Fundraising

Finding needles in the social media haystack.

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It's a cold, blustery day outside so I'm huddled in my office with a hot cup of coffee catching up on a week's worth of reading. One article at the top of my list this week is  this short piece on Trends and Outliers, the blog of TIBCO's Spotfire data visualization software. In a nutshell, the post outlines efforts by researches to use Twitter information as the basis for predictive models. Professors at MIT have created a model that they say can predict hot topics before they go viral, while a researcher at UC Riverside is building a model that forecasts stock prices based on Twitter chatter about various firms. 

Interesting stuff, with potentially fantastic implications for fundraising. Imagine being able to shift through a pile of tweets to find donors more likely to give at year end. And at the same time, as seems to be the case with all applications of predictive modeling, I see sinister undertones as well. Do we want our global economic health, for example, to be dictated by the whims of millions of Twitter users? Although I guess one could argue that we're not far from that reality already...

In any case, worth a few minutes of your time. I hope you are warm and cozy wherever you are!

Optimism: Yet another reason to try multichannel fundraising.

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I thought this post on Beth Kanter's blog from Frank Barry (@franswaa) of Blackbaud was worth sharing: It's an overview of Blackbaud's 2012 State of the Nonprofit Industry report. Not surprising, "flat or decreasing funding" ranks as one of the top problems cited by the nonprofits surveyed. More interestingly, nonprofits who use multichannel approaches are more optimistic about their fundraising prospects and are up to three times more successful than groups relying on fewer channels.

Who can't use a dose of increased optimism?

Most of the groups I talk with understand they need a multichannel strategy but have a hard time getting off the dime into new approaches. Usually the culprit isn't a lack of ideas, but ironically, a history built upon huge success in a single channel. That is, a nonprofit will find success in one channel and naturally build its organization around that channel. But ultimately this can create a structure that is too rigid. In other words, business processes are often the biggest impediment. 

If your organization has processes that are overly centered on a single way of approaching donors, diversifying doesn't need to be as difficult or as scary as it sounds. Like everything else, the key is to start small. Initial forays into major giving, digital giving, direct mail, or event fundraising can be bite-sized -- you don't have to start by hosting your own triathlon. 

Better results are a compelling reason to diversify in my book. And the prospect of being happier and more optimistic each day? Sign me up!

Full infographic at the source link below. 

Another way to look at Hurricane Sandy donations.

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Figure 1: Disaster giving over the last decade. Click to enlarge.

I wanted to follow on Monday's post about the fundraising results from Hurricane Sandy. If you remember, some observers have commented on the fact that the overall donations generated following Sandy have fallen far short of other recent disasters.

Let's first take a look at the fundraising results we looked at on Monday. Figure 1 shows the results of post-disaster fundraising from five recent disasters: the Indian Ocean earthquake and tsunami, Hurricane Katrina, the Haitian earthquake, the Japan earthquake and tsunami, and Hurricane Sandy. The numbers estimate U.S. private giving three weeks after each disaster.

Setting aside for a moment the tragic thought that there seem to be an increasing number of severe natural disasters, we can see that yes, there does appear to be a downward trend in response. Note that I did not access primary data for the graph, and so there are likely to be inevitable inconsistencies in how the numbers were measured. In fact, I can guarantee we're not looking at a strictly apples-to-apples comparison. But we're interested in order of magnitude, and in that sense we can see that both Hurricane Sandy and the Japan earthquake and tsunami seem to have inspired notably less generosity from the U.S. than the other three disasters.

But is that the whole story? Is giving perhaps related to the overall scale of the disaster?

This is where we find ourselves on tricky ground both ethically and empirically. From an impact standpoint, scale is certainly a matter of perspective. Even one lost home, pet, or loved one is heartbreaking. How can we quantify physical loss and emotional pain? If your heart aches, it aches. 

On the data side, we're on equally rocky footing. I attempted to see if I could quantify the scale of each disaster in economic cost. Given enough time, I could probably find the correct sources and create normalized data -- but I can tell you it does not appear to be an easy task. For example, the economic loss from Katrina is estimated to be far higher than that of the Indian Ocean earthquake and tsunami -- in large part because of the amount of development on the Gulf Coast as opposed to that in rural India. But does that make Hurricane Katrina more tragic?

Figure 2. Disaster impact as measured in overall loss of life. Click to enlarge.

What if we turn to a more verifiable -- and macabre -- statistic: Number of deaths. These statistics are, sadly, very easy to find. And, without sounding crass, they do not need to be indexed for inflation. Figure 2 presents total confirmed deaths attributed to each disaster.

What do we see? Well, we see a different picture. It's hard not to be struck by the enormity of the crises in the Indian Ocean and Haiti. Again, this is not to say that the other disaster weren't crises; our attempt here is to find a way to compare the relative impact. The overall loss of life from the disasters in the U.S. was far less than the disasters in other parts of the world. 

Figure 3. U.S. giving as compared to loss of life. Click to enlarge.

