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How to Use the Fundraising Funnel to Maximize Your Fundraising

How to Use the Fundraising Funnel to Maximize Your Fundraising

Steven: Well, good afternoon for all of you
joining us from the East Coast, and good
morning if you’re on the West Coast. Thanks for joining us for
today’s webinar, “Using the Fundraising Funnel to Maximize Your
Fundraising.” My name is Steven Shattuck, and I’m the VP
of Marketing here at Bloomerang. And I’ll be moderating today’s
discussion. And today I’m joined by two experts in fundraising.
The first is my new friend, Joe Garecht. Hey there, Joe. Joe Garecht: Hi, Steven. Steven: Thanks for being our guest today,
Joe. For those of you who don’t know him, he’s
been involved in professional fundraising for over a decade. And
during that time, he’s worked with organizations large and
small, helping them design profitable fundraising plans,
implement new fundraising strategies, and supercharge their
development efforts. He’s the creator of the rapid growth fundraising
formula, and he’s the author of multiple books – “The Silent
Auction Handbook,” as well as “How to Supercharge
Your Fundraising.” So, thanks for being here, Joe. It’s a real
treat to have you. Joe: Thanks for having me. Looking forward
to it. Steven: And also joining us, as always, is
my colleague, Jay Love. He’s the cofounder and
CEO over here at Bloomerang. Hey there, Jay. Jay Love: Good morning. Steven: Thanks for being here, as always. So, what we’re going to do today is Joe is
going to get us started. He’s got a really great presentation
planned. I had a chance to get a peek at his slides, and I’m
just really excited for the content he’s going to share with you. And what he’s going to do is run through his
presentation, then hand it off to Jay, who’s got a short presentation,
as well. And after they’re both done, we’re going to jump
right into an interactive Q&A session, where Jay and Joe
will both be on the call to answer any of your questions. So, if you hear something that maybe you’d
explained or elaborated a bit more, don’t hesitate to send
questions my way via the chat function on the webinar interface
right there. And I’ll see those, and Jay and Joe will also
see those as well. And we’ll try to answer just as many questions
as we can before the two o’clock Eastern hour. So, I’m not going to waste any more time.
I’m going to hand it off to Joe, who’s going to get us started.
So take it away, Joe. Joe: All right. Well, thanks, Steven, and
welcome everybody. Glad you could be here.
What I want to talk with you today about is the donor funnel, or
the fundraising funnel. I think I found one of the most
important concepts for nonprofits both large and small to
understand and to use as we plan out our fundraising and our
development operation. Most nonprofits, even very large
nonprofits, think of fundraising as simply a series of steps, of
tactics. It’s sending out fundraising letters. It’s holding
events. Maybe we have the occasional capital campaign or planned
giving campaign thrown in. But this mindset is what keeps many,
many nonprofits from reaching their full fundraising potential. Fundraising needs to follow a formula, and
that formula is what you see on your screen right now. It’s the
prospect, cultivate, ask, steward formula, or what we call the
fundraising funnel. You need to follow the formula and the steps
of the fundraising funnel if you want to build lifelong relationships
with your donors. And that’s really key – building long-term
relationships with your donors that outlast that first gift
or that second gift. That helps you bring in new donors over and
over again who don’t have any previous relationship with your nonprofit,
other than being interested in the story that you tell
and the work that you do. And we can do that by following the
fundraising formula of the donor funnel. The first step in the donor funnel is prospecting.
And what is prospecting? At its most basic, prospecting
is simply the activity that we do to bring in new donors.
It’s acquiring new donors. It’s how do we find new prospects who are
interested in our work and make that first contact with them? Now,
it’s important to remember the reason that people give. Why
do people give to our nonprofits? They give based on relationships. They give because we have spent the time to
build a relationship with them through communication. Prospecting
is the first step in that process. It’s the first step in that
relationship process. Remember that strong-arm fundraising doesn’t
work, at least not for long. So, what so many of us do when we
reach out to our boards and to our other donors is we essentially
beat them over the head to try to get them to give us names
of new people that we can contact or that we can get them to
contact to sell just one ticket to an event or get just one donation. That’s why I call strong-arm fundraising,
because we’re asking our board or our other supporters to call
in favors to get just one check. Well, we want to stop looking at
donors as an opportunity for just one check. Instead, figure
out a way to build a relationship with them that outlasts
that first gift. I also want to remind you that prospecting
needs to be a deliberate process. And again, this is something
that a lot of the nonprofits that I work with don’t implement.
We think of prospecting as let’s just throw everything
at the wall and see what sticks. Let’s figure out how we can find new donors
in any way possible. And the truth is, the way that prospecting
works best is when we make it a deliberate process, when we have
a plan in place for finding new prospects and building a relationship
with them. I like to think of prospecting as a series
of concentric circles – what you see on your screen right now. In
the center is “me.” It’s the nonprofit I am working with. And
in the rungs around me, as we go out further and further, are
people who have less and less of a relationship with my nonprofit.
