FROM PERIL TO PROFIT
WHAT DONORS SAY WILL TURN FUNDRAISING AROUND IN THIS ECONOMY
This Seminar Draws From…
 Donor-Centered Fundraising
 Philanthropy in a Turbulent Economy
 Communication Is the Ask
How Profit Is Made in Fundraising
 Not-for-Profits can only spend fundraising profit.
 Profit is the remainder between the value of the gift and
the cost to get it
 The profit margin widens the longer a donor gives;
therefore, extending donor retention equals earning
higher profit
 a manageable number of donors, encouraged to stay
loyal and inspired to give generously makes more money
for a NFP than does a volume of donors which is so large
that it has to be handled through mass marketing
How Fundraising Actually Works
 large-volume fundraising is the norm
 donor attrition is over 90%, with 65% of contributors
never making a second gift
 constant, high volume acquisition is deployed to make
up for the loss of large numbers of unprofitable or barely
profitable donors
 this drains the fundraising budget, leaving too few
resources for donor retention strategies
Fundraising Cost
Type of Fundraising Program
Cost per Dollar Raised
Direct Marketing Acquisition
$0.75 to $1.00
Direct Marketing Renewal
$0.25 to $0.35
Major Gifts
$0.10 to $0.15
Planned Gifts
$0.03 to $0.07
An Intriguing Question…
Why is the norm in fundraising
actually the less profitable option?
DONORS ARE ON THE
MOVE
Changes in Giving: 2008 to 2009
 # donors contributing: down 5.8% (continuing a 3-year




decline)
Donor Retention: down 1% (continuing a 5-year decline)
Donor acquisition: down 12.9% (3-year decline)
Reactivation of lapsed donors: down 6.5% (3-year
decline)
Average gift value: down 2.1% (first time this has
declined in 5 years of measuring)
 2009 Index of National Fundraising Performance; Target Analytics;
performance of 35 million donors compared between 2008 and 2009
DONORS’ CHANGING
GIVING BEHAVIOR
2002 TO 2007
How respondents’ giving philosophy has changed in the
five years prior to economic decline
THE DONOR-CENTERED
SOLUTION
What inspires donor loyalty and
increasing gift values?
 prompt, meaningful gift acknowledgment
 reassurance that gifts will be used for a specific
end purpose
 measurable results on the impact of donors’
contributions
Are Donors Noticing the Shift
to a Donor-Centered Model?
 A March/09 review of NFP websites found that
only 43% stated their mission & goals and only 4%
identified how they use charitable donations
Getting Donors and Keeping
Donors – Not the Same Thing
UNIQUE SELLING
PROPOSITIONS FOR
PROSPECTS AND DONORS
Why Donors Stop Giving
(from Donor-Centered Fundraising, 2003)
 46% of study donors stop giving for reasons
connected to a ‘failure to communicate’
 41% stop giving because of over-solicitation
What Are Measurable Results?
 progress that can be quantified – for instance,
increase in volume of service or enhanced quality
of programs
 only specific programs and services can be
measured
Why Are Measurable Results So
Important to Donors?
 they allow donors to evaluate whether their
gifts are being used effectively
 they justify donors’ assessment of themselves
as contributing members of society
Case Study
RESTRICTED vs UNRESTRICTED GIVING
PHILANTHROPY in a
TURBULENT ECONOMY
How the Study, Philanthropy in a
Turbulent Economy, Was Conducted
 Online survey conducted between January 12 and
February 3, 2009
 Cygnus reached out to 963,458 donors by partnering
with 69 not-for-profits
 21,947 respondents started the survey; 17,365
answered all questions for a completion rate of 79.1%
PROFILE OF SURVEY
RESPONDENTS
Gender
Age
54.3% are between 45 and 64 years of age
Annual Household Income
Has Responsibility for Financially Supporting
Children or Other Family Members
Occupation
50
45
44.3
40
35
30
%
25
20
20.1
13.1
15
8.5
10
5.7
5
0
Professional
Retired
Owner/Executive
Sales/Marketing
Homemaker
Disability/Unemployed
5.6
2.7
Tradesperson/Clerical
Highest Level of Education
Religious Practice
Volunteer positions held by the 68% of respondents with
volunteer experience in last 12 months
GIVING PROFILE OF
RESPONDENTS
Number of charitable causes
supported in 2008
43.7% support 3-5 causes
Average Value of Gifts Made by
Respondents in 2008
all respondents and top 5% by total giving
Average total value
Average value of the
Smallest charitable gift
Average value of the
Largest charitable gift
$11, 490
$72
$4,055
$169,561
$521
$58,909
HOW THE ECONOMY HAS
AFFECTED RESPONDENTS
AND THEIR PHILANTHROPY
How the economic downturn
has affected respondents
When respondents expect the
economy to recover
Short-term vs Long-term
Expectations for Recovery
 Respondents between 75 and 84 years of age are
slightly more optimistic about the time it will take for
the economy to recover
 Respondents earning over $200,000 are somewhat
more optimistic
 Respondents who are more pessimistic about the
timeframe for economic recovery gave, on average, 40%
more money to charitable causes in 2008
Anticipated giving in 2009
Reasons for planning to maintain
or increase giving
Why some respondents will decrease
charitable giving in 2009
How respondents will decrease
their giving in 2009
Will the 24% of respondents committed to multi-year gifts
alter their terms due to the economic downturn?
Case Study
“But I Did Everything Right”
FUNDRAISING
OPPORTUNITIES
Donor Acquisition
To what degree would the following scenarios
motivate you to give to a not-for-profit organization?
1=not at all motivating 7=highly motivating
7.00
6.00
5.00
4.00
3.00
2.00
1.00
.00
5.29
3.19
2.26
Matching Gifts Monthly giving Gift from IRA
($1 = $2)
(Less cost/ fewer (Avoids tax)
appeals)
2.15
Cash + deferred
(larger gift/
preserve cash)
Double Gift Value
1=definitely would not 7=definitely would
How the economic slowdown will influence respondents
to alter their methods of giving in 2009
Respondents under 35 years of age
How the economic slowdown will influence respondents
to alter their methods of giving in 2009
Respondents 35 years of age and older
Gender and Income
Gender and the likelihood of
doubling gift values
Giving Scenario
Male
Female
Measurable results provided
27.5%
32.8%
Cost-effective service
34.8%
42.2%
Fundraising cost-effectiveness
33.4%
38.5%
Felt appreciated
19.4%
22.7%
Long term supporter
35.1%
40.2%
NFP encourages communication from donors
19.5%
22.5%
NFP helped donor or family
33.6%
42.4%
Donor has volunteered
36.5%
43.7%
Recession Giving by America’s
Most Generous Donors
 more likely than other donors to have increased their




