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Prospecting

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Research on How to Turn Donors into Repeat Givers

Survey data that illuminates what motivates nonprofit donors to give again.

A few weeks ago, I wrote about how donor retention is the biggest problem facing the modern nonprofit, with 73% of those first-time donors you work so hard to get not giving a second time. For many nonprofits, the retention rate is even lower.

Janna Finch, a nonprofit analyst and managing editor at Software Advice, recently surveyed 2,833 nonprofit donors to explore what motivates them to keep giving. Here's what she found:

  • 60% of donors want impact stories to prove how their first donation made a difference

  • 46% of donors prefer to be contacted with personalized letters

  • 35% prefer you wait seven months before asking for another donation

Janna told me, "It seems that demonstrating your mission’s success through impact stories and direct mail significantly encourage donors to give again." (You can follow Janna on Twitter @AbleAltruist.)

Here's a slideshare with the data; I found slide 3 particularly useful for thinking about nonprofit communications:

Thanks to Chantelle for sharing this research with me!

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Getting New Donors Isn’t Your Problem

Don't forget about donor acquisition. But put it on the backburner.

Most of the nonprofits I interact with are initially interested in growth from donor acquisition. In the long term (and this is a major ongoing point of concern for the board), they want new wallets paying into the account.

Come November, or the last couple months of their fiscal year, they are suddenly worried about meeting their budget needs by the end of the year. And their existing donor base doesn’t seem to be getting them there. By then, of course, it’s too late to find new donors, so they focus on begging and pleading with their existing ones. (I know that sounds harsh, but that really is the point you reach sooner or later if the picture is looking grim.)

But the reason they got to that panic point in the first place has much more to do with how they treat their existing donors, not with the number of donors.

Ten years ago, 67% of first-time donors never made a second donation. By last year, the number had grown to 73%.

Put another way: if you treat your donors the way most nonprofits do, three quarters of your first-time donors will never give again!

Getting someone to give the first time is quite expensive. It’s much cheaper to keep an existing donor.

So how do you do it?

Frank Barry at npEngage polled some nonprofit consultants. You can read their responses here, and I recommend doing so.

The consistent thread, one person after another, is the same: treat your donors like people. When a donor gives, don’t check him off as “mission accomplished” and add him to your pile of conquered territory (your “database”). A big chunk of your organization’s brainpower and manpower needs to go into continuing a conversation with that donor; getting to know him and his interests and priorities, listening, showing him what you’re doing in ways that will mean something (and that link back to his gift), and so on. There are lots of ways to do it, depending on the number of donors you have. There’s a lot of good advice on Frank’s page.

And when you’re ready to graduate to the pros, start thinking about the fact that the donor has friends who probably like the same things he does.

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Facebook ads or Google ads?

Priorities, priorities. The real issue: you’ve heard people argue both. Google ads help people find you in web searches, which is where you get most of your traffic from right now. But there’s a lot of talk around social media. Where is the best place to start?

The answer is…yes.

Not trying to be coy, but they’re both good things. Ideally, you would be doing both. But which one you should be doing in your situation, now THAT is the question. A look at each option:

Google Ads

The upside: Combined with good search engine optimization on your website (SEO), Google ads allow you to help the right people find you through internet searches. For example, if you offer housing for low-income families, running ads built around relevant web searches (“low-income housing”) will help you pop up first on the list. You can even tailor it geographically so only local people will see your ad. You can almost instantly start driving hundreds or even thousands of extra visitors per week to your website, with reasonable confidence that they’ll be the people you want to find you.

The downside: They’re not cheap. You could find yourself paying upwards of $5 or $6 ­per click for your visitors. And they’re not social—that $6 for that one visitor usually only buys you that one visitor, with no way of connecting with his friends. That is, unless you get him to connect socially while he’s on your site, which brings me to…

Facebook Ads

The upside: Facebook ads allow you to target people even more specifically than Google. Google is inherently limited to people who are actively searching for you (unless you pay for ads that appear in other websites, which are an added cost). Facebook allows you to put posts in the sidebar or even the news feeds of people who you already know would be excited by what you do. On top of that, Facebook ads are cheap (if you know your stuff, you can get someone to like your page for $0.10 or $0.15 per like), and they’re social (meaning every connection is a window into yet another network of friends who might find you exciting).

