Thu, August 27 2015

6 Quick Behavioral Economics Lessons for Fundraisers

Caryn Stein's avatar

VP, Communications and Content, Network for Good

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Filed under:   Fundraising essentials •

Last month I had the chance to listen to Professor Judd Kessler of the Wharton School during the Ruffalo Noel Levitz Annual Fundraising Conference in Minneapolis. He shared insight on how behavioral economics can affect nonprofit fundraising.

Wait, what the heck is “behavioral economics”? Think about it as simply understanding the factors and situations that influence behavior and motivate people to take action. Many researchers have tested which scenarios prompt more charitable donations, many of which are illustrated in The Science of Giving.

But behavioral economics isn’t only the territory of PhDs. Professor Kessler encourages all nonprofit marketers to consider themselves to be scientists and to use simple A/B tests as experiments in their fundraising laboratory to sort out what will drive their donors to give more.

So, what are the principles that can affect fundraising for both small and large nonprofits? Here’s a quick overview of six common concepts and how you can use them in your fundraising strategy.

1.  Accountability & Recognition

What it is:  This is the idea that if someone cares what other people think of them, they may give to appear more generous, responsible, or important.
The research:  Gerber, Green & Larimer (2008) showed that voter turnout in Michigan was affected when registered voters received a message that indicated other voters would be notified of their neighbors’ voting habits.  In a different study, donors were found to give more when they were recognized as consistent donors to a fund.
How to do it: Accountability and recognition are two sides of the same coin, with recognition being usually perceived as the more positive of the two. Offering public recognition for donors can inspire donors to give to achieve and maintain the recognition, and this same attention can influence others to give to gain the same status. Give donors a special status when you feature giving opportunities on your website, in your newsletter, and in upcoming appeals.

2.  Peer Pressure

What it is:  In this case, the peer pressure comes from the simple power of the personal ask. If someone personally asks you to do something (especially in person or on the phone), you’re more likely to go along with the request to avoid embarrassment and disappointment, or to win praise.
The research:  Meer and Rosen (2009) showed that those who were called in addition to receiving a mailed solicitation were more likely to give.
How to do it: In addition to your direct mail and email appeals, make sure you are calling or meeting with key supporters to make that personal connection and encourage them to complete their gift. Bonus: you’ll likely learn more information that will help you nurture the relationship or fix issues that may have prevented future giving.

3.  Social Information/Social Proof

What it is:  This is really peer pressure of a different kind. We take our cues on what to do to fit in (and avoid guilt) by looking to social norms—what other people are doing in the same situation. 
The research:  Frey and Meier (2004) studied the decision to give to student funds at the University of Zurich.  When students were told that historically more than half of students gave to the fund, they were more likely to also contribute. Shang and Croson (2009) also showed that when donors were told what others had contributed, it affected the size of their gift. 
How to do it: In all of your fundraising materials, make it clear that others support and value your work. Some of the easiest ways to show this social proof include: donation tickers and thermometers, testimonials and quotes from current donors, and charity ratings badges based on positive reviews of your work.

4.  Gift Exchange/Reciprocity

What it is: A gift exchange happens when people feel obligated to repay gifts or return a favor, even if they know the gifts are intended to get them to take action.
The research:  Falk (2005) found that illustrated cards from street children in Bangladesh increased the relative frequency of donations.
How to do it:   Although address labels and totebags come to mind, get more creative when it comes to using the idea of reciprocity in your fundraising. Think about how your incentives or tokens of appreciation tie back to your mission and connect your donors with the end result of their gift. This could mean an exclusive tour of your facilities, a personalized note from a beneficiary, or a custom video from your volunteers. A gift exchange doesn’t need to be expensive, it just needs to be sincere.

5.  Identifiable Victim

What it is:  When our minds turn to statistics or large numbers, we tend to think about problems in abstract, and feel less connection to them. To be inspired to give, donors need to be able to connect with your ask on a personal and emotional level.
The research: Small, Loewenstein and Slovic (2007) discovered that highlighting an “identifiable victim” made donors give twice as much as when donors were presented with an abstract story or “statistical victim.” 
How to do it:  We’ve written a lot about this phenomenon on this blog, but essentially it all boils down to focusing on one person to illustrate the human impact of your issue. Tell a compelling story that donors can comprehend, and they’ll be moved to give.

