Why do nonprofit re-brands so often lead to steep drops in revenue?

The entire purpose of a re-brand is (or should be) to enhance an organization's ability to do its work, usually by becoming more effective at raising funds.

How could it go so terribly wrong so often?

(It's a challenge so strange and with such huge ramifications, I wrote a book about it: The Money-Raising Nonprofit Brand.)

Here's some more about nonprofit branding, from Queer Ideas: Why you should stop f***ing about with your logo and stick to fundraising instead:

... if you are hoping a rebrand might increase your income, it may well be the case that you really should be speaking to a fundraising agency instead.

Check it out, or watch the video here:

It's been a puzzle ever since email became a viable way to communicate with donors: There's something wrong with e-newsletters.

Usually the lowest open rates of email types. All the other numbers low too.

Which is odd, because print newsletters do very, very well for most who do them right -- that is, make them relevant to their donors.

But, in my experience, when you port them over to email -- and I've tried every which way of doing it -- the magic is gone!

But here's a possible solution, from the Better Fundraising Blog, at How to Increase Your Email Open Rate by 58%.

Yes, you read that right: A different way to handle email newsletters that has boosted open rate from 24% to 38%.

It's called an "e-story," and the main difference from an newsletter is that it tells one “before and after” story. No formatting, no header image, no photo, no links to social. It's a message from your ED or president that looks like she typed it herself.

Here’s the outline for an e-story:

• Warm, personal greeting
  
• Directly tell the donor that you are going to tell them a story that’s a good example of how their gift made a difference
  
• Tell a “before and after” story from your organization’s work
  
• Reaffirm to the donor that they helped make that ‘before and after’ happen
  
• Let the donor know that they can give again if they’d like to
  
• Thank the donor for their generosity
  

The results, at least for the organization that has done it: Much higher open rate, leading to higher response rate -- that is, a lot more revenue. Response rate leads to stronger retention, so over the course of a year of sending them, you are likely to see an uptick in that critical measurement.

Try it. See if it works for you.

(And if you're already measurably succeeding with your email newsletter, let me know. You might have found another solution to the strange puzzle of e-newsletters.)

Inflation and a sinking stock market are going to kill our fundraising, right?

Maybe not. If you keep your nerves and go to your donors with relevant (to them) messaging, you will get through this, according to this post at the Veritus Group Blog: Inflation and a Troubled Economy Should Not Affect Giving.

... if your ask perfectly matches your donor’s passions and interests, and if you explain in human and emotional terms what happens if the need is not met, there is high probability that the donor will give. Why? Because they deeply care about what you are presenting to them. And even in times of financial difficulty the human spirit rises to be others-oriented versus self-oriented.

Even when people are struggling, worried, and not sure what's next for them, they still care about the things they care about. Their giving to your organization can be a source of joy and of feeling in control ... if you treat them with respect.

Don't decide for donors that now is a bad time to give. For some, it may be. For many, they want and need to connect with your cause.

Failure is inevitable in fundraising. Show me an organization that never fails, and I'll show you one that's not prepared for the future. Even the very near future.

Here are five categories of fundraising failure -- and how can survive them and make the best of it:

1. Abject Failure. Flat-out, unambiguous, it-didn't-even-come-close failure. You tried, but you just missed. This most often happens because what you were selling, they weren't buying. Maybe you had no clear call to action. Or your offer and your audience were not aligned. Or your audience wasn't really donors. When you experience Abject Failure, at least you know one thing not to do again!
   
2. Hidden Failure. Sometimes failure is mistakenly considered success. It happens when the fundraiser doesn't pay attention to all the things they should be measuring. The most common version of this is looking at gross revenue but ignoring net revenue. It's not hard to improve gross revenue on a fundraising project when you aren't thinking about net. Always watch all the metrics of fundraising, especially net revenue, and you'll avoid these hidden failures that masquerade as success.
   
3. Good-Enough Failure. A lot of fundraising activity is in this zone. It does just well enough not to cause anyone pain or to prompt the soul-searching and idea-seeking it takes to change a bad situation. It's especially hard when the organization doesn't have any workable alternatives. They come to view just barely good-enough results as okay. Don't let this happen to you! Always work on improving your fundraising results. Even if they're already great -- but especially if they're marginal.
   