In the ring right around me is my board and are my current donors,
large donors. And I need to maintain my relationships with
them, but I also need to remember that they have their own
set of connections, they have their own network, and I want to
figure out a way to get those people who are in that ring, right
around my nonprofit, my closest connections, to refer
me to that next ring out so that I’m not doing cold prospecting. I’m not looking for new prospects just by
looking through the phonebook, or the online equivalent of the
phonebook. I’m trying to get my current donors to refer me to their
own network and to their own prospects. And then, once I cultivate that next ring,
which are my donors’ friends and colleagues and coworkers, then
they’re going to give, and then they’re going to refer me to
their friends. And the universe of donors and of prospects that
I’m working with is growing, as I’m building more and more relationships. I also want to remind you that for the vast,
vast majority, if not all, of the nonprofits that are on this
call, most of your prospects should be individuals. Most of your
prospects should be individuals, not foundations, because the
vast majority of the money that’s available for nonprofits
is available from individuals. So let’s get down to brass tacks. What’s the
question we’re asking? How do we find these people? How do
we find new prospects? Well, first, remember to take care
of your built-in prospects. So if you’re a school, you have parents and
grandparents and alumni. If you’re a church, a synagogue, you
have members or parishioners. If you are a hospital, you have
a set of building donors who perhaps came through the hospital
or had a loved one who did. It’s important to remember not to take those
folks for granted. Don’t take your building prospects for granted.
They need to be cultivated before they’re asked. And so many
of those organizations that have building prospects
move right to the ask. Remember that they have to be cultivated and
treated as if they’re prospects. In my mind, though, the
best way to find new prospects is referrals. And so many nonprofits
are not using this tactic, a basic tactic that we see. If you came across a business that was involved
in sales, and they told you they weren’t looking for referrals
from their current customers, you would tell them they
were crazy. Well, the same thing is true for nonprofits. Nonprofits can and should be asking not just
our board, but our current donors, our volunteers, our staff,
even our clients sometimes, the folks that we serve, depending
on what type of organization we are, to refer us to other
people who might be interested in our work. That is, in my mind, the best source of new
prospects that we can add to our fundraising funnel. And it
is probably the one that most nonprofits never, ever do beyond
beating their boards over the head for new names. In my mind, the second best way to find new
prospects is non-ask events. Now, you may have heard these referred
to by other authors or consultants as point of entry events
or introductory events. I call them non-ask events, because
that’s what they are. They’re events where we’re not asking for
anything. We’re not asking for money. We’re not asking for volunteer
hours. We are just asking our friends and supporters to
come to an event, to hear more about our money, and to bring their
friends. And we make it clear that we’re not going
to ask their friends for money. They’re not going to look bad in
front of their friends. Our goal is to just introduce these
new potential donors to our nonprofit. And then, obviously, the goal there is to
make sure we know who comes to those non-ask events, and then to
follow up with them in a series of follow-up calls and emails
and communications so we can see if they are interested in becoming
prospects or they are interested in becoming donors or getting
involved with the organization. Steven: Hey, Joe. This is just a quick question.
Do you find that sometimes board
members are reluctant to do the non-ask events, where there’s
not going to be any money raised for the event itself. Do they
look at it just as cost item in the budget versus something that
could generate revenue? Joe: Great question. So, in my mind, for some
board members, yes. Non-ask events are
seen as a liability. So, what they’ll do is they’ll say, “Well,
if we’re going to be having people come, we might as well ask
for money. We might as well ask for $50 or $100.” For other board members, it’s a new world,
because they’re so used to the nonprofit saying, “I need you
to find me new donors,” then when we finally say to them,
“Look. You can help with fundraising in a very real way without
asking for money, just by getting two or three or four people
to this very nice event at our office to hear about our work.
It’s only going to take an hour. We’re not going to ask them
for money there.” In my experience, you’re going to have board
members who jump at that chance to feel like they’re contributing
to fundraising without having to ask for money. To overcome
the objections of board members who see this as a cost item,
it’s important for the development team to explain the fundraising
funnel to the board and to explain that this is part of
our plan for acquiring new donors. I would also make one last suggestion, which
is, don’t spend a lot of money on these events. These are not
events you’re going to have at a fancy hotel. These are coffee
and dessert or cocktail events that you’re having at your
office, or that you’re having at the office of a board member,
and we’re trying to keep costs really, really low. So, in my mind, the reason why referrals and
non-ask events are really, really effective is because they’re
warm. They’re warm leads. They’re a way to meet new donors by
leveraging the relationships of our current donors. And of
course, there’s lots of other ways that you can meet new prospects
as well – your website, public events that you host, informational
events, corporate partnerships, and business partnerships. And there’s all those means of traditional
prospecting through things like traditional direct mail processing.
But if you’re not doing referrals and you’re not doing introductory
events, I think now’s the time to start, because these
are really the best ways to find new prospects. All right. Let’s move to the second step in
the donor funnel, and that’s cultivation. So what is cultivation?
Cultivation simply is everything that you are doing with
your prospects between the time you first meet them and the
time when you’re asking them for money. Cultivation is a process of relationship building.
And that’s really important. Just like prospecting is
a process, cultivation is a process, and it takes time.
Remember that relationships are built with people. You’re not building a relationship during
the cultivation phase between your organization and another organization.
You’re building a relationship even if it’s a business
that is the prospect. You’re building a relationship between
people at your organization and people at the business. Remember also that people want to feel like
part of your time. When do we do cultivation work? We want to
make sure that donors and prospects feel like they’re part of our
team, like they feel like they’re contributing actively, even if
it’s just through giving advice to us or through volunteer work
or just through hearing about what we’re doing, like they’re
actively involved in what we’re doing, and make them feel like
part of our team. And I also want to remind you – and this is
key – we always want to cultivate before we ask. So many nonprofits
jump from prospecting to asking, and they skip that
cultivation phase, and that’s what makes onetime donors. When we move from the first contact to the
ask, we create onetime donors. When we follow a true cultivation
path, that’s how we build lifelong donors for our organization. So, how do you build relationships with your
donors? It’s a simple process of communications. It’s mailings,
it’s emails, it’s calls, it’s meetings, it’s small groups.