6. Donor Identity

What it is: We tend to think of ourselves in a certain way or with certain ties to our social groups, community, or experiences. Therefore, when we are reminded about the identity, we are compelled to act in ways that feel consistent with it.
The research: Kessler and Milkman (2015) showed that when donors were reminded of their identity as previous donors, they were more likely to give again.
How to do it: In your fundraising appeals, invoke the idea of your donors’ identity to make your ask feel more relevant and personal. This might mean underscoring their connection to a certain neighborhood in your community, a specific alumni group, or a special factor that binds them to your cause.

Want more ideas on how to implement these concepts into your fundraising communications? Check out our guide on
How to Make the Case for Giving or enroll in The Ultimate Donation Page Course.

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Tue, August 25 2015

Ignite Action with a Powerful Data Story

Liz Ragland's avatar

Senior Content and Marketing Associate, Network for Good

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Filed under:   Fundraising essentials •

[Editor's note: Today's post comes from Lori Jacobwith, founder of Ignited Fundraising. Lori is a fundraising culture change expert and master storyteller. Be sure to register for tomorrow's Nonprofit 911 webinar to hear Lori tell you all about how you can change your nonprofit's data story.]

As a master storyteller people often mistakenly think I only tell stories about people. The truth is, I find stories everywhere: In a glance between a client and staff, at board meetings, and even in financial data.

The question is what to do with the stories you find, especially the stories in your data?

One of the best ways to use some of the data you have is to share it in a visual display that paints a clear picture AND gets people to take actions to change the data. That might mean taking action to increase your fundraising, retain loyal donors, maintain an ample cushion of cash on hand at all times or, well, you decide.

The question then is: What actions do you want your staff, board and your community to take?

A good place to start is to create a board activity dashboard based on the actions your board has decided will make a difference.

A few metrics I like to see on a board dashboard are:

  • Attendance at board & committee meetings
  • Annual financial giving
  • Participation in donor stewardship activities: story sharing, thank you calls, guests brought to events

Creating the dashboards is the easy part. Deciding what to show on the dashboards is what takes time and focused conversation.

Here are some simple steps to get you started:

Step 1: At a retreat or during a board meeting, provide ample time for your board members to answer a few key questions. You can refer to this post 5 Questions Every Board Should Ask for some helpful questions.

Step 2: Once the board has determined the ways they will be of most value AND what they want to track, the role of staff is to create a dashboard to support their actions.

Step 3: Make sure your dashboard shows both what has happened in the past AND what actions you want to cause in the future.

Step 4: Review dashboards regularly with time to discuss activity updates and what new actions must be taken next.

Whether you use a traditional bar graph or you use something different (Blue Avocado has an excellent example), your goal is to cause new actions that support your mission and your bottom line.

Simple Board Activity Dashboard

Simple Board Activity Dashboard

On August 26 on the Nonprofit 911 Network for Good Webinar I’ll take you through a deeper dive into how to Change Your Data Story.

Join me to view samples of what your dashboards should look like and how best to use them to inspire action. I’ll share six of the most common mistakes when designing dashboards and some examples of what you can do differently.

----------

A nationally recognized master storyteller and fundraising culture expert, Lori L. Jacobwith has coached thousands to raise nearly $300 million dollars from individual donors. And counting. Her proven strategies & tools teach nonprofits and their boards to share stories powerfully and easily. Lori holds a BA from the University of Minnesota, has additional training from Indiana University’s Fund Raising School and is a longtime member of the Association of Fundraising Professionals. Follow Lori on Twitter @LJacobwith or Facebook

Change Your Data Story Webinar
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Fri, August 21 2015

Master Monthly Giving (Part 2: Expert Interview)

Nancy Schwartz's avatar

Nonprofit Marketing Expert

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Filed under:   Recurring Giving •

Read Part 1 here

I’m thrilled to share more monthly giving mastery with you from my recent interview with leading monthly giving expert Erica Waasdorp.

