Audience Insights: Organizations Overlook the Most Important Clues

Clues for increased satisfaction and visitation are often right under the noses of cultural organizations. I frequently hear executive leaders Read more

Do Expansions Increase Long-Term Attendance? (DATA)

Sometimes it feels like nearly every cultural organization is taking on a major expansion project. But do these projects Read more

Over 60% of Recent Visitors Attended Cultural Organizations As Children (DATA)

You may have guessed it was true – but here’s why this statistic matters. The idea that those who visit Read more

Cultural Organizations: It Is Time To Get Real About Failures

Hey cultural organizations! Do you know what we don’t do often enough? Talk about our failures. It’s a huge, Read more

How Annual Timeframes Hurt Cultural Organizations

Some cultural executives still aim for short-term attendance spikes at the expense of long-term financial solvency – and they Read more

Special Exhibits vs. Permanent Collections (DATA)

Special exhibits don’t do what many cultural organizations think that they do. If fact, they often do the opposite. Read more

donations

Why Donors Stop Giving to Cultural Organizations (DATA)

Here’s why some people make a few donations to a cultural organization and then stop giving, according to the donors themselves.

Yesterday was #GivingTuesday! Though it’s a rather noisy day amongst nonprofits, I hope that your organization secured at least a few more dollars to help fulfill its mission – and added new supporters to your list of advocates!

As the end of the year approaches and cultural organizations work hard to attract and retain donors, it seems the perfect time to share this data on why folks donating between $250 – $2,500 annually to cultural organizations stop giving to the organization. That’s the focus of this week’s Know Your Own Bone Fast Facts video.

The reasons why donors stop giving may not be what you think. The good news, however, is that the top three reasons stem from the same – resolvable – issue. We’ve got the data on why some donors don’t renew their contributions – and it’s a wake up call.

Take a look at this data from IMPACTS and the National Awareness, Attitudes, and Usage Study. The study includes donors that had previously made an annual gift between two hundred fifty and twenty-five hundred dollars to a cultural organization – and then did not donate again within 24 months. See if you can spot what the top three responses have in common…

Why donors stop making donations to cultural organizations - IMPACTS data

Notice anything interesting here? The top three reasons why donors stop giving have something rather straightforward in common…

 

The top three reasons why donors stop giving are very basic communication/relationship management  problems.

 

The primary reason why donors did not contribute again is not being acknowledged or thanked for their gift. And with an index value of nearly 244, that reason is a very big, and very strong one. The second reason is also big and strong, according to these past donors: They simply weren’t asked to give again. Lack of communication about impacts and outcomes is third. And again, these index values are very high.

Interestingly, it is the reasons that we tend to blame that trail behind these big three, including unactualized intent (or, forgetting to give), giving to another organization instead, or a change in personal priorities. Perhaps these are the reasons that we tend to blame because they have to do with the donor – not with our own lack of follow-through or effort. Really, the top reasons why once-was annual donors stop giving and don’t come back is on us. 

 

While this data may be a bit embarrassing, we can fix it!

 

Online donations are on the rise – especially this time of year. One possible culprit here seems to be the misunderstanding that engagement over the Internet is more about technology than it is about people. A donor is a donor whether they hand a check to someone behind a desk, or they support you over the computer in polka dot PJs at home. A donor giving online is not any less deserving of a personal “thank you” or a follow-up than a donor giving by any other method. Remember, there’s a human being behind that computer screen – and it’s a human being who happens to support what you do.

With much of our focus on cultivating members at cultural organizations, there may also be a tendency to forget those important people who give beyond membership and thus deserve another level of care and attention. That said, data suggest the visitor-serving organizations could also do a better job making high-level members feel valued and respected as well. If we’re having a hard time with this audience, it makes sense that we might also have difficulties with folks who give between $250 – $2,500 and consider themselves to be donors rather than straightforward members alone.

