Flat Earth Fundraising
We’re sorry, but it’s really hard to watch the collective stupidity of our trade unfold and remain silent.
But then, having renounced and abandoned our role as consultants, that’s not a problem we can deal with directly. On the other side of the coin, however, we no longer have to care whom we please or displease.
Consequently, inspired by North America’s celebration of Columbus Day yesterday, we think this is the perfectly appropriate time to introduce our forthcoming series titled “Flat Earth Fundraising.”
Our goal is NOT to pillory dumb practices on the part of consultants and nonprofits – that would be ‘negative’ and heaven only knows ‘negative’ doesn’t work in this world.
Rather, we want to celebrate innovation – the bold and courageous fundraising navigators who are pushing us all beyond the flat earth state of current practices. Sure, there are dragons at the edge of the map and surely we will all fall off and be gobbled up by the new, new thinking.
With this series we intend to challenge the ‘flat earth’ nonsense of RFM and other outmoded fixtures and dogma. As well as the high-falutin, pompous pronouncements of so many consultants who really don’t know what they’re talking about … but make it sound so good.
One thing we need from you to do this really well – examples of fundraising innovation.
Please bring ‘em on and we’ll all have a ball. We haven’t been awarding many Agitator raises lately, and the money’s burning a hole in our pockets.
Roger and Tom
6 responses to “Flat Earth Fundraising”
Behavioral Science Q & A
Integrating an individual giving appeal with other communications from a charity can have both positive and negative effects, and the outcome largely depends on how it’s executed. Advantages of Integration Brand Consistency: Maintaining a consistent appearance and messaging across all communications can reinforce the org’s brand identity and strengthen brand recognition and trust among your […]
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I’m not aware of any in-market tests specifically comparing recurring vs. gift frequency language. I suspect the answer might not be the same with all gift frequencies, nor with all people. It sounds like a great opportunity for you to test and find out what works for your audience. Based on the literature, here’s a couple […]
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Based on what we know from existing data, those renewal notices can actually be pretty effective in getting people to donate. They tap into our psychology – creating a sense of urgency, reminding us of past support, and using personalization to make the message hit home. They’re playing on our natural tendencies to feel obligated […]
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Interesting question. I had a quick look at the testing done on this topic. On the positive side, in all cases, over half of donors decide to cover the fee. In some cases, it goes as high as 65%. Not a negligible percentage at all. Here’s another test from iRaiser showing consistent results (see point […]
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There’s just one thing to consider when designing a supporter journey: the supporter. More specifically, you need to take into account: Who the supporter is i.e. their identity, which is the reason they support this cause, and their personality, which describes the way they “see” and process the world. These will determine the kind of […]
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I’m not an expert in this but a quick search surfaced this article on the effect of tax reforms on 2019’s charitable giving. The researchers didn’t find a reduction. Actually, they observed an “increase in charitable contributions in 2019, even with the lower tax rates and the dramatically smaller number of taxpayers who itemize their […]
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Roger and Tom, look forward to seeing the fantastic new things people are doing BUT I also want to see great examples of tried and true fundraising discipline being applied!
Who keeps a rigorous record of all their tests nowadays? And knows what to test, and how to act on the results?
Who really celebrates and inspires their telephone or face to face fundraising teams, whether in-house or agency – two of the most powerful tools any mass-market fundraiser has access to?
Who’s using new media most effectively to capture those all-important phone numbers where real people can actually be reached, and where you can have a real dialogue with them?
Who knows their cost per donor for acquisition and retention across all of their channels and demographics?
Who’s really ‘developing’ their donors?
So often a lot of what passes as ‘innovation’ seems to me to be a flight from the bits of fundraising that we think are beneath us – “Now that I’ve got this great new technique, I can stop bothering my supporters with those awful phone calls/”, etc, etc.
We mustn’t encourage that any further, surely….
