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Fundraising Lessons from Barack Obama

Thursday, October 30th, 2008

Over $600 million dollars, with a record breaking $150 Million raised in September — in the midst of a steeply declining stock market and widespread economic worries. What is the Obama campaign doing right and what can your non-profit learn from this success?

Small donations can really add-up – Consider this quote from a recent LA Times Blog post:

“The Wall Street crisis appears to have had little effect on Obama’s small-time donors. He expanded his fundraising base by 632,000 individuals in September to a record total of 3.1 million — most of whom gave in small amounts. Roughly half of the $605 million Obama has raised has come from small donors, and nearly all of them give over the Internet.”

http://latimesblogs.latimes.com/washington/2008/10/barack-obama-to.html

Reduced response levels from direct mail and the allure of major gifts can cause nonprofits to focus less effort on small donors, but ignoring smaller donations is a mistake. The Internet can provide a remarkably efficient and effective tool for collecting large sums in small amounts.

But what is bringing all these donors to the Obama website to give?

Great content – Check out Obama’s website. There is lots of real information for visitors to learn about the candidate’s positions on important issues, but even more importantly many calls to action to get involved, not just by making a donation, but volunteering, sign-up for email, etc. Giving people a reason to visit your website and multiple options for becoming involved is certainly lesson #1.

Effective email list building – Its pretty hard to go anywhere on the Obama website without providing your email address and the campaign has collected millions of them and used them very effectively to solicit financial and organizational support.

Leveraging supporters for personalized donation requests – The Obama campaign has not only mastered the use of social networking tools like Facebook, MySpace, etc., but they’ve provided supporters with simple tools to solicit friends and family to get involved and make an online donation or sign up for a mailing list. These personalized donation requests have been another critical piece to the growth of Obama’s email list and online fundraising success.

Creative use of technology – If you think personalization only applies to soliciting donations, read this wonderful post about someones experience after making an online donation to Obama.

http://authenticorganizations.com/harquail/2008/09/23/obamas-website-made-me-cry/

Compelling message – Certainly a critical aspect of the Obama campaigns successful use of technology wouldn’t be possible without his strong and motivational message. Fundraising success always requires communication that inspires people to action and Barak Obama has proven himself a true master of this. Although you and I may not have Obama’s gift for communication, we can still apply this lesson (Inspiration = Motivation) when crafting email donor solicitations and website messaging.

Doing it well takes time and energy – The Obama campaigns online fundraising success didn’t just happen, they have clearly spent lots of time and money developing and refining their website, emails, and messaging. Undoubtedly each of their successful efforts was proceeded by numerous less successful ones with their ultimate success the result of continuous testing and refinement.

Posted in donor email addresses, fundraising basics, online donations | No Comments »

International Fundraising Cuisine…

Saturday, October 18th, 2008

For the first time, we exhibited at the International Congress on Fundraising, held around this time of year near Amsterdam, Netherlands. This year they had record breaking attendance, and it was fantastic to get a world view of fundraising that’s different from our own.

For example, person to person is BIG in Europe. It works like this: charities hire 18-25 year old solicitors with good looks, put them in uniform, and have them patrol the downtown area of major European cities, especially in the UK and Scandinavian countries. In fact, people now have a word for it- they call them “Chuggers“, as in Charity Muggers!

Despite what they are called, the programs are indeed successful. It’s my understanding an average Chugger will sign up a new donor once per hour. In addition, they don’t ask for a one time gift- oh no, they are going much higher. They are actually able to persuade strangers to sign up for a monthly giving program, with an average monthly gift of $10 US.

As one can expect, attrition rates can be high- but they are actually very comparable to traditional pledge non-electronic programs and averages about 15-20% / year (Meaning the renewal rate is about 80-85%).

However, once a donor lasts into the second year, then their behavior matches that of a more reliable donor, and the attrition rate drops into the single digits.

Recurring revenue is critical for any organization, and it’s one of the main reasons why these programs (at least from the non profit’s perspective) are very popular. While ‘Chugger’ fundraising hasn’t taken off in the US (and it might never), monthly giving programs can still be established through traditional solicitation requests, including direct mail and on-line fundraising.

In these uncertain economic times, organizations that rely on this type of recurring revenue certainly sleep easier at night as they know, with laser like precision, their future revenue stream.

Posted in Chugger, International Fundraising, Monthly Giving Program | 6 Comments »

Tales from the Road

Saturday, October 4th, 2008

I just finished exhibiting at the National Catholic Development Conference, held this year in Orlando. Typically referred to as NCDC, this conference hosts over 700 development professionals from about 500 catholic organizations across the US.

It’s our fifth year exhibiting at the conference, and our first, in at least 10 years, that our booth and materials did not make the flight. Apparantly, they were hijacked to Texas instead, and we had to activate “Operation Conference Backup”. Luckily, after a quick infiltration of a local 24 hour Kinkos shop and with help from our marketing gurus, we whipped up some materials and booth in

Chaucer’s “Canterbury Tales”

just a few hours. Special thanks goes to both Chad Kashub and Sam Goldenberg for stepping up to the plate and helping out over the weekend.

The conference proved to be a major success as we were able to demonstrate our latest version of DonorPerfect, Version 10. Version 10 sports some new features, including a completely integrated Special Events module that makes it easy to plan, coordinate, and execute almost any kind of special event.

It’s easy to record event details, such as venue information, expenses, and even auction items. Invite groups of constituents at a click of a button, and record responses just as easily. The module even tracks teams or tables in a drop-and-drag interface, making these assignments painless. Finally, over a dozen reports track the progress of the event, and comparison reports make it easy to evaluate one event against another. It’s simply awesome!

Surely, the chief buzz at the conference was the state of the economy and its effect on giving. Though there were some exceptions, most people were resigned to the fact that this year would be tough and they were preparing for a decline in most revenue categories as compared to last year. An exception seemed to occur in major gifts and planned giving, which at least anecdotally, seemed to be on the rise.

The next several weeks will be very busy for us as we release Version 10- it’s going to be very exciting!

Posted in NCDC, Version 10 | No Comments »

Step 1 for Dealing with a Tough Economy – Don’t Panic

Thursday, October 2nd, 2008

There is no question that the current financial crisis is serious and that economic downturns and declining stock markets create a tougher environment for fundraising. It’s hard not to worry when the press is filled with articles like this one from the NY Times Economy Expected to Take a Toll on Charitable Giving. So why do I say don’t panic? Three reasons:

It doesn’t help – Worrying just takes energy that could be used far more productively by finding solutions and taking action.

The economy is not as bad as the media portrays it – Most of the current crisis relates to over-leveraged financial institutions who are suffering from the effects of bad loans. The result has been a severe contraction in banks willingness to lend money. Though credit is an essential component to a healthy economy, no donor or foundation is borrowing money to make a gift to your nonprofit. The most significant factors related to giving capacity are wealth and income. Despite the recent decline in the stock market and real estate values, both are still at close to historic highs. Similarly unemployment is up, but still at a level that is close to “full-employment.”

I’m not trying to minimize the issues that do exist — confidence in the economy does matter, but it is easy to forget that there is still tremendous wealth in the U.S. — as well as compassion for worthwhile causes.

Adapting under Adversity can make your organization stronger – Adversity often forces us to review what we’re doing and how we’re doing it and look for better methods. The solutions might involve more effective use of technology or eliminating less productive fundraising methods. Any improvements in efficiency will not only allow you to do more with less in the short-term, but will continue to pay dividends as the economic outlook strengthens.

Posted in Uncategorized | No Comments »