Fundraising IS Rocket Science...

My last blog post seemed to generate a lot of buzz (well, not in the comments yet) but in the emails I received from some other fundraising industry insiders.

Though we are in challenging times, it's important to stay focused on the bigger picture. At DonorPerfect, we're focusing our energy helping our clients retain the donors that they have. While average donation amounts are declining, it's critical to keep and retain donors for the long term.

As a result, as a company we've actually seen a great increase in business in the last part of the year as non-profits are struggling with ways to raise funds or simply keep their funding the same. After all, while the results were down across the spectrum, there was still a large group - 40% - that actually grew their fundraising last year.

Fundraising is hard. It really is rocket science. You would never try to build a rocket ship without the right tools and materials, so why limp along with the equivalent of hammer and chisel with Excel or Microsoft Access? It doesn't make sense.




In other news, my partner and colleague, Doug Schoenberg, recently blogged how cell phone fundraising is effecting the Haiti relief efforts.

Overall, I think cell phone fundraising is great- for the right organization. Unfortunately, people may jump to the conclusion that they need to start fundraising via cell phones, when in reality their chances of success are actually quite small.

Consider this:

The maximum cell phone donation is $10. The average online gift is $120.00. That means you roughly need 12 times (1,200%!) more donors to give via cell phone simply to make up the huge loss in the average donation amount. Can you realistically see your donor base grow 12 times? It's not likely. Your resources will be more effective if applied elsewhere in your organization.

Before people start drinking from the mobile giving kool-aid drinking fountain, they really need to make sure they have their best practices established. Creating and maintaining a direct mail program, on-line giving, major donors, newsletters, annual program, special events, capital campaigns, etc., all take a good deal of time and effort. To date, all of these fundraising techniques will be much more effective than mobile giving and should be considered first and foremost as the best bang for your buck.

2010 - Light at the End of the Tunnel?

Now that 2009 is in the books and our clients have had a chance to enter all of their data for December, it's time to review the fundraising results for the year. It's not pretty.

2009 will likely be the worst year-over-year performance in the non-profit sector since 1956- the year the Giving USA Foundation first began publishing annual reports of philanthropy in the USA.

Because DonorPerfect is a SaaS (Software as a Service) based CRM fundraising software solution, we are able to aggregate the fundraising results of all of our clients. In a sample size of 468 clients that have been using our software for at least 3 years, giving in 2009 dropped 10.77% vs. 2008.*

The bad news doesn't stop there unfortunately- the average gift for this same group of clients dropped from $530.68 in 2008 to $475.94 in 2009, a 10.3% decline. (Note: this includes all gifts- direct mail, major donors, pledge payments, on-line, etc.) The average on-line gift amount collected through our web based giving solutions, WebLink and DonorPages, also declined 12.3%, from $139.17 in 2008 to $122.12 in 2009.

However, as this post is titled, there is some good news, and it could be the light at the end of the tunnel.

In the holiday period (November and December 2009), giving actually increased by 2% over the same period in 2008. In addition, on-line giving increased nearly 65% for all of 2009 vs. 2008.

What does all of this mean?

First of all, if you are in the group that raised more in 2009 vs. 2008 (and that is still nearly40% of you) - congratulations! You are well ahead of your peers. If you dropped some but less than 10%, you're still doing well compared to the average. Finally, if you dropped more than 11%, now is not the time to panic. Similar to all financial trends, fundraising goes in cycles, and this one is no different.

The key to maintaining your results is still the same this year as in the past- retain, retain, and retain your donors. One of the worst things to do is to 'give your donors a rest' or cut your fundraising expenses. Such thinking will quickly turn loyal donors into lapsed donors, and the end result will be MUCH less revenue, especially now since you need it the most! Worse, your results will geometrically suffer in the coming months as donors who are 'resting' lose interest in your organization and give elsewhere.

So, stick to the fundamentals, and maintain your mailing/solicitation frequency. The giving climate will turn around and things will get better- it's inevitable!


* Note: Results based on a sample size of 468 clients using DonorPerfect Online for at least 3 years, raising at least $10,000/year/client. Total raised was $763,047,713.86 in 2008 vs. $688,871,107.30 in 2009 , or a 10.77% decline in fundraising gifts. Totals include all payments and gifts-in-kind.

