The Non-Profit Dilemma

The Nonprofit Dilemma

Fund Raising is Down – and We are Needed More Than Ever

We have been around for a long time, we do great things for lots of people and more people need us now than ever before. We tighten our budgets, but our Annual Giving Program is giving us less and less money.

So what do we do?  Stop mailing out the letter, change our message and try online social communities?  We have to figure this out or we will be in trouble.

Does this sound familiar?  Is “The Great Recession of 2009” starting to have more and more impact on your fund-raising efforts? Though you have heard stories about getting involved with online giving, you haven’t heard many success stories – but still, what’s your choice? You don’t think you have the skills to make the online thing work, so what do you do?

If any of this sounds at all familiar, read (click here) for what might be the answer – LoyaltySolutionsGroup.com.

In the fall of 2008, the world of fund raising changed, and I believe this change will be forever.

The idea of donations as a way to help pay for needed and relevant causes has been around for a long time. But over the last 25 years, the concept of development or advancement has grown until it now is a very large industry.  I was told that in my city of Seattle, Washington, in the early ‘70s you could hold a meeting of all the fund-raisers in the area and there might be 25-30 people that would attend.  In the fall of 2008, it would probably be more like 10,000 attendees.

Every “501” has a development function and, if you have a cause or effort of any size, you most likely have a small team of people that focus on two to three of the major development elements  First is the Development Officer in charge of major gifts.  This individual is responsible for finding people with capacity to make a gift that would have an impact on the organization or a group of gifts that when packaged together create an endowment, enhance a capital project or support a program for a cause that they feel needs their help. The basic idea of development is that once someone is engaged, given a reason or case for support, feels strongly about the mission of the organization, values the way the organization acts, believes in the financial stability of the organization, and finally and most importantly,  believes the organization’s leader is capable of delivery on the promise, the Development Officer makes a request for a major gift.

This process is almost the same for the world of planned giving. Although the timeline of these gifts is less understood, these are very important elements of any good development organization.

The Great Recession of 2009 has definitely had an impact on both the Development Officer function and planned giving. But the place where the development world has been the most impacted is paramount to a thriving nonprofit: the annual giving program. The concept of an annual giving program is the front door to any nonprofit and the precursor to their future success. For the last 10 years, this effort has mostly consisted of a direct mail letter request.

If there is one program that has the potential for a complete crash, it is the basic annual giving direct mail program. So let’s put a few assumptions on the table before I describe the cultural transformation that will be required to save this very important element of any development effort.

1. It is widely known that the best and most effective way to get either a large gift or planned gift is to have a donor make between seven and 15 gifts – regular giving is the most important predictor of a future larger gift.

1. Annual direct mail letter response rate has been declining for the last 5-7 years, costs are going up and results are down.

1. The effort of creating an online giving options has been okay, but has not replaced the revenue lost from direct mail programs.

1. There is a whole new element to this effort called Social Technologies – Facebook, LinkedIn, Twitter, blogs – the new world of social communities.

1. The people who currently are in the development business are not at ease with the new technologies and though they might participate in some personal use of the new networks, not many have successfully figured out how to change their overall annual giving strategy and make all of it work together.

At Loyalty Solutions Group, we have designed a very clear and easy approach that takes all of the elements and migrates this very important aspect of your development operation into an annual engagement system within two years.

For a detailed step-by-step approach to this transformation effort, go to LoyaltySolutionsGroup.com for more information.