(Well written) email matters

Email is dead montage
Maybe crap email is dead. The rest is doing fine.

In the past week, three organizations I run into a lot online and through work posted writing jobs. More specifically, email writing jobs (a list of them is below).

Writing in less than 140 character snippets, coming up with the pithiest text to put over a share image, and (at the other end of the spectrum) even longer form essays seem to be the skillsets du jour.

Yet email remains a workhorse — building and connecting supporter networks more directly than social media. In combination with social media channels, video, websites, online ads and everything else, email can be more valuable. Email goes directly to the inbox, it can introduce a topic or remind the reader of something posted on Facebook or sent through postal mail.

“But wait,” you might say, “I get way too much email” or, if you’re in the field, you’ll point out the single digit (and falling) open rates in most sectors of the email world. Both are valid points. There IS too much email and most of it is just plain BAD.
Continue reading “(Well written) email matters”

Don’t be the coyote: Falling retention rates can be stopped

Recently, Blackbaud’s npENGAGE blog gathered tips on how nonprofits can do a better job keeping donors on board from some of the best fundraisers around.  Your mileage may vary but each insight offers a little piece of gold bound to help at least a little bit. I was struck, however, by the general message: “you need to do a better job engaging people, acknowledging them, and being genuine, loyal and transparent.”

Retention rates will fall as predictably as Wile E Coyote if you don't understand why people support you and focus on those likeliest to stick.
Retention rates will fall as predictably as Wile E Coyote if you don’t understand why people support you and focus on those likeliest to stick.

The message is true and the tactics presented are solid but it’s not enough. We we need to understand why people enter the organization, recognize that many aren’t going to stay, and build fundraising strategies with likely long-term donors in mind. Organizations also need to structure their acquisition and fundraising programs (online and otherwise) for strong collaboration between staff that handle acquisition and long-term retention.

Donor retention is headed downward with a sort of Wile E Coyote falling off a cliff predictability.  Blackbaud’s head science guy, Chuck Longfield, reports that new donor retention is around 27% these days. Retention keeps falling while the incentive to keep people on board grows — acquiring a new donor costs five, six, seven or times more than keeping an existing donor.
Continue reading “Don’t be the coyote: Falling retention rates can be stopped”

Facebook Grants, Nonprofits and what’s really needed

Facebook GrantsEarlier this week Facebook announced that it had begun putting “Donate” buttons on pages run by US nonprofit organizations. The program rolled out on 19 nonprofit pages and other groups are invited to express interest in participating. Facebook is offering to funnel donations to nonprofits free of charge — 100% of donations made will go to the nonprofit.

This program is important for several reasons. Perhaps most importantly is that it begins (we hope) to standardize the Facebook donation experience which has to date been cobbled together through a combination of free and paid third party apps, forms embedded on page tabs (an interface Facebook removed), and any number of attempts to move potential donors off Facebook which has always been difficult.

A Donate Button? Yeah! Oh, wait. Meh.

The response to this news from the broader nonprofit community may be characterized as lukewarm at best. Why? Organizations won’t receive the names and contact information of donors. Nonprofits are tired of Facebook’s ever-changing algorithms, interfaces and rules. Organizations are also finding they have to pay to get their content in front of Facebook users that already Like and follow their page. Facebook makes it hard for organizations to reach their audience without paying. Nonprofits are not flush with communications and marketing resources. A pay to play environment shuts many if not most groups out of Facebook.
Continue reading “Facebook Grants, Nonprofits and what’s really needed”

Investment, results, and transparency: Younger generations change changemaking

A recent study by the Dorothy A. Johnson Center for Philanthropy and 21/64, a nonprofit consulting practice, dives into the giving interests and preferences of young major donors. The report, available at NextGenDonors.org, provides useful insights into how young, highly engaged activists and donors view their relationship with charities and social change campaigns.

Modern fundraising integrates online and in-person approaches. Photo via Flickr user jaymiek.
Modern fundraising integrates online and in-person approaches. Photo via Flickr user jaymiek.