giving in 2008
three times more likely to be interested in giving that
preserves principal / planned gifts
more sure about how they will give in 2009
53% more likely to award larger gifts to fewer not-forprofits
47% more likely to decrease giving this year
Generosity and religious practice
Religiosity and Its Impact on Giving
in this Recession
 actively religious Americans are more generous
donors and more active volunteers
 they are also more likely to maintain or increase their
giving during the recession
 Religious conviction decreases with age which may
have implications on giving and volunteering in the
future
Younger Donors: A Hidden
Fundraising Gem
 69% of donors under the age of 35 are professionals,




academics, owners, managers or entrepreneurs
47% earn over $70,000 (52% of donors between 25
and 34, who are less likely to still be in school)
70% are not supporting dependents
more open to giving to causes for the first time
more likely to give through technology-driven appeals
The relationship between
gift value and age
13-34
35-44
45-54
55-64
65+
Total average giving
$1,613.42
$5,514.91
$18,936.16
$10,010.03
$17,711.72
Average smallest gift
$42.14
$81.99
$81.50
$72.97
$66.76
Average largest gift
$724.19
$1,974.56
$6,880.98
$3,891.98
$4,583.46
Response
Giving comparison by age group among employed
donors earning between $40K and $129K
Donors under 35
Donors 35 and older
Response
Average
total giving
Average
largest gift
Average
smallest gift
Average
total giving
Average
largest gift
Average
smallest gift
$40 - $69K
$1221.11
$635.50
$31.72
$2580.45
$1060.86
$46.99
$70 - $99K
$1484.64
$707.11
$44.47
$5110.60
$2644.36
$60.47
$100 - $129K
$1989.29
$850.29
$50.50
$4651.78
$1997.73
$64.40
Volunteer activities of survey respondents
based on their age
Board member
Direct service
Committee member
Administrative
Campaign cabinet member
90
80
70
60
50
%
40
30
20
10
0
18-34
35-44
45-54
55-64
65+
Age comparison of respondents planning to
maintain or increase their giving in 2009
35
18-34
35-44
45-54
55-64
65+
30
25
20
%
15
10
5
0
Plan to increase giving
Plan to decrease giving
How to Communicate With
Your Donors
Drowning in a Sea of
Information
Communication in an Age of
Information Overload
THE LESS INFORMATION YOU
GIVE YOUR DONORS AT ANY ONE
TIME, THE MORE THEY WILL
ABSORB AND RETAIN
Memorable Communication Materials
According to Donors of a Social Service NFP
70
60
50
40
%
30
20
10
0
Annual Report
Program Brochure
Newsletter
Thank You Letter
Nothing stands out
Most Commonly-Recalled Communications
Vehicles for an Arts Client
90
80
70
60
%
50
40
30
20
10
0
ALL
Donor Only
Donor/Subscriber
Assessment of Key Report by Donors
of an Ivy League University
40
35
30
25
%
20
15
10
5
0
Read it in some
detail
Skim in report
Skim the report
looking for your
name or your
classmates' name
Not read the
report
Not recall
receiving the
report
FROM EIGHT PAGES TO
ONE PAGE TO…
BULLET-PROOF VESTS
ARE HOT AND SWEATY
IN JULY
Communication that Matters
to Donors
Measurable Results
News
Communication from the Right Person
ANYTHING CAN BE
MADE INTERESTING
Typical Board Meeting Agenda
1.
2.
3.
4.
5.
6.
7.
8.
9.
Call to Order, Welcome from the Chair
Regrets
Minutes of the Previous Meeting
Treasurer’s Report
Report from the CEO
Report from the Chair of the Fundraising committee
New Business
Next Meeting: April 17th, 2009
Adjournment
Call to Order,
Welcome from the Chair
 Chair, Bob White, will recite the Periodic Table from
memory at precisely 6:30 pm (latecomers will not be
admitted!!!)
Regrets
 Why Jean Albertson, Frank DiAngelo and Tom
Hathaway can’t come to the board meeting (personal
excuses written in Haiku)
Minutes of the Previous Meeting
 Approval of minutes of the previous meeting (sung by
the Chair to the tune of Row, Row, Row Your Boat)
Treasurer’s Report
 Treasurer’s Report (this meeting’s winner of “stump
the treasurer” will get first pick of donuts at the break)
Report from the CEO
 Report from the CEO:
 Highlight – measurable results of the two year pilot project on
the impact of alternative health remedies on recovery from
lung cancer. Board to vote on extending project for five more
years.
Report from the Chair of the
Fundraising Committee
 Fundraising Committee Report (Andrew Coyne, Chair)
 Highlight – Net revenue up 13% over same quarter last year.
(Andrew is bringing a dead crow to the meeting for Bob to eat.)
New Business
 New Business (Surprise us, we can take it!)
Next Meeting, April 17, 2009
 Next meeting: April 17th, 2009 (whoever comes to
the meeting with the most interesting fact about the
historical significance of April 17th, wins the mystery
prize of the evening)
Adjournment
 Adjournment (let’s maintain our perfect record of
never going past 8:00pm)

