Good morning.I’d like to welcome you to this morning’s session on “World Fundraising and Donor Databases”.I would like to use this morning’s session to extend upon some of the ideas I spoke about yesterday
Today we’re going to work through a few topics.We want to understand a little bit more of fundraising and philanthropy world wide; and the impact that this has on our database requirements and the implications of what we want to do as nonprofits
Let’s start by looking at fundraising worldwide by putting into context the way we look at data.
I want to direct you to some work that we do, in a program called donorCentrics. With donorCentrics we work with not-for-profits to better understand the information that they have in their databases.Normally, most statistics are provided from external sources such as government agencies or 3rd party analysis organisations.Using this information we base our predictions, campaigns and plans for the year ahead, and this is supplemented by the data which we have within your organisationWhere donorCentrics differs, is that it analyses data from the inside out. It looks at the data that nonprofit organisations hold. What makes it more powerful is that these results are compared and trended against other not for profits. It actually gives us a more accurate idea of how not-for-profits are doing and how their constituents are behaving.It produces some very fascinating insights into the operations of a nonprofit.We’re going to have a look at some of those pieces of information today.
Here are some key findings.I want to focus on online fundraising, but I will touch on more traditional channels. One of the key reasons that I want to do this, is that online fundraising has changed the shape of fundraising, and it will continue to do so. It represents one of the biggest shifts in fundraising techniques.So what have we learnt from working with our current customers, and analysing their data?We learn a couple of key things, that I want you to take away from this morning’s session.Online donors are younger and have higher incomesOnline donors give larger gifts and have a higher long term valueOnline donors have a slightly lower retention rate – meaning that we need to work harder to keep their attention.While they do have higher average gifts, this masks the lower retention rates – this is a real opportunity for improvementWe must integrate our online channel with our more traditional channelsOne specific point that I do want to make, is that while we have a lot of the data today, we are still a long way from completely understanding the long term effects of online donors. From the information that we know today, the signs remain very positive that we will continue to see a growth through this medium, and that there is room to continue to improve.
Let’s have a look at the impact that online donors have.The group of online donors that we acquire is still lower in volume than our traditional channels. What we have learnt is that people still require quality person to person interaction to begin the process of becoming a support of an organisation whether directly or through friends.The data continues to show that there is a growing impact of online donors, and that this new generation of donors is stabilising their incomes and are more conscious of the need to contribute.
What is the value of online donors to an organisation?The data that we have today, continues to suggest that there is strong long term growth and impact of online donors.We see that over a 5 year period, that the median value of an online donors is almost 3 times higher than offline donors. Once we roll online donors into overall fundraising programs, we are anticipating that there would be similar loyalty to our organisations that we see today for more traditional donors.
We get a blind spot. We do not always consider the retention of these donors.With all the data pointing in the direction of growth and optimism, I’d like to balance that information with what we are seeing today when we look at the data a little more deeply.Some key considerationsEven though higher value donors usually mean higher retention, we are not seeing this in online donors.We have lots of opportunity of improving retention of these high value online donorsDo online donors just give in response to a need, but don’t really have an affinity with the organisation’s mission?We are still seeing membership organisations do well. This however is a factor of the way that they are set up.
To provide you some context, here we see that online fundraising still only makes up a small proportion of our revenue pool. Online in 2008 only made up 5% of the overall value of contributions made. With this in mind, we need to consider how we report against the performance of online vs offline, and the impact that it will have. What this chart is saying is that we need to continue to invest heavily in our more traditional fundraising methods as this will form the basis of the revenue that will fund your day to day operations for a few years to come.
The excitement when looking at online is because of what this specific graph is telling us. We can see that the growth of online fundraising continues to increase very strongly.This helps us to put the value of online giving into a little more context. Online giving should be viewed in light of the fact that it is a strongly growing contributor to overall fundraising. Today, online fundraising is not “high value” but “high growth”.It will continue to exhibit strong growth and will continue to play it’s part in fundraising.
Nothing in your fundraising career has prepared you for this.Online technology is a changing platform on which we work. We regularly see changes to the environment and culture that we live in today because of this changing technology. This is one of the primary drivers behind the high growth. New devices and applications are brought out every day. As organisations, we are often not as focused on how we can adapt to this.