4. Bull-Headed Failure. This is caused by organizational insiders who refuse to pay attention to the fundamentals. They often have beliefs about how donors and fundraising ought to be and they refuse to learn what they really are. Organizations trapped in Bull-Headed Failure often find themselves in financial death spirals. Let your fundraising be based on facts and known best practices. Not someone's ideology.
   
5. Good Failure. Any failure can be good -- when it gives you information. That takes an open mind and a flexible approach. The best kind of Good Failure is when you set up scientific testing: You have a hypothesis you can test with clearly defined expectations. But even the worst kind of failure can retroactively become Good Failure if you look closely at it!
   

(This post first appeared on July 19, 2017.)

Your donor newsletter (the print version, anyway) should be bringing in net revenue.

If it isn't, it might be that you aren't sending it to donors, or you don't have enough active donors to make it work.

But if you aren't raising net revenue and you have enough donors (let's say at least 1,000 current donors, though I've seen organizations with fewer make it work:) -- it might be you are sending the wrong content.

Here's a good look at what you should be in your donor newsletter, from the Bloomerang Blog, at How Do Nonprofits Raise More Money Through Their Newsletters?

It's quite simple, really:

• How their support of your recent campaign made a difference.
  
• Beneficiary stories.
  
• Donor stories (i.e., “Why I care, why I give”).
  
• Photos with captions that tell a story.
  
• Inspiring stories made possible through legacy giving.
  
• A "soft" ask.
  

You'll notice I specified print newsletter above. My experience with e-newsletters is that it is much more difficult to raise money with them. They get low open rates and low everything else rates. The magic just doesn't seem to translate into email. If you're doing an email newsletter that's generating decent revenue, let me know. Because if you're doing that, you've either discovered the secret or you have a truly amazing donor list.

We spend a lot of time perfecting our asking. How much do we spend on our thanking?

Thanking well might matter as much or more than asking. It's a key ingredient for turning a donation from a transaction to a relationship.

Here are some great tips from The Storytelling Non-profit, at 10 Tips for Writing a Better Donor Thank You Letter:

1. Personalize as much as possible. Your thank you letter is a message specifically to one donor. That means you must (really must) use their name and their gift amount. And anything else you can come up with that's about them.
   
2. Lead with a story when you write a donor thank you letter. Telling a story that shows them the kind of amazing thing their giving helped make possible is the main thing that should be happening in your thank you letter. That's how you show impact: with story, not stats!
   
3. Find your non-profit’s unique voice. It's easy to fall into a formal businesslike tone. But that doesn't sound human. Write like a person connecting with a person.
   
4. Be genuine when thanking donors.
   
5. Write short sentences. Readability is the ultimate form of politeness and respect for your reader. Writers who think they look smart with complex copy are really just the equivalent of public speakers who mumble. It's rude. And people stop paying attention. See the next tip...
   
6. Use short words. As George Orwell said, never use a long word when a short word will do. It's the combination of short sentences and short words that make writing easy -- and more pleasurable -- to read.
   
7. Use the word “you” often. Remember that a thank you message is about the person you're thanking. It's not about your organization. Too many thank you letters are really just self-congratulations letters. That doesn't work in our life relationships, and it doesn't work in fundraising.
   
8. Be specific about donor impact. Remember that the donor gave to make something happen. Make it clear that something really did happen, and it was amazing! Don't just roll out abstractions about "making a difference."
   
9. Be uplifting. Even if the donation is small, make it clear that it really matters!
   
10. Paint an inspiring vision for donors. Many donors are haunted by the idea that no matter what they give, nothing changes. Show them that is not the case.
    

A donor writes a letter to the president of the organization. It’s an articulate critique of what the donor dislikes about their fundraising: It’s simplistic, repetitious, and emotional. What do you do? What do you say? We read an actual letter from a real donor and talk through the right — and wrong — response. There’s a disastrously bad response that many organizations make to letters like this. There’s also an affirming, correct, and revenue-enhancing response.

From the archives of the now-defunct podcast Fundraising Is Beautiful. This episode first aired on November 19, 2014. Listen here:

(If you don't see the audio player below, click here to listen.)