Update! New Website, New Version!

If you're reading this now, then chances are you took notice of our brand new website launch!!!

While we've always been proud of the information we provided on fundraising software on our old website, it was clear that we needed to redo everything and give DonorPerfect a new look moving forward.

The website is part of a new wave in design for DonorPerfect. For the past 25 years, we want to make sure that ALL of our software, including our website, takes the latest and greatest technology to make it easier for our clients to fulfill their mission. The website and our new client area will make it easy for non profit organizations to understand and realize the benefits of professional fundraising software.

But we're not just talking about our web site either! Several weeks ago we launched our latest release of DonorPerfect Online! Updated with a completely new look and feel, DonorPerfect Online has now set the standard for what easy to use online fundraising software should look like. Personally, I think it makes Apple look uncool, but I'll plainly admit I'm a bit prejudice and you can judge for yourself:

The DonorPerfect Online Dashboard. Menu items are now organized at the
top of the screen, and client resources are available in the lower left.

A Sample Constituent/Donor record. Actions, such as attaching a file or viewing an
information sheet are logically grouped together at the top of the screen.

Whether or not it's 'Apple' cool, I think it's crystal clear that the new version and new website will make it easier for non profit organizations to raise more money and save valuable time to focus on their mission.

If you haven't seen the new version, try DonorPerfect today!

NCDC, Inc. 500

The summer goes by pretty quickly, and with Fall just around the corner, the start of fundraising conference season kicks in again.

This season we kicked it off with another visit to the National Catholic Development Conference, held in Crystal City, VA. The conference was very well attended, and it was great to see everyone again and also some new faces.

As you may have been noticing on the recent Twitter feed, we'll be announcing some news- and we were able to share that with the attendees at this year's conference. October 6th is the date, and the newest release of DonorPerfect Online Fundraising Software (Fall 2009) will likely turn out to be our largest ever! Look for a post soon with screen shots as we get closer to the date.

I also had the opportunity to attend the Inc. 500 conference held just a couple of days later. This conference attracted some of the best and brightest entrepreneurs, and it also wasn't surprising that philanthropy was on quite a few agendas. I think the key points about building successful companies and organizations really centered on two key concepts- persistence and execution. (It also didn't hurt to know a few other successful people as well, of course)

Finally, I had some interesting travel experiences as well. On my ride back to Philadelphia, the train was delayed for security reasons. Why? Because Vice President Joe Biden rides Amtrak. Not sure where he is though- I didn't see him except for the extra security in place.

New Partnership...

What happens when you combine the good work of two fundraising software companies with the same philosophies?

You get the new DonorPerfect - LifeLine partnership, making it easy for LifeLine users, who need on-line access to their data, convert to DonorPerfect Online.

It all started several years ago, when we were converting a client from LifeLine to DonorPerfect. We were having trouble with the data extraction, so we thought a call to LifeLine was in order.

To our pleasant surprise, not only did we receive the help we needed, but also affirmation from LifeLine that they knew they were a success when someone outgrew their program!

Flash forward a couple of years, and I reached out to the CEO of LifeLine, Barry Genzlinger, to see if it makes sense for us to work together. Lifeline has always been a good solution for small non-profits, but if they wanted web-access or other features (like online donations or QuickBooks Accounting integration), what would they do?

Answer- DonorPerfect Online.

In just a few short months, we worked out an agreement whereby LifeLine customers would be able to convert to DonorPerfect Online with no data transfer fees. This is quite valuable, as previous data conversions from LifeLine cost anywhere from $500 to as much as $4000, depending on the size of the database and the usage of the system. Because of the partnership, this fee can be eliminated, making it easier and more cost effective for LifeLine clients to convert to DonorPerfect Online.

We're proud to partner ourselves with Barry and all of LifeLine- I really believe both companies are the best at delivering comprehensive software at the best value for our respective segments of the non-profit industry. Working with Barry was delightful- if you ever get up to New Hampshire, near Lake Sunapee, let Barry know! I'm sure he'll be glad to meet you!

Random Ramblings...