Apple is a great example of how it has changed the way that we are involved in technology.Theiphone is a disruptive technology. A disruptive technology, is a technology that changes the way we do things. It is a shift in the way that we live our lives. The iphone and smart phones in general continue to shape the way that we work and do business. It has meant that we now have greater access to the web via mobile technology. We have a greater ability to be updated about current information and events. We are constantly connected to everything and everyone around us. This has a huge impact on the way that we should approach fundraising.[click]And now we have the iPad. How are we going to take advantage of this piece of technology. It has an amazing capacity to shift and change the way we do fundraising today. Have you considered how you might use it for face-to-face fundraising, or about the information that you have available at your finger tips? What does it mean for your database? Will this mean that SaaS solutions become an even better option for a database solution? How can you use these tools to your advantage?What about for the donor, how can you make these devices a means to support your mission? Is there a way to raise donations from these tools and to raise awareness?I saw a great example of this, where Save The Children released an iphone game to help it’s supporters understand the difficulties of doing disaster relief. IT was an imaginative way to grow affinity and awareness for the work of the organisation.
To bring this back to the Japanese context, we are seeing that over the last 10-15 years, that the growth in the number of online users has increased through Japan. More importantly, we see that the penetration rate is at 78% of the population. We would expect that this will continue to increase over the coming years as the internet becomes more of a daily necessity.The implication of this is that there is a massive change to what we need to do as we approach a newer generation of supporter
We face the challenges of a changing technological environment and the way that it affects our lives. How does this change the way we view our donors?
What are your donors like? They read their emails before paper mailThey are comfortable online, and more to that point, they are comfortable paying onlineThey have very little time and want to do things when they are ready – so you have to be available 24 hours a dayThey are used to having their experiences customised and made for themThey expect immediate feedback and responses from people. They are busy and don’t have time to waitThey want to see progress and stewardship, this is similar to the previous point. They want to be able to see what is happeningYour donors are moving away from certain types of communications and engaging more into a more in the virtual world where interaction is fast and response is immediate.
I want to pause a moment just to remind you of what we’ve spoken about so farThe use of new media is a growing disciplineWe can see the growth and impact that the online space is having on donor giving and retentionWe can see the continued investment and expectations that non-profits are placing on the use of new media, and the impact of itWhat can we do as nonprofits then?We must work out how to cater to our new donors (and of course not neglect our current donors), by being relevant, meaningful and personal.Give your supporters the right information, at the right time and in the right way. To summarise:Online fundraising today is high growth and we still need to focus on our traditional channelsThe internet has changed the way we now interactOur constituents have changed and now require different things
In the second half of this session, we’re going to look at how we might approach this from a technology perspective, and the vision we have in order to combine those concepts a reality.We’ve really only looked at one perspective of fundraising – the impact of online. I want to now bring this back into the wider context of your organisation.
I’d like to introduce you to Hideko.Hidekois a supporter of your organisation. You interact with her in a number of different ways.How do we make those interactions relevant, meaningful and personal in order to better engage Hideko?
Firstly, let’s start by understanding how we currently treat Hideko. We often treat Hideko as a number of different people because there are many different aspects of Hideko’s interaction with your organisation. [click]Is Hideko an event attendee?Is Hideko an email recipient?Is Hideko a website visitor?Is Hideko someone you call?Is Hideko a newsletter recipient?Is Hideko a donor?
Hideko is not any of these individual pieces. They do form a part of who she is but each of them by themselves do not give you a true representation of who Hideko is.We often only address our constituents as they relate to specific activities that we are undertaking, and sometimes we are so focused on these particular activities, that we don’t stand back and see the whole picture of the audience we are trying to relate to.By treating our supporters and constituents in this manner, we fail to engage them how they want to be engaged.I, as a supporter, want you, as a nonprofit, to recognise what I’ve done, and to know that I’ve interacted by going to an event, or donating to your latest appeal, or that I’m engaged with you in an online capacity through email, facebook, forums or other websites.The more we can do this, the more we can be relevant, meaningful and personal.We’re going to do a quick Activity to demonstrate this:I want you to turn to the person sitting next to you. Now I want you to shake hands with them. Now close your eyes and try again.It’s a lot harder isn’t it? We can’t be blind to what we are doing, it makes interacting harder. By seeing everything we interact much better. Eventually, you get there, but it’s not as easy to do. The same concept applies when we talk about data and multi-channel.
