Could The AFP Study Suggest The Failure Of "Best Practices"?

It seems like every week I read the phrase somewhere in the volume of nonprofit writing I connect with about “best practices” It is a peculiar piece of lingo for our sector of the economy.  If you have read the recent AFP fundraisingeffectiveness report you clearly see that it might be hard to find any best practices among the organizations they studied to create this report.

If nonprofits are losing donors at the rate suggested in the report then exactly where is best practice? This is not a new question for me.In 2001 I purchased the domain designthedonorexperience.com. For my team, at the time, this site and the images posted became a symbol of what our advancement effort was going to be all about. We were extremely focused on retaining the donors that were generating 90% of our yearly revenue. While our peers focused on participation and other short-term measures we focused on customizing the donor experience and extending the lifetime value of our key supporters.

Our quest for understanding customer service took us to the Disney Institute to experience what real donor management should look like. We ignored, what was then considered, all the “best practice” we could because those conversations were not at all about the donor.  Donor centered metrics are difficult to find.Run through your head the current measures you have in place in your shop. How many are tied directly to donor satisfaction or for that matter what is yourcurrent donor happiness index?  A recent book on measuring nonprofits does not include a single metric tied to donor longevity or their emotional propensity for continued support.

What is your donor (customer) retention?

The AFP study is a significant wake up call for ourindustry.  One of the many Peter Drucker quotes I appreciate: “Every business model reaches a point of diminishing returns”.  It appears, from this study, we have arrived.  

Make 2013 the very best for your very best customers or donors!!!

Back To The Future

I have been reading a lot lately about the importance of retention. Some one recently posted a blog about some incredible information coming from a person with the title "scientist" who is a vendor to the nonprofit sector. The scientist stressed how critical it is not to focus all your attention on acquisition of donors. A compelling case for today's market as it was equally compelling in 1975. The math is simple, we renew each year more than we acquire. Traditional fundraising of course not disaster relief efforts.

Wow Institute

There is a bunch of noise in the market about tools that will rescue us from our own ineptness and completely fix the very real retention issue demonstrated by the recent AFP Effective Fundraising Study. It reminds me of the hammer salesperson who sees the solution to every problem as another hammer. Great customer service is the by product of a mind set. It can not be manufactured with a tool. Putting the world's best scalpel in my hand will not make me a great surgeon. Today there are people talking about retention and providing advice that have never executed strategy that resulted in increased donor retention. Sort of Bernie Madoffs of philanthropy.

If you seriously want to wrap your head around impacting retention please know that it has nothing to do with tools.  It is driven by creating a culture of service and a good old fashion understanding of  exactly who the customer is you can't live without, and then making sure you keep them.  In 2001 I took my advancement team to Disney to learn about customer service because Disney had the highest repeat customer metrics of any industry. We could not learn about retention from the standard fundraising conferences available. In addition we could not embrace the current "best practice" metrics because these metrics have actually produced the dismal results in the recent AFP survey.

The above gaps led a group of us to create the wow institute over a decade ago, it was designed to put the donor at the center of the conversation.  Today The New Science Of Philanthropy delivers a set of metrics never before discussed in best practice circles but proves, in a linear manner,  there is a better set of questions that exists to build a sustainable fundraising initiative. It would be great to hear from any of the old Wow folks who experienced a week in the mountains of New Hampshire to let us know what their perspective on donor retention is now that their wow experience was a decade ago!

Keep Your Goals To Yourself!

I have long believed in the power of having a goal but have also thought it was very personal. Since I entered the fundraising profession I could never figure out why the practice was to tell the donor that it was important for them to give because of the goal the organization had. Never made sense. I mean how might you feel when you entered the car salesroom and the sales person came up to you and said, "Hi great to see you, I nee to sell 5 more cars this month for a bonus". That would so be not about the customer right?  Why have we ever thought this worked in our world, but certainly our industry retention numbers let us know how not about the customer we are.  But here is another poetential reason.   Enjoy

Have You Spotted The Social Mediaprenuers This Season?

What is great about the social media hustle is that you can witness it in real time.  I am amazed at the number of social media experts we have to choose from, perhaps that is because I spend a great deal of time in that space reading and learning. I do love the capability to create incredible customer experiences that these rapidly evolving tools provide. But I have yet to find a single person who has in any meaningful way connected the dots for the nonprofit community. While I am quite aware of all the self proclaimed or endorsed experts, what I find when I scroll deeply into their work that there is very little substance or practical understanding on the mechanics of philanthropy. A recent book on metrics for nonprofits does not offer a single connection between social media and the ability to identify, acquire and most importantly sustain the relationships that have the ability to transform your organization. I find embracing such publications for nothing more than a high buzz index remarkable. Yet because of the power of social media tools thousands flock to see if maybe this time there is actually something really worth learning. Anecdotal stories are nice and often can inform but without any real substance leaves us hungry like a Chinese food buffet …. But the stories do take up the pages and thus there is a book to sell. In addition telling someone else's story becomes the slight of hand for genuine competency. 