Summer's here and like most everyone else, I've been busy and neglecting certain things- hmmm, like this blog. I think my own advice from several posts ago suggested that a good blog strategy is not necessarily the frequency of communication but the predictability of it.

Unfortunately, I've been unpredictable lately.

I have only a few excuses- summer being one of them- and apparently the number of 'tweets' I send from watching the Phillies (Yes, I am a die hard Phillies fan).

So here's a few random thoughts I wanted to share:

Deceptive Credit Card Sweepstakes.

On the radio the other day, I heard that TD Bank (a major banking institution here in the NorthEast) is offering a summer sweepstakes whereby their Debit cardholders can win a prize if they 'swipe and sign' instead of entering in their PIN number when making a transaction.

Why is TD Bank encouraging their customers to sign a receipt instead of using their PIN? Simple. Just follow the money. By classifying the transaction as a VISA/MC purchase, TD Bank (or their affiliates) can charge more than if the transaction is using a PIN number. That is, they can charge the merchant/business 3% instead of 1% or even less. That adds up- and quickly. No wonder TD Bank is willing to give away $50,000 to make it happen but the end result is that everyone else loses. By encouraging these transactions, businesses have to pay more in fees which inevitably leads to higher prices which hurts everyone. So the advice of the day? If you are going to use a Debit card, try to use your PIN. You save the merchant money which will be passed onto you in the future in the form of lower prices.

For non-profits, it works the same way. If your organization has the capability to process Debit cards with a PIN, or better and you can use ACH (Checking/Saving Account info)- you can save your organization a lot of dough (and you don't have to win a ridiculous sweepstakes to get it).

DonorPerfect Roadmap Roadshow

Tomorrow and Wednesday I'll be presenting the DonorPerfect Roadmap Roadshow (TM). Nearly a thousand clients have already signed up but it's not too late! Check your email for the invitation or login to your client account for more information. This 45 minute presentation will highlight our direction for DonorPerfect and outline plans for our impending release of DonorPerfect.NExT- scheduled for October 6, 2009!

Social Network Fundraising

As many of you know, we've been offering a Social Network Fundraising solution for over a year now. Called DonorPages, this groundbreaking solution makes it easy to enable your constituents to raise money on your behalf. We've got a ton of success stories, and with that success we recently promoted Rob Strickler to manage the division. Rob just launched his blog here, so take a look- DonorPages is simple the most powerful, easiest and cost effective solution in the marketplace!

Sound the Alarm?

As it does every year, the Giving USA Foundation released its annual study of giving in the USA, and it reported charitable giving dropped 2% from 2007 to 2008. Here's a Washington Post article, along with the actual press release. Though a drop of 2% sounds reasonable considering our country's current economic turmoil, the drop could actually become much worse in 2009- read on if you dare!

Back in December of 2008, I blogged about our analysis that showed DonorPerfect clients donations were actually up 4% in the preceding 12 months (October 2007-October 2008). Using the same data analysis technique and aggregating our clients' results, we now show that overall giving for DonorPerfect clients for the entire calendar year of 2008 vs. 2007 remained relatively flat, increasing .5% (the mean result was -.8%). Note that this is higher than the Giving USA data, and it’s consistent with our multi-year analysis that shows DonorPerfect fundraising software clients improve their fundraising results by 1% to 2% above the national average of all non-profits.

Given that our clients were up 4% in the first 10 months of 2008, the flat results for the year mean that fundraising was down significantly in November and December. Our analysis shows a drop of nearly 18% in that two month period, an unprecedented decline.

What's does that mean for 2009? Well, our analysis for the 1st quarter shows an 8.4% decline vs the prior year. This shows improvement from the huge drop at the end of last year, but unless this improving trend continues, there is a good chance that overall giving in the USA in 2009 may be down more than 2008’s -2%, perhaps even as low as -10%!

The obvious fear is that cash-strapped nonprofits will need to reduce services at the very time when they will be needed most.

The good news is that this does not have to be a foregone conclusion. After all, Americans are still some of the most generous people in the world. Our data shows that there are still many nonprofits that are maintaining – even growing their donation levels using DonorPerfect. Yes, it may be harder to reach your goals in 2009, but there are still many opportunities to reach out to supporters with a compelling message and achieve success.