This study has been making the rounds. It has been covered recently by The Chronicle of Philanthropy, was introduced by its authors in Stanford Social Innovation Review, and moved Jeff Brooks to provide a valuable critique that we’ll get into shortly.

What’s important about the opinions of a few hundred wealthy young donors? It’s well known in philanthropic circles that the transition of wealth from baby boomers to younger generations is coming – it has in fact begun – and will pass trillions of dollars to donors that have come of age in a world where the Internet has radically changed both communications and donor-organization relationships.

Basically, these are important nonprofit supporters today but in years to come this cohort will be found on nonprofit boards and in other leadership positions. Their attitudes towards giving and programming will help shape nonprofit budgets, staffing, and more.

What’s less clear, of course, is how transferable the experience and opinions of a small set of young donors is to a larger populace that will (one hopes) become tomorrow’s nonprofit donors, members, activists and volunteers. We can, though, highlight some key takeaways from this survey that coincide with our own experience working in and around nonprofits in recent years.

Investment, results, and transparency

The nature people’s relationship with nonprofit organizations is constantly evolving. This is true on an individual level – most people are more engaged in their community as they get older, have kids, stay in one place for a while, and have more disposable income – and at a broader scale. The Internet has changed communications, hastening a shift in expectations people have about information sources, interaction with government and community groups, and the availability of performance or result-driven data. Continue reading “Investment, results, and transparency: Younger generations change changemaking”

Pretending to be your donor

2468506922_c1ed495959_z - Sybren A. StüvelI found myself wondering the other day – as I struggled to make sense of the less-than-clear instructions on my business’ quarterly sales tax return – how often anyone from the Department of Revenue actually goes through the process of filling out their own paperwork as though they were a business owner like me.

If the folks who process returns, the people who manage the people who process returns, the department heads and the political appointees at the top of the org chart … if any of these folks had actually experienced the process of filling out a return, they might be inspired to improve the design of the system, or at the very least prepare clearer instructions.

I suspect, however, that most of these folks don’t actually use the system they run, so most have no idea just how complex, frustrating, and difficult it might be for the end users.

It’s easy to poke fun of large government agencies for not bothering to use their own services, but I’m willing to bet that most nonprofit folks don’t do it, either. When is the last time you walked through any of your user experiences, not with the eye of the program manager or executive director but as though you were the customer, user, visitor, or client? If it’s been more than a few months, it might be worth revisiting.

  • While pretending you are a first time prospective donor to your organization, visit the website and see how easy it is to find the information you think you might want to know.
  • Go through the process of making a donation while pretending you are a supporter of the organization but unfamiliar with the donation process … visit the website, find the donation page, and actually make a donation. Any annoyances? Any steps where you might be tempted to give up and do something else?
  • Try signing up for your newsletter. Was there any friction in the experience? Now unsubscribe to your newsletter. Was that as easy as it should be?
  • If you sell products online, are there any annoyances in the shopping or purchasing experience, or it is smooth and delightful?
  • Try playing the part of a long-time supporter experimenting with a new service or tool for the first time. Did you easily figure out each step? Did the process make you feel valuable?
  • If your nonprofit provides a facility or a service, this list gets a lot longer: imagine being a first-time visitor to the museum, or a first-time customer of the service.

Walk through every step of the process thinking about how that user will experience it. Every user touch point sends a sharp signal to your supporters and potential supporters. It tells them how much you care about them and their contribution. And beyond the symbolism and messages, the more friction and the less pleasant your user experience, the fewer who will actually complete the transaction.

When we run programs, websites, and organizations, we often think about their design in terms of what’s easiest for us. We pick the donation tool that most easily integrates with our database and our bank. We design the navigation on our website in terms of how our staff uses the website. We design the sign-up forms for our membership programs, field trips, and services based on what’s convenient for managing those offerings.

We often don’t think about the experience of our supporters, visitors, customers, and clients. The result: the user experience is often neglected, filled with unnecessary points of friction, and can even be simply unpleasant.