Nancy: Once you have a new monthly donor in the door, what’s the best way to welcome him?

Erica: If donor signs up online, make sure you get a warm, appreciative email to him ASAP. Automate that via your donor management system.

In addition, I recommend that you always send a snail-mail thank you letter to new monthly donors. I’m a strong proponent of including a certificate in that mailing.

Skip the premium—thank yous are not the place—but make sure to include a personal contact at the organization, who signs the communication, and that person’s phone and email so its easy for donors to get in touch. You don’t have to send a monthly thank you letter in hard copy, but monthly emails are great. In both your email and thank you letter, include the fact that donors will receive a tax statement the following January.

Nancy: What are the best channels for monthly giving campaigns—email, direct mail, or something else?

Erica: Nothing works better than telemarketing. The response rate is simply higher than mail or email. Unfortunately, most organizations don’t have the budget for this. When that is the case, email and direct mail are the next best thing.

Most important, putting monthly giving front and center in your outreach is absolutely vital. Make it easy to find on your website and other appeals. Then ask and ask again via every main channel and piece that makes sense.

Nancy: I recently wrote a case study about Global Giving, which included a call to action for both monthly and one-time giving in its disaster-relief appeal for Nepalese earthquake survivors.

Have you seen that kind of dual call to action work? I am a huge believer in putting out a single, doable call to action to prospects and supporters, and then following up with a second step once the first has been completed.

Erica: Yes, it can work, and it ties in with the answer above—ask, ask, and ask some more.

The more you put monthly giving out there, the more donors will start giving that way. I see some of the “big guys” putting monthly giving front and center. For example, they offer monthly giving first and one-time donations second.

Nancy: What’s the greatest monthly donor recruitment case study you know?

Erica: Where do I start? I’ve done some huge monthly donor recruitment campaigns over the years, including one that raised $13 million. Most recently, I doubled the monthly donor base for a religious organization client, and those donors now generate 50% of the organization’s annual revenue.

But remember that these figures are relative, because your dollar total depends on the size of your existing donor base.

Consider another client I helped get started with monthly giving: a small animal shelter with 500 donor emails. The only mechanism they had for online giving was PayPal, so we customized the PayPal recurring giving options, put it on their donation page, and directed folks there from a three-part email series asking donors to join the “Champions” program.

We used a small board challenge of $5,000 with a clear deadline. Now the organization gets $2,500 a year from its monthly donors, and they also got the $5,000. We’re planning to do this again with the aim of doubling the monthly donor base every time. Cost is virtually nothing because it’s all done online. For this organization, starting monthly giving is huge.

Nancy: What’s the biggest monthly giving mistake you see fundraisers make again and again?

Erica: That’s an easy one—the biggest mistake is not starting and not asking. And the second-biggest mistake is asking too high.

If you want to start asking for monthly gifts of $50 per month, you’ll be disappointed if you see that the average gift is $23 per month for the first group of donors. Ask high and you’ll get a low response.

Instead, ask low and you’ll get a high response. In the case of monthly giving, you can absolutely upgrade monthly donors later. The key is to get them used to giving monthly first.

Nancy: What’s your most vital advice for fundraisers hoping to grow their organization’s monthly donor program?

Erica: We’re all overloaded. That’s why it’s vital to organize and systemize your monthly giving program before you promote it.

If you don’t set all steps up before you start recruiting, including assigning all roles and responsibilities, something’s going to fall through the cracks.

That’s why I’m so excited to have co-authored the ready-to-roll templates and tips in the no-charge Monthly Giving Starter Kit. It’s a great help in getting started and keeping your monthly giving strong.


To learn more about monthly giving, download our free eGuide! download recurring giving guide

About Erica Waasdorp

Erica Waasdorp is one of the leading experts on monthly (aka sustainer or recurring) giving. She is the author of Monthly Giving: The Sleeping Giant and co-author of the DonorPerfect Monthly Giving Starter Kit. As president of A Direct Solution, she serves nonprofit organizations in their fundraising and direct marketing needs with a focus on monthly giving, annual funds, and grant writing.


