Measuring your fundraising effectiveness

By Kirsten Bullock

Have you ever told someone you were a fundraising professional and they said, ‘oh, you’re a professional beggar then’. It makes me cringe just to type those words. If you’ve been in the field for a while, you know that nothing could be further than the truth. Arm twisting, begging and other ways to manipulate a gift out of someone might work once, but it’s not a way to build long-term, sustainable relationships with those people who will join with you to accomplish your organisation’s goals.

At its best, fundraising is about building long-term partnerships on behalf of the organisation. At its worst, it’s about a transactional approach that results in a one-time gift. Unfortunately, too often it falls into the latter category. And too often, the only measurement we look at is how much money has come in. While that’s certainly a good indicator to track, it’s definitely not the only one that should be followed.

Now the Association of Fundraising Professionals in the USA (AFP) have introduced growth in giving (GiG) reports, based on results from their fundraising effectiveness project (FEP). Just in case you’re not familiar with the fundraising effectiveness project, here’s the summary from AFP’s website:

The goal of the fundraising effectiveness project (FEP) is to help grow philanthropy’s share of the GDP. It pursues this goal by providing nonprofits with tools for tracking and evaluating their annual growth in giving. Growth in giving is the net of gains in giving minus losses in giving. Nonprofits raise more money by investing more money in growth-oriented fundraising strategies that both increase gains and reduce losses. The FEP is focused on ‘effectiveness’ (maximising growth in giving) rather than ‘efficiency’ (minimising costs). It conducts an annual survey and publishes gain/loss statistics in a yearly report through a partnership between AFP, the Urban Institute and AFP’s donor software workgroup.

That definition seems a little wordy to me, so my understanding of the project is that it helps people better measure their fundraising success. It provides a format so that you can compare your year-over-year results and look at indicators for long-term success, rather than just money.

While putting together the report can be a little complicated, the numbers it measures are fairly easy to explain. Gathering the numbers usually requires a good donor management software programme. The good news is that the members of the AFP donor software workgroup (who are partners in this ongoing study) have said that they would build in a report to give you this information.

First, it looks at new donations that are coming in. This could be in the form of new donors, returning donors (those who had stopped giving previously) and donors who gave higher gifts than in the previous year.

Then it compares those numbers to areas of loss in donations. This includes donors who gave less this year than last year, those new donors who gave last year but not this year and those donors (who had given for two or more years) but did not give this year.

AFP, at www.afpnet.org/FEP, has provided tools to help you develop these charts for your organisation. They are available as a service to the community, so you are not required to be a member to access them. Here’s a direct link to the page that provides a template for the report.

All that is well and good, but the most important thing is what the information helps you to accomplish. First, it provides a format for a report you can take to your board to help them understand what the total amount raised means. Next, it can help you measure how you’re doing against other participants in the study. Third, it helps you identify those areas you’re struggling most in – and address them appropriately. And finally, my personal favourite, it will provide validation regarding where you’ve done well – and gives you a reason to celebrate.

The 2010 fundraising effectiveness survey report found that, from 2008 to 2009, respondents reported gains of 45 per cent in new funds coming in. Unfortunately, this was offset by losses of 61.1 per cent, resulting in an overall loss of 8.1 per cent in gifts. The report, in PDF format and available here provides a detailed breakdown (just in case you’re as addicted to data as I am).

Are there similar projects in your part of the world? I’d love to hear about them.

Making it real

by Lucy Gower

We know that people make decisions based on emotion. Great fundraisers deliberately seek ways to develop emotional connections between their donors and their cause. This is usually achieved in a number of ways, through storytelling, use of language, images and film.

If you need any evidence check out the story of the Explore the Bay campaign for Save the Bay that raised $11 million. Fundraising board members Joan Abrams and Kate Kilguss discovered that reconnecting people to their own relationship to the Bay was the key to inspiring them to give.

David Brooks, author of The Social Animal (Random House Inc, USA, 2011), wrote: ‘Reason is nestled upon emotion and dependent upon it. Emotion assigns value to things and reason can only make choices on the basis of those valuations.’