You can do more of those non-ask events that are for current
prospects. We call them cultivation events. You can have volunteer opportunities. You
can have committees that you place people on or give them advisory
roles. You can ask them for direct action, like writing letters
to the editor. You can have participatory fundraising, things
like walkathons. But the key is to keep moving people through
the funnel and keep moving them towards an ask. And that is the third of the four steps of
the fundraising funnel – it’s asking. And I know what most
people think when they hear the word “asking.” They think it’s
scary, like it has to be a really, really scary thing to make
asks. Even seasoned fundraisers oftentimes are not
looking forward to making asks. And it doesn’t have to be a scary
process. Again, if we’re cultivating before we’re asking,
if we’re following the funnel, asking should be an opportunity to
simply ask people to invest in your work. It should be something
that is a natural outflow of the funnel that we’re following. It’s also important as we prepare to make
asks that you understand your prospective donor’s mindset.
So here’s what you need to know about your donors as you’re preparing
to make asks. First, your donors don’t want to be sold,
but they do want to give. So they don’t want to feel like you’re
selling them, but people have an innate desire to give. They
have an innate desire to support your organization through words,
through actions, and through donations. But they won’t give – and this is the second
key thing – they won’t give unless they’re asked. So you have
to make sure that as you’re getting folks through the funnel,
you’re actually making real asks to donors, because they’re
not going to give unless you do make asks. Your donors want to know where the money is
going. That’s important. The larger the donor, the more
likely they are to want to know where the money is going. So
as part of your case for support, as part of your cultivation process,
let your donors know how you’re spending the money. And I suggest you do that in more ways than
just your annual report. Let donors know the big vision you
have for your organization and how new money, how donations
are going to impact that big vision, because – and this
is also very important – donors want to know that they’re
making a difference. Your donor wants to know that he or she is
making a difference by giving to your organization. And then, perhaps the most important thing
– we’ve mentioned this already – is that donors give based on
relationships. They give based on the relationship that your organization
has built with them over the cultivation process. So, let’s talk for one minute about what an
ask is, and what an ask is not. In order to be an ask, your conversation
with a donor has to be three things. First, it has
to be an actual question. But if we’re not asking a question to the
donors – we’re making a statement, something like, “Jay, I’d really
like you to give to our nonprofit – know that you have not
made an ask. So when you go back to your office and you think,
“Gee, I wonder why they didn’t write a check.” The reason is because we didn’t make an ask
yet. We just made a statement that we’d like them to get involved,
but we have not made an ask. So, in order to be an ask, it has to be a
question. Second of all, in order to be an ask, it has to be a
concrete step. This means that you have to be asking them to do
something. If we ask them a question that’s not a concrete step,
it sounds something like this: “Jay, would you be willing to get
involved with our nonprofit?” “Well, sure I would. That’s why
I’m talking with you.” That’s a question, but it’s not a concrete
step. We’re not saying, “Would you be willing to
make a donation? Would you be willing to become a volunteer?
Would you be willing to serve on the board?” And then third, and
finally, in order to actually be an ask, it has to be a specific
action. That concrete step, we have to put specifics
behind it. So, it has to be, “Jay, would you be willing to make
a $10,000 gift to our organization?” “Joe, would you be willing
to serve as a volunteer and head up our cleanup committee?
And it’s going to take 10 hours a week. Would you be willing
to do that?” Those are questions where we’re presenting
a concrete step, and we’re presenting a specific concrete step,
a specific amount. And that’s what it takes to make donor asks. Now, one thing I do want to briefly talk about
is how to handle donor objections, because sometimes when we
make those asks, one of the things that holds us back from making
those asks is that we’re afraid of what’s going to happen if
donors object. So it’s important to remember that donor objections
and donors saying no when you make an ask are really
very uncommon when you properly cultivate your donors before you
make the ask. So when you build a relationship with a prospect,
and they start to feel like part of your team, they look
forward to your emails. They look forward to your events.
They want you to succeed. So for many of these prospects, making
a financial investment in your organization is the logical
next step. That being said, you’re occasionally going
to hear or sense objections from your donors, so here’s how
to handle objections. First, make sure you understand the objection.
What is the person really saying? And again, you want
to clarify. You don’t want to be argumentative. You just want to
get to the bottom of the prospect’s concerns. Second, I suggest you restate the question
and validate the concern. So you want to make sure that you
know what the objection is and validate that the prospect
has the right to be careful in how they invest their money. Let them know you understand their question
or their objection, and that it’s a reasonable concern. And then, third, directly answer the objection.
So, for many objections, you should have information on
hand or know how to handle the objection from previous interactions. So spend some time with your team figuring
out what the most common objections are when asks are made for
your nonprofit and brainstorming the best responses for those
objections. You may have heard of Zig Ziglar. He’s a famous
sales trainer. And he used to say that getting an objection
from a prospect is a good thing, because it shows actual interest. The person isn’t saying no. They care enough
about what you were telling them that they were thinking about
it, and they are telling you that they were thinking about
it, and they are telling you why they’re hesitating. So, for Zig Ziglar, objections were the beginning
of the sales process. And I have often seen the same thing
for nonprofits. When someone raises an objection, it often
shows that they’re furiously considering making a gift, but want
to clear some things up or place some restrictions on the
gift. So when someone raises an objection, answer
it. Then continue to build that relationship and make the ask. And that brings us to the fourth and final
step in that fundraising funnel, which is stewardship.
