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On this episode of Bloomerang TV, Caity Craver, CEO of DonorTrends, stops by to offer some mid-year fundraising advice.

Full Transcript:

Steven: All right, welcome. Hey there, thank for joining in to this
week’s episode of Bloomerang TV. My name is Steven; I’m the VP of
marketing here a Bloomerang. And today I’m joined by our guest, Caity
Craver. She is the CEO over at DonorTrends. Hey there Caity, how’s it
going?

Caity: Good, thanks for having me Steven.

Steven: Yeah, thanks for being here, this will be fun. So what is
DonorTrends, for some folk who maybe aren’t familiar with your
organization?

Caity: Sure. Before I talk about what DonorTrends does I want to talk
about really why Donor Trends was built. And DonorTrends was
built, and Bloomerang has produced and incredible infographic
about this point exactly. When we think about fundraising, we
think about donor retention or attrition, so, how much money are
we losing? And the facts are astounding. So we talk about one
dollar, for every dollar you’re going to make this year, you’re
going to lose 60 cents of that dollar.

Steven: That’s bad.

Caity: Right? So the time is now to think about how we protect the
bottom line in a different way. How can we grow this 40 cents of
every dollar that we’re saving year over year, how can we get
more of this dollar? So how can we improve that? And that is by
focusing on real fund raising metrics and developing strategies
to improve that. And that’s why DonorTrends is here.

Let’s take the data that non profits have spent years and years
collecting, and develop intelligence around that data to raise
more money. So DonorTrends works alongside non profits of all
sizes to use their data more intelligently.

Steven: Cool. Awesome. So, we’re recording this on July 8th. It’s the
first full weekend after the July 4th holiday. I think everyone
is a little groggy. It seems kind of quiet in the non profit
sector, and it seems like we’re kind of in that summer doldrums
period. Would you agree with that kind of assessment?

Caity: Absolutely. You know, it’s an exciting time for many
organizations because for those fiscal years ends that were June
30th closed, it’s a big time. You know, everybody has FY15
budget ready to spend. And it is the quiet before the year end
storm, right? So we have organizations that we’re working with
that are already building their plans for August, September,
October campaigns.

But now is the time where your colleagues are kind of on vacation and
email is a little bit slower. Now is the time where we can kind
of sit back and reflect on our FY15 plans and say, “How can we
use this month that’s going to be a little more quiet to think
about our fundraising strategies to get more of that dollar?”

Steven: Yeah. What should people be doing, in your opinion, this month
that will really set the tone for that end of the year stuff
that is coming down?

Caity: Sure. I think holistically when we look at our fundraising kind
of programs, the first thing that we always say at DonorTrends
is to know your numbers. So, I know that a lot of organizations
spend a lot of money on analytics and get a lot of data tabs and
spreadsheets coming in that have a lot of numbers and
percentages.

But, have they sat there and critically thought about the fundraising
metrics that matter and what that means for their overall
fundraising strategies and file growth? So, since we’re going to
stick to kind of four ways to think about your program in a
different way, to use the summertime in a different way.

Let’s identify four metrics that matter the most. So, I think what
Bloomerang would agree that retention is a priority. If we want
to keep more of this dollar, we have to think about how to
either hold on to more donors, or upgrade those donors. So know
your numbers.

We need to understand retention, how many existing donors are you
retaining? How many new donors are you retaining? That number is
an easy number to calculate, but you need to know what we call
kind of the leaky bucket, all right?

Another visual I’ll hold up here is how many donors are you feeding
into the bucket? How many donors are coming out the bucket, and
more importantly, what is that costing your organization? If you
do not know the cost of attrition we can help you calculate it
immediately.

It’s important that you know that for your fundraising strategies
because you don’t know how much money is attrition costing your
organization. And as marketers, we don’t know how much money to
spend to fix the problem. So on the donor file side, the two
metrics that matter the most, new donor retention, existing
donor retention, and that leads to your overall growth score,
how much your file is growing or shrinking.

Steven: So, you kind of look back on how you did. But what about
looking forward to those challenges coming up? Is that equally
important?

Caity: Absolutely. And just like when you go into the doctor’s office
or the ER, the first thing they’re going to do is take your
vital signs. Maybe you don’t have a retention problem; maybe you
have a donor value problem. So you need to analyze your file
performance, figure out your retention metrics, and then look on
the value side, look at lifetime value and look at either
revenue per donor or average gift, to see how well your
increasing donor value. And then from there identify the
challenge areas on the file.

So how can we build those strategic plans year over year if we really
don’t know where the challenge areas are? Are you having a
harder time converting second gifts? If so, what is the forward
thinking plan to convert more donors. And so that’s what we
recommend first, knowing your numbers, and then let’s develop an
action strategy to address those areas of concern.

Steven: All right, so let’s talk about that strategy. So you do a good
job maybe, and then the first couple weeks here in July, and you
really know what you need to work on, and now it’s time to put
that plan together. How should people go about formulizing that
strategy?

Caity: Sure. So we use a tool called an objective tree. You first
define your objective, so let’s say to increase net revenue,
that’s kind of a common objective of all non profits, and then
you build the tree down from there, asking yourself how, how,
how on every layer.