We also know that fundraising is hard. Fundraising is becoming increasingly competitive with thousands of ‘good causes’ trying to attract income from limited resources. Fundraising is a business discipline and, like any business, charitable organisations must be constantly innovating and developing new ideas to keep ahead of the competition. So, the more creative you are in finding ways to connect donors emotionally to your cause, the more successful your fundraising will be.

Storytelling, good use of language, images and film work fine, but is fine good enough? If you can get your donors to experience your cause in a physical way it will be even more powerful.

‘It’s never enough just to tell people about some new idea. Rather, you have to get them to experience it in a way that evokes power and possibility. Instead of pouring knowledge into people’s heads, you need to help them grind a new set of eyeglasses so they can see the world in a new way.’

John Seely Brown, Seeing Differently: Insights on Innovation (Harvard Business Review, USA, 1997).

You have to help people have an experience. There are many ways to do this. Below are some of examples to get you thinking.

Masaru Ibuka, Sony’s then honorary chairman liked carrying his bulky cassette player with him when he travelled. It was rather cumbersome so he instructed Sony engineers to make it smaller. At that time portable cassette players were predominately used by journalists to record interviews, no one understood why anyone would want a cassette player that played and didn’t record. When the Sony Walkman was launched in 1978, Sony employed actors to walk, cycle and, apparently, skateboard around Tokyo demonstrating the use of the Walkman in action. Journalists were taken to a park where they, on their very own Walkmans, could experience the quality sound and see other people using the device. They felt it. It was made real for them. The rest is history.

Chip and Dan Heath tell a compelling story in their latest book, Switch (Random House Inc, USA, 2011), Chip and Dan Heath tell a compelling story of a manufacturer wasting sums of money due to poor purchasing. An employee, desperate to make management understand the waste, hired a summer intern to investigate just one product and the prices that were paid for it. The intern gathered data on the prices paid for standard gloves that were used in all the factories. The result was 424 different gloves and where there were like for like gloves, the cost of these ranged from $5 to $17. At the next board meeting the 424 pairs of gloves were placed on the boardroom table with price tags on. The board members understood. It made the waste real for them in a way that a PowerPoint slide or a spreadsheet would not have done.

During World Water Week UNICEF in New York sold dirty water in dirty water vending machines. No one wanted to drink the dirty water but many made a donation. Watch the clip here to see some emotional responses. Every day, 4,100 children die of water-related diseases. Being asked to buy the dirty water that kills so many made it real for the passers-by.

Plan International pioneered child sponsorship 70 years ago and it remains a key part of their fundraising today. As a child sponsor with them and other sponsorship agencies, such as ActionAid, you can go and visit your child in his or her community and see the difference your donation has made. Sponsors can record and write about their experience. You can learn about The Bramelds trip to Ghana here. It certainly made it real for Lynne and Paul Brameld. It also helps make it real for other child sponsors like them.

Guide Dogs for the Blind hold a blindfold walk where participants are sponsored to walk blindfolded, with the help of a guide dog. I think there is so much more potential for this concept. It helps people understand the crucial role of a guide dog. It makes it real.

Hunger affects a billion people worldwide. WeFeedback asks you to think of your favourite meal and donate that value to help feed others. For example, steak and chips is calculated at $23 that, the steak and chip eater is informed, can feed 92 children. It makes it real.

Unseen tours are walking tours led by homeless guides. They offer a historical yet hitherto unexplored perspective of London, as perceived through the lens of homelessness. The tours include the guides’ own stories and experiences.

Making it real is about helping your donors physically experience your cause. It involves thinking just that bit harder about how to connect your donor emotionally. Whether you make a prototype, or gather real evidence, or play out the real situation, or compare daily lives of your donors and beneficiaries, the more you can do to make it real and emotional, the more connected your donors will be. In a competitive marketplace spending time making it real will make your donors more committed and your fundraising more successful.

If you liked making it real you may also be interested in:

Art of Woo, G Richard Shell and Mario Moussa (Capstone Publishing, UK, 2008).

Enchantment, Guy Kawasaki (The Penguin Group, UK, 2011).

Switch, Chip and Dan Heath (Random House Inc, USA, 2011).

The Social Animal, David Brooks (Random House Inc, USA, 2011).