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.

News Bits...

In the news...

I opened the front page of my local paper today, and discovered that the Hunter Soccer Club, a local soccer club for youth in the area, lost $25,000 in on-line donations when the firm they used, Count Me In, Inc., went bankrupt.

Here's the article about the bankruptcy. Interestingly, the web-site still seems open for business.

Among other allegations, it was suggested that the company did not have a reserve built in for registration payments, and co-mingled funds from its customers and used those funds to pay expenses. This, my friends, is just another example of a Ponzi scheme, where registrations funds from new customers are used to pay off old customers. Like the recent Madoff scheme, it was inevitable that the scheme would fail, as expenses piled up and they no longer were able to continue to "rob Peter to pay Paul". What is extraordinary was that it appears to have lasted many years, collecting somewhere north of $175 million before it fell apart.

What's the lesson to be learned here? Organizations should use their own merchant accounts. This way, the money collected from credit cards never pass through the vendor, and is deposited directly with the organization. It's also why we offer WebLink, our online fundraising software to collect and process donations, registrations, and even purchases that then easily integrates with DonorPerfect.

More Local News...

Coincidentally, in the same local paper, I spied our own company news - SofterWare acquires Agena Informatique. While it isn't news to me, it is certainly an indication of our continued growth in the industry. We will now control an office in Quebec, and we plan to expand rapidly in the rest of Canada as we'll have an increased presence on the ground.

So it's barely a month in and it looks like some of my top ten predictions are already starting to come true. I wonder what's next? Stay tuned.......

The Case for American Express...

Since we've introduced WebLink, our on-line donation system over 3 years ago, we know that only about 1 in 5 organizations offer American Express as a payment option in addition to Visa, MasterCard, and Discover.

We believe this to be the case because American Express requires a separate merchant agreement, with separate monthly account fees, and typically costs a bit more (~3.5% vs. ~2.99%) to process donations.

However, I really believe this is costing non-profits money in missed donation revenue. If you do not give donors the ability to choose their desired payment method, some of them won't donate at all.

Recently, one of our smaller clients noticed that they had about 8% of their transactions proceed half-way through the donation process. I.E., the donor would designate a gift amount, fill in their personal information, but when it got to their credit card information, the donor stopped. WebLink easily identifies these incomplete donations, so the non profit contacted several donors and asked them what was going on.

What they found was surprising- the donor stopped because they could not use their American Express card. What was even more surprising was that while the donor had every intention of still giving with an alternate payment method, they admitted that they forgot to "get around to it."

Immediately, the non-profit obtained an American Express merchant account- it only took 4-5 days. They then identified those donors that did not complete a donation and sent them an email explaining that American Express was now available as a payment method.

Within just 30 minutes - yes 30 minutes- they received 5 donations, totaling more than $400, just from American Express users. This extra revenue already paid for any additional expense American Express created, more than justifying its use.

Don't let your organization leave money on the table. Make sure you offer all of the payment options, including American Express- it's worth it to give your donors the option to give however they want.

Second Year Online Results....

Here's a powerful story of a client and how on-line fundraising grows from year to year.

As I blogged about it last year, the Woody's Circle of Care Foundation conducts an annual charity golf outing. Like last year, they used WebLink to collect registration fees and additional donations.

The difference was that this year, over 95% of the attendees registered on-line for the event vs. about 50% last year. In fact, only a few people paid on-site, which eliminated any resemblance of a registration line.

The benefits were many:

• Increased donations. Donors donated more when using a credit card.
• Eliminated donor frustration and enhanced donor convenience. Since money did not have to be collected on-site, donors were not waiting and having fun instead.
• Saved significant staff time. On-line registration saved significant hours of staff time as compared to just 2 years ago.
• Captured more prospects. Since all golfers registered online, their demographic and email information were captured for future solicitations.

We're signing up dozens of WebLink clients a month- are you ready to become the next success story? Click here to find out how.

Be Careful about PayPal Donations....

I had a friend recently who had some money frozen by Paypal- he occasionally sells items on Ebay and one of his buyers refuted the charges over 30 days after (after giving positive feedback no less!). It wasn't a lot (<$200), but the very fact that PayPal not only froze his PayPal account but also dipped into his checking account remains very disturbing.