At their very core, our organizations are all about people and connectivity. We need to be successful facilitators of shared experiences within our walls, we need to also be able to master connectivity with supporters outside of our walls and master proper communication with donors. If we want support, we need to carry out effective communication and relationship management. When donors stop giving, it’s generally not them. It’s us. 

Let’s make an active effort to show donors our gratitude and how their gifts are making not only our organizations, but our communities and even our world a better place.

 

Like this post? Don’t forget to check out my Fast Fact videos on my YouTube channel. Here are a few related posts from Know Your Own Bone that you might also enjoy:

 

Interested in getting blog posts, tips, and some silly social media geekery periodically delivered in your Facebook newsfeed? Like my Facebook page. Or for more regular sharing of nonprofit marketing information, follow me on Twitter.

Posted on by Colleen Dilenschneider in Community Engagement, Fast Facts Video, Financial Solvency, Fundraising, IMPACTS Data, Myth Busting 1 Comment

Why Donors Stop Giving Money to Cultural Organizations (DATA)

Why Donors Stop Giving to Cultural Organizations

Why do some people make a donation (or a few) to a cultural organization and then simply stop giving? The top three reasons stem from the same issue.

Cultural organizations exist to carry out their missions (which often relate to educating and inspiring visitors) – but they cannot achieve these missions if they are unable keep their doors open and their lights on. Simply put, we need our visitors and donors in order to thrive.

It would be wonderful to think of annual donors as fish that we can keep as trophies and mount on our walls. (As in, we catch them and then they are forever ours!) But donors are actually like fish that we catch and then throw back into the sea – hoping that we can use evolving tactics to catch that same fish year after after. This is especially the case if the fish is a $250-$2,500 donor. (That’s a fancy fish!)

While it’s great when we can “catch” and cultivate a $250-$2,500 donor, we all have observed that not every donor renews their gift on an annual basis. So, what gives? Why do some donors fail to renew their contributions?

Take a look at this chart, provided by IMPACTS Research and informed by the 98,000 person sample that comprises the National Attitudes, Awareness, and Usage Study. This chart represents the responses of previous $250-$2,500 annual donors who did not make another gift to the same visitor-serving organization within the past 24 months.

IMPACTS - Why donors stop making contributions

The reason that we segment by the $250-$2,500 range is because we noticed that the repeat giving rate was much, much, much higher for annual donors at the >$2,500 level.  We posit that this because (a) larger donors don’t have the same financial constraints in terms of affordability factors; (b) they are likely very committed to the organization/cause (as evidenced by their higher level of giving); and (c) higher level donors often receive a higher level of attention from an organization. In other words, they are less likely to slip through the development “cracks.” Of course, this still happens all too often…

Notice anything interesting about the top three responses? 

 

1) The top three reasons why donors drop out of giving are due to relationship management issues

Not being thanked for a previous gift, not being asked to donate again, and lack of communication about the impact of one’s donation all represent massive communication fails. Advances in relationship management technologies are supposed to make communication fails increasingly rare – but, the data suggest that many of us remain our own worst enemies when it comes to retaining donors.

CRM stands for “customer relationship management.” CRM is an organization’s approach to managing interactions with current and future customers (or – in the case of cultural organizations – constituents, visitors, and supporters). It’s a bit of a jargon term for “How your organization connects with people and manages relationships.” And it’s important – especially because giving money can feel very personal and, today, audiences want to support something meaningful. If your organization fails to reassure supporters of the impact of their gift – heck, if your organization fails to thank folks for their gift – than there’s definitely an opportunity to re-evaulate your organization’s CRM strategies and tactics.

The fact that not being thanked for previous gift holds the spot as the leading reason why folks stop giving to an organization feels a bit incongruous with the values of the types of organizations that we are supposed to be. We are doing good. And we want people to do good with us. Do we have an excuse for not even acknowledging precious folks who do exactly what we want them to do? I’m not sure that, “I’m too busy to write every $250 donor or member an email” counts in today’s world…

 

2) Expectations of personalization today are unforgiving toward forgetful organizations

This is a good segue to the next point: Personalization trends are affecting everything. We now live in a 24-hour world of constant connection. Most folks expect responses within one hour on social media, and all of our ads and even our newsfeeds are tailored specifically according to our interests. Personalization trends are altering long-held CRM and even programmatic beliefs within cultural organizations. Indeed, change can come slowly for nonprofits, and if there were only a single urgent (and perhaps obvious) need to adapt personalization into cultural organizations, thanking and communicating with donors may just be it.