Now let's go back to the giving numbers. We now have enough information to take our data analysis one level deeper. Figure 3 shows a basic scatterplot of U.S. giving as compared to overall loss of life. In this admittedly very small dataset we can see we have two groupings: A linear trend for overseas disasters, and a separate, very steep cluster for the U.S. disasters. 

All of which takes us to figure 4, which shows dollars donated per death. From this graph we can see that on a relative sense, the response to Hurricane Sandy is the most generous by far. It is a grisly metric, to be sure -- and let me say once again that I in no way mean to imply that some losses are more important than others.

What I am trying to do is show that the truth is often in the interpretation. In matters of giving data, as in most things, it is worth doing a bit more digging before deciding you have the whole picture. I don't contend that figure 4 is the whole story, either -- but it is a valuable addition to the discussion.

Figure 4. Donations per death. Click to enlarge. 

For my part, I do not believe that our country is less generous, or less responsive, or weary of providing relief. I believe that people give according to the perceived scale of the impact. At least on this  measure, the response to Hurricane Sandy has been laudable. At a time of political weariness, economic sluggishness, and sustained appeals for help, we continue to respond to the call. 

Being Big.

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This probably doesn't need to be said, but here goes: Being big is not the same thing as being great. This applies to most things and all organizations, and certainly applies to all nonprofit organizations. If your primary rationale for support is that you are the largest -- or the oldest -- nonprofit in sector X, then it is time to rethink your value proposition. If your primary goal is to get to Y size, then it is time to find a goal that actually relates to impact rather than appearances. 

Corollary: I have noticed that there is an inverse relationship between organizational size and organizational passion. This is not a universal rule, but it does appear with notable frequency. 

There's nothing wrong with growing, and there's nothing wrong with large organizations. But size is not the purpose of anything we strive to do. Impact is. The challenge is to endeavor to be great and to grow while doing it -- while not breaking the things that make you great in the process.

Interpreting the reaction to Hurricane Sandy.

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Yesterday Gina Bellafante of the New York Times ran a piece about the many cause-marketing initiatives being launched in the wake of Hurricane Sandy. I found much of the article to be a re-hash of many previous essays about the pros and cons of cause marketing, so I kind of skimmed down the column until my eyes stopped at this:

According to data from Indiana University’s Center on Philanthropy, three weeks after the storm, $219 million had been collected. Comparatively, at the same point, after Hurricane Katrina in 2005, $1.3 billion had been raised; at the same point after the Indian Ocean tsunami in 2004, $610 million. The figure for the 2010 earthquake in Haiti was $752 million.
One explanation for this disparity is that donors presumably have been less moved to help victims who seem largely middle class and white — the residents of Staten Island, Breezy Point in Queens and the Jersey Shore — than they were to assist broader communities of the poor in New Orleans and abroad.

There's something more here to explore, and over the next several days I'd like to come at it from a few angles. Is the country biased against New Yorkers? Is there, as Bellafante seems to intimate, well-meaning but latent racism at play? Is this a massive example of how impact and need both need to be demonstrated in an ask? Have the economic conditions taken another toll at giving? Or has the tragedy in NYC just not gotten the exposure of the other crises?

I'll take a look at a few of these ideas this week.

An interesting trend.

Is Giving Tuesday a bad idea? No.

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As you probably heard if you spend any time online, which is everyone reading this, yesterday was Giving Tuesday, a day created by a consortium of nonprofits to emphasize charity during the busiest shopping period of the year.

Interestingly, in addition to garnering a great deal of attention (and from what I've heard from our clients, creating an actual spike in giving), Giving Tuesday has inspired criticism from some circles as being the exact kind of commercialized, homogenized pseudo-caring it has been designed to counteract. Notably, both Tim Odgen in SSIR and Jeff Brooks in Future Fundraising Now -- neither a slouch in the space -- have written with some cynicism about the effort. 

I agree with the point that Giving Tuesday has the potential to be hollow and trite, and obviously also with Jeff's point that December 31 is already the biggest giving day of the year. Further, there's no denying that Giving Tuesday was a dreamt-up idea, although to be fair it was created by marketers hired by nonprofits, not by marketers.

What I'd offer, though, is that there's really nothing good about the biggest giving day of the year being the LAST day of the year. I applaud any effort to try to shift that giving earlier in the year. I'm not sure I understand the downside.

Further, with the incessant drone of BUY-BUY-BUY that now starts weeks before Thanksgiving and floods every single media channel, I like the idea of trying to mesh in some other message -- if only for balance.

I get the cynicism, I really do. But isn't combatting that cynicism the whole point?

The State of Event Fundraising

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Thanks to David Hessekiel and the wonderful folks at the Run Walk Ride Fundraising Council, I had a chance yesterday to riff for an hour on "The State of Event Fundraising." An overblown title, to be sure, but when David approached me several months ago about speaking I told him I wanted to steer away from my usual mix of strategy and analytics. Instead, I wanted to speak at a broader level about what I'm observing and thinking about.