Some donors just aren't that into you. They give, and then never give again.

In fact, a meaningful majority of donors never give a second time to any organization that donate to. Industry-wide, 81% of first-time donors don't give again. I assume that because you read this blog, you are doing better than that with your first-time donors, but still ... most of them won't repeat.

Here are some donor types who are least likely to give more than once:

• Event donors. Donors who give at a gala, auction, or other event are more motivated by the event, and their connections to the event, than by your cause. They're even less likely to give again if their donation is in the form of sponsoring someone at an event.
  
• Memorial/tribute donors. Giving to honor another person -- living or passed on -- is a strong motivation. But it doesn't translate into a donor relationship very often.
  
• Disaster donors. When a major disaster hits, donors come out of the woodwork with donations to help. But they are much less likely to stay with you than other types of donors.
  
• Young donors. The younger they are, the lower their rate of subsequent giving. Many of them are also in one of the previous groups of low-continuation donors.
  

Fundraising is all about building relationships. These are donors who are less interested in that. So what should you do? Have a plan!

• Be realistic. No matter how hard you try, their likelihood of giving again is low. Don't beat yourself up because so many of them aren't giving again. And throw good money after bad.
  
• Think of them as prospects, not donors. In that light, they're quite good! Higher response rates and higher average gifts than most non-donors. Use the economics of acquisition, not donor cultivation.
  
• Look for ways to get second donations from them that have something to do with what caused them to give. Whatever caused them to give in the first place, find ways for them to do that again.
  

A recent study of arts and cultural organization fundraising found that early in the pandemic, some organizations experienced a marked increase of return on investment (ROI) while at the same time revenue just barely edged upward.

See the report at SMU DataArts, Studying Early Pandemic Data: Less Fundraising Expenses Led to Higher Returns for Arts and Cultural Organizations. Here's the basic finding:

• In 2019, every dollar spent on fundraising raised $6.22. This was close to the several previous years.
  
• In 2020 every dollar spend on fundraising raised $7.35 -- a 16% increase.
  
• In the same period, donated revenue increased by just 1%.
  

As the report notes, this change was driven mostly by fundraising expense reduction.

Hooray?

I don't think so.

But higher ROI is better, isn't it?

Not always. In fact, rarely is increasing ROI a clear sign of success in fundraising.

Because you can't budget-cut your way to greatness. Show me an organization with high-ROI fundraising, and I'll show you an organization that's likely declining in number of donors, donor upgrading, and number of donors making charitable bequests.

The easiest and most dependable way to spend less on fundraising is to do less fundraising. Cut direct mail appeals -- especially acquisition -- and you'll immediately save a lot of money.

At the same time while you're saving money, your dollars-per-donor will likely hold steady or improve. Because while your overall donor file is eroding, the donors you keep are the top donors: those giving the most and most likely to keep giving.

ROI loves that.

But your future revenue is screaming as the car zooms toward a cliff.

During the pandemic, a lot of organizations saved a lot of money by shutting down their fundraising for a short (or long) time. Many congratulated themselves on their improved ROI while overall revenue held steady.

But organizations that kept their head and stayed in touch with donors and asked them to help during the crisis -- they saw ROI stay the same. Or even drop.

But revenue skyrocketed.

What do you want: really good ROI, or more money to fund your work?

Because that's largely a choice you can make.

ROI us a useful indicator of the efficiency of your program and your campaigns. But when you focus on ROI, it can lead you down a destructive path that will undermine your current and future viability.

Higher ROI is not always a good thing. Sometimes it is very, very bad.

Should board members be required to donate to their organizations?

Joan Garry says: ABSOLUTELY at Should Board Members Be Required to Donate?

And she's absolutely right.

The main reason:

...because the two most powerful words in “ask choreography” are “JOIN ME.”

Some institutional funders specifically require 100% board giving. Other donors, volunteers, and all kinds of stakeholders are encouraged when the ultimate leaders and insiders have skin in the game.

(And show me a non-donating board member, and we'll likely see a sour micro-manager who makes every board meeting a torment of useless conflict. Not always, but frequently.)

Now here's the important thing: The amount a board member donates is not the issue. Requiring a minimum amount -- even if it's a "give or get" goal -- is a big mistake. It guarantees that you will have a board that lacks the diversity you need to succeed as an organization.