So what is stewardship? Stewardship is everything we
do, all the communication we do with a donor after they
make a gift. When someone makes a gift, our relationship
building process isn’t over. It’s really, in many ways, just
begun in a new phase. Stewardship matters. It matters because
we want our donors to continue to give. It matters because
we want them to give more – we want to upgrade them. And it matters because of what we talked about
way back, when we were talking about prospecting. It matters
because we want to build referrals. We want some referrals from
our current donors. And they’re not going to give us those referrals
to new prospects unless we are properly communicating
with them – unless we’re stewarding them. So what goes into good stewardship? Well,
it’s communication. We need to stay in touch with our donors. It’s
transparency. We want to be honest with our donors about how
things are going and how we’re spending their money. It’s recognition.
We want to recognize our donors for their positive impact
and provide some thanking and some recognition as part of that
process. And I would suggest that if you’re unclear
on how powerful stewardship can be that you take a look at
how hospitals and universities do stewardship. Hospitals and
universities are two nonprofit sectors that really know how to
steward their donors. And what you’ll see from them and what is
true is that it is a process. It’s an ongoing process. You have
to keep it fresh and exciting, and you do have to solicit occasionally. You want to solicit sparingly. You want to
make new asks, but you do want, as part of that process, your
donors to keep giving. And that will require continuing to
make asks. So, I tell people, “When you think about stewarding,
it’s kind of what you would see in your kid’s high school
yearbook when they write K.I.T. – Keep In Touch.” That’s
what keeping in touch with your donors is. It’s newsletters. It’s your website. It’s
non-ask events for donors. It’s one-on-one meetings and small
group meetings. It’s donor recognition. It’s giving clubs and donor
clubs – which many nonprofits are not using, but could be
using to steward their donors. It’s giveaways. It’s little
presents. It’s staying in touch. So it’s a lot like cultivation. It’s a lot
like cultivation in that it’s continuing to build a stronger and
stronger relationship with our donors. So my suggestion to you is, put your fundraising
formula using these four steps – the prospecting, cultivation,
asking, and stewarding – into a plan for your nonprofit
and work it. And of course, don’t focus on everything at once.
There are hundreds of ways to cultivate your donors. Try two or three ways, to start. Don’t use
everything in the book at once. And test, test. Test new things.
Test new prophecies. Drop what doesn’t work, and focus
on what does work. And that is just a brief overview of the fundraising
funnel and how you can use it at your nonprofits. Now, I’m going to hand things over to Jay,
who’s going to talk a little bit more about effectively using the
donor funnel. Jay: Thank you very much, Joe. And I’m so
glad that you set it up in this manner,
because you’re so right in what you’re saying that if the ask is
before cultivation and the stewardship doesn’t come into play,
you end up with a parade of onetime donors. As I always refer to – and anybody that’s
heard me speak knows – I talk about being on this endless treadmill
that you can never get off of searching for new donors instead
of really nurturing and taking care and providing the stewardship
to the ones that you have. So we’re going to talk about what I think
is a little piece of the puzzle here that, depending on the nature
of the organization, can be a very big piece or a
smaller one. It’s effective use of a donor database that allows
the donor funnel process to be a natural progression in the
relationship. It’s all about building the relationship.
And relationship, to me, is built upon communication, so we’re
going to talk a lot about that, and we tie that together with
a concept called engagement. Engagement is really the linchpin in bringing
all of this together. If you think about what a linchpin
is, it’s literally something that’s meant to hold items together
or hold elements together. That’s the dictionary definition of linchpin,
but when we talk about engagement, it allows us to avoid what
we’re seeing in this graph right here. What we’re looking
at here is what happens if that engagement is not as strong. And the attrition rates that we’re looking
at here, you’re going to see a row with 20% attrition, which means
we have an 80% retention, a 40%, and a 60%. I want to concentrate
on the bottom over there, because that’s the national average
right now for small- to medium-sized nonprofits. 50% of
the donors are attriting each year. So, if you start with a thousand donors, look
what happens after just one year. You’re at 400. Then you’re
at 160, then 65, then 26, then – the really scary part here – we’re
at 10. I really ought to make that a red circle instead of
a yellow one there on the screen, because that 10 is sort of scary
to know why we have to be on that donor acquisition treadmill,
because we’ve just not done a very good job of bringing that
out. And the reason I say that the national average
is 16% — the fundraising effect on this project – which
I’ll talk a little bit in a minute – the most current figures
for going from 2011 to 2012 are just in, and it went down again
by another 2%. Donor retention is only at 39%, which means 61%
are attriting in any one year for that. And that’s really sort of scary, considering
that in the last seven years, it’s gone from a 50% retention
to a 39% retention. Now, let’s talk about where those numbers
are coming from. Well, when we look at the difference between new
donor retention and repeat donor retention, there is a significant
difference. New donor retention here is at 22.9% on the average,
but repeat donor retention is 60.8%. So just see how
vital and how very, very critical it is to get that second gift
or to have that organization have those people stay involved
for the second year. If you can get as many as possible to the
second year, you’re automatically in this higher level of retention.