What we have typically found is that many nonprofits operate like their own islands. Information is stored in a number of different places depending on what purpose they are forWe often have a group of people who look after the website, and handle emails.We have others who look after our volunteersWe have others who are trying to look after our fundraising campaignsBut often the data doesn’t overlap. We can operate like our own little islands, without much knowledge of the participation of our constituents in other parts of our organisations.As your organisation grows and becomes more specialised and sophisticated, this becomes more and more obvious. We need to start bring all this information together. This is where having a fundraising database software will help you immensely.“United we stand, divided we fall”
With the emergence and growth in new media and new technology, the biggest divide is between what you’re doing online and offline. I believe that this is for a number of reasons:With the growth of online media, organisations have had to respond quickly to the changes and to build a web presenceThe development of online media begun as a marketing and information engineIntegrating of online and offline systems is often a complex taskBecause of the nature of technology, we see continual improvements and changes, and to be able to keep up with this becomes harder and harder. So we struggle with the changing nature of this technology, and as a result we build short term solutions that met immediate needs. Not only do we do that but we evolve that solution. At some point it is important to recognise that we need to re-consider the approach we have taken, and often to start overFor these and many more reasons we have seen an evolution of products that do not necessarily fit into what we want to do as an organisation.
Our offline systems are built to be able to handle our traditional day to day functions, because these activities pre-dated the software solutions that were built to assist those activities.Websites are a relatively new technology for fundraising, and as nonprofits have responded to the need to have one, they have never really needed to consider how this would affect their entire fundraising strategy because the web was always seen as a tool for push out information. No one, ever in their wildest dreams ever imagined the direction that online media would evolve into.As a result each system has developed in isolation from each other. Each one specialised for their task, but not complete enough to provide a total view of a constituentSo far this has been sufficient, but as we become more sophisticated in our understanding of how to use the web, this has become less meaningful.
Our true solution is to do what we’ve done in the past with other new technologies as they have become available. That is to integrate them into our overall systems. We want to make online tools a fundamental piece of our total solution. The need for engaging our donors online will only get bigger and bigger.By bringing all the pieces of our data and solutions together, we are able to build a better overall picture of our constituents and be able to better develop our communication channels.Specifically, it lets us analyse the data that we have better. The goal of this is to be able to better segment and target our audience. This is key to ongoing success. By being able to better profile donors through software solutions, we can increase the effectiveness of our campaigns.For example (I need to only pick 2)Do you know if a donor is more inclined to respond to an email or a direct mail piece?Do you know the impact of email open rates for donations? Do you know if your donors only respond to certain types of appeals?How about knowing when someone last visited your websiteThe effectiveness of a landing page and donations?Do you know if someone has raised money for you online, and how many new donors they brought in?Do you know how your communication plan via email affects long term retention?
What does this mean for Hideko, our constituent?By being able to bring all the different aspects of our interaction with Hideko together into a single record, we can have a better view of who she is. We are able to see her total engagement with our organisation. We can recognise that she is a donor and a volunteer, or a offline donor who responds better to email communications.What does it mean for the not-for-profit?Look for a good fundraising solution that will help you to capture this information. What we want our databases to do is to be able to capture all our information in one place, rather than having lots of individual sources of information stored on spreadsheets. Once we have all our information in one place, we can better profile and better target our constituents. And there is plenty of good software out there today that can help you do this, and it’s becoming better and cheaper as we move more towards a Software as a Servic.To provide some perspective, Blackbaud is moving away from it’s more traditional client server systems to SaaS technology because we believe that we can provide a secure, reliable, functionally rich, available and cost effective system to our customers this way.
Moving on, let’s look at multi-channel marketing.Being able to converge your database systems into a single source of truth and to break down the disparate data sources will help us to do multi-channel marketing.You can still execute multi-channel activities without a complete system, however the task is much harder, your efficiency is reduced and your ability to gauge effectiveness is harder.Having an integrated system will help determine your results and what activities you engage in by understanding all aspects of your constituents
Today we have a number of traditional channels that we are very comfortable with. We know how to use them, and to build strategies that effectively use them.Direct mailTVPhoneRadioFace 2 FaceEventsThese are what we are using
We are also have our online channels. They continue to grow at an exceptional pace.We have seen an explosion in the use of Social Media and how it has changed the way that we interact with our constituents and how they interact with their peers. There is a significant domino effect in play, so getting it right can be hard.We still continue to separate our online campaigning and strategies from our main strategies, and sometimes only have online an after thought.
So rather than having online and offline channels, we want to begin to integrate our channels together. Bringing a combined presence and strategy to our approach as we engage the market. So when constituents are engaged with us as nonprofits, they get a clear and consistent message.Not only is it making your communications consolidated but it’s the timing of that communication that is important to.