With refreshing practicality, Nancy Schwartz rolls up her sleeves to help nonprofits develop and implement strategies to build strong relationships that inspire key supporters to action. She shares her deep nonprofit marketing insights—and passion—through consulting, speaking, and her popular blog and e-news at GettingAttention.org.

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Wed, August 19 2015

Master Monthly Giving: Q&A with Erica Waasdorp

Nancy Schwartz's avatar

Nonprofit Marketing Expert

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Filed under:   Recurring Giving •

I’m thrilled to share this monthly giving mastery with you, drawn from my fascinating interview with leading monthly giving expert Erica Waasdorp.

In her unequaled guidebook, Monthly Giving: The Sleeping Giant, Erica walks you through recurring giving, step by clear-and-doable step. “Historically, U.S. fundraisers have focused on major gifts. I’m thrilled that organizations are widening their focus to include monthly giving and small to medium gifts. There’s huge potential there,” says Erica.

What do fundraisers need to know about how monthly giving has changed since the release of Sleeping Giant in 2013?

Erica Waasdorp: What’s changed most dramatically, especially in the past year, is that monthly giving has exploded.

I think the main reason for this growth is fundraisers’ laser focus on donor retention. That focus, already there for some, was further fueled by results of the 2013 AFP Fundraising Effectiveness study, which highlighted the fall of donor retention rates to 39%. That was a real wake-up call for all of us.

There are two more factors that I think have added to the monthly giving boom. First is the emergence of reliable, thorough monthly giving guidance—from me, Network for Good, and others. This abundance of content triggers interest and provides reliable results-based guidance for fundraisers. Fun features, such as Network for Good’s monthly giving challenge, reinforce interest and skills.

The second factor that’s boosted monthly giving is the ease of adding, processing, and managing monthly donors via many donor database and online donation systems. Despite these widespread improvements, automating this process remains one of the biggest hurdles for fundraisers.

Why should an organization convert its donors from annual to monthly? Is there any risk of losing existing donors?

EW: No, there’s absolutely nothing to lose—as long as you target the right group. In other words, I do not recommend you ask your $250-plus donors to join monthly giving. Unless a donor at that level requests to be a monthly donor, don’t ask. You risk decreasing her gift level.

But for those who make gifts of $100 and less annually, there’s no way not to gain by converting them to monthly donors. You’ll retain them as donors and increase their total gifts per year. Plus, monthly donors are six to seven times more likely to make your organization a beneficiary in their wills. Win-win all around, if you ask me.

What’s the WIIFM (what’s in it for me) for monthly donors?

EW: The WIIFM depends on which donor group you’re talking to. For example, monthly giving is a fantastic way for donors on a fixed income to make gifts to favorite organizations. It’s easy and convenient, and they can’t forget it.

That’s a perfect lead-in to my next question. Are all existing and new donors ripe for conversion for monthly donors, or is there a specific segment where fundraisers should start?

EW: Well, it depends on how many donors you have who give $100 and less annually. And it depends on how many times you ask your donors for money now—that is, how many times they can give.

Those donors who have given more than once are more likely to convert. But recent monthly giving stats indicate that even nondonor supporters, such as those who have signed a petition, can be converted. You do have to ask them, though.

If you have a robust email list, start there. Focus your first direct mail campaign to donors who give by credit card. Targeting is essential to boost monthly giving campaign results, just as for other types of fundraising campaigns.

What’s the most reliable way to convert one-time or annual donors to monthly donors?

EW: There are three components of a reliable monthly giving strategy:

  • To deliver the most cost-effective and effective monthly giving campaign, launch an email appeal series based on a deadline-driven challenge (matching gift or otherwise).
  • To generate the highest response from your monthly giving recruitment campaign, include calls to your media mix. Email, direct mail, and phone all work, but a combination of all three works even better.
  • To ensure monthly donors stay with you as long as possible, ask donors to give through electronic funds transfer (that is, via their bank accounts).

Thanks, Erica!

