Designs For Fundraising
Knowing what to measure is as important as getting the metrics right.
To grow, understand what metrics are most important. Not all data points are equal. Each one provides insight, but few can stand alone as a guiding light for your organization.
Long-term donor net revenue illuminates the dark and rocky path of potential marketing decisions like no other.
Short Story: Why Are We Not Growing?
During a quarterly review meeting Bob, Executive Director of Charity USA, is speaking with Amy, Fundraising Strategist.
Amy: Bob, why don’t you ask for email addresses in your print efforts?
Bob: We tested it and it depressed giving.
Amy: What do you mean, how did you test it?
Bob: Well a couple of years ago, we conducted an A/B split test in direct mail. Group A was asked for their email address on their return device within their mail package. Group B was not asked and Group B raised more money than Group A.
Amy: Were your test panels stratified?
Bob: What does that mean? Look, here are the results, Group B produced $31,850 and Group A produced $26,605.
Amy: Well, if your panels were not stratified, Group B simply could have had more major donors because you selected your groups randomly. Therefore, Group B was going to win in gross revenue almost in any case.
Bob: I thought random is good?
Amy: Yes, random is good but only in regards to match panel testing. Stratified or Match Panel Testing ensures each test group will have the same amount of major, mid, new, and regular donors in each group. They are selected randomly of course but this helps prevent an imperfect test materializing.
Bob: Come to think of it, the test panels were stratified.
Amy: Can you produce the list of donors who gave to Group B?
Bob: Of course, give me a second.
Bob grabs a piece of paper from his printer with the list of donors and their giving amounts from Group B. and hands to Amy.
Amy: Bob, look here you have a Mr. Thompson who gave you a gift of $6,500.
Bob: Yeah, he always gives us $6,500 each December.
Amy: Well in that case, do you think we should count the gift toward Group B. It seems like he would have given anyway?
Bob: Why not? How do we know if Mr. Thompson got the Group A package asking for his email address, he would have gotten turned off and not given?
Amy: I doubt that would have happen.
Bob: Yes, but how can we be sure?
Amy: Okay, since it has been two years, have you looked at the long-term value of donors in both groups?
Bob: What do you mean? How would we do that?
Amy: Since the test began, which group has produced the most revenue for the organization?
Bob: Wouldn’t it be Group B?
Amy: Not necessarily. What did you do with the people in Group A who gave you their email addresses?
Bob: We included them in our monthly email fundraising campaigns.
Amy: I see. So it is possible Group A donors gave subsequent gifts through these email campaigns?
Bob: Yes.
Amy: As well as giving through direct mail efforts?
Bob: Yes, you’re right. Let me run a query right now on income received by both groups for just in the last 24 months. Wow!
Amy: By how much?
Bob: Group A now has given more than twice as much as Group B.
Amy: When do you want to start implementing email requests in your print efforts?
Bob: Immediately and thank you! You are a fundraising GODDESS! I worship you!!!
A change in metrics. A change in outcomes.
“What did you spend on a marketing channel and what did you get” is Direct Marketing’s mantra. However, it is an old view in a fast-changing world. Today’s Direct Marketing mantra should be, “What did you spend per donor and what is their year-to-date net revenue?”
One of the main reasons you are not growing is because you are using short-term metrics to validate long-term decision making.
Our metrics need to evolve from micro to macro . . . from tactics to donor engagement. Move from measuring initial response to a channel in isolation toward donor responsiveness to strategic initiatives over time.
Increased donor engagement yields more revenue.
Keep analyzing. Don’t make decisions from analysis that is older than six months. Update findings and never stop. Each decision is critical to growing your cause.
A rising tide raises all boats . . . donor-first fundraising will lift revenue for all channels. Donor-first fundraising is answering the question, “How can our marketing best serve our donors?”
Forget about which media, person or channel gets credit. For donor convenience trumps all tactics. Let donors give and engage in the way most convenient for them and not you.
Launch donor-first integrated multi-channel campaigns and watch your tide rise.
By Todd Baker
Baker is Vice President and Senior Strategist with Milwaukee Direct Marketing. He is the author of the popular blog book, OrgMarketing.com, which is required reading for UCLA’s Digital Fundraising Course, which Baker teaches as part of the university’s Certification Program in Fundraising. He writes the Fundraiser Confidential series for Fundraising Success Magazine and he is also known for the Baker’s Dozen fundraising series for the Nonprofit Times. Baker is also a contributing author to one of the bestselling nonprofit Internet books of all time, Nonprofit Internet Strategies and is also the author of Champions of Philanthropy. He is a former member of the Association Fundraising Professionals Board of Directors for Washington State. Baker spent more than 13 years with World Vision.
Photo Credit:
https://unsplash.com/photos/6kg-tSWq9Ao