It took several unanswered emails and 30+minute phone calls, and to date, the problem still isn't resolved! In fact, a short search on the Internet uncovers a literal treasure trove of horror stories about using PayPal to collect money. It sure seems safe to use it to buy things, but when you collect money (for items or even donations), you put yourself at a lot of risk.

PayPal is not a bank- when you collect money, it goes into a PayPal account which is neither federally regulated nor insured. In fact, it's not even your money. PayPal can decide to do whatever they want with your money at any time. In addition, if you do have problems, customer service- at least according to my friend- is abysmal. One easy way to check is try and calling support at http://www.paypal.com/ - go ahead try it- they make it nearly impossible to contact a live human being (there's voice recognition software that you have to wade through first).

Here's a short list of some websites... while some of them are more or less trying to steer customers to their payment solution, the sheer number of horror stories leads me to believe that my friend's experience is very common.

http://paypalproblems.wordpress.com/
http://www.paypalwarning.com/
http://digg.com/security/PayPal_hit_by_payment_problems
http://pcworld.about.com/magazine/2007p030id101525.htm
http://www.reason.com/news/show/33114.html ****

**** This last one is quite interesting because it shows how a blogger raising money had his account frozen because he simply included a link about terrorism that was recognized as 'hateful' by PayPal.


Bottom line- I would never recommend PayPal to any non profit organization. Though we do offer our own service, called WebLink, with it's own real Merchant Account, I would encourage readers to use something else, even our competitors' products, before they use PayPal.

Athletes for Hope

You may have seen some of the following legendary sports stars on TV today:


Andre Agassi
Muhammad Ali
Lance Armstrong
Warrick Dunn
Jeff Gordon
Mia Hamm
Tony Hawk
Andrea Jaeger
Jackie Joyner-Kersee
Mario Lemieux
Alonzo Mourning
Cal Ripken, Jr.

Collectively, their individual foundations have raised over $500 million dollars over the years funding a wide variety of philanthropic organizations.

They've now banded together to make a difference. They've joined forces and formed Athletes for Hope, to build upon the connection between these athletes and their fans to inspire millions of people to follow the lead of athletes in a philanthropic movement.

Here's their website:

www.athletesforhope.org

We're proud that they have chosen to use both DonorPerfect and WebLink to assist them in their mission. Specifically, they are using WebLink's custom forms to capture constituent information from their website and have it automatically transferred to their DonorPerfect system. The process is seamless, and most importantly, affordable.

WebLink was created for organizations of all sizes, and there's pricing that can fit your budget. Whether you're hosting a small, local Casino Night event, or taking to the airwaves on Good Morning America, there's a DonorPerfect and Weblink solution right for you.

Gerald Ford Memorial

From time to time I recognize clients who I know well, are well recognized by others, and are using our solutions in innovative ways.

The Gerald Ford Foundation is one such client. They are using WebLink to capture all of their online donations. Here's a link to their website, and here's a link to their WebLink form.

We're very proud to be associated with this organization and continue to hope that other organizations can increase their fundraising efforts by offering online donation processing through WebLink.

Be Your Own Donor

One of the best ideas about improving your relationship with your donors is to experience first hand what it's like to donate to your own organization. It doesn't require too much effort, and can really open your eyes to improve the way you communicate and interact with the lifeblood of your organization.

So, try these steps (it will help to submit a different name than your own so that the results aren't influenced!):

1. Send an email to the contact email on your web-site and see if you get a timely, professional response. Better yet, make a phone call during a random time of day and ask for information. Measure how long it takes the information to arrive in the mail.
   
2. See how long it takes to find your "Donate Now" button on your web-site. (Don't have one? Click here for WebLink)
   
3. How long does it take to find out if there are volunteering opportunities at your organization?
   
4. Make a donation through the mail and see how long it takes to receive a "Thank You" acknowledgment.
   
5. Try and search for your website using keywords related to your organization on any of the main search engines (Google, Yahoo, MSN, etc.)
   
6. Attend a fundraising event to a different organization- not as a volunteer, but as a donor.

By trying these different steps you'll be able to see through the eyes of the donor and make sure the message you are trying to convey is actually happening. Then take this insight and improve your communications and procedures- it will be well worth the effort!

Shooting under par...

I had the good fortune of participating at a recent golf outing for Woody's Circle of Care, a non-profit organization that gives grants to at-risk families in our local community. It was a perfect day in the Northeast, so getting away from work for the day (after so much traveling) was relaxing.