Also, keep in mind that “not being asked to donate again” isn’t about collateral and messaging so much as it’s about personalized communication. Reaching out to folks to ask them to give again is an opportunity for connection and personalized interactions. If an organization sees “not asked to donate again” in this data and thinks, “Let’s send that form letter out 10 more times,” then that organization is missing the point.

A donor online is a donor off-line  – and lack of a personal touch just doesn’t cut it anymore.

 

3) Connectivity is king (and losing donors for CRM failures indicates lack of awareness of this reality)

Essentially, the top three reasons why people discontinue giving are because organizations are forgetting that today, connectivity is king. Content is no longer king for many reasons – but one of them is because many staff members “not my job” the word “content.” Similarly, CRM sounds like marketing jargon (because it is), but other departments – and especially fundraising and membership – “not my job” customer and community management today at their own expense. In fact, community and customer management may be just as – if not even more – important for development and membership teams as it is for marketing teams because big donors lead to big donors and word of mouth from customers drives all other avenues of engagement and revenue – including the gate.

 

The good news about these top three responses is that organizations can change them. These challenges to sustained giving may only be issues because they represent “growing pains” as organizations evolve to meet the needs of our super-connected audiences. But realizing the need to evolve and update our outdated systems is critical for change.

While this data may be a tad embarrassing, it’s something that we can control – and that’s great news! Let’s fix our development and membership communication issues and remove the top three barriers to our $250-$2,500 donors continued giving. After all, our donors want the same thing as we do: To make the world a better place.

Our donors are supporting us. Let’s support them back.

 

Like this post? Please check out my YouTube channel for video fast facts! Here are a few related posts from Know Your Own Bone that you might also enjoy:

 

Interested in getting blog posts, tips, and some silly social media geekery periodically delivered in your Facebook newsfeed? Like my Facebook page. Or for more regular sharing of nonprofit marketing information, follow me on Twitter.

Posted on by Colleen Dilenschneider in Community Engagement, Digital Connectivity, Financial Solvency, Fundraising, IMPACTS Data, Myth Busting, Sector Evolution, Trends 6 Comments

Three New Realities for Cultivating Big Donors in the 21st Century (DATA)

Three New Fundraising Realities for Nonprofits in the 21st Century- Know Your Own Bone

Our world has evolved and so has fundraising. It’s time for organizations to embrace these three, new realities for cultivating bigger donors.

Our rapidly evolving, super-connected world has introduced new realities for visitor-serving organizations – particularly with regard to admission and affordable access opportunities. Similarly, the information age has created new opportunities for organizations to more successfully approach fundraising. Maximizing these opportunities requires that organizations embrace many of the challenges currently affecting how nonprofits operate. Fundraising is no exception to this need for evolution.

When organizations consider the evolved role of fundraising, they often seem to think of crowdfunding campaigns aimed to raise money from (often small) donations from a large number of people. No doubt, crowdfunding campaigns can be powerful! (And cultural organizations are benefiting from them, too!) But what about cultivating bigger donors and more directly building long-term affinity for the organization as opposed to a specific project? Well, those realities have shifted a bit as well.  Here are three fundraising realities- contemplative of the fast-paced, connected world in which we now live- that organizations should consider if they want to reach bigger donors:

 

1) Donor targeting can be done more intelligently than ever before (but this is not done often enough by nonprofits)

I’m big on the fact that optimal admission pricing for cultural organizations is a product of data sciences. While not exactly the same, donor targeting is becoming more of a science, too. There’s reason to consider that soon the days of casting the general “Make a donation today!” net to all audiences may be long gone.