And, unlike the Department of Revenue, we can’t compel people to use our services.

(Photo by Flickr user Sybren A. Stüvel).

Jacob Smith is the co-author of The Nimble Nonprofit: An Unconventional Guide to Sustaining and Growing Your Nonprofit, the former mayor of Golden, Colorado, and a nonprofit consultant.

Coming: charitable donations with Facebook Gifts

Today, Facebook announced the ability to make charitable donations (to one of 11 nonprofits at this point) through the Facebook Gifts program that is still rolling out to users.

Because you probably haven’t seen it, Facebook Gifts is e-commerce baked into Facebook that lets users buy gifts from Facebook and announce the gift through the Facebook platform.

The charitable donation program will let you make a donation in someone’s name to the charity of your choice or let the person you are gifting choose the charity.

Facebook gifts donation screen

At this point, Facebook seems to have rolled the program out using pre-selected non profit partner organizations, including:

  • American Red Cross
  • Blue Star Families
  • Boys & Girls Clubs of America
  • DonorsChoose.org
  • Girls Inc.
  • Kiva
  • LIVESTRONG
  • Oxfam America
  • RAINN
  • St. Jude’s Children’s Research Hospital
  • Water.org

By and large, these are all well-established, high visibility organizations.  Wired reports that gifts are limited to $25. It is unclear how much, if anything, Facebook or 3rd parties are taking for processing fees.

Will donations through Facebook Gifts empower a new revenue source for non profit organizations? That seems unlikely but, really, it’s too soon to tell if (or even how) the Gifts program on Facebook will work. Offering a donation portal makes sense from Facebook’s perspective.

We think there are two potential upsides to this. First, it may raise awareness of the organizations involved. Second, and perhaps more importantly, it may make people more aware of or comfortable with the idea of giving to organizations through Facebook.

The onus will still be on organizations to actively engage supporters and move them to donations or other appropriate interactions. While this may make more people aware of the idea that Facebook is a donation platform it won’t make marketing and communications easier. Keep an eye on how these 11 organizations communicate with their Facebook audiences for insights into what works (or doesn’t).

Should grantmakers act more like venture capitalists?

Should philanthropic foundation board members and staff act more like the venture capitalists who fund internet startups?

That’s the question our good friend Jon Stahl posed a few weeks ago. Jon’s focus was on the high level of involvement that venture capitalists often have with the companies they invest in. Lead investors typically have a seat on the board and often participate actively in the company, at least at the strategic level. Jon points out that foundation program officers, with portfolios that often run in the dozens, simply don’t have the bandwidth to engage much with their grantees.

I think it’s a great point; maybe there are ways we could refine the philanthropy model to offer grantees more support from their funders.

But the venture capital investment model has some other qualities that may or may not fit our social sector goals very well. For one thing, the VC model is designed to foster blowout success at the expense of everything else. In financial terms, a 2x ($2 returned for every 1$ invested) or even 5x return isn’t very interesting; the VC model is designed to produce 10x and 100x or even larger returns.

In fact, VCs have a lot of incentive to actually kill companies in their portfolio that don’t knock it out of the park. You probably won’t get funded in the first place unless you’ve got a great idea, a great team, and a great market, but if you don’t show aggressive growth in users or revenue pretty quickly, and then sustain that growth, the odds are decent that your VC will actually be part of shutting you down. A typical venture fund might see half or more of its companies fail outright, thirty percent performing modestly enough that the fund can get its investment back or perhaps make a small return, and only twenty percent doing really well. (The actual numbers are tough to come by, and there’s a lot of disagreement about exactly what they are, but we know that the huge hits are pretty rare and that lots of venture capital funds actually lose money).

The model might make sense on issues where our most desperate need is for a few blowout successes (and where we are comfortable killing off the groups that don’t achieve this level of success). For example, it might be perfectly reasonable for the Gates Foundation to fund malaria eradication programs using a VC-style approach, hoping that one of their high-risk-high-reward investments comes up with the solution we’ve all been waiting for.