Maintenance wishes to remind everyone that the building
must be vacated by 11:00 pm (party can resume at the Chair’s
house, if necessary)
BEING DIFFERENT IS THE
FIRST STEP TO BEING
BETTER
Even
Annual
Reports Can
Be Enticing
How respondents’ giving philosophy has changed in
the five years prior to economic decline
50.0
40.0
30.0
40.1
33.3
29.4
28.6
27.3
26.9
%
20.0
13.9
13.4
13.2
10.0
2.8
0.0
Stopped when over-solicited
More research before 1st donation
Focus on one sector
Meaningful relationships important
No appreciable change
Cost/dollar fundraising
Larger gifts fewer NFPs
Support local NFPs
Stopped sooner if dissatisfied
> interested non-cash gifts (bequest)
2
How Donors Research NFPs
 on NFP websites
 through Guidestar and other sites that rate NFP
performance
 by reading print brochures, newsletters
 by perusing fundraising solicitation materials
Content Disconnect
What donors get:
What donors want:
 Mission statement
 What you’re raising
 Organizational history
money for, specifically
 Track record with past
contributions
 How to make a gift
 Anticipated outcomes
 Description of programs
and services
 Unsubstantiated and
anecdotal information
Being Donor-Centered
in an Electronic Age
COMMUNICATION IN A WORLD
OF INDEPENDENTLY-MINDED
DONORS
Print vs Electronic
Communication
IN ELECTRONIC COMMUNICATION,
MORE THAN EVER YOUR JOB IS TO
GET TO THE POINT!
E-Newsletters
 51 seconds
 skimming, scanning, glancing
 forget introductory copy
 the “15-word rule” is essential…but the bonus is the
technology and how people think and read when at
their computers
Key Recommendations
 Integrate all media
 Build and maintain your email list, but don’t let the
volume of emails be the only measure of your success
 Drive traffic to your website
 Give donors choices and respect them
 Enhance feelings of security and trust
Online Giving or
Online Communication?
ONLINE COMMUNICATION IS
MUCH MORE IMPORTANT THAN
ONLINE GIVING
Online Giving vs Online
Communication
 both donors and prospects travel to your website
primarily to get information



40% of donors consult online information sources prior to
transacting gifts on or off-line
and 60% of them go directly to specific NFPs’ websites (as
opposed to watchdog organization)
focusing on your own website is more important than enhancing
your rating at Guidestar, for example
Great Copy Does Not “Push”; It “Pulls”
 75% of users are in content gathering mode, while only




25% are searching for something specific
“pull” and “push” are marketing terms for how
information is transmitted from an organization to its
constituents
Pull: user is in control and actively making decisions
regarding where they will go
Push: the user is inactive and is being fed content
Images can also have pull and push qualities
DONATE NOW
THE ULTIMATE “PUSH” COPY
IN FUNDRAISING
Transaction Abandonment on
Donations Pages
 lack of or different design/graphics
 2-page donation forms
 surveys and other extraneous requests
(get the gift first)
It’s OK for donors to have
second thoughts about
donating online…just not
about donating
Donors Are In Control
Fundraisers Who Evolve from
Gatekeeper to
Customer Service Agent Will Reap the
Rewards
CYGNUS APPLIED RESEARCH, INC.
CHICAGO / TORONTO / YORK, UK
(800) 263.0267
WWW.CYGRESEARCH.COM