Much like certain people profile as likely visitors to cultural organizations more than others, some folks profile as more likely donors than others. Increasingly, organizations can research current and potential donors (or members!) in order to identify the demographic, psychographic, and behavioral attributes that indicate a likely donor. And, while the nuance of this profiling effort will vary by specific organization, extant data reveals terrific insight into the type of people who are currently engaging with cultural organizations as donors. The table below indicates a High-Propensity Donor profile based on member/donors annually contributing at least $500 to a nonprofit, cultural organization (e.g. zoo, aquarium, museum, science center, botanical garden, symphony, theater, etc.) If you’re a cultural organization, your $500+ donors will fit this profile, but the specifics of your organization may lend additional attributes to the mix.

IMPACTS HPV donor profile

Once an organization has an idea of what kind of people are most likely to be their respective high-propensity donors, then the organization can focus on identifying and targeting specific individuals who possess those same attributes and may have an affinity for the organization. And organizations can deploy the same targeting methods for potential donors as cultural organizations do for potential visitors. (Side note: Why don’t more organizations do this beyond the few at the top? From what I can tell, a contributing factor may be the fact that marketing and fundraising are often separate, siloed divisions that tend to consider their own expertise as singular and sacred. How can we do that “we’re better together” thing more often within the same institution?)

Data, analytics, and technologies allow organizations to identify, target, and deliver highly-customized messaging to high-propensity visitors and donors alike. Many smart organizations are already doing this to engage onsite audiences – it’s a natural extension of the same best practices to leverage these resources to support contributed revenue categories. It’s time to invest in fundraising data and intelligence… and then consider this information in the formation, targeting, and deployment of fundraising strategies. Data-informed audience identification and targeting are every bit as useful to development departments as they are for marketing teams.

 

2) Cultivating donors is a time-investment strategy with a new twist

Today, the speed of information sharing and the ease of connectivity allow for potential donors to hear about the work of organizations long before those organizations reach out to potential donors. It also becomes easier to form an opinion about an organization before an organization is aware of it. This means that fundraising departments are less able to “curate” a donor’s pathway of engagement with clear certainty than in a pre-digital era. In the past, a fundraising department could be relatively certain of a donor’s interactions with an organization. Today, a donor may check out an organization on Facebook, share a post, or even “hide” posts from an organization that is not of interest to them. Donor opinions of organizations can be formed earlier than they were in the past because of our increased connectivity.

This is important to note because a major gift (such as one that is seven figures or above) may require decades of careful donor cultivation. Fundraising big bucks is not like an annual advertising campaign – it requires a substantial investment of time. For more robust fundraising success, organizations benefit by investing for a sustained period of time and actively building a relationship on the potential donor’s desired platforms. (As you can see in the chart, high-propensity donors are “super-connected” via the web, so know what you’re doing with donors on social media.)

Many organizations measure giving amounts in years, not decades. It makes sense that we measure progress on an annual basis, but when we don’t look at fundraising over longer periods of time, we tend to promote a culture wherein we focus on this year’s giving and fail to prioritize long-term potential donors. If it takes ten years to cultivate a ten million dollar donor and fundraisers are primarily focused on the current year, then an organization may never receive that ten million dollar donation. Though the instant gratification of today’s society may be making us perpetually impatient, we must remember that fundraising and building meaningful relationships (still) cannot often be rushed. 

 

3) Competition for donor engagement has gone global

Competition for donors can now be more global and intense. Potential donors need not be more involved with or committed to organizations in their backyards. We live in a world where a donor in New York can be cultivated by an organization in Los Angeles. Being “local” matters less- or at least, it doesn’t necessarily make an organization a shoe-in for a potential donor’s support. In the past, it was more difficult to connect with organizations that did not reside in a donor’s community. There may be a bit of a lag in this development for cultural organizations, as many donors appreciate having the ability to attend these institutions. However, as cultural organizations necessarily focus more on their social missions instead of their existence as straightforward attractions, they may see the same fate as other types of nonprofit organizations when it comes to global competition for donors. Being a local organization can still be important to a donor , but in our world of increased connectivity, it isn’t necessary and may matter less than the efficacy of mission execution.

