Industry Best Practices Are Put to the Test

By Wendy Hatch, CFRE, Vice President and Jennifer Shin, MBA, Consultant

Alford Group Texas AFP surveyOver 3,000 development professionals from across the country attended AFP ICON in San Antonio, Texas last month. Alford Group took advantage of this assembled fundraising brain-trust to conduct a highly scientific (wink!) survey around a few hotly debated fundraising topics.

Participants weighed in on three important “questions of the day” at Alford Group booth by placing colored ping pong balls into giant glass vases to cast their votes. Fundraisers from across the country representing diverse sectors and roles brought their expertise to challenge some misconceptions and tried-and-true best practices. So, we asked the following three questions:

  • Do you primarily tell stories or provide statistics in your fundraising appeals?
  • Do you favor direct mail or email fundraising?
  • Do you focus primarily on garnering restricted or unrestricted gifts?

And the fundraisers have spoken.

Storytelling or impactful statistics?

An overwhelming 85% of participants voted for storytelling over statistics. Are you surprised? As fundraisers, we have witnessed the power of a great story and how it inspires people to take action, make deeper commitments and give more generously. A few of our voters commented that “stories drive human connection which equals impact,” “stories drive decisions” and “stories move hearts and stay forever on our minds.”

Although there is no denying that a moving story has the potential to transform your direct mail appeal and bring inspiration to your donor meetings, a remaining 15% of participants feel that powerful statistics are most important. However, all fundraisers agreed that they both play a critical role – the right data can enhance your story and impactful stories should be backed up by meaningful statistics.

On this note, let’s review key points to consider when you’re folding in meaningful data points in your next feature story:

  • Know your audience. Understanding the donor reading your story is key to ensuring that the story you’re telling is memorable, impactful and personal to them. For example, if you know your donors are more business savvy and data-driven, wrapping meaningful statistical evidence into your story can be an effective tool.
  • Meaningful data. Using statistics in a balanced and relevant way in your story is critical. Making sure that your data ties the story to the real impact you’re highlighting will help inform your readers and inspire action. Remember, not all facts are useful and some may even confuse donors if they don’t tie into your message, so choose your stats wisely!
  • Test when possible. If you have the capacity to test different messages, this will help you identify key messaging that appeals most to your donors. Keep in mind that testing one variable at a time is important and that you can measure everything from subject lines to the call to action that do or don’t utilize data.

Direct mail or email fundraising?

In this poll, fundraisers were more evenly divided with 56% voting for direct mail tactics over email fundraising. This indicates that both approaches are incredibly important in today’s fundraising efforts. Here are a few industry trends that made this question a challenge for our voters:

  • Cost of fundraising. Emails typically cost much less than direct mail solicitations, in which a single letter can cost anywhere from $0.20 to $0.80 in printing costs alone. If you are targeting lower level donors, you may want to engage them with an email solicitation before including them in your direct mail solicitations to leverage a more cost-effective option.
  • Multi-channel tactics. Consider offering donors multiple ways to give and sending varied communication. They are more likely to respond when they receive multiple messages across many different channels to reinforce your request for support. With direct mail costs so high, an email may be a great way to send a friendly reminder about your recent appeal letter.
  • Donor preferences. The best way to communicate with your donors is to know their communication preferences. Explore ways you can track solicit codes in your database system and consider surveying your donors, too!
  • A digital world. It’s hard to ignore the fact that online giving made up 8% of all giving in 2017 and has continued to increase by 12%. Additionally, marketing campaigns using direct mail and one or more corresponding email experience a 118% increase in response rate compared to using direct mail only. These indicators tell us that leveraging email components in your fundraising campaigns is critical when trying to engage an increasingly digital audience.
  • Direct mail isn’t going away yet. There is still a large percentage of donors who respond to direct mail and, depending on your organization’s culture, it’s something to continue to utilize if it makes sense. Many of the fundraisers in our survey shared that that their donors still respond to direct mail and their ROI proves it is still an effective mode of fundraising. Additionally, studies show that there isn’t an overwhelming difference in communication preferences for email over direct mail or vice versa. So, for now, keep your bulk mail permit!

There are many ways to integrate both direct mail and email in your annual fundraising strategies that will help with your donor retention as well as increase your revenue. Our fundraisers agree that it’s hard to choose one method because most organizations leverage both. Alford Group can help you determine if a development assessment will better inform you of the different ways you can unlock your fundraising potential. Contact us today!

Restricted or unrestricted gifts?

In our final question, we found that 67% of our fundraisers voted for unrestricted dollars over restricted. When talking with these participants, they shared that unrestricted support is critical because it is used where the need is greatest and has the most flexibility. Fundraisers also expressed that unrestricted giving is what they are left to raise when large institutional funders frequently have tightly restricted gifts that leave little room for other restricted individual giving. Although it can initially appear to be a harder sell, unrestricted gifts are an important aspect of a balanced fundraising approach.

The 2016 U.S. Trust Study of High Net Worth Philanthropy provides us with insight into donor behaviors and attitudes around restricted giving. For starters, this report confirms that 74% of high net worth donors’ largest gifts were identified as unrestricted and nearly a third of these donors feel that restricted gifts limit the organization’s ability to make the appropriate budgetary allocations. This indicates that some of our most valued donors understand the need for unrestricted funds.

Another donor loyalty study found that donors are evenly split when it comes to their preference for restricted and unrestricted fundraising across all giving levels. This study found this preference was influenced by donors’ longstanding relationship with the organization. In longstanding relationships, donors are already confident that the organizations they support are being good stewards of their gifts and they felt informed about how their gifts were being used.

There is no doubt that both restricted and unrestricted funds are important to every nonprofit organization and that our donors understand this need. Donor communication and stewardship play an important role in building confidence and trust in your organization. This ultimately impacts their gift intentions and their willingness to invest in your organization with or without restrictions. Refer to this posting on creating a meaningful stewardship plan for your donors to help multiply the impact of your stewardship planning process.

Final Thoughts

Though our colored ping pong ball methodology keeps us from reporting our findings in an academic journal, each of the questions generated great conversation and debate among the voting public at this conference. Best practices can help guide our work; however, it’s important to continue to explore new ways to approach your fundraising strategies to meet the needs of your unique and evolving donor base.

Alford Group has been a proud diversity sponsor of AFP for 20 years and is celebrating its 40th year of strengthening nonprofits across the sector. Please contact us for more information on our services focused around strengthening fundraising strategies for nonprofits across all sectors.