So, how are we going to improve net revenue? We’re going to raise
more money, we’re going to decrease costs, how are we going to
raise more money? And as you build this plan down, and it’s a
very simple tool, I can send you a template afterwards, so you
can see how some of these trees build themselves, for anybody
out there in the audience that is interested.

At the end of it, at the base of the tree, you have very defined
goals and benchmarks. So to improve revenue we’re going to
increase average gift by $4.00. Where the action strategy
becomes important, it’s understanding at the end of this
decision tree, what does that mean to the bottom line?

So we’re passionate at DonorTrends to say, we call it moving the
metric. So how if we move the retention metric by two percentage
points, what does that mean to the overall bottom line? So for
this organization is more than a million dollars in additional
annual gross revenue, if they could just improve retention from
48 to 59 or 51%. It’s a nominal kind of moving of the metric,
but it’s laying out that strategy to think, what do I need to
improve and how am I going to get there?

Steven: Cool. So, you come up with a strategy, you’ve got your tree,
you got all of your things in place, now it’s time to execute,
right? So how do you kind of rally your troops, assign all those
tasks to all the people in your organization. What advice would
you give for people when it’s actually time to do these things,
all the things that you’re talking about?

Caity: Sure, I’d say keep it to three things or less. I think as
fundraisers, there is so many different things that we can try
to improve, reactivation rates, acquisition rates, retention
rates, reduced costs. And I think it becomes overwhelming when
fundraisers are under very tight budgets. Every year they are
asked to improve net revenue, which means they have to cut back
on investment programs and try to really kind of burn and trim
these house files.

And so I’d say let’s do three or fewer things that you want to
accomplish for the year, and then laser-focus on moving those
metrics. And doing that is going to require a different type of
mindset. Thinking about your fundraising program in a different
way. From my vantage, we start by thinking about audience
selection, and then data processing in a different way.

All right, so if we’re casting the same costly wide net to the same
donors and expecting different results, that’s not going to
happen, you are not going to raise more money. We have to think
about targeting our donors in a different way to influence
whatever type of donor behavior we’re trying to influence. But
again, my recommendation would be to focus on one, two, or maybe
three things that you can accomplish, and then get your whole
team on board, with, here are the goals, and here is how we are
going to benchmark that success.

Steven: Yeah, don’t overload yourself. Because it seems like you go
through the exercise that you recommend here, they’re going to
come up with 50 things that we need to work on, and then you
just get really discouraged, and you get this paralysis because
you don’t want to tackle them all.

Caity: Exactly. It becomes overwhelming. It becomes overwhelming and
that why understanding what it means to the bottom line is
imperative to marketers and fundraisers, right? So if we know
that improving retention is going to raise a million more
dollars, and improving reactivation is only going to raise
50,000 more dollars, then it’s a better use of internal
resources and marketing budget to focus on moving the retention
metric.

Steven: Right. I know we’re kind of talking about this in the context
of, okay, it’s midsummer, maybe the fiscal year is over. But,
should people go through this exercise more than once a year?
What other times of year or circumstances that you think they
should do an exercise like this, if not the exact one that you
recommend.

Caity: I think laying out a strategic plan annually, it starts with an
annual plan, and then revisiting that once a quarter to check in
with the team, where are we with this plan, are we on track to
accomplishing this holistic annual plan. But a quarterly check
in running a metric with the numbers and fundraising, really
doesn’t need to be more done more than once a year, depending on
the metrics that you are running.

Some organizations look at your numbers quarterly. But because on
average a donor gives maybe 1.7 gifts a year, really looking at
the whole annual plan and then checking quarter by quarter to
make sure that your campaign level strategies are supporting
your overall fundraising objectives.

Steven: That makes sense. Well, I know we’re running out of time.

Caity: Already?

Steven: Yeah, I know, its fun isn’t it?

Caity: That was fun. And I feel like it was so, you know, this is
summertime; I wanted to have like some kind of fun background,
maybe some tropical drinks or something.

Steven: No, it looks good, it’s good.

Caity: Yeah, I know, it looks great.

Steven: So if you were going to talk to a nonprofit, maybe a smaller
profit, they had a good first six months, their feeling good.
What’s one piece of advice, what is one thing that you would
tell them that they need to do in July?

Caity: I would say know your numbers. If you don’t know your numbers,
it’s takes less than a week to produce fundraising vital signs.
And that way you will empirically know here’s where we are
today, and here is our goals to get wherever we’re trying to go
tomorrow.

Steven: Perfect. Cool. Caity, this was awesome, thanks for hanging out
with us for awhile.

Caity: Yeah, absolutely, thanks for the invitation. Thanks
everyone.

Steven: All right, we will catch you on next week’s episode, thanks for
watching, and tuning in; we will see you next time. Bye now.

Kristen Hay

Kristen Hay

Marketing Manager at Bloomerang
Kristen Hay is the Marketing Manager at Bloomerang. From 2018 - 2020, she served as the Director of Communications for the Public Relations Society of America's local Hoosier chapter. Prior to that she served on several different committees and in committee chair roles.