Here is an example that I want to show you quickly how it might work together. By having our information in single location, we can manage our channels better and look after our donors more.We see the flow of all the different channels into a system of actions and options with followup activities. We can only do this if we have a complete multi-channel strategy.
To better understand the value of taking a multi-channel approach, we can see from this chart that donors who gave online tend to migrate to other forms of donation over time. The reasons as to why are difficult to gather, but I believe that online meets a short term immediate need. The internet is a great awareness and activation tool. By offering the various approaches, we can maintain a higher retention rate of our constituents.Offline interaction, in particular newsletters and mail pieces have a better relational and long term impact because the style is different. You have more opportunity to explore issues that are important to you in a newsletter or offline communication. Offline items are also not time bound. They can sit around on a table for people to read, consider or be reminded of.
The more means by which we can engage with a donor, the greater the overall lifetime value of a donor in your system.Multi-channel donors, typically give more, 4 times more than for offline and twice that for online onlyWe see that it’s a great acquisition tool, gathering 13% of new donorsWe also see that our retention rates for donors is at 51% which is significantly higher than for the other channels by themselvesAnd our ability to reactivate our multichannel donors is higher, because we are continually in contact with them, whether actively or passively, we become a part of their day-to-day lives.
To summarise, I want to encourage you to continue to take an integrated approach to communicating with your audiences. There are 5 key reminders when it comes to communicating:Have a plan – how are you going to communicate to new donors? To people who communicated as part of a new Be consistent across all your channelsBe regular in your communicationsBe where your constituents areMake sure you can track your informationThe last point really leads us to the last section of this presentation.
Data.Data is your most valuable possession. For all the communicating that we do with our constituents, we want to make sure we have all the data that will help us to continue to better address them.
Your data is valuable, in 3 key areas:1. Data Integrity – Do you maintain quality data? Is your data usable? Can I find answers to questions I ask of my data?Data integrity is about keeping good information, and ensuring that it stays that way. Having a systematic way of keeping it will improve your success. This is where a specific fundraising system can help you.2. Data Securityam I making sure that my data is secure and safe?Am i providing my constituents with confidence that their information is safe with me? By storing your data in a secured environment you can better manage your security. 3. Data Capture – Am I capturing enough data? Am I capturing the right data?Make sure you’re collecting data. This will help you to understand your constituents better.
The more accurate and properly managed data that you can maintain in your system, the better you’ll be able to:Understand who your donors are, and what they’ve done in the pastSee what works and what doesn’t workSee how your constituents behaveBeing able to access this through an integrated database system will be the key to your ongoing success.Your data is the lifeblood of your organisation![Reference unicef at the “perform trend analysis”]
Let’s conclude this session by summarising what we’ve looked at this morningwe’ve looked at online donors and the impact that this is having – we are seeing that this is a strong growth area with a strong potential for impactWe’ve looked at how the online medium has changed our donors, and how they want organisations they engage with to be more personal, meaningful and relevantWe’ve then looked at how we might do this by:Having an integrated database system that lets us see everything about our donorsCommunicating with them via multiple channelsLastly, we’ve discussed the value of the data we have in our integrated systems, and how we should use it to analyse what we are doingMy key take-aways from this are:Look for a good fundraising database solutionThey can help you become better fundraisersMake sure you know who your constituents are: be relevant, meaningful and personalYou need to engage your constituents on their terms by being relational with themWork together in your organisation, so that you can be consistent across all your channelsHaving a clear message across all your channels will help your constituents focus in on what is important to your organisationMake sure that you use your data.Analyse it, it could improve your success by showing you what is important.[next slide]
I’d like to thank you for your time.I will be available for a few questions. Please do come up and say “hello”, I would love to have a chat to you.We have time for a few questions.