Today I have have nothing to sell, yet J, but would love to share with you a great read that could save you a lot of time and disappointment, but also provide incredible value for your time invested. In April of 1999 I read the Cluetrain Manifesto and quite honestly I have not read another creative thought on the topic of web-based communications since. Its all there for the taking and it is also the book that gave birth to the first blog, in North America, for marketing in the nonprofit educational sector. Check out Chuck's Corner at Proctor Academy, who is part of the advancement team that kicked of blogging in 1999, something NAIS could state with some pride that this kind of innovation came out of independent schools, years before other nonprofits flipped on the on switch.  

Click on the image to go to theoriginal site from 1999

These are challenging times and our ability to weed through the pile of  inexperienced nonprofit “experts” is a new skill that we all need to sharpen Just because someone has a website, blog or a small twitter army does not mean they have any real practical experience in the business of creating a place for philanthropy. P.T. Barnum is credited with the saying that “a sucker was born every minute”. I think if he were alive today he may suggest that now one is published every minute, just check your rss web aggregator!

Good luck!

That Is Not Retention

Recently on a LinkedIn discussion in the CASE group there was a fairly typical discussion regarding the retention of donors. It started off as a loyalty thread, which is a topic I look forward to addressing here in the very near future. At one point an individual stepped up to outline the significant success his program had at moving retention from 67% - 70%.

Introducing The New Science Of
Philanthropy in San Francisco last month

First, what is the logic of measuring retention in a percentage? Let’s take the higher number as a quick example. If you kept 70% of your donors that means you are losing 30%.  A next logical step is to stretch that out over time, you would go through 100% of your donors in 3.33 years.  In the business of building and sustaining relationships our questions need to be based on longer-term outcomes.

Measuring a year over year retention rate as a percentage will only hurt your ability to actually do what you want to do. In the above scenario the 70% does not hold level for multiple years, as a result the loss of donors accelerates. The above LinkedIn member’s donor base is most likely barely surviving 3 years on the books.

Founders New Science

I will go much deeper into retention on this blog but let me suggest that retention is measuring by years. Example: ten years ago our donors remained on the books 2.5 years. Today the average length of time a donor remains is 4.28 years.  Now that is a 71% increase in donor retention.

The New Science Of Philanthropy currently has a patent pending on a proprietary dashboard technology that for the first time assists organizations in building strategy for actual retention results. It will impact social media, communications, stewardship and acquisition.

Targeted Curation For Nonprofits

This is a cool new tool that I am enjoying getting to know. However, it is quickly easy to see that if your organization was generating online content you could serve it up nicely and targeted to your customers. Take a few moments and watch the clip and then go play.

Are Your Vendors/Partners Stalling Your Capacity?

Clay Shirky notes, “Institutions will try to preserve the problem to which they are the solution.”

Are you sure that the tools you have had in place for decades can insure success in the decades to come?

I can hear the senior professionals now “what has been the cornerstone of good fundraising success remains the cornerstone”.  As a matter of fact I believe that is extremely accurate. I truly doubt there will ever be a time when the quality of the relationship with our key supporters will ever be of little importance.

Relevant again?

Having said that I think it would be difficult for any of us to make the case that the way we open, build and grow relationships is the same as it has always has been.  If we concede to any of that then the mechanisms and measures we have been using for decades need to be up for discussion.  The NewScience Of Philanthropy has proved with linear methodology that our traditional metrics have failed our ability to maximize our fundraising potential.

The tools and vendors of the past several decades have served us well and successfully brought us to this point in time.  Despite working feverishly to remain relevant with new packaging and language the tools remain grounded in strategy developed decades ago.  One of the greatest pitchers of all time recently made headlines while considering making a comeback after his time had come and gone. The baseball world simply looked on in disbelief. It is through that same lens I see so many vendors, as a result of antiquated thinking, just not able to provide the real tools needed today in order to deliver the experience to, and inspire, the donors we need in order to achieve success in the next twenty years. 

When analyzing your current needs keep Clay Shirky's thinking forefront.  Being relevant in 1980 is not all that meaningful in 2012. Anyone reading this on a Wang laptop :-)