You should have board members who can only give "small" amounts. No amount is unimportant. Participation is what matters.

But you should not have non-participating board members. They are a drag on your organization.

A great way to do better fundraising is to be better.

Let me tell you about something that's better. It's a line of blank notebooks called Moleskine. The small one that I use costs around $10. Pretty dumb, huh? I could get a notebook at the drugstore for under $2. And every time I go to a conference I bring home two or three little notebooks for free.

Yet I shell out ten bucks for a Moleskine. Because it's better than the other options:

1. It has better features

The paper is acid free, so it won't turn brown and crumble in a few years. The pages are rounded off, so they don't get dog-eared. It's bound so it can lie open flat. There's a ribbon bookmark. There's an elastic strap that holds it shut. The oilcloth cover looks and feels nice.

All around, it's well made and a pleasure to use.

Other manufacturers have noticed and are selling high-end notebooks. Some probably even better than Moleskine. Or at a lower cost. That's why Moleskine's second advantage is so important ...

2. It has a better story

This isn't just any notebook. It's been around for a long time, and was supposedly used by some very cool people, like Picasso, Van Gogh, Mallarmé, and Hemingway.

Travel writer Bruce Chatwin was obsessed with his Moleskines. Part of the story is that the original manufacturer died; when Chatwin tried to buy some at his favorite Paris bookshop, he was told, "Le vrai moleskine n'est plus." That quote is always in French in the Moleskine story -- it flatters me that they tell it to me without a translation -- of course I understand the (very easy) French!

Moleskine reeks of creativity, sophistication, and quality. The features and the story come together to make it almost irresistible. I know writers who swear Moleskine notebooks are part of what makes them able to write well.

Can you do this with your nonprofit mission? Actually make it better and give it a better story? Think about it...

How to create better features

• You could be noticeably more effective than the usual organization. But it would have to be in a way the non-experts could understand and appreciate.
  
• You could leverage donors' gift in some powerful way.
  
• You could acknowledge donors' giving in some very exciting way.
  
• You could make donors part of a community or group that they love belonging to.
  

How to tell a better story

• Connect with your donors' aspirations better than others.
  
• Really give them something they can brag about when they give.
  
• Connect to a great heritage that donors would be proud to be part of. (This might be an especially powerful for some religious and cultural organizations.)
  
• Have amazing spokespersons (living or dead).
  
• Strongly affirm donors' beliefs about themselves.
  

You can't make this stuff up. You have to make it real.

But it's possible to make it real, if your entire organization is part of the effort.

And the reward? How cool would it be to become the "Moleskine of Nonprofits"?

(This post first appeared on May 3, 2017.)

I hope you read The Agitator's post that might this outrageous claim:

Charities need more debt, less revenue diversification, less leanness (bigger reserves), and higher overhead.

(Do The Opposite?)

You might be thinking, If we did those things, the watchdog agencies, the press, and even our donors would throw a collective hissy-fit, and we'd be in deep trouble!

But consider research on financial data from 130,000 charities from 1982 to 2012:

• Having a higher overhead generates 15% more program spend over 10 years.
  
• Having less revenue diversification results in 17% more program spend over ten years.
  
• Maintaining above median level reserves yields 32% more spending on programs.
  
• Having an above-median interest expense ratio contributes about 11% to program spending over 10 years.
  

All in direct contradiction of the common press narrative that nonprofits should operate in a constant poverty/desperation mindset. And the numbers that get us good watchdog ratings. Many boards are on board with the narrative too, and keep their organizations from accomplishing what they could.

Start your fight against the poverty mindset close to home. Work on your own leadership to get them thinking about what really works to fund your organization. And together, maybe we can take on the watchdogs and the press.

Why do your donors give?

Is it because your organization is awesome and doing a great job at something important?

Yes, but not really.

The real reason they give is something inside their own heads, according to the Better Fundraising Blog at People Make Donations to Tell Ourselves...

Here's why they give:

You and I make donations in order to tell ourselves who we are.

Of course, you need to be awesome. You owe that to your cause, yourself, and your donors.

But when it comes to asking, you are on your donors' turf. And you'll do a lot better by speaking your donors' internal language, and show them how their donation makes them more truly and deeply who they are.