And we see some organizations that move that up to as high
as 70%, 75%, and 80% for that. We can see that this is a little bit more
of a bigger problem the smaller your nonprofit is, because it’s
really sometimes hard when you’re small to put all of that
relationship building techniques into play. That’s why I think a database can make such
a huge difference, because it can be that connecting tool that
allows you to make that happen. So, yes, your eyes did read correctly. This
data that’s coming from the Urban Institute and the AFP and its
brought up from all of the donor recordkeeping systems that are
out there, as you can see there – your eyes are reading correctly
– 6 out of 10 of the donors from the previous year did not
donate at all the next year. Then, we’re not talking about just the first
year donors here. This is the blended rate, that a retention
was only 39% across all areas. We here at Bloomerang turned to two experts
in the industry to really help us with this, and most of our
guiding principles that are built into the Bloomerang product
come from Dr. Adrian Sargeant and from Mr. Tom Ahern. Dr. Sargeant, sort of the father of donor
retention and donor loyalty, has been doing research for 22 years,
and has written several books. Then when you talk about the
communication aspect and how do we build that to be a better tool
for us, we do that with the help of Mr. Tom Ahern, who is our
donor communications head coach, and has written several books
on it. If you don’t take away anything else out of
this session today, please sign up for Tom’s newsletter. He does
a weekly newsletter. If you look up Tom Ahern on the
internet, you’ll find his weekly newsletter. It comes out every
Monday morning. It just does a superb job of talking about
donor communications and how we can make that happen. But when we talk about best practices in retention,
it was Dr. Sargeant who coined this particular quote
right here: “A 10% improvement in retention can double the lifetime
value of your donor database.” Now, that’s pretty significant, to think about
the lifetime value that’s in my database, based upon what
the average gift is and the average number of years that someone
supports us, could possibly be doubled. I’m sort of a prove-it math person. I minored
in statistics in college, so I asked Dr. Sargeant, “Can you
prove this to me with some sort of a spreadsheet?” And I’ll be darned
if he didn’t do that for me here. He said, “Let’s just take
and reuse the previous retention rate of 41%” – that was
the previous year, as I just mentioned – “and drop it down to 39%.” But if you start at 41% and compare that to
a 10% change in 51%, and you have 5,000 donors in your database
with an average gift of $200, this is what happens in year two. With a 41% retention rate, you drop down to
just over 2,000 donors, and you end up raising, as you can
see there, $451,000 versus over here, with a 51% retention rate,
you’re at $561,000. So there’s a $110,000 difference in the first
year, and that sort of carries on year after year. You see there’s another $100,000 plus difference
in year two compared to your three over here. And as you
add that up, you’ll see the one with a 41% retention rate has
a grand total of $820,000 versus over here, this organization
is raising $1,277,000, a difference of almost a half
a million dollars. From that, you also see that you have some
donors that are with you for four additional years based upon that.
But more importantly, we make up the full additional
balance by what Joe was referring to earlier. It’s the folks that
are in the third, fourth, fifth, sixth, seven years that are
your very best stewards. So, that is a big difference here in that
we can make up the additional difference to get up to nearly
a doubling of the funds coming in, based upon the additional
donors, the people that are your best donors year after year,
steward in because you have more of them, and they’re with you
longer. So the stewardship actually rises to make up that
additional balance. Now, let’s talk about what we can do to help
drive that retention area – some of the things that you
can do to double the lifetime value. First and foremost, if
your organization is mission-driven, which almost every nonprofit
is, share the performance data from your mission. Don’t make it dry. Make it interesting and
that means by sharing your mission performance data through stories.
If you can make it interesting and people want to hear about
that, that’s some of the communications that you can do that
does not require an ask to be part of it. Connect often. And I’m a big believer that
we should let the donors tell us that. And one of the best ways
to connect in the first 90 days with your donors, especially
your first-time donors, is to provide a quick survey. A quick survey, to me, is no more than three
or four questions, with one of them being how they would like
for you to communicate with them – in what manner, how
often, what means, what type of information they would like to
know. They will share that with you, and you’ve got to have
a system that enables you to make that come to life. Be personal and segment. As Joe was mentioning
earlier, a good part of a personal relationship is being on
a first name basis with somebody and being able to use the proper
titles and salutations – and I’m going to share with
you one of the ways to do this, in a minute, with your thank you
letters. But also, if someone is a three or four year
donor, you may want to use a different type of appeal letter,
a different type of acknowledgment letter than someone that’s
a first-time donor. Same thing for someone that’s a higher level
donor than someone that’s a lower level donor. We go about making this retention happen by
developing it like a good personal friendship. This allows you
to connect on many different levels. And sometimes it might be
email. Sometimes it might be by regular mail, by phone, by face-to-face
meeting. Make sure you vary the different ways you
can do that. If someone has come to you via stewardship
– I am a huge believer in so many of the mentors I have
in the sector – continue to use those human connectors. Even if it’s somebody that’s a table captain
at one of your events – at a gala, for instance – make sure
that the thank you letter, and perhaps some aspect of the follow-up,
is done via that table captain, as well as yourself, because
they’ve come on behalf of that person, and that may be where
their tightest connection is at first. And it’s up to you to help move that connection
from the person that they supported by coming to your event
or by coming to your non-ask event, as Joe’s referring to. You’ve
got to move that to the next level. One of the really, really key areas here – and
I’m going to underline the whole part here – always communicate
what the monies are doing. People, particularly the
next generations of donors, want to know what their funds are
being used for. It’s very, very important to get out there. Let’s talk a little bit about how you actually
figure your retention rate. The reason I bring this up
– every time I’m speaking to a crowd of people – I’m going
to be speaking tomorrow morning in Boston, for instance…
I was in Boise, Idaho, and I had about 75 people in the room. I asked how many people knew what their current
retention rate was. Only 3 hands out of 75 were raised to
say that they knew what their retention rate was at that current
point in time. It’s very simply figuring out how many donors
you had in the previous 12 months and putting in the numerator,
the number of those donors that stayed with you in the next
year. If you had a thousand donors in 2011, and
450 of them donated again in 2012, that’s 450 over 1,000, or a
donor retention rate of 45%. One of the screens that I’m showing out of
Bloomerang today is our dashboard, and you can see right here,
now, that we immediately show what the retention rate is
for every one of our customers every single time they start using
the system and every single time they login. This goes back
exactly 365 days. It changes from day to day and week to week
and month to month, and you can see whether your retention is
moving up or moving down. And that is a drastic influence on the
behavior that makes that happen. It’s sort of the Dow Jones industrial
average of your database. It really lets you see what those changes
can be, and it’s so automatic that no guesswork’s done. And as
I just mentioned there, what is watched is really addressed. Some of my favorite emails now that I get
from our customers that are using the Bloomerang product are
people that come and email me and say, “Hey, we just went over
50%” or “We just went over 55%.” I had one a couple weeks ago that they got
their retention meter above 60%, and so we were offering them a
very, very hearty congratulations for making that come to life
for them. Let’s let’s talk a minute about lifetime value.
