In Part 1 I urged all of us to become “expert novices” –fundraisers who have knowledge and confidence but are capable of maintaining a seed of doubt that they may be wrong.

Of course, the building blocks of knowledge, skepticism and curiosity must be stacked on top of the rock-solid granite foundation of fundamental fact.  You can’t call yourself a fundraising “expert” or strive to be an “expert novice” if you don’t know and understand basics.

There’s a wealth of good fundraising advice and “how to” information out there about stewardship and donor-centricity –from messaging, to digital, to donor relationships, etc.—that can sate our thirst for knowledge.

BUT…I fear that all too many fundraisers blindly grab on to that advice with little fundamental understanding of the problems the advice is meant to cure.  Like a physician marveling at some new miracle drug, without having any basic knowledge about the importance of the patient’s weight, blood pressure, pulse or other vital signs before writing the prescription.

In short, if you consider yourself an expert and want to challenge the status quo you first have to have the fundraising basics firmly in hand.

    Basic Questions Every Fundraising “Expert” Must Answer

If you can’t answer the following basic questions about your organization or your client you’re not a fundraising expert by any stretch of the imagination.  And, you shouldn’t be messing around with new ideas and applying new techniques until you have answers to these basic concepts/answers tattooed on your brain.

Many fundraising managers or directors no doubt feel it’s beneath their pay grade as an “expert” to worry about such mundane detail, but it’s as fundamental to your success as a fundraiser as a thermometer is to a doctor.

If you can’t answer these questions and don’t have time to find the answer, assign someone on your staff to get them for you.  And if you employ “full service” consultants and they can’t answer them, in 5 minutes, then fire them immediately.

[ Tip:  To assist you in this process I’ve prepared a Short Guide to Answering Questions Every Fundraiser Should Ask.  You can download here.]

Question #1:  How Many Donors Can We Reach? 

Nothing is more basic that the ability to actually get a message into the hands of your donors.  MostAgitatorreaders use postal mail and digital email for communications to their donors.

I’ll bet Nick’s next pay check that 80% of our readers have no idea how many “undeliverable” or “deceased” donors are on their file.

A review of serval hundred nonprofits by our colleagues at TrueNCOA  indicate that on an average file 11%  of their donors can’t be reached. Obviously, this means that these organizations will self-inflict a decreaseof 11% for their #GivingTuesday or Year-End appeals right out of the starting gate.

In addition there’s the waste of postage and printing money (TrueNCOA  has clocked a savings of $25 million over the past year for those groups that have cleaned their lists.) Also, don’t forget the embarrassment and relationship-destroying fall-out that comes from the families of the deceased donor who continue to receive solicitations to the dearly departed.  (You can deal with this for pennies through TrueDeceased.

And the non-delivery rates for email are even higher –and about to get worse as email services and Internet Service Providers (ISPs) tighten their standards and protocols. (I’ll deal with this growing danger in a future post.)

Don’t assume your mailing house, CRM or data processing firm will automatically clean your files as part of your contract with them.    Many don’t. Ask yours if they do and what they charge.

Many fundraising managers or directors no doubt feel it’s beneath their pay grade as an “expert” to worry about such mundane detail, but it’s as fundamental to your success as a fundraiser as a thermometer is to a doctor.

Question #2:  What is Our Retention Rate?  Why go through all that money for acquisition, and all the cost and effort on donor communications and stewardship if you can’t hold on to your donors? “Retention Rates” are an accurate reflection –an annual referendum—on just how many of your donors (and their money) are willing to stay; and how many are heading for the exits.

Related questions are how your retention rates compare to other organizations similar to yours?and are your retention rates for first=year and multi-year donors getting better or worse year over year?

Only when you know whether or not you have a retention problem are you in a position to seek advice and put it to work in an effort to hold on to donors.

Question #3:  What Is the Life Time Value of Our Donors?  LTV is he GPS of fundraising.  It tells whether your work with donors is going in the right or wrong direction.  Without this figure firmly in hand there’s no way you can justify investments in acquisition…stewardship efforts…upgrading campaigns…or almost any other fundraising initiative.

But when you know the LTV of your donors you can quickly spot problems and opportunities.

You’ll find this post Back To Basics: Lifetime Value (LTV) helpful.

By way of example here’s a message I received from a veteran consultant a few days ago:

“Just reviewed a program that is mailing three nickels and getting a $14 average gift at a cost of more than $30/donor. Five-year value $77, with renewal costs of about $40, a profit of $7 over five years.  Crazy!”

Basic Answers Focus on Problem Areas and Solution Opportunities

The answers to the basic questions above should trigger an additional set of questions for you.  By answering the following 7 questions you’ll be armed with the basic information needed in your new role as an “expert novice” to start questioning and challenging the status quo.

Each time I’m asked to audit or evaluate a fundraising program I’ve asked and answered these questions.  And each time I’ve gained new insights into how well current efforts are working and new approaches to stewardship/donor centricity (onboarding, communications, asking strategies, new initiatives like mid-level or monthly giving) that should be exploring.

• Is my donor file size growing or shrinking?
• How loyal are my new donors?
• How loyal are my existing donors?
• How much is a donor worth after 5 years?
• How much has revenue changed from year to year?
• On average, how much does each donor contribute?
• What can I do to protect / grow donor retention and revenue?

So, please take some time to answer these basic questions or assign someone to get the answers for you.  And don’t hesitate to use the helpful shortcuts I’ve listed in this downloadable Short Guide to Answering Questions Every Fundraiser Should Ask.

Next…in Part 3 I’ll explore a dynamite way to help you see through biases, overconfidence and all the other traps that keep you from learning the truth about your organization and its donors.

Roger