[NPFX Ep. 13] Nonprofit Fundraising at Year-End: 4 Things to Do

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Welcome to The Nonprofit Fundraising Exchange, a podcast from IPM Advancement. Our mission is to help you raise more money so you can make the world a better place.

Today’s topic: Nonprofit Fundraising at Year-End — 4 Things to Do

In this episode, we discuss:

  • Why it’s still important to have a strong CYE campaign, even during the pandemic
  • Specific language you should include in your appeals to improve your end-of-year fundraising
  • The most effective way to present a matching donor offer
  • The value of defining clear goals (and specific examples for different donor file sizes)
  • How episodic giving and rapid response fundraising impact your CYE campaign
  • Why presenting a strong donor value proposition is so important, especially at year-end

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For most nonprofits, Calendar Year End fundraising is a crucial part of their annual fund program. For some, CYE donations account for the majority of their fundraising dollars for the entire year. In today’s podcast episode, we will review four of our favorite strategies to help our clients beat their annual fundraising goals.

Let’s meet our panel.

Diana: Hi, I’m Diana Gartner, and I am the Vice President of Client Development at IPM.

Samantha: This is Samantha Timlick, and I am the Vice President of Client Services at IPM.

Russ: And this is Russ Phaneuf, I am the Managing Director and Chief Strategist with IPM.

Curtis: Thank you all for joining me today for what is the final episode of our podcast for 2020.

Russ: Woohoo!

Curtis: Yeah, we’ve got lots of great content planned for 2021. But today, we’ll be talking about some of the best fundraising strategies that nonprofits can use to make sure they end the year as strongly as possible. Before we get to recommendations, I’d like to set the stage by sharing news that came out in October from the Fundraising Effectiveness Project’s Second Quarter Fundraising Report for 2020. Now although Q1 giving was down this year from 2019, giving for the entire first half of 2020 — that’s Q1 plus Q2 — was actually up 7.5% compared to the first half of 2019. Gifts across all donation levels went up, but the under $250 segment grew the most, by nearly 20%. So the good news is that donors seem to have responded pretty darn generously in the first 3-4 months of the pandemic. That said, we know that COVID-19 has caused revenue to be down for some nonprofits, especially membership-based organizations. Also, as the infection numbers continue to rise, we’re already seeing a new round of shutdowns in hotspots across the country. No one knows how long this will last or how it will affect long-term giving trends. So my first question for the panel is: What are you seeing with our clients and what does it mean for CYE fundraising?


The Impact of COVID-19 on Annual Fundraising

Russ: Yes. So the impact of COVID that we’ve seen with clients and what we’re seeing in the industry, it really varies from nonprofit to nonprofit, it’s clear that membership based organizations, nonprofits that really rely on that experiential delivery, to connect with their audiences have been hardest hit. But, you know, COVID, really, the those people have found some ways to work around it. It’s clear, they’re not operating at 100% in terms of revenue, but it has highlighted the need for a really strong case for support. So people who have a strong case for support a strong value proposition, those are the organizations that are that are weathering this. But as we look at calendar year and giving, I think it’s important that, you know, maybe it’s time to put your mission first, you know, have your theme of your calendar year and mailing. So, you know, unless you’re on the frontlines in a health care organization or human services. If you’re directly tied to COVID, and you can authentically make that connection and tie it into a strong year end message. Go ahead and do that. I think for almost everybody else. It’s an important time to highlight your case for support, make sure that’s really strong, really airtight, and have a very strong donor value proposition. And in maybe put COVID on the back burner — you can use COVID as color for that and make sure that you’re not completely ignoring it. But really focus on the work and get people focused on what you’re doing out in the in the community.


Engage Donors with an End-of-Year Appeal

Curtis: So that leads us nicely into our first recommendation: Make sure you send an end of the year appeal. In other words, assume that your donors still want to support your mission even during this pandemic.

Diana: Yeah, I mean, and I’ll take this one, Curtis, I think, you know, as people have been a little bit more reserved as to what do they do in terms of fundraising during a pandemic, starting to warm up to the concept that they should continue to, you know, charge forward, and and that with no exception means the calendar year end, calendar year end is probably for most organizations, the strongest quarter in which organizations receive the most funding as it ties into year end giving and acknowledging new goals into the new year. It’s also for particularly for some of my clients, when we discuss forecasting and projections, it’s an excellent opportunity to make up for any loss revenue from the previous quarters. And it really allows the organization to readjust and realign themselves with what’s a more realistic fundraising goal, as you close out the calendar year. And having said that, it’s a really great opportunity to tap into your arsenal of lapsed donors, folks who have not connected with you, throughout the previous year, really exciting opportunity to re energize and bring them back to improve on some of those attrition rates, particularly for those who in some instances have marked their communication preferences to only being contacted once or even twice a year. This is the you know, kind of all in campaign that you want to reengage and reactivate that base.