The downside: They’re slow and they take active engagement, especially if you don’t have the kind of money that would have allowed you to do a massive Google Ads campaign. You can get dozens or hundreds of likes per day, or thousands of post views, pretty inexpensively—but building that up to 10,000 likes and translating it to the activity/email subscriptions/donations you want will generally take weeks or months, and it will take a lot of planning and day-to-day engagement (whereas Google Ads technically run themselves, although you want to tweak them regularly).

Feel free to get in touch with me if you want to talk about this further.

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How do I know which social networks to use?

The daunting question with the simple answer.

How do I know which social networks to use?

The real issue: technology is moving too fast. There are a lot of social networks out there, and they seem to rise and fall in popularity. You’re wondering whether it’s possible to move forward when all your work to build a Twitter following might fall apart in five years if Twitter loses popularity. Or maybe you’re just wondering where on earth to start.

First off, the easy answer: it depends on your mission. You definitely start with Facebook, which has over a billion users and is easily the largest. But after that, what you do dictates which other social networks you should start with, because each network has its own demographics and its own best kinds of media. Broadly speaking, a few of the heavy hitters as of October 2013:

  • Twitter is about conversation. It works well for any organization that deals a lot with news, or policy issues, or fast-paced developments. If your organization is more long-range and slow-paced, Twitter may not be the most efficient use of your time at first. That said, you’d be surprised: I have a client that runs a food bank, and didn’t use Twitter much…but when Colorado Springs caught fire and people were driven from their homes, they were quite glad to be looped in with local news sources on Twitter, because it enabled them to effortlessly spread the word about their services.
  • Pinterest is about images. It’s most effective when you can work with pictures, and its user base is heavily female. It’s increasingly a popular third network after Facebook and Twitter because it has a good track record of driving traffic to your website.
  • Google+ is Google’s version of Facebook. It lets you post pictures, links, videos, everything. Frankly, it’s a lot better than Facebook in most ways. But while hundreds of millions of people have Google+ accounts, most of them are really just Gmail accounts and their owners never get on Google+. For the moment, G+ is best if you’re in a technological or creative space, because those are the kinds of people who frequent it.
  • Instagram is just pictures. Whereas Pinterest allows you to post anything (for example, a wine shop could post its favorite wine country scenery, or pictures of products with links to their purchase pages on an e-commerce site), Instagram only works through your phone’s camera. So it’s good for photojournalism but not so good for more holistic engagement. Its user base is also much younger.

On a larger level, though, the more important question is what you do with people after they’ve followed you on a social network—having a strategy that is about engaging and developing donors and can be tweaked no matter what social networks go in and out of vogue. This is why I advocate a holistic approach that is more about building a traditional donor base with contact info, e-mails, and so on. “Social media marketing” is about, say, getting thousands of Facebook likes. Social fundraising says those likes are inadequate if there’s no mechanism to translate any of them to donations.

My advice is to think of it in these terms: you want to build relationships with these people. Social media is a key starting point to finding them and introducing yourself, but the relationships need to go deeper.

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How do I navigate the shift from prospecting letters to social media prospecting?

Proven vs. unproven techniques and a tricky transition.

How do I navigate the shift from prospecting letters to social media prospecting?

The real issue: mass mail letters have a proven rate of return; social media doesn’t. Much like making a switch from snail mail newsletters to e-mail newsletters, transitioning from one to the other creates risks of losing people along the way who aren’t on top of the technology. How do you handle the transition?

The answer: gingerly.