FRJ2011 - World Fundraising and Donor Databases
World fundraising and donor databases<br />Clive Lam<br />Product Manager<br />International Business Unit<br />
Philanthropy World Wide<br />How Does This Change The Way We View Our Donors?<br />A New Direction – Unified Databases<br />Multi-Channel Marketing<br />Your Most Valuable Possession – Your Data<br />Conclusion<br />Questions<br />Agenda<br />
donorCentrics can help you :<br />Conduct sophisticated donor behaviour analysis <br />Make strategic decisions based on objective, industry-standard performance metrics <br />Evaluate long-term trends among specific donor populations <br />Learn proven strategies and best practices from peer organizations <br />Set future budget and performance goals that maximize your direct marketing budget <br />Fuel your major and planned giving prospecting efforts by identifying donor loyalty patterns <br />Use graphical outputs to communicate high-level program performance to staff and board members<br />http://www.blackbaud.com/targetanalytics/benchmarking/donorcentrics.aspx<br />Donorcentrics reports<br />
Online donors are younger and have higher incomes than traditional direct mail donors. <br />Online donors give larger gifts and, as a result, have a higher overall long-term value than donors to more traditional giving channels like direct mail.<br />Have slightly lower retention rates than direct mail acquired donors.<br />Higher average gifts mask the lower retention rates of online donors, which may present an opportunity for improvement at many organisations. <br />The online giving channel must be an integrated part of an entire direct marketing program because although offline donors do not generally migrate to online giving, online donors do migrate to offline channels in large numbers.<br />Summary of key findings<br />
Smaller group of donors compared to traditional channels but have a greater revenue impact than offline donors <br />16% of new donors and 27% of new revenue <br />Give larger gifts<br />Have slightly lower retention rates than direct mail donors (could be due to cultivation strategies through direct mail)<br />What is the impact of online donors?<br />
Have a higher cumulative value over long term that traditional mail-acquired donors<br />Higher giving levels (median gifts was a median $237 for online acquired donors vs. $86 of offline acquired donors)<br />Similar loyalty over the long term <br />Online donors are acquired in higher numbers with higher average gifts<br />What is their value to the organisation?<br />
In general, the higher a donor’s giving level, the higher their retention rate tends to be. We would expect their average retention rate to be higher as well but this isn’t the case…Retention rates are lower for online acquired donors.<br />Is this a function of fundraising techniques to renew the donor? If so, this presents an opportunity for improved retention strategies. <br />Is this because the online donor’s giving doesn’t equate to the same affinity of a direct mail donor? i.e. a $50 gift from a younger and higher income donor may not equate to the affinity of a $50 gift from an older and lower income donor<br />Membership organisations had better retention than others <br />May be due to their benefits associated with giving levels<br />Where’s the catch?<br />
Total giving 2008 (us)<br />$292.23 Billion Offline<br />$15.42 Billion Online<br />Source: Giving USA / Blackbaud<br />
(Source : Ministry of Internal Affairs and Communications “Communications Usage Trend Survey” (2009))<br />Japan internet usage<br />Source: http://www.internetworldstats/asia/jp.htm<br />
How does this change the way we view our donors?<br />
Reads email before snail mail<br />More comfortable online<br />Busy, satisfies interests on own schedule<br />Expects information to be personalised<br />Expects immediate feedback<br />Demands information on progress/stewardship<br />Wants a way to share experiences with others online<br />Your donors today<br />
Understanding the value of multi-channel<br />Large numbers of online donors migrate away from online or email giving and to other sources, primarily direct mail. Direct mail donors rarely switch channels to become online donors.<br />
Median revenue per multi channel donor was $339 compared to $88 for offline and $170 for online<br />13% multi channel donors are new and 28% have given in the last 5 years<br />First year retention for multi channel donors was 51% compared to 30% for offline and 29% for online donors<br />Reactivation rate for multichannel donors was 16% compared to 7% for online and offline donors <br />How does it work out?<br />
No disconnect offline vs. online –constituents find what they seek
Effective and efficient use of funds</li></ul>Reuse of content and creative<br />Improved results through message penetration<br />Close gaps on wasted opportunities<br /><ul><li>Increase contact and data capture
Increase satisfaction with planned follow-up</li></ul>Benefits of multi-channel Marketing<br />
Your most valuable possession – your data<br />
Data Integrity<br />Data Security<br />Data Capture<br />3 Key Data considerations<br />
Data is how you know your donor<br />Your historical data is important because it can tell you a story of who your donors are<br />Effectiveness of campaigns and appeals across segments<br />Perform trend analysis of your donors<br />Why is your data so important to you?<br />Data is the lifeblood of your organisation<br />
Know your constituents, not just aspects of them<br />Your constituents expect to interact with you on their terms<br />Cultivating relationships is key to ongoing success<br />Your organisation should stop working in silos<br />Look at all points of contact with your constituents<br />Make sure your messages are unified, clear and consistent<br />Analyse your data!<br />Your database isn’t just for record keeping<br />It can help you better understand your constituents<br />Key takeaways<br />