who you are. Give them that 101 training. Share some of the trends. Share the behind the scenes numbers that contribute to whether or not you’re actually hitting your dollar goals. Give them the tips on how they can be successful.

We all assume that board members join boards. They’re very successful in their personal professional lives, and they should know what it means to be a good board member. But when it comes to fundraising, it’s helpful to give them as many tools as possible. So it could be giving them templates and scripts or talking points. That case messaging that we talked about earlier, distill it down into bullet points for them, so they could make . . . sort of comes off the tip of their tongues. Help them before they have a donor meeting. Help them with canned calls to action. So if somebody asks them at a cocktail party, you know, again, post-COVID, “What can I do to help?” They’ve got those three things that are easy to say.

And then how you put this all into your plan. Make sure you’re tracking your metrics. You’re using those as your goal setting. You’re setting a board fundraising goal in your plan you’re sharing with them, and you’re working with your board to work towards that goal. You’re helping your board members to understand where they can be involved and giving them all the tools that they need. If they’re still not successful, then ask them what else they need. What’s holding them back from being successful? And work with them to give them that coaching and that training. And making sure that you build in some sort of fundraising training every year.

All right. So this whole road map ultimately leads to more donors, more money raised, and more staff retention. I think, Adrian and Steven, we’re ready for some questions. These are all the ways that you can connect with us. A copy of the report and the user guide will be . . . are available on my website. I know they’re available on Adrian’s website, and Steven’s going to send them out to you as well.

Steven: Yes. We will send everything out. First, this was awesome. Barbara, Adrian, thank you. You got through a lot of good stuff in a short amount of time, and thanks for doing the research also. You know, you put in so much work. I think I maybe was on two phone calls and, you know, chimed in occasionally. I did nothing, but you guys . . . this is a real resource for the sector, and hopefully, it’ll help, you know, nudge some people along, especially those maybe board members or bosses.

Barbara: Thank you.

Steven: I think I’ll start with my question if people don’t mind. What surprised you both and what didn’t surprise you? Wondering how well that tracked with me. What do you think, Barbara, first?

Barbara: Yeah. Well, what surprised me was how complex the answer was to this what I thought was a simple question. Do your fundraising plans lead to more money raised? It was so much more nuanced in all the factors and components. So it was, yes, there is a plan having that clear road map that organizations can refer to, but all these other factors still influence whether or not that plan is effective. I don’t know. Adrian, what would you say?

Adrian: Well, when I teach fundraising in other countries, I’m usually trumpeting just how good U.S. nonprofits are at engaging with the board. And I say that in North America, in particular in the USA, boards understand their role in fundraising, and they’re much more likely to get involved. But when you look at the numbers, all our boards have made meaningful gifts. You know, fewer than half of our respondents were saying that that’s really the case. So I was quite surprised by that whole section. I was expecting there to be, you know, more evidence of the board involvement, more evidence of board giving, and more evidence of policies that help drive some of those things. So, you know, being able to get oust, let’s say, people who aren’t willing to make a gift. Because as I said in my presentation, it’s so important. It’s not the money. It’s the message it sends to the fundraising team. It’s how . . .

Steven: Like they’re doing it.

Adrian: . . . [it acknowledges 00:55:35] colleagues in that function.

Steven: That makes sense. There was that section on innovation, Adrian, in your slides. A couple people have asked about why do you think those numbers were so low? Why is it that innovation is kind of something that . . . ? It just seems like it’s something that we’re behind on compared to maybe the commercial sector. I know the comparison isn’t always fair. But what do you think is holding us back from truly innovating?

Adrian: It’s interesting that the number there was low, and there’s an echo of that strategic stance stuff that we looked at with prospectors. And, you know, only around a quarter of the sample would say that they’re, you know, really looking for growth. And, I think, there are relatively few, or one thing I’ve learned from the survey is that there seem to be really relatively few organizations that are really driving with ambition for growth, and as a consequence, the focus on innovation in the sector is a little bit lower.

Steven: That makes sense.

Adrian: And, I think, you know, if you get the balance of the fundraising right, you can achieve that growth without borrowing it from somebody else. You can achieve that growth by growing the philanthropic pie, and that’s another thing, of course, the innovation does. It allows that potential to grow the philanthropic pie and to grow philanthropy in the States. And as a profession, we’ve singularly failed to do that. It’s been stuck at around 2% of income however you measure it since the born of time. Yeah. I’m disappointed by that. And that’ll be one of the things that will change as we come out of the pandemic because I suspect we’ve seen more innovation in the last few months than we’ve seen for quite a long time.

Barbara: Yeah. I would add that, I think, it’s fear also, just underlying fear. There’s fear because, you know, development teams have limited budgets, and they’re going to stick with what they know that has worked in the past with that limited budget. And if they try something that’s a little bit different, try a new acquisition model, or try a new technology, and it doesn’t have that quick or return on that investment, then they’re going to feel like they failed. And then, “Gosh, we could have used that money to do something else, you know, what we used to do that we knew worked.” And, I think, we’ve got to allow ourselves that courage to say it’s okay to test and iterate and fail.

Adrian: Yeah. I think that’s bang on. I think failure is the acceptable cost of innovation. Anytime you’re involved in an ambitious growth project, you must expect that there will be some failure along the way. So you have to redefine that. You know, failure is not, “Oh, we tried it, and it didn’t work.” It’s, “We tried it, we got a set of results, we learned from it, and we’re going to take that learning and apply it to what we’re going to test next.” It sounds like a subtle distinction. There’s a big difference between those two ways of looking at failure.

Steven: Absolutely. Well, geez, I feel like I could talk about this stuff all day with you and have before . . . we’re getting close to the hour. How can folks get a hold of you two if they want to keep the conversation going? We didn’t get to all the questions. There’s some good ones in here, but I want to give folks an opportunity if that’s okay with you.

Adrian: Yeah. Our contact details will be in the slides that the folks are about to receive. And I’m sure I speak for Barbara when I say and if you have any questions, don’t be afraid to reach out.

Steven: Awesome.

Barbara: Yes. This is fun.

Steven: You two are awesome. This is fun. Thank you for doing this. This is a real treat. It was nice to see your faces. You know, usually, I’m seeing you a couple times a year, but this is a good consolation, a gift through Zoom, I guess. And thanks to all of you for hanging out. I know it’s late in the day and late in the year. So I appreciate all of you hanging out. We got some good webinars coming up in November. This isn’t our next webinar, but it’s one I just wanted to call out. It’s a popular topic, grants. My buddy, Margaret Brazda Poirier is going to come on and talk about grant funding. She’s kind of my go-to. But there are really a lot of good sessions on our webinar page on through into next year already. It’s hard to believe. So check that out. We’d love to see you on another session.

But we’ll call it a day there. Look for an email from me with all the slides, the recording, the goodies. We’ll get you the research. It’s being beautified from what I heard from Barbara, but we’ll get that out real soon. And hopefully, we’ll see you again on another Bloomerang webinar. So have a good rest of your Thursday. Have a good weekend. Stay safe. Stay healthy. Vote next week if you can . . . if you’re able. And hopefully, we’ll see you again on another session. Bye now.

Barbara: Thanks, everyone. Thanks, Steven. Thanks, Adrian.

Adrian: Yeah. Bye-bye.

Barbara: Bye-bye.

 

Kristen Hay

Kristen Hay

Marketing Manager at Bloomerang
Kristen Hay is the Marketing Manager at Bloomerang. She also serves as the Director of Communications for PRSA’s Hoosier chapter.
Kristen Hay