In a nutshell, I think the dynamics in the nonprofit space are changing, and I'm not sure that we're reacting fast enough. I don't have many of the answers, and I haven't even articulated all of the right questions. But I know enough to know that I should starting talking it through with other thought leaders in the industry.

My fears of appearing overblown turned to performance anxiety when I learned that over 500 people had registered for the presentation -- a new record for Run Walk Ride. As it turned out, over half of those actually showed up and stayed to listen to my ramblings, which can be found on Slideshare here or at the bottom of this post. The entire hour-long presentation, with audio, can be found at Cause Marketing Forum.

I'm not sure what to take from all of that -- y'all don't have enough to do on Thursday afternoons, apparently . But I think what it means is that many others share my anxiety that the dynamics are changing, and many others share my hope that we can benefit from those changes. 

I look forward to sharing some of the observations, thoughts, cautions, and ideas over the coming weeks. 

"Stewardship" does not mean waiting for checks to roll in.

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I wrote a short post today for Event 360’s blog that will likely annoy many development professionals. But honestly: Sometimes I can’t help but wonder how some large nonprofits got so large. 

Stewardship is not the same as accounts receivable. If you find yourself dealing with a high number of lapsed donors or defaulted pledges, don’t blame the donors. Look first at your own organization’s stewardship — or lack thereof.

A short commentary on fundraising incentives.

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Long-time colleagues know that I’m not a huge fan of fundraising gifts and incentives — I think they are nice as recognition tools, but not particularly smart when used as a way to drive action. I’ve never really taken the chance to expand on my thoughts, though, and so I jumped at the offer by Katya Andresen of Network for Good to riff a bit on why. 

The full text of the article, running today at Katya’s Non-Profit Marketing Blog, is here.

I love a soapbox, and I thank Katya for offering one!

An overused narrative.

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Perhaps it is the fact that the 2012 presidential campaign is underway in earnest, along with its ongoing torrent of analysts parsing every word. Or perhaps it is because I find myself reading more and more business blogs that are really pseudo-marketing blogs. Or maybe it is simply that my subconscious vocabulary overflow meter has finally been triggered.

Whatever the reason, I find myself mechanically tearing clumps of hair out of my head whenever I hear what has to be the most abused, overused word of the year: “Narrative.”

We are told that the Romney campaign has to find a “narrative that resonates with Middle America,” while the Obama campaign needs to find a “narrative to respond to the Romney campaign.” Marketing leaders are looking for a “narrative that resonates with consumers.” The Olympics provided us with a “rich narrative of personal achievement.”

I finally reached my personal limit when I started seeing the word pop up in the nonprofit space. “We have to find a mission narrative that donors will respond to.” Honestly, when I hear nonprofit executives talking about a “mission narrative,” I want to scream. 

“Narrative” is a word for our times. It sounds grown-up. Sophisticated. But it is also, basically, meaningless. Is a narrative a story? A theme? A conversation? A pitch? A lie? It is a word that offers little but self-importance. It is a word designed to be deliberately vague. 

Call me old-fashioned, but I’m not sure where “narratives” fit in politics, business, or particularly, the nonprofit world. Campaigns need platforms — a worldview that is supported by policies, not stories. Businesses need strategies — unique, defensible positions supported by operational activities that fit together. And nonprofits need a mission — a specific way of changing the world. 

It is important to be able to talk about how you can help change the world. But it is much more important to actually have a way to change the world, and then to go about doing it. It could be that your problems in fundraising (or marketing or selling or operating or campaigning) have less to do with the way you’re telling the story and more to do with the actual subject matter. Are you making a difference? Does your organization actually help people, directly and impactfully? If the answer is yes, we can find a way to powerfully tell the story. If the answer is no, then no amount of marketing, writing, editing, or creative manipulation will help you grow. 

Leave the narratives to the authors. The world needs help — what are you doing about it?

Pareto's Principle in Fundraising: An Interactive Example

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Over the last few months, I’ve presented and written quite a bit about Pareto’s Principle in fundraising. Better known as the “80-20 Rule,” the idea is simple: Most of the money we raise comes from a small number of donors. This dynamic shows up in nearly every campaign I’ve worked on. Even so-called “grassroots” campaigns are heavily dependent on a small number of donors; just because we ask for small gifts doesn’t mean all of our donors contribute equally.

What is just as amazing to me as the math, however, is the fact that many people have trouble getting their heads around the idea. Even though most of us use donor pyramids and gift tables every day, it is often hard to understand how even massive programs are really driven by small percentages of donors.

This interactive graphic, built from actual campaign data, is designed to help illustrate Pareto’s Principle. Click on any gift level to see how many donors contributed at that level — and how much of the total revenue those gifts represented.

All of this begs at least two questions: Are you trying to grow large numbers of donors or are you spending time finding and cultivating donors who are connected to you? And do you treat donors equally or do you talk to them differently based on how important they are to you?  

Click to interact.

Click to interact.