Mythbusters - Why Conventional Fundraising Wisdom is Wrong

MYTHBUSTERS!

Damian O’BroinAsk Direct

#dfk15@damianobroin

MYTH #1

Germany is the best football team in the

World

Deutschland ist der beste Fußballmannschaft der Welt

MYTH #1

Germany is the best football team in the

World

Deutschland ist der beste Fußballmannschaft der Welt

BUSTED

You can’t replicate the ice-bucket challenge

so you shouldn’tbother trying.

MYTH #2

Sie können die Eiskübel challengeso sollten Sie nicht die Mühe, nicht replizieren.

7

Summer 2014: €1.4m raised

@ €4 per text = ~350,000 participants

Almost 1 in 10 people in Ireland took part

#icebucketchallenge

47% of Rovio’s revenue come from licensing

2013 Profit: $568 million

How to replicate the ice bucket challengeGuaranteed!

1. Invest very heavily in idea development - properly resource innovation teams and buy in outside expertise if necessary

2. Develop a ruthless culture of fail-fast and be prepared to fail repeatedly.

3. Practice Zen-like levels of patience. This could take 10 years.

4. (Buy a couple of lottery tickets, just in case.)

5. Implement robust online and mobile tools to be ready for when it takes off.

6. Develop top-of-the class social media strategies and tactics so that you can amplify the message when it goes viral.

7. Cross your fingers.

8. Sit back and wait for the money to roll in.

Sie können die Eiskübel challengeso sollten Sie nicht die Mühe, nicht replizieren.

You can’t replicate the ice-bucket challenge

so you shouldn’tbother trying.

MYTH #2

BUSTED

Sending thank you letters to all your donors for every donation is a

waste of time

MYTH #3

Senden Dankesbriefe an alle Ihre Spender für jede Spende ist eine Verschwendung von Zeit,

“It appears no one has any empirical evidence that thanking donors, promptly or otherwise,

makes the slightest difference...”

“On average, we get more than one fifth of our net income from direct mail from our thank you letters...”

- Angel Aloma, Food for the Poor

(No ask, but envelope & reply device)

Test Group A Test Group B

Q = 25,000 Q = 25,000

ControlAdditional thank you piece

at start of year(no ask, envelope or reply device)

– + $450,000 in gifts

“The closest I've come to testing that was when a client of mine accidentally turned off their acknowledgement program.

It stayed off for about three months — donors not getting any thanks for their gifts — because nobody noticed. 

We saw retention drop during that time, and we had no idea why, until we learned about the missing acknowledgements. 

Of course, it wasn't a test with a control group, so we couldn't say for sure that not sending the receipts is what caused the drop in renewal.”

- Jeff Brooks, TrueSense Marketing

The 7 Key Drivers of Donor Commitment1. Donor perceives your organisation to be effective in trying to achieve its mission.

2. Donor knows what to expect from your organisation with each interaction.

3. Donor receives timely thank yous.

4. Donor receives opportunities to make his or her views known.

5. Donor is given the feeling that he or she is part of an important cause.

6. Donor feels his or her involvement is appreciated

7. Donor receives information showing who is being helped

ASK

THANK

REPORT

Who’s saying thank you?

“When people ask me what difference a donation can make, I reply that donations to Starship transform lives. “Parents have told me with tears in their eyes what it means to know their child is receiving the best possible care at Starship.

And behind every one of those children there are compassionate people like you dedicated to helping. Thank you.

Your donation will help Starship support children and their families at their moment of greatest need. It is at these moments, when a child’s life can hang in the balance, that your donation becomes truly transformational.”

THE BIG QUESTION:

Why don’t we testthank-yous more?

Sending thank you letters to all your donors for every donation is a

waste of time

MYTH #3

BUSTED

Senden Dankesbriefe an alle Ihre Spender für jede Spende ist eine Verschwendung von Zeit,

If you mail your donors too often you’ll drive

them away

MYTH #4

Wenn Sie Ihre Spender zu oft mailen Sie sie zu vertreiben

“There is absolutely no evidence that frequency of solicitation negatively impacts retention and

lifetime value. Period.”

This is at least 24 mailings per year

Lots of charities are here

Typical response rates

Mailing arrives from your favourite charity

Take out your cheque book and make a donation

Receive warm glow from beautifully penned thank you letter and satisfaction that charity has explained exactly how they’ve spent

your money

Mailing arrives

from a

DIFFERENT

charity

Write cheque to YOUR COMPETITOR

If you mail your donors too often you’ll drive

them away

MYTH #4

BUSTED

Wenn Sie Ihre Spender zu oft mailen Sie sie zu vertreiben

You need to givepeople concrete facts

and figures to persuade them to give

MYTH #5

Sie müssen sich die Menschen konkrete Zahlen und Fakten, um sie davon zu überzeugen, geben

The RokiaExperiment

Food shortages in Malawi are affecting more than 3 million children.

In Zambia, severe rainfall deficits have resulted in a 42% drop in the maize production from 2000. As a result, an estimated 3 million Zambians face hunger.

4 million Angolans – one third of the population – have been forced to flee their homes.

More than 11 million people in Ethiopia need immediate food assistance.

23% of earnings donated

Her life would be changed for the better as a result of your financial gift.

With your support, and the support of other caring sponsors, Save the Children will work with Rokia’s family and other members of the community to help feed her, provide her with education, as well as basic medical care and hygiene education.