The fact that donor competition has “gone global” means that it’s even more critical for organizations to realize that if a donor is giving in a big way to one organization, he/she often cannot give big in the same way to another. This is true across organizations and causes. Big donations are often zero-sum games. A donor who makes a major gift to one organization has that much less giving wherewithal to donate to another organization. Is it possible that this same donor may reach further into their well of largesse to support your organization with a similar, significant, bit-time gift immediately after giving to another organization? Yes. Is this a good strategy to bank on? No.

Think about your own giving! You probably have a kind of overall, annual giving quota based on what you feel comfortable with and what you can afford. Once you max out, you max out. Again, that’s not true for everyone, but it’s probably not a good idea to build a strategy around an exception. Know that there’s competition, and be contemplative of the donors gifts to other organizations and causes as well. As much as we romanticize big givers, most are not – actually- bottomless pits of never-ending cash.

 

The digital era has changed more on the fundraising front than simply bringing us crowdfunding campaigns and social media communication. It’s increased opportunities for effective donor targeting, altered traditional donor engagement pathways, and increased global competition for big donors.  It’s time to get serious about evolving to more informed methods of fundraising – because if you’re not doing it, then another organization likely is. Let’s take these new realities into account and move forward with the important work of finding and connecting with those who have a passion-match with our mission.

Let’s update our thinking about finding and communicating with people who can help us make the world a better place.

 

Like this post? Here are a few related posts from Know Your Own Bone that you might also enjoy:

 

 Please subscribe over on the right hand column to get KYOB posts delivered right into your email inbox. Interested in getting tips and some silly social media geekery periodically delivered in your Facebook newsfeed? Like my Facebook page. Or for more regular sharing of nonprofit marketing information, follow me on Twitter

Posted on by Colleen Dilenschneider in Community Engagement, Financial Solvency, Fundraising, IMPACTS Data, Sector Evolution, Trends Comments Off on Three New Realities for Cultivating Big Donors in the 21st Century (DATA)

Barriers to Adopting Social Media: Creating Buy-In

(or, Why Your Organization Needs Social Media)

Last week, I identified buy-in as one of the four biggest barriers to change in inspiring institutions to embrace social strategies. And it makes sense that this is a barrier for change; why should an institution invest time and energy into social media if they aren’t aware of the benefits? The good news is that buy-in is a breakable barrier.

Buy-in is important on all levels when transitioning an organization to take on social strategies and online communications. The formula for change addresses important elements in tackling employee and colleague buy-in. However, for many marketing and communications directors with their pulse on social technology, the real obstacle is obtaining buy-in from the head-hanchos. That’s not always easy. In fact, some of the best ideas about social strategies are bound to come from employees working with visitors on the ground because it’s been found that, when it comes to large scale-change (like catching onto the social media revolution), the front-line folks see it first.

Here’s the bottom line: Social media contributes to both of your organization’s bottom lines. That is, (1) the economic needs of the institution, and (2) the social mission to inspire and educate.

 

1) Social media helps keep the lights on in a big way:

  1. Word of mouth marketing through social media and earned media are worth more than paid advertising efforts. Marketers may be familiar with the Bass Model. This model is based upon the coefficient of innovation (paid advertising and marketing) and the coefficient of imitation (word of mouth marketing, including social and earned media). According to the model, the initial sale of something depends on the number of people interested in the product (innovation). However, later sales are dependent upon the number of folks drawn to the product after seeing their friends and acquaintances use it (imitation). In the theory, innovation (q) has a value that is often less than 0.01, while imitation (p) has been found to have a value between 0.3 and 0.5. In other words, word of mouth marketing is over ten times more important than paid advertising in terms of driving sales. 
  2.  

