GiftWorks: Nonprofit Fundraising Software

Building Relationships

This past weekend, one of the nonprofits I work with asked me to help them raise funds--urgently. It's something I really believe in, and I've worked hard for over three years on the issue. The fundraising has never been organized, and has never taken off. Yet we're accomplishing most of our goals. Still, we need to fund the Executive Director's salary; he just started in November, and we're run out of the startup funds.

I'm not in charge of fundraising, but I feel I need to drive it now that we're so close to the edge, and because I pretty much started the whole thing in the first place. So first I'm starting with my closest relationships--my friends and families (not co-workers; I have close relationships with most of them but we have a rule about pushing causes within the office). I'll call them individually, and ask them based on what I know their ability to contribute without pain is.

After that, I'll hit my email list--a broader list of people I've met over the years around politics or causes, and ask them for smaller amounts. The link will be to the online donation page of the nonprofit, which, sadly, doesn't have online donations working yet. Which leads me to this: execution is everything. Without the online donations page there, the conversion rate will be a lot lower.

Next, I'll send out a letter appealing for support. The letter will be simple, short, and direct. I'll include an informational page. We'll see how well it does--I expect to get this done over the next 2 weeks. I'm using GiftWorks to do this, too, so I'll let you know how it goes.

The bottom line is this: people aren't going to donate to the cause alone. They are going to donate because they know me, and I'm asking them to support something I am endorsing. My relationship with them is more important to them than the cause itself. In other cases, they'll contribute because they agree that the cause is critically important.

Either way, they'll enable the heroes of our movement to continue to move the issue forward. But it doesn't happen in a vaccum. It's all about the relationships.

Budgeting for Fundraising

Fundraising is really a combination of marketing and sales, and fundraising software like GiftWorks (hey, there's really nothing like GiftWorks!) is just a tool to ease, track, and analyze the process. We have sales and marketing budgets here at Mission Research, and we invest in a range of marketing activities.

One marketing focus is Direct Mail, which we use on occasion. Most of our customers use direct mail to reach out to their donors, usually in the form of direct appeals or fundraising event invitations. Now I'm not a direct mail fundraising expert, so I'm not going to have any really great tips.

Except one--go read Mal Warwick's tips. Mal's on our board of advisors and is a really great guy. Before he began advising us, I read a number of his direct mail books and applied what I learned to our own for-profit direct mail. Anyway, go check out his site--there's a lot of really useful tips and articles there. And then come back here!

Great Tip from Mal Warwick's Site

Mal Warwick advises Mission Research and has allowed us to pull articles from his archives and publish them here for you. Here's a good one:

Q: In what order should ask amounts be listed?
I recently got a piece in my own mail from the Salvation Army, and the string was as follows:

[ ] $65      [ ]$55      [ ]$100        [ ]other

Why do you think the amounts were listed in this order? — Diana Lee, Pacific Institute for Studies in Development, Environment, and Security, Oakland, California

What is the best way to order your donation ask amounts on a reply form — lowest to highest, or highest to lowest? For example, should a reply form gift amounts read "$25 $50 $100 Other", or "$100 $50 $25 Other"? — Michelle Pilatzke, World Wildlife Fund Canada, Toronto, Ontario

Mal answers:  There's no "best" way to do this. Like just about every other detail in direct mail fundraising, this matter is testable. There are some practitioners who hold that the gift string should be ascending in donor or member acquisition mailings and descending in house file mailings. Presumably, they tested this question and found those arrangements advantageous.

A big mailer like the Salvation Army probably tests this sort of thing regularly. Either this is one of those tests, or previous tests have determined that it produces better results. Irregular sequences like this occasionally work well. All I can say, though, is that it's wise to test when in doubt.

Sending Mass Email

GiftWorks 2006 has mass email capability built into it. Sending mass email to your supporters on occasion makes a lot of sense--it's a cheap way to communicate with your support base and can get them back to your website if the email is compelling enough. But how much email is too much? What email works well for you, and what fails? At what point do you become spam and lose their support? Email can be a terrible way to communicate with your donors if you use it just to ask for money or try to generate online donations. "Online donations" can be a smart, convenient tool, but only if you've nurtured relationships with your supporters. Email is a great way for building that support base if you use it correctly--and frugally. What's your opinion? Click Comments below to tell us.

Timing

Steve Martin used to do a thing about comedy, how it's all about ti-MING--no!--timing, timing...which leads me to mailings. We send out mail on occasion to introduce people to GiftWorks. We did a December mailing that was disastrous--we need it would be but we did it anyway because we're sometimes not very smart. This Spring we sent out a lot of CDs to lots of nonprofits, and the response rate varied depending on the message and the time of the week or month the nonprofit received it. This week we did a mailing--or tried to, except the mailing house failed to get it out on time last week, and dropped on a Tuesday this week, and will do another drop maybe on Friday, and I have to say I'm not happy about the ti-MING of it.

Are your donors home when you send an appeal? Does it show up on a major junk mail day and get discarded with other mass mail? Does it show up on a Saturday? Do donors open your mail in the Fall but never the Spring? It's important to learn the best timing to send mail to your supporters. Because ti-MING can be costly and frustrating.

So do any of you use mail houses? Or do you you bring volunteers in? Tell me by clicking on Comments below. [Kintera, Blackbaud, Donorperfect, fundraising, nonprofit software, yeah, these are keywords]

Direct Mail Fundraising

We send out a lot of direct mail and we track response rates. Frankly, I hate sending direct mail because it wastes a lot of material -- you're very lucky (or good) if you get more than a 3% response rate, and while it's a great marketing tool, it does make me uncomfortable. as a socially responsible CEO. But not so much that we don't do it as we test different ideas for Mission Research--direct mail does work. Most of our sales are from word of mouth and direct mail (though that will change in the next 3 months).

If you're like most nonprofits, you send direct mail to raise money. If you aren't, you probably should start. It works. The broader your support base, the more stable you'll be. And like Mal says in his books, you need to test everything and measure everything. You might get 1% response rate from one letter and 5% from another. Do you know, or do you just have a feel for what works? If it's the latter, you might learn that you can improve on your gut (what I call "informed intuition") by adding some basic metrics to your mailings, tracking who gets the mailings, tracking what messages work, and tracking your return on investment. We're building some of this into GiftWorks, but it's likely it will take until next year to really get it right for our customers (they'll tell us, I'm sure).

Consider this: if you spend $10,000 (crazy, right?) of your $100,000 budget on a single direct mailing that reaches 10,000 people in your area, including people in your database and people outside of your database from a decent list. Let's say you get a 2% response rate--just 200 people. If you get an average of $50 per person, you've covered your costs--$10,000. But that's just the beginning of your nonprofit's relationship with these new donors. Most will donate year after year, and it's likely some will increase their giving as your relationship develops with them. So that $10,000 investment now will pay back perhaps $50,000 over 5 years.

So your goals might be to raise money now. But sometimes it's important to plan for the future, and raise money, yes, but get new lifetime donors, too. I'm definitely no guru. Mal Warwick is a guru and has a lot of great articles he lent to us you should check out. But I know we do better here when we follow the same principles Mal talks about in his books and articles. Let me know what works for you--I look forward to learning what's worked for you!