48% of earnings donated

0%

10%

20%

30%

40%

50%

EmotionalRational

Combination

Small,  Loewenstein  &  Slovic

Proportion of Earnings Donated

The Mother Teresa Principle

If I look at the mass,I will never act.

If I look at the one, I will.

The Joe Stalin Principle

One man’s death is a tragedy,

but a million deaths is a statistic.

You need to givepeople concrete facts

and figures to persuade them to give

MYTH #5

BUSTED

Sie müssen sich die Menschen konkrete Zahlen und Fakten, um sie davon zu überzeugen, geben

You need to invest in brand awareness to drive up fundraising

income

MYTH #6

Sie müssen sich in die Markenbekanntheit zu investieren, um bis Spendeneinkommen

Fundraising Spend €500,000 €300,000

Awareness Spend – €200,000

Cost per Response €125 €100

# Responses 4,000 3,000

Awareness campaign would need to improve performance by 40% to justify spend

Jeff Brooks isn’t as optimistic as me...

“...for the awareness campaign to be worthwhile it would have to improve fundraising by 67%...”

You can’t compete with these people

“The consumer approaches impulse items, like Coca Cola, as a PULL .i.e., they go and buy a soft drink, and Coke is (or is not) their choice of beverage. They get a new car and choose between a Ford and a Toyota.These brands spend millions on ‘Top of Mind’ marketing, which makes sense.

However, charity fundraising is different. Statistically speaking, people don’t give without being asked. The only exception is a media disaster story such as an earthquake, or, bizarrely, Princess Diana dying.

Outside of emergencies, fundraising is a pure PUSH exercise. Being top of mind definitely makes asking easier, but a charity that asks effectively and is not top of mind, beats the charity that is top of mind, but doesn’t ask effectively.”

- Sean Triner (101Fundraising.org)

Cash  Acquisi,on  ResultsDecember  2010  –  May  2012

When Number  Mailed Response  Rate Average  GiD Number  of  new  donors

December  2010 77,000 1.8% $58 1,474

April  2011 85,000 1.9% $55 1,675

September  2011 43,500 5.8% $46 2,608

March  2012 150,000 2.7% $46 4,328

May  2012 156,000 3.9% $48 6,298

TOTAL 511,500 3.2% $51 16,383

You need to invest in brand awareness to drive up fundraising

income

MYTH #6

BUSTED

Sie müssen sich in die Markenbekanntheit zu investieren, um bis Spendeneinkommen

Take major donors out of your direct mail

programme

MYTH #7

Nehmen Sie den wichtigsten Gebern aus IhrerDirect-Mail-Programm

The Black Hole of Almost Major Donors

1% of the response - just 21 people - generated over 35% of the total income from the appeal.

20% ofdonors

80% ofincome

20% ofdonors

4%

80% of 80%= 64% of income

Pareto Pareto2

Take major donors out of your direct mail

programme

MYTH #7

BUSTED

Nehmen Sie den wichtigsten Gebern aus IhrerDirect-Mail-Programm

There’s no point investing in direct mail unless you’re a large

charity with a big database of donors

MYTH #8

Es hat keinen Sinn Investitionen in Direct-Mail, wenn Sie eine große Charity mit einer großen Datenbank von Spendern sind

$3,900 million

€40 million

4.4million 4.9million 5.4million

Ireland

Barcelona

There are advantages to being small...

Use thePareto principle

Personalise

Make it feel homemade

Ask for REALLY big gifts

€0

€200,000

€400,000

€600,000

€800,000

20072008

20092010

20112012

Annual Direct Marketing Income

There’s no point investing in direct mail unless you’re a large

charity with a big database of donors

MYTH #8

BUSTED

Es hat keinen Sinn Investitionen in Direct-Mail, wenn Sie eine große Charity mit einer großen Datenbank von Spendern sind

Women are from Venus and Men are from Mars

MYTH #9

Frauen von der Venus und Männer sind vom Mars

Control No priming men outperformed women

Male Primed“men perform better than women in this test,

probably for genetic reasons”men outperformed women

Female Primed“women perform better than men in this test,

probably for genetic reasons”no gender difference

Delusions Of Gender: The Real Science Behind Sex Differences– Cordelia Fine (2010)

Women students in business trying to organize a humanitarian action in Togo.

We are relying on your support

DONATING = HELPING

Women students in business trying to organize a humanitarian action in Togo.

We are relying on your support

DONATING = LOVING

CONTROL €0.54

HELPING €0.62

LOVING €1.04

“One possible explanation is... the loving concept acts as a prime that leads to activation of further concepts associated

with compassion, support, or solidarity that, in turn, lead participants to offer donations more favorably”

The effect of the word “love”on compliance to a request for humanitarian aid: An evaluation in a field setting– Dr. Nicolas Guéguen & Lubomir Lamy (2011)

Control Time-ask Prime Money-ask Prime

–“How interested are you in volunteering for HopeLab?”

“How interested are you in making a donation to HopeLab?”

$4.42 $5.85 $3.07

Activates emotional mindsetActivates value-maximization

mindset

Asking for time vs asking for money

Women are from Venus and Men are from Mars

MYTH #9

BUSTED

Frauen von der Venus und Männer sind vom Mars

I’m buying free drink for everyone in the bar in...

oh, about 5 minutes time

MYTH #10

BUSTED

Ich kaufe Freigetränk für jeden in der Bar in ...oh, ca. 5 Minuten Zeit

DANKE

@damianobroin [email protected]