What that means is if you want to do well in fundraising, your messaging should...

... tell donors that they’ll love giving to your organization. Your fundraising will need to tell them that your organization has the same values that your donor has. Your fundraising will need to communicate, “people like you give gifts to this organization.”

You can ignore this reality -- most fundraisers do. You'll just raise less money for your cause.

One of the fun things about having a blog is that people you don't know ask questions. That gives a sort of insight to what is puzzling and worrying people in the fundraising industry.

Here are some of the most interesting questions I've been asked lately:

1. When a donor gives, how long should I wait before sending another appeal?
   
2. We just hired a digital specialist who says we should have completely different fundraising program online than we do in the mail. Is that a good idea?
   
3. Our walkathon is super successful, bringing in hundreds of new donors every year. But few of them ever give another donation. What are we doing wrong?
   
4. My newsletter gets no response. Literally zero. How can I change that?
   
5. I have a limited training budget for myself and my staff. What's the best way to use it?
   
6. The portion of our donation revenue coming from digital channels has grown every year -- and direct mail revenue is static. My boss says it's time to stop spending our money on direct mail and switch entirely to digital fundraising. Would that be a good move?
   

Do you have questions like that?

How would you like a personalized face-to-face answer to your questions?

Good news. You can get that now. You can schedule an in person (Zoom, actually) session with me. On your schedule.

Here's how click this scheduling link and you'll be able to schedule a free 25-minute zoom call with me or one of the other fundraising experts at Moceanic.

Yes, free. No obligation to do anything but ask a question and get help with your fundraising.

It's very easy. Low key. Fun.

And you might discover something important. Or at least get a sympathetic ear!

Schedule your meeting now!

Want to avoid some painful and expensive fundraising mistakes?

Check out this post from YUCKS Enterprises, at 5 Universal Truths About Fundraising:

1. Donors are not ATMs. It would be easier if they were just machines -- you just punch in a code and money comes out. But they are human beings. If you want them to give, you need to treat them as human. That means listen to them. Show them how your cause connects with their values. Be thankful. Show them they matter.
   
2. People have the Right to Say No. In fact, most donors, most of the time do say no to our fundraising. That's why building a relationship matters: it can turn "no" into "not now."
   
3. Those who Dislike Fundraising Often Have Money Anxiety Issues. Everyone has a relationship with money, and some have a very difficult and painful one. That's what causes many in our industry to seek ways to avoid asking. Or to ask in weird ways. Understanding yourself (or others) can help you overcome this deep and wide barrier to fundraising.
   
4. If You Want Money, Ask For It. The Good Book says, Ask and it will be given to you. The unstated but just as powerful corollary to that is Don't ask, and you'll get zilch. You can hope people will just show up with donations. But it rarely happens.
   
5. Reverse Engineer Everything You Can. If you want your next campaign to work, model it after a campaign that worked. There are times for re-inventing the wheel, but it's a lot more work, and a lot more likely to fail.
   

ICYMI: the 5 most-read Future Fundraising Now blog posts from the month of May:

1. When we write like robots
   
2. An easy email welcome series that will help you keep your donors
   
3. Try the "Grandmother Question" to improve your fundraising
   
4. Why you should "preach to the choir"
   
5. What your fundraising can learn about being relevant from Adele
   

Easier to read, more likely to raise money.

It's pretty simple, but you might not know that to read a lot of fundraising these days. It mimics that turgid style of academic writing, with long, complex sentences and always-choose-the-longer-word vocabulary.

Some fundraisers apparently think that makes them look smart or sophisticated.

It actually makes them look worried about their organization's future. Because writing that way steeply lowers response.

A recent test, reported in We Don't Write So Good, a free ebook from NextAfter and DonorVoice (available for download, registration required) found the following disturbing, though unsurprising result:

... by lowering the reading level of the message from 10th-grade down to a 6th-grade reading level, we observed a 90.8% increase in revenue....

For many people, the only place they've had formal training in writing has been at school. And school teaches academic style: complicated, erudite, formal. Appropriate in the closed world of academia (maybe), but bristling with barriers to engagement and comprehension in the real world, where nobody is being paid (or forced) to read your stuff.