  3. Social media contributes to your brand’s reputation, and reputation is a main driver of attendance. Studies have shown that online communities are increasingly important for brand management and are often more important than your website. You likely wouldn’t think of  taking down your website because it’s one of the best ways for potential visitors to learn about the organization. However, social media and online interactions are stealing this spotlight, and it’s worth investing time and money in these social endeavours. Moreover, social media enhances reputation because it increases the perceived value of a product.
  4.  

Social media increases your word-of-mouth reputation, garnering attention and inspiring visitation. Thus, social media increases attendance (and donations). It does this in two, important and related ways:

  • By creating connections that are unique to your institution. Social media provides the opportunity to create a personality for the organization and connect to individuals on a personal level. Because social media platforms are (should be!) always in seemingly-transparent dialogue with fans and followers, these potential visitors have constant sneak peeks into operations. Social media allows folks to feel like insiders who are personally connected to museum happenings. This makes your institution unique to individuals and not “just another visitor-serving organization.” Instead of just a place to see a generic X (say, an original manuscript). It makes that generic X meaningful, and your museum is the only place in which that particular entity exists.
  • By securing earned media. Earned media is a gold star in the world of word of mouth marketing. Earned media is media that your institution does not pay for. For instance, a mommy blogger writing a blog post about her terrific day at the museum is earned media. It is a high-propensity visitor sharing his/her experiences with their network, who are also likely to be the kind of high-propensity visitors that your organization is targeting. In the mommy blogger example, this free agent is spreading the museum’s message on her blog, and her blog is likely read by other mommy bloggers, increasing the odds of securing visitors. But not all earned media is organic and spread by visitors. Social media also helps put operations in front of members of the media who may contribute to earned media by writing or reporting about the organization. Here’s a related little tip: thank your free evangelists.

By these same processes, social media aids in building and igniting donor relationships. As every fundraiser knows, building personal connections to an organization is critical for securing donations, and social media helps do just that. On social platforms, dialogue with an organization continues long after visits take place. Social media provides an opportunity to engage potential donors and inspire ongoing connections. Once they’ve contributed, social media helps keep donors and members posted on an organization’s great works, ensuring them that funds are used wisely and that the organization is continuing to cultivate community involvement.

 

2) Achieving the organization’s mission of educating and inspiring communities

Social media doesn’t just help keep the lights on; it helps organizations fulfill their missions. Informal learning environments often have the mission of educating and inspiring communities. Social media helps by providing an opportunity to:

  • EducateThese YouTube videos are creating a one-of-a-kind connection with the institution (and the people working there) that will end up elevating reputation. In real-time, they are presenting engaging content in a fun and informational way.
  • Transcend location and taking the mission home– Traditionally, we think of museums and cultural centers as places that are exculsively “place-based.” However, with the development of social media and creative engagement, museums are more than just buildings full of objects… They are accessible everywhere. You can learn from an organization and be inspired through computers, mobile phones, ipads, and podcasts. With the focus taken off of location, audiences can integrate organizations easily into their everyday lives, keeping the institution “top-of-mind” and building brand trust and transparency.
  • Reach new audiences– Generation Y has terrific engagement potential, and this audiences is most easily accessed through social media. Moreover, they are accessed on a personal level through social media. To say that having a social strategy will put you ahead of the game with this demographic (and future generations), however, is a lie. Social media is critical for reaching folks of the future—and folks right now. And if you’re not doing it well (or trying to), then you’re already outta the game. As a side, social media doesn’t just appeal to Generation Y. Know a few folks who say that they aren’t involved with social media because of their older age? Studies show that they are lying; one in four Americans over the age of 65 have an account on a social media platform.

 

Social media is critical to a visitor-serving organization’s everyday operations, as well as its long-term goals. It will be increasingly harder to educate, inspire, fundraise, and even keep the lights on without embracing social media and related social strategies.

What would you add to this? What are other but-in inspiring reasons why innovative social media is an organizational necessity? Please share your input below.

Posted on by Colleen Dilenschneider in Community Engagement, Digital Connectivity, Trends 2 Comments