They used WebLink to capture all of their golf registrations and raffle ticket purchases, and offered credit cards as a payment option. It was quite interesting to see the staff at the golf course, connected to a wireless internet connection, using the software to register everyone- and it was very successful.

If your organization hosts a fundraising event, you should definitely consider WebLink as it saved this organization dozens and dozens of hours in administration time. In addition, they realized that just being able to accept a credit card had distinct advantages. I witnessed one exchange at the registration table where one golfer said:

"Oh you take credit cards? Here, run $1000 through this [card] and keep the remainder as a donation."

Before this extra donation he was contributing ~$450, so offering credit cards netted an additional $550!

Finally, since this was their first event using WebLink, they did learn a few things. For example, though they were able to accomplish the registration process with one laptop computer, it really required two (and in fact, based on this experience, we at DonorPerfect believe you should have 1 laptop for every 50-60 guests.) Additionally, it does make sense to make sure you have a backup system (paper notebook) in place in case an internet connection goes down (which happened for 3-4 minutes and ended up being an issue with the laptop's wireless card).

Regardless of the small hiccups, everyone agreed the outing was a huge success and they look forward to using WebLink for their future on-line registration needs. Contact Julie Blum at jblum@donorperfect.com to see how WebLink can solve your on-line form and payment processing needs.

Oh, and the scores that day??? Well, I'm not the best golfer in the world, but our team did manage to shoot under par... (as long as you include all the mulligans we took! ;) )

More Weblink Success...

As you may know, our WebLink solution makes it easy for you to capture information from your web site and have that data automatically integrate with your DonorPerfect software.

WebLink is so flexible, it's being used for:

Online Donations
Event Registrations
Volunteer Sign-up Forms
Petitions
Surveys
Orders (Requires Order Inventory Module)
And much, much more

Our latest successes include Institute for Public Relations and Voice of the Faithful. In fact, Michelle Hinson (Development director for the Institute for Public Relations) said:

"I am happier and less stressed since WebLink came into my office. I no longer have tons of paper registrations and payments strewn everywhere. I feel like I am now in control."

See for yourself how WebLink can make you more happier and less stressful and call Julie Blum at 800-220-3537 or jblum@donorperfect.com

The SuperBowl of Fundraising

I was watching the SuperBowl yesterday with some Steelers fans- needless to say they were a pretty happy bunch- and my thoughts turned to our SuperBowl of fundraising conferences, the 43rd AFP International Conference on Fundraising.

If you haven't been to a prior International conference, you're missing out on a great experience. There's over 2500+ other fundraisers who attend, and the knowledge and networking gained from this event helps us and our clients really focus and improve our fundraising efforts.

We'll be attending again this year (Personally, I think it's my 9th year) and we'll be showing off our latest versions of DonorPerfect and DonorPerfect Online Fundraising Software at booth # 416. In addition, we'll be highlighting WebLink, our new Web form solution that will streamline any organizations data collection needs over the Web.

The conference will be held in Atlanta this year, and I'm looking forward to going because I've always enjoyed the downtown area and I also have several college friends who live in the area.

PS- If you are attending, the first person to mention this blog will receive a free gift! Good luck and see you at the conference!

Customizable, Integrated Online Forms with WebLink!

What is WebLink? Besides a cool logo, WebLink empowers all of our clients to add forms to their websites to collect information that automatically integrates with their DonorPerfect Fundraising System. We've been working on WebLink for over a year, and last month we released it to our customers.

In WebLink, you can easily create online forms that can:

• Capture Volunteer Information
• Process Online Donations
• Register Participants for an Event
• Capture On-line Petitions
• And much, much, more...

Best of all, you can review the entries, and automatically download them into your DonorPerfect software.

Weblink forms are highly customizable to allow you to collect any data you want. The form(s) can be configured to have the same look and feel as your own web site (by using the same style sheet). Currently we set the forms up for clients, but we are introducing administrative tools to allow clients to adjust the layouts themselves.

To learn more about WebLink, click here: WebLink Product Page

Weblink is designed to be the foundation for many other new web-based tools we're developing to allow clients to use their website to enhance constituent interaction and management. I'm really excited about it because WebLink really can take the functionality of your nonprofit's website to the next level!

If you have questions or would like to sign up, contact Russ Scupari at 800-220-3513 or email Russ at rscupari@donorperfect.com