But on lots of social sector issues, activists and funders are happy – and reasonably so – with moderate, sustained success. If a VC-style approach on malaria eradication comes at the cost of stable, sustained funding for effective malaria prevention efforts, it’s probably a much less appealing strategy. In fact, those “moderate” successes only look modest by comparison to absurdly high Google-style returns.

And on many issues there probably just isn’t a knockout punch waiting to be uncovered through high-risk entrepreneurial style investment by philanthropic donors. Preventing extinction and recovering endangered species is just hard work, politically and ecologically; there almost certainly isn’t a fantastically successful strategy just waiting to be discovered. We ought to have more sophisticated ways of measuring outcomes, and more effective ways of rewarding nonprofits that craft and implement successful strategies, but success across lots of fields won’t look like the 1,000x return that early Facebook investors walked away with. There may be some radical advocacy innovations waiting to be uncovered, but odds are good that most of our success will come through philanthropic investments with returns that look more like the equivalent of 2x, 5x, and 10x outcomes in the investment world. And even though these numbers look small compared to the superhits, they are still huge success: anytime a foundation invests $50,000 in a nonprofit and gets $100,000 or $250,000 worth of social change value out of the deal we all ought to celebrate.

The VC model also shifts enormous control over the company itself to the investors. It’s one thing for a social sector funder to have detailed expectations about how their grant will be spent, and perhaps to use the size of their grants to influence organizational decisions about staffing and strategy (which itself is enough to make many nonprofits very uncomfortable). It’s something altogether different when the funders actually control the organization itself.

Finally, the idea that funders might play a more active role in managing the organizations they fund carries as many risks as it does benefits. The best program officers offer real expertise about the issues they fund, they can draw on wide experience working with the nonprofits they fund, and can offer a higher-level strategic vantage precisely because they aren’t in the trenches on a day-to-day basis. But even the best are still at a distance from the day-to-day work, they often don’t have much experience on the other side of the funding equation, and they can be very prone to a favorable results bias.

In fact, while investors and entrepreneurs may not (and often don’t) share the same long-term vision, they measure results in a very consistent way: how much money is this company earning and how much is it worth. Philanthropic funders and the nonprofits they support may tend to have better alignment on long-term vision, but they rarely share a consistent and unambiguous approach to measuring outcomes. And this problem is only amplified by the strange power dynamics that characterize most grantmaker-grantee relationship. Deeper involvement by program officers in the nonprofits they fund comes with some real challenges.

I’m guessing the appeal of the VC model for Jon is mostly around the opportunities for nonprofit folks to learn from the experience and vantage of the funders they work with (not to mention the potential for funders to provide other kinds of resources to their grantees), and given how weak nonprofits usually are mentoring and professional development this makes a lot of sense. The trick, as is usually the case when drawing from outside models, is making sure we understand what those external models are designed to do and adjust the ways we mimic and poach from them accordingly.

There are other models worth exploring, as well. Angel investors often contribute much smaller amounts but expect much lower returns, which means that a moderate success can still be a success, and the angel investment model includes a lot of room for investor involvement and support. Crowdsourced funding models, with Kickstarter as a marquee example, might offer some insights. In many ways these models look a lot like traditional membership-oriented fundraising in the nonprofit world, but as federal law expands accessibility to true crowdsourced investment we can expect to see rapid evolution in the mechanics and structure.

I agree with Jon’s basic point that we should look at the venture capital model for ideas about improving philanthropic funding. I do think, however, that the VC model in particular has some significant limitations in a social sector context. The nonprofit world, at times, goes overboard when it pulls from other sectors, missing the nuance and context and overdeveloping some particular element that seems important. But we can learn a lot, too, by paying attention to other sectors, and we’ve got a lot to gain by poaching, adapting, and testing whatever we think might help.

Data Informed, Not Data Driven

This Adam Mosseri talk about how Facebook uses data to make decisions is a little dated but his observations are still extremely useful. His key insight: clear metrics and strong data-driven feedback loops can be powerful, but they have their limits as well. Facebook often uses solid empirical data to make decisions about their website design, their products, and the workflows that users experience on Facebook. They can test two versions of a website design, for example, and if design option A produces higher engagement than design option B it’s an easy choice.

