How Much Fundraising R&D?
Yesterday I summarized Ken Burnett’s recent recommendations regarding “7 things for fundraisers to do now.”
Two that I think are especially important relate to fundraising R&D and knowing your data.
Regarding R&D, Ken recommends earmarking (‘ring-fencing’ as the Brits say) 10% of your fundraising budget for rigorous testing of new ideas. While of course there’s no hard and fast rule, that strikes me as a reasonable target.
Moreover, I’d take that monetary target and, figuratively, double or even triple it in terms of mind share devoted to conceiving appropriate test propositions and scenarios. Before you ever hit the “TEST” button, you should have devoted significant time to considering what variables or hypotheses or alternatives are most worth testing.
Naturally your new testing should be informed by your old testing. But how many organizations “forget” the lessons they have already learned … often simply through staff turnover?!
To really know your data, another of Ken’s recommendations, you need to store it in some readily accessible form. For example, do you maintain a database or “testing bible” that records your testing in sufficient detail that a new fundraiser could come into your organization and make sense of it?
Ken was talking more broadly about extracting and mastering all the possible intelligence — from basic list performance to more complex lifetime value projections — that’s buried in all of your response data, not just testing. And he’s absolutely right. Know it deeply yourself … or pay your analyst well!
But looking just at testing, if you are going to spend 10% of your budget on experimentation, you want to be awfully sure you are advancing the ball (by exploring meaningful new hypotheses) and not just re-inventing the wheel.
If I’m your boss, I want to be sure you’ve mined all your available data thoroughly (and stolen every possible insight from your competitors) before I sign-off on your 10% slush fund!
Tom
2 responses to “How Much Fundraising R&D?”
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Hi Tom,
Well put. Though it may be unrestricted money with no fixed targets set for it, the test budget (or slush fund) that I’m advocating must indeed be monitored over time so that everyone can see its outcomes. The other thing I should have said about this fund though is, please please please, monitor accurately and record the results of all your tests. And keep these priceless results somewhere safe and accessible for you and future generations. I’m amazed at the number of fundraising direct marketers who carry out expensive tests but keep no good records of their results, relying instead on memory. Then, of course, these airheads get another job, and move on. Fundraisers have to keep a guard book (see http://www.kenburnett.com/BlogGuard%20book.html)
Best wishes,
Ken
Sorry that link should be http://www.kenburnett.com/BlogGuard%20book.html