Samantha: I totally agree with everything Diana said there. And I’ll just add that another group to think about at year end, would be your monthly donors, it’s a really great opportunity to acknowledge all the support they’ve given you over the year, and then ask them for an additional gift to close out the year, particularly if you are short of revenue, or you have a you know, a specific goal that you’re trying to reach. And the only other tip I will add here is we have a lot of discussions with clients about whether or not to include tax deductible when they’re talking about giving in their general appeals. And you know, some do some don’t it’s a it’s a preference thing, but we have specifically tested it for CYE giving and if you are only going to include that language on occasion, and of the years, the best time to include it. So whether it’s in the PS, or call out on the reply form, someplace where folks are sure to see it, I would encourage you to to include that as well.

Russ: And just to add on to what Diana and Samantha were talking about, I think both of those takes are spot on. And you know for most nonprofits see why he represents anywhere from maybe a quarter to a half of their individual giving fundraising revenue for the year. So it’s a super important time of year for for basically every organization that’s out there actively fundraising this year with Giving Tuesday falling at the beginning of December. It’s kind of the de facto starting gun for CYE fundraising and we’re even doing fundraising you know, kind of counting and counting down before Giving Tuesday. So there’s a solid month, maybe even up to six weeks where where you want to basically be in an active year end campaign. And I think that this year, especially anybody who’s been kind of on the sidelines during COVID, and even people that gave early on when there was clearly a need, that organizations were touting, I think you’re going to have a great opportunity to get people who may have just, you know, been slow to respond in the earlier part of the year. But also, it’s a good opportunity to get people to give a second gift this year.


How to Use Matching Donations to Inspire CYE Giving

Curtis: Yeah, that’s a really good point. And speaking of gifts, this next recommendation is one of my favorites because it can be so powerful. Number two: Get a matching donor.

Samantha: Yeah, matching donor is really great. For the end of the year, we have seen an excellent response. And as we have a be tested it as well. And appeals that include a matching donor often have a higher response rate than those that don’t. So the end of the year is a great time to have a matching donor. And really any match is better than no match. But the best match is one where you can get very specific. So you have a specific individual who’s willing to put their name and their face on it. Ideally, if it’s somebody who would be well known by your donors, that’s even better. But simply being able to name the individual or entity who is giving, who’s matching gifts, as opposed to saying, you know, an anonymous donor, even you know, a board match can be very effective here. So I would encourage you to get as specific as possible in terms of being able to share who is doing the matching, and what your goal is, and then always remembering to follow up on that goal to sort of close the loop with your donors.

Russ: And I think to add on to that, it’s important to make sure that if you do present a match to donors and prospects, you tie it to a deadline, you want to use that match to generate a sense of urgency. And typically, you know, there’s lots of timelines you could look at, you could try it longer than 48 hours. But I think the best results that we see are matches that are delivered by email, maybe you can reinforce them on social media, in, you know, in large part, we don’t want to make the match longer than maybe 48 hours when you’re dealing with the online kind of digital platforms.

Diana: And I would just, I would echo both Samantha and Russ and saying that, you know, we have some pretty specific experience, running match campaigns with calendar year end for a couple of our clients, one in which was anonymous, and another was named. And the named match outperformed the anonymous snip match by various donors. So we’re talking not just the zero to 12 months before we were looking at even extended long lapse donors who came back as a result of a named match campaign versus a non named match campaign. And I would also reiterate, what Russ said is that we don’t necessarily want to drag out the match opportunity because it sort of loses its essence of urgency. You know, it’s really sweetens the deal when you run a quote, unquote, limited time or a limited offer, that helps incentivize donors to give even more. And by running it for a limited time on various platforms, including on your website, and having it as somewhat of a pop up or window, as well as in the digital space. You can do social retargeting campaigns, by putting that specific timeline really does give this sort of nice bump and trajectory in those closing days before the calendar year end deadline.


Using Urgency and Integration for a Coordinated Campaign

Curtis: Mm, interesting. So regarding this idea of urgency, we’ve all seen those email appeals that use a countdown, you know, 1 week left, just 48 hours left to make your year-end donation. Is that a good way to generate urgency?

Russ: Again, I think what we’re looking for here is to generate a an authentic sense of urgency and, you know, if you can have, number one, have a appeal messaging that’s goal based, right don’t just make it this general kind of black hole that people throwing money into really set some goals, set some meaningful goals for your campaign for your year and campaign. And keep people updated on that maybe if you can, you know, have a live update or a thermometer or some kind of regular update on how you’re doing at least daily, that’s a, that’s a good practice to do. That sense of urgency can come through in a lot of different ways. You know, one way that we work with clients is to theme a series, so you’ll have more than one email, you’ll have multiple emails go out, maybe you do it across multiple channels, you can integrate it with direct mail, social media, and maybe even get your corporate communications side of the house involved with PR, any way that you can kind of present this unified front of communications, that this is really you know, your last ditch kind of micro campaign for the end of the year. And the better constructed that campaign is in terms of just making sure that everything is working in lockstep, you know, look at it, like gears, just mesh together, that that are driving this, the better your results will be at the end of the year.