As I’ve noted elsewhere, for now, snail mail prospecting still has a decent rate of return—you might not make our money back on the first round, but even that 5% of the recipients who end up donating will more than reward your effort over the next few years.

But you’re aware that it’s unlikely you’ll see the same kind of results from younger generations, even as they age. Gen X and Gen Y do not process information the same way—the want their information in smaller doses, more frequently. Their brains are being trained by TV, YouTube, Twitter, and other similar things. In addition, they’ve been marketed to their whole lives, are skeptical of scams, and prefer to support fewer organizations but know them more intimately. (That last bit is increasingly true of a suspicious older generation as well.) Seven-page letters from complete strangers asking for money go straight into the trash can, and I don’t think that will change in 20 years (in fact, I think it’s likely the trend will go the opposite way).

So since you have potential donors who you know won’t respond to snail mail letters for 20 or 40 years (if at all), you know it’s worth investing in prospecting techniques that will work now.

Some thoughts:

  • Social media prospecting is painless to ease into.  Smart social ads, strategically targeted, can help you find precisely the kind of donors you’re looking for and connect with them for as little as $0.13 per new like or follower. Even $5 a week, let alone $5 a day, can pay off.
  • Let your desired donor base and social success guide your snail mail prospecting. Is it a goal to have a younger donor base? Then don’t bother sending letters. Are you seeing at least as good results from social prospecting? Ditto.
  • Don’t ditch your donors. Be aware of who your existing donors are—their ages, situations, technological preferences. If you don’t stay on top of this information in the normal course of operations (as many nonprofits don’t), you may want to send out a survey asking people about how they prefer to hear from you—or even a quick checkbox survey directly in an e-mail. You won’t get everyone, but you’ll be able to start phasing out forms of communication you don’t think have a future.

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Are you saying I should stop using mass mailers for donor prospecting?

Pros and cons (yes, there are pros) of snail mail.

Are you saying I should stop using mass mailers for donor prospecting?

The real issue: do you want us to abandon everything that has worked for us in favor of an experimental technology? We’re pretty sure most of our donors don’t even use social media, and a lot of them don’t use e-mail.

The answer: not necessarily.

First of all, more of your older donors use social media than you’d think.

But I, for one, am not saying you should stop using something that’s been working for you—at least not yet. But you have to understand what’s coming down the road: Generation X is likely to throw away your prospecting letter unopened, and Generation Y (the Millennials) probably won’t even get it.

For now, snail mail prospecting still has a decent rate of return—you might not make our money back on the first round, but even that 5% of the recipients who end up donating will more than reward your effort over the next few years.

Another point I’ve heard made here is the opera example: young people don’t go to the opera (or the symphony), so a lot of companies have tried very hard to cater to them. It didn’t work. The Knight Foundation and others put a lot of money into studying what did and didn’t work to attract audiences. (I published a study of this in my report on art philanthropy for Philanthropy Roundtable.) One thing they found is that a lack of appreciation for high art wasn’t a generational thing—it was a young people thing. When those young people got older, they started going to the symphony and the opera just like their grandparents had.

So the question is: is snail mail prospecting a similar case, where Gen X or Gen Y will start opening the letters and giving you money as they get older?

I don’t think so. Two thoughts:

First, the younger generations do not process information the same way—the want their information in smaller doses, more frequently. Their brains are being trained by TV, YouTube, Twitter, and other similar things. In addition, they’ve been marketed to their whole lives, are skeptical of scams, and prefer to support fewer organizations but know them more intimately. (That last bit is increasingly true of a suspicious older generation as well.) Seven-page letters from complete strangers asking for money go straight into the trash can, and I don’t think that will change in 20 years (in fact, I think it’s likely the trend will go the opposite way).

Second, if you had potential donors who you knew for a fact wouldn’t respond to snail mail letters for 20 or 40 years, why wouldn’t you invest in some prospecting techniques that would get them to donate now?

So by all means, keep using the methods that have been working for you. But invest in tomorrow’s methods as well, whatever you decide those might be.

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