About Erica Waasdorp

Erica Waasdorp is one of the leading experts on monthly (aka sustainer or recurring) giving. She is the author of Monthly Giving: The Sleeping Giant and co-author of the DonorPerfect Monthly Giving Starter Kit. As president of A Direct Solution, she serves nonprofit organizations in their fundraising and direct marketing needs with a focus on monthly giving, annual funds, and grant writing.


With refreshing practicality, Nancy Schwartz rolls up her sleeves to help nonprofits develop and implement strategies to build strong relationships that inspire key supporters to action. She shares her deep nonprofit marketing insights—and passion—through consulting, speaking, and her popular blog and e-news at GettingAttention.org.

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Tue, August 18 2015

#GivingTuesday Success with a Staff of One: Q&A with CASS

Liz Ragland's avatar

Senior Content and Marketing Associate, Network for Good

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Filed under:   Giving Days • Nonprofit leadership •

Last year, Network for Good customer Collective Action for Safe Spaces (CASS) had a great #GivingTuesday campaign and won our prize for Best Social Campaign. The organization raised more than $17,000, came in fourth on our leaderboard for number of donors, and exceeded its original goal by 43%.

Because I experience and witness street harassment in Washington, DC, I can see the immediate importance of CASS’ mission. CASS mobilizes the community, through online and offline activism, to end public sexual harassment and assault in the DC metropolitan area. The campaign caught my eye and I was inspired to donate to it on #GivingTuesday. After I became a donor, I was delighted to receive some of the best post-donation communication ever! CASS has become one of my favorite nonprofit customers that we serve in DC.

Because CASS had such great success on #GivingTuesday 2014, I wanted to do a Q&A with Zosia Sztykowski, the nonprofit’s executive director, to find out how they put together an amazing campaign with just one paid staff member.

How did you plan and set goals?

Zosia Sztykowski: We set a very ambitious goal for our end-of year-campaign—triple what we had done in the previous year—and based on our experience, we knew we’d have to get a strong start on #GivingTuesday for that to work. #GivingTuesday and New Year’s Eve are always the best giving days for us.

How did you reach out to donors before, during, and after?

ZS: We started reaching out to donors four weeks in advance with soft touches via email. A week or two before, we gave all of them a call and asked folks to pledge. During the campaign, we reached out via email and social media. Afterward, everyone who donated received a special thank you email and a handwritten card.

What surprised you the most about #GivingTuesday?

ZS: It’s amazing how generous everyone is even when every other organization is asking for donations at the same time. There’s something very touching about that. It really is a day about giving in the broad sense of the word. In 2014, we managed to quadruple what we raised in 2013 on #GivingTuesday because of this generosity.

What is the number one piece of advice you would give to nonprofits doing #GivingTuesday for the first time?

ZS: Plan, plan, plan. Read about others’ successful strategies. Get your emails and your social media materials ready well in advance. Know that you’ll need all hands on deck on #GivingTuesday. Have a schedule—but be prepared to throw it out the window if you come up with a better idea at the last minute.

How did you manage it all with very few paid staff members? CASS only has one paid staff member, right? And how did you make sure volunteers followed through with their commitments to help make it great?

ZS: Yup, just one—me! Needless to say, I had some pretty serious tunnel vision going in late November/early December. But our volunteers are one of our strongest assets. They get the word out and solicit people in their networks. Every time we run a campaign like this, we don’t just reach multiples of our dollar goal, we also multiply the length our donor list, and I think this is directly attributable to our grassroots strategy. If a volunteer team is well organized and engaged—trained, prepared with all the materials they need, and knowledgeable about the organization and its fiscal needs—then they will follow through. Better yet, they’ll make it fun. It’s really about starting a conversation with volunteers that continues throughout the process.

What will you differently this year?

ZS: We’re planning to reach out to more big donors way in advance to build a lot of momentum for #GivingTuesday.

Thank you, Zosia, for sharing these details with us! If you want to put on a great #GivingTuesday campaign in 2015, we can help. Sign up to get Network for Good’s #GivingTuesday resources sent directly to your inbox.

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