But Mosseri also explains how an excessive fidelity to data-driven decisions can privilege incremental and uninspired changes at the expense of innovation and ambitious thinking. Facebook sometimes is aiming not only for high levels of engagement but for more fundamental changes in the way people interact with it and with each other. Facebook’s Timeline, for instance, inspired anger and fierce resistance among many Facebook users and sharp derision from the press, and the use of a conventional data-driven decision process would have killed it before it got very far, but Timeline is now a central and deeply-valued part of the Facebook experience.

Most nonprofits don’t seem to rely much on data for their decision-making about their websites, email newsletters, programs, and fundraising efforts, and when they do those efforts aren’t often carefully crafted and executed (some do, of course, but for every one that does there are many, many more that don’t). The remedy isn’t to swap all the intuitive and qualitative decision-making for analytic feedback loops, but to find a good balance. “Data informed, not data driven,” as Mosseri says.

Feeling the Love

I’ve been subscriber to a local cultural organization for twenty years now, and for the first time since I first joined I didn’t renew my subscription.

From the “Missed Opportunities” folder: in all those years, nearly every time the organization has ever reached out to me has been a solicitation … contribute to the organization, buy tickets for a special event, donations to special funds. No notes just thanking me for being a supporter. No acknowledgment of my long tenure as a subscriber. No invitation to offer my thoughts for the next year’s performance schedule or ideas for other events and programs. No phone calls from board members asking what I think of the organization or if I enjoyed the performance last week. No gestures of appreciation at all.

What’s so striking is how little it takes to make supporters feel appreciated. It doesn’t require fancy parties, expensive gifts, or elaborate theatrics.

For their five-year anniversary, the local cafe in a town I used to call home gave coffee mugs to all of their customers. A decade later that mug is still a cherished part of my morning coffee routine, and I eat there every time I pass thru town. Every now and again, I’ll get a call from a nonprofit staff member or board member just to thank me for supporting the organization. I’ve enjoyed the occasional “member appreciation event” over the years. After getting stuck in the dreaded “purple line” at President Obama’s inauguration and missing the event, my Congressional Representative sent me a photo of the swearing-in. It didn’t make up for missing the event, but it was a very cool gesture and required very little effort or expense.

Even more disappointing: if they couldn’t figure out how to reach out to me in some non-solicitous fashion during the many years of my support, at the very least this local cultural organization might have done so when I didn’t re-subscribe by the deadline, since retaining me as a subscriber has to be much less expensive than re-acquiring me later. Doing so would have offered them an opportunity to learn why I didn’t renew (too expensive this year), earn my gratitude if it had been because I forgot and missed the deadline, perhaps offer me a special deal because of my tenure, or suggest an alternative (“did you consider renewing with tickets in a less expensive section?”).

I’m a huge fan of this organization, but I’m not feeling the love coming back my way, which can’t help but weaken my enthusiasm for them. Even for those organizations that are the most resource constrained, you can find ways to make sure your supporters know how much you appreciate them, and that, in turn, can’t help but deepen their relationship with you.

(Photo by Flickr user candiceecidnac).

The Network for Good Online Giving Report: Growing, Growing, and Growing Some More

Network for Good just released their “Digital Giving Index: Q1 2012” report, and as expected it’s got some juicy tidbits and insights about trends in online donations.

A couple of highlights:

  • Online giving is up across all channels. For instance, online giving overall is up 16%, social giving is up 20%, and giving through branded charity websites is up an impressive 36%.
  • Average gift size grew, including a 90% jump in the average size for social giving. The average is now just under $100.

I think the simple take-away here is that online giving is growing – and will probably continue to grow – in importance relative to conventional charitable giving channels. I wouldn’t dump the direct mail program yet, but I’d guess that having a robust online presence is going to be increasingly important for most nonprofits.