We mentioned the notion of being able to double the lifetime
value. That’s the total net contribution that the donor generates
during his or her lifetime in your database. If you want to make yourself a quick personal
note here, this is a wonderful, strategic subject to bring up
at a board meeting and talk about that. Most board members have no idea how long the
average donor is in your database and what the average gift is.
Many of them, if you asked them, missed that by a margin of 100%
or more. And it’s very, very enlightening to be able to see
that come to life. One of the reasons I wanted to find the lifetime
value is, the value of your database changes drastically
over time. As you can see, in most situations, people come in on
one of the bottom three levels. If we can retain them and keep them in the
fold via our stewardship with them and being able to continue
to cultivate them, more times than not, you’re able to
move them up this donor pyramid so that they can move to the
higher levels. What’s neat are your biggest planned giving
and the quest giving prospects are folks that have been with you
five years or longer. They don’t necessarily have to be
in this top section up here to be that. Many of them are in these
two middle sections here. If you can keep them in that fold and giving
at an above average level for the longest time period, you can.
Those are your true, true planned giving prospects. So let’s talk a little bit about how we measure
this engagement, this linchpin, and our Bloomerang product.
We do that by the engagement level that you see here. And we’ve
got a foundation here that right now is at a cool level. I
can look here. This is an individual that’s moved up to the
warm level. And then we’ve got somebody that we would all
desire to have, someone that’s on fire. We move people across
five different categories. Those movements across those categories
are all done on an automatic basis based upon the factors
that you see here. We take a look at whether they’re an outright
cash or check donor versus a multiyear pledge or perhaps
a recurring gift donor, the number of years of giving, whether
or not they’re moving up or down, of course lapsing in giving
makes a huge difference. We also take a look at their event attendance
and their volunteers. We look at both of those very
closely. We find that those are strong indicators of engagement
with somebody. And then, a lot circulates around your communications.
We can track whether or not someone opens your emails,
or clicks on links in emails, or forwards it to other people,
unsubscribes, has their communication preferences on file
– those all indicate an engagement to that – whether or not they
have inbound interactions. One of the key elements of Adrian Sargeant’s
algorithm was that we doubled the value. If someone has picked
up the phone and called you, has emailed you directly, has
stopped by your office, that inbound interaction shows a tremendous
amount of interest – soft credits. We know that stewardship is so important so
we give a lot of value to someone who has a matching gift company
and uses that, perhaps a family foundation. It’s very good,
Stuart, as far as bringing people to events. Anything that they
do where they’re getting soft credit back from donations coming
from other sources is very important. Then, one of the things that we’re adding
in the early part of next year is social media. So if someone likes
you on Facebook or follows you on LinkedIn or Twitter or says
something about your organization, we will track those. And
that will all lead us back to moving this engagement level up
or down. It allows you, with this engagement level,
to really keep a thermometer of what’s happening with your
involvement with that individual. It’s updated every single day
based upon actions that are happening. You don’t have to do anything
on your own. What I love is this part right here. It’s
so easy to report and filter on. When we start to define who our
major gift prospects are and who we’re going to decide follows
up and starts that cultivation, you can find people that are
already engaged to a certain degree. When you combine that with prior giving or
with prospect research information with their capacity to
give, you really have a win-win-win situation that provides
the springboard for major and legacy giving to come to life for
you. We also track that over time with our timeline
here so that we can see every touch point, and what’s in these
yellow boxes that you see over here on the side are the major
movers of the engagement from one time period to the next. I promised you we’d talk a little bit about
how we can make engagement happen here with our acknowledgement
process. And I talk about dividing into quadrants here. The first quadrants are gifts above the average
gift amount or the gifts below the gift amount, and whether
someone’s a repeat donor or a new donor. If you can set up these
four quadrants, it’s very easy then to set up appropriate
communications and communication steps that allow you to cultivate
each one of these as they expect to be cultivated. We base so much of this on the work of Mr.
Tom Ahern. As you can see, with his quote there, “Success with direct
mail appeals are quite simple at heart. They are love letters
to donors and prospects woven through with clear cries for
help.” We really take to heart a lot of what Tom
says to come to life. In fact, any communication that you’re getting
ready to send out of Bloomerang, we’re very proud that are most
recent release has what we refer to in this upper right-hand
corner here as the “Ahern audit.” And what we do – prior to running
any communication out, we run two simple tests. The first test is we check for all the pronouns
that are in the letter or email that you’re sending out, and
verify whether you’re spending more time talking about the
donor or the prospect or yourself or your organization.