Writing for ease of reading is not easy. It takes more skill, especially if all you know is what you learned in school.

But if you hope to succeed in fundraising, it's a skill you need.

Check your readability. It's built into the grammar check of many programs. Or you there are many online places that will check your reading ease for you.

And write for reading ease.

When you write like an academic, you actively exclude most of your donors, including those with advanced degrees.

And they'll respond by paying less attention, which means they'll give less often. Or never.

There was a discussion on Twitter about the word partner, used as a verb. As in, "Will you partner with us on this important project?"

Lisa Sargent was advising against it. I think any real writer (like Lisa) has a flinch reaction to partner as a verb, because it's abstract and jargony.

But someone else in the conversation noted that he uses it all the time in fundraising, and is doing just fine, thank you.

Which viewpoint is correct? Is partner-as-verb terrible for fundraising -- or harmless, maybe even good?

I've never tested it. But I've tested a lot of things, and I can tell you that testing one word is almost guaranteed to end in a statistical "tie." The test would be a waste of time and money.

So everyone should feel free to use partner as a verb in their fundraising, even though it makes most writers flinch. Right?

Well, no.

I'd warn you away from using partneras a verb. Ever.

Not because it's going to do any measurable harm to your fundraising results (it probably won't do that). But because communication is cumulative.

Let me explain: All written communication is in a context. There's a reason you never read those software user agreements before you click "I've read these terms and agree to them." They trained you long ago that they were not only boring, but incomprehensible. They accomplished that by being boring and incomprehensible, over and over again.. Now they're impossible to read. And nobody reads them.

Fundraising is also in a context. It is training donors to think of it as interesting, or exciting, or important, or whatever is most often is. Even if it's boring, or incomprehensible ... or (much more likely) abstract and jargony.

Every time you use partner as a verb -- or any other word or phrase that doesn't communicate specific action and/or pulse-pounding emotion ... you put one more brick in the wall that will eventually keep donors away from reading your fundraising.

If your organization has a great brand, and you have a powerful call to action, and the right audience, and your writing is largely strong, clear, and emotional ... your fundraising is going to do well. Even if you use partner as a verb. The negative impact is darn close to zero.

But we need to think about your future fundraising. Will donors approach it expecting to have a powerful emotional experience and a believable opportunity to change the world? Or will they approach it expecting vague jargon that they have to puzzle through to understand? The difference is at least partly up to what you do now.

So I'm with Lisa. Sweat the small stuff. When the verb that comes to your mind is an abstraction like partner, be a writer: Push beyond for a better word -- more concrete, more emotional, more thrilling.

It matters. Maybe not for the project at hand, but eventually.

(This post first appeared on March 27, 2017.)

In fundraising, the Big Lie of the decade (actually the last couple of decades) is that direct mail is dying.

It's not. It's more difficult (and expensive) than it used to be, but it's still a powerful way to stay connected with donors. If you're avoiding direct mail or just barely dabbling in it, check out this useful post from Common Sense for Uncommon Fundraising, at Don’t Be Afraid to Try Direct Response:

1. Plan your entire direct response activity before you begin. Direct mail works best when it works with other channels. When you plan your mailing, make sure you also plan related emails (make sure it's several of them!), telephone followups, social media posts, and anything else that can support the message.
   
2. Only use partners who have expertise in direct mail. Save yourself a lot of money, time, and agony by using the services of writers, designers, and printers who are experienced with direct mail. It's not a forgiving medium for people who are figuring it out for the first time!
   
3. Talk to the donor in your copy, not to your board chair or CEO. If the boss and board love what you've written, you should probably go back to the drawing board. Motivating donors is a very different task from making the boss feel good.
   
4. Avoid the temptation to think you have to create an award-winning package. It's weird, but the things you do to win awards are almost always directly opposed to the things you do to motivate donors. Make your award the support of donors and the revenue that means.
   
5. Mail consistently. Most fundraisers are leaving a lot of revenue on the table by only sending one or two appeals per year. And it's not just short-term revenue they're losing -- it's also future revenue, because sending few appeals means lower donor retention. If y you're afraid of over-mailing, you're afraid of the wrong thing. Not many organizations ever get anywhere close to over-mailing.