Adrian
If you google flat earth fundraising, you are taken to Jonathon Grapsas “Flat Earth Direct” company… as well as Jon Duschinsky’s Philanthropy in a Flat World.
Perhaps they might be good starting points for seeking out examples 🙂
Adrian makes a most important point: master the basics first.
There is indeed a frightening tendency to get to the next new thing without truly plumbing the known–and successful –tried and true.
Tom and I will certainly keep this front and center as we go forward with this series. Many thanks.
Roger
Laurie…. Thank you. You’re right on. In the concluding page of Jon’s “Philanthropy in a Flat World” he throws down the gauntlet that serves as adequate notice for the slothful, the uninspired and the ‘hey-this-is-just-a-job crowd.
He quotes a friend who said that if your charity exists to save lives and you are not doing enough to raise sufficient funds to operate adequately, “then people are dying as a result of your mediocrity” – and that is “tantamount to manslaughter.”
In brief, that’s why we’re tackling this and hopefully will make the slothful, unthinking sweat.
Roger
I’m interested to understand more about why you think RFM is outdated? What do you propose as the more current and I’m assuming alternative?
Thanks
Suzanne
Suzanne,
It’s not that RFM is outdated it’s simply that given the overly-simplistic way it’s generally used it is a very crude and inaccurate approach.
In a future post we’ll outline some of the alternatives, but for now here’s why traditional RFM as usually practices falls into my ‘flat earth fundraising’
category.
There are two great weaknesses with RFM analysis:
1) It only uses 3 variables– Recency, Frequency, Monetary Value — and,
2) Does not use the 3 efficiently.
Let’s focus just on the second point. Consider a hypothetical (but typical) RFM select for who is “in” and “out” of a particular mailing; 0 to 12 months, with 3 or more gifts and a highest previous contribution of $20 or more. Now imagine, a donor, we’ll call her Kate, whose last gift was 18 months ago, though she has given 6 gifts in the last 3 years and her highest previous contribution was $50. Because her last gift was outside the 0 to 12 range she is left out of this “active”, mailing, despite doing well on frequency and monetary value or dollar amount.
The reason? All three variables, R, F and M, were given arbitrary, almost meaningless and extremely inefficient weights or assigned “importance”, probably with almost no recognition by the person or group doing the select. In this hypothetical example, RECENCY of gift is weighted, unknowingly, at 100% for Kate and countless others like her with most recent gifts outside the 0 to 12 grouping.
How about a more extreme example? Consider Ken, whose last gift was 12 months and 1 DAY AGO or 366 days but with 3 gifts and a highest previous contribution of $25. Ken is just as OUT as the Kate and another hypothetical donor Chris, whose last gift was 36 months ago.
To put a fine point on it – 366 days recent, 540 days and 1095 days recent are TREATED IDENTICALLY using traditional RFM analysis.
There are better alternatives available to virtually all fundraisers through predictive analytics that apply a formulaic weight to each of the 3 variables (R, F and M) and would produce a more gradual, “fair” (and accurate) treatment of Ken, Kate and Chris.
The weights or importance of each variable are based on their value in predicting future response, giving every donor a granular score, a score that can be assigned a dollar value and mailings sent based on anybody with a predicted dollar value equal to or greater than the cost of the mailing.
In this way, there are many, many combinations of past giving (i.e. R, F and M) that put one “in” the final select. This group will include MANY who would have been left out of a traditional RFM select and DROP many who would have been put in. This dropping and adding of different donors is the efficiency or LIFT provided by predictive modeling over traditional, crude RFM segmentation.
More about all this shortly.
Roger Craver
The other summary observation about RFM is that it only uses 3 variables. Consider a rather pedestrian fourth data point, age. This variable typically matters a lot in identifying likely donors. The only way to efficiently handle a fourth, fifth and tenth variable is with predictive modeling to determine, objectively, which of the ten matter (not all will) and at what weight or importance. Not using other information, much of which is probably sitting on the file, is to greatly under-perform on mailing efficiency and returns.