And we look for a two to one matching here – at least two times
the number of “you” words versus the number of “we” words. Then, we also take a look at the grade reading
level. Believe it or not, the best appeal letters and thank
you letters are written between the sixth and the eighth grade
level. We check your letter to see, and if it’s not within
these guidelines, this is what the screen looks like. We can see here that this particular piece
of communication did not pass the “you” test. It did not pass the
grade reading level test. You can use that in addition to this
ability to work very closely. I’m a big believer that all donor
retention and all donor stewardship starts with an acknowledgement
process. A couple of key things to keep in mind here
– and we’ve got five of them – first of all, the 48 hour rule.
I think it’s very important that they hear from you within 48
hours about the thank you that you would have, particularly
if it’s an online donation. They’re expecting some sort of a
follow-up email in a very short time period. Be different than the rest. Part of this is
making sure that your acknowledgement email or your acknowledgement
letter doesn’t look like and sound like it came from
the IRS. We know that it’s tax deductible, but that
should be a very small part. What we’re talking about is what
a difference their funds are making, and how they’re making a
difference in our mission. Nothing trumps handwritten communications.
Most of you will probably realize that handwritten notes are
sometimes kept for years and years and years. Going back to what
we talked about before, state exactly what the monies will
be used for, and if you can, combine into your steps of communication
to call or see that person as often as possible. W hen we go back to these quadrants that we
were talking about earlier, decide if someone is above the average
gift amount, and they’re a brand new donor or repeat donor,
maybe that should require a phone call. I f your average gift amount is $190, and someone
comes in at $500, hopefully somebody in your organization
can pick up the phone and call them or arrange a visit for
them. My last bit of advice is talking about the
communication strategy as a whole. As you take a look at
those four different segments, if you can fully map out a track
for each segment, saying what’s going to happen – let’s say
I’m going to send a thank you letter, then I’m going to invite
him to a non-ask event, then we’re going to send a survey.
Map out a strategy and a track and do that. I’m a big, big believer in surveys, that everybody
likes to be surveyed and asked their opinion. Continue
to involve the human connectors, and remember that “nurture” means
personal. We’ve got to make sure that we never, never
use any “Dear Friend” letters or anything of that nature
– that every type of communication is as personal as possible.
And that’s where the database comes in. And keep in mind the “you” test for every
touch. I have had people that have asked me out to lunch. I
guess they consider me to be a major gift prospect, Joe. They talked
so much about their organization rather than what a difference
I can make in their organization. It’s such a pleasant difference when somebody
brings the “you” test into their personal communication and
face-to-face communications and telephone calls. That can
make such a big difference there. So, with that, Steven, I wanted to make sure
we left at least 10 minutes. Here are 15 minutes, so we get in
some questions. Let’s open it up and see what questions they have
for Joe and myself. Steven: Yeah, that was great. Thanks, Jay,
and thanks, Joe, for your presentation too.
We’ve had a lot of discussion here in the chat room, so I’m just
going to jump right into it. Dorothy was wondering – maybe Joe can speak
to this potentially – she was wondering how you get potential
donors’ names and contact info at non-ask events. So, maybe
you’re talking to someone at an event that isn’t really a fundraiser,
but you know you might want to ask them in the future. What’s a good way of maybe getting that contact
info without being too abrupt or too overpowering? Joe: Sure. I actually like to setup a registration
table, believe it or not. Even though it’s
a non-ask event, I like to set up a table where we’re asking for
some basic contact information. S ometimes we do things like hand out bumper
stickers or hand out packets or information at that registration
table. I like to funnel everybody through, because getting
contact information at a non-ask event is the single most important
thing you can do at that non-ask event. If you have a non-ask event, and your donors
and supporters and board members invite people to it, and you
don’t know who was there, then it was a waste of time, because
it’s impossible to follow up with them. I have never found, in doing probably hundreds
of non-ask events, the people who come were resistant
or were upset that we were asking them to give us their name and
address and email address and giving them a sticker and a brochure
and sending them on their way. Keep it easy, keep it quick, but you’ve got
to get that contact information. Steven: [crosstalk] Jay: I’ve been to a lot of non-ask events
and a lot of ask events. Both of them have a
registration, and people are expecting that because you’re
coming to find out about the organization, to do that. And it’s nothing that goes beyond what would
be expected there – their name and address and maybe an email
and a phone number for that, knowing full well we’re going to take
the cue from you on whether or not you want us to follow up after
that. I’m a big believer, Joe. That nametag is making
a huge difference, because that’s the first step
on getting the rest of the information. Steven: Great. Joe: Yeah. It gives a reason also. Another
reason for the registration table would
be to get your nametag. Steven: Great. Hey, Joe, you mentioned board
members briefly in your slides. And David
here in the chat room was wondering if you have any pointers,
tips for getting board members engaged in all of the processes
that you talked about. You don’t have to just rely on your staff.
You can plug into those board members as well. You got any tips
for David on that? Joe: Sure, I would say two things. One, treat
your board members like adults. So often
we treat them like kindergarteners. We come in as development
staff and we say, “I need you to do this on Tuesday. I need you
to do this by next week. And by October 1st, I need you to do
this.” But we don’t explain to them the overall theory,
the overall process. I like to go into boards and say,
“Look, first of all, what are your ideas? What are you thinking
about our fundraising? What are you thinking about our
processes?” I may take all of their advice, I may take none
of their advice, but I want them to be heard. But then I want to come back and I want to
say, “Look, here’s our plan. Here’s how we’re going to find new
donors, and here’s what you can do to support that. Here’s what we’re going to do with those new
donors. Here’s how we’re going to make our ask. Here’s the 10
different ways you as a board member can participate.” And explain
to them the whole process. One of the reasons why board members are reluctant
to give us names or reluctant to invite people to events
is because they don’t want to look like a jerk to their friends. If they don’t trust us, if they think that
we’re going to get names from them or meet their friends at an
event, and say, “Hi. How you’re doing? Nice to meet you. Oh, Jim tells me you’re rich. Would you give
us $100,000?” They’re never going to give us names. So they
have to understand the whole process, that whole funnel, that
whole cultivation process, and trust us. And then the second thing I would say is,
you want to be in a position of earning names from your board,
not begging for them. I think the key there is, we as fundraisers
have to cast the vision for the nonprofit in a way that’s big
enough that it’s infectious. They may have been on the board for 2 years,
10 years. They may be new. They may be doing it just because
the CEO of their company told them to. We need to get them
so fired up about the mission and so comfortable with our funnel
and our plan that they can’t help but get involved with fundraising. Steven: That’s great. Jay, you’ve served on
these boards in your lifetime. What things
worked well for you, getting you engaged in these kinds of
things? Jay: I think it all begins when someone is
being considered to come onto the board.
There are two things. There’s an introductory session before the
invite is issued, where you talk about all the responsibilities
and what everybody does for that. Every successful board I’ve been on conducts
a board orientation. And that board orientation can
be as little as an hour, or I’ve had some that have been as long
as three or four hours, and that you’ve conducted that someone
goes through that prior to the first board meeting. Any fundraiser or any executive director that
doesn’t want to do that is just kissing that potential major
gift goodbye, because in that orientation, you really get a chance
to implant firmly the mission of your organization and how that
mission is supported and how things operate so that someone
comes into the board meeting not being bewildered by some
of the reports and things that are being talked about. Then, so much flows happily if you can make
those two things happen before the very first board meeting. Steven: Great. Well, we’ve probably got time
for about one more question. I do want to be
respectful of people’s time, especially if they haven’t had
lunch yet. Sand I don’t want to get in the way of that. Melissa
has a question – and maybe, Joe, you can speak to this. She was wondering how you can approach or
get buy-in from management or leadership on this whole idea
of a funnel in your whole system. What tips would you have for
Melissa or for getting buy-in to implement this kind of thing? Joe: Sure. With anything, people are – whether
it’s management, whether it’s boards –
are a) resistant to change, and b), they’re resistant to things
they don’t understand. So I’ve found that when I’m trying to get
an executive director, a CEO, a board member invested in this kind
of funnel process, a) showing them how it works – so, that’s
the first thing, showing them how it works – b), hopefully,
being able to point to what some other local organizations are
doing that fit into that mold. For instance, if I’m trying to convince a
nonprofit that non-ask events, introductory events work as a way
to meet new donors, the best thing I can do is to take that person
who’s resistant to a non-ask event at another organization
that I’m either working with or I know of. When someone walks into a room and sees 15
or 20 new prospects just sitting there, listening to another organization’s
program staff tell stories about their work, their
eyes light up and they think, “Gee, I can’t believe what a difference
it would make if, once a quarter, we had 20 new people
sitting in a room listening to us who were potential givers.” My suggestion would be to explain the process,
but then also to hopefully show the process – hopefully be
able to connect to other organizations that are doing this kind
of process, these individual steps, and being able to show how
successful it really is in the real world, in actual process. Steven: We are just about all out of time.
Joe, since you were nice enough to
be our guest, I want to give you a chance to tell folks how they
can learn a little bit more about you – your website, your
books, and such? Joe: Sure. I really enjoyed being with you
all. And if you’d like to connect with me
further, I run a website called “The Fundraising Authority.”
It’s, where we have a couple
hundred articles on fundraising, including how to use the donor
funnel, and also, a weekly newsletter that you can sign up for
right there. When you do, you get a free copy of a book
I wrote on how to hold great fundraising events. And if you’re
on Twitter, I’d love to connect with you there. It’s @FundraisingAuth
on Twitter. You can also, if you’re interested in my books,
find me on Amazon. Just search for Joe Garecht, and they’re
all available there as well. Steven: Cool. And, Jay, how about you? You’re
also on Twitter, I believe. You’re a
Twitter user. Jay: Oh, yeah. Most everything as far as finding
myself and Steven and the other key
contract providers to Bloomerang is at our website. You can see
it on the page there right there, If you type, you will find
a nice nursery in Canotia, Wisconsin that sells flowers. But
if you go to “.co,” you’ll find our company. So, that’s where
the information is out there, and we’d love to hear from you. Follow
us on Facebook, Twitter, etc. Steven: Thanks. And if you enjoyed this webinar,
we do, do these webinars weekly.
They’re totally free and totally educational. And next week,
we’ve got a nice one that’s apropos to some of the questions
that were asked today. Keith Curtis [SP] is going to be joining us
to talk about boards and recruiting a strong board and getting
them involved in your fundraising efforts. If that interests you,
definitely check out our webinar page and register for that. It’s
going to be a really great discussion next week. I just want to say a final thanks to Joe and
Jay for joining us. And hopefully everyone in attendance enjoyed
the content. I will be sending out a recording and the slides
of the full presentation here later this afternoon. So,
look for those to hit your email inbox. On behalf of Jay and Joe, I’ll say goodbye.
And thanks again for joining us today. Jay: Thanks, Steven. Joe: Thank you.

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