Diana: And I just I would agree with that. And it’s really beautiful to see when the various departments come together, even people outside of advancement and development, working together on a singular goal. And, and having that sort of unified block step that that Russ was talking about, come at play, where everyone is singing the same song and dancing, the same dance, because those are the efforts that are way more successful than the efforts that are a little bit more in a silo versus cohesion.


Message Frequently to Your Donors

Russ: One other thing I want to add to that, one of the things that we do see people do is, you know, I’m Giving Tuesday, they might come out with something that’s thematic, it’s kind of catchy, it’s well encapsulated. But then they just leave it for like three or four weeks and don’t come back to it until the very end of the year. I think that’s a missed opportunity for a lot of organizations. There’s a lot of information coming to people right now. And so this sense of like, well, in my messaging too much, I would err on the on the higher side of how many times you’re getting out to people. You know, it’s kind of this awful thing that we all have to be exposed to this kind of piling on of too much information and too many messages. But in this environment, you know, your mission is really important, it’s really important to connect with people and engage them in this last part of the year. And you know, when you spread out your messages, and you kind of mix them in amongst all those other messages, it’s not as thick is, as you know, you think it is, in terms of, you know, your own organization getting out there into people’s attention spans.

Samantha: I agree. And, you know, I think this is something we’ve spoken about on other podcasts before, but we know that the two most important components of sort of moving the needle with your donors, his strengths and frequency of messaging. So you want to make sure that your message is strong and cohesive. You also want to make sure that you’re getting out there and in front of people a lot, especially when it’s it’s such a busy environment right now.


Create a Clear Plan with Specific Goals

Curtis: Russ, you brought up this idea of goal-based messaging. Which would ideally come from a nonprofit having clear internal goals in the first place. And that’s a great setup for our next recommendation: Create a clear plan with specific goals for 2021. Now Samantha, you and I recently had an interesting conversation. We were talking about different levels of goals for building a nonprofit’s annual fund donor file. Could you maybe recap that for listeners as an example of what we mean when we say “specific” goals and why that’s important?

Samantha: you may have heard, if you listen to our first podcast about his annual giving dead, you know that I am a big fan of the annual fund. So I like to recommend that going into the new year, whether you’re on a fiscal year or a calendar year, you really think big picture about what you’re trying to do. And that goes beyond the annual fund. We’re talking looking at your strategic plan if you have one, identifying the big goals that you want to meet out of your fundraising plan. But if we’re talking specifically about the annual fund, this is a really great opportunity to pull back and look at, for instance, your the size of your donor file and set a goal or a threshold that you would like to meet. We know that if you were working with smaller file sizes you are tending to pay more specifically when it comes to direct mail, you pay more per piece. And it can be really tough to have a program net positive. When you are finding yourself with a small file, you have to invest more in re engaging those lapse donors. And now you’re paying more price per piece. And it can be really hard to get that get that program running at a net profit. So it can, you know, do its job of feeding the pipeline of mid and major donors, but also do it in a sustained way where you’re not paying more than you’re bringing in to run it so if you were looking at a file size, it’s less than one 500 I would suggest that you consider doubling that, you know, what would it take to get to 5000, because at that point, you’re going to be saving more money in your production. And you’re going to be setting yourself up for better prospecting, you can get into co ops and more list exchanges, so that you’re bringing donors on at a lower price point at 10,000, or 25,000. donor files, you’re going to see a significant drop in your direct mail production. So if you’re already at five, maybe your next goal is 10. Or maybe you’re ready to look at what would it take to reach that 25,000 point, when you start getting into the higher figures, like 50,000 donors, or 100,000 donors, and I’m talking active file that you are mailing consistently, so maybe not necessarily zero to 24. But when you’re getting into those higher and higher levels of donor file, you can generally afford to mail much more last into your file at a lower cost, allowing you to require lapsed donors at a cheaper rate than you would pay to bring on a brand new donor. So it’s really, I guess, my point here is going back to, this is the time to step back and look big picture of what you were trying to accomplish. And then put in place, even the beginning steps to make that happen. You know, ideally, you build it all the way out. But maybe you just need a baseline to get yourself rolling into the new year. And get everybody on the same page with what you’re trying to accomplish there.

Diana: And I would follow that up because right, it’s like you hear this saying, you make plans and God laughs and the importance of that, too, it means that you must constantly adjust. You know, the best laid plans are set out well in advance. But as you as you go along those plans, things tend to change budgets sort of change and communication strategies change. all that to say is the importance of meeting, you know, frequently with the various departments on what those plans are, and what you need from them to be on board with your plans, asking for help across the various departments, whether it’s comms operations, finance, really to focus on what the collaborative goal is, because at the end of the day, as fundraising and development experts, it’s your job to ensure that the lights are still on. And so it is so critical to be able to connect and check in frequently with those various departments to ensure that they’re aligned with what your organizational goals are, and how they can help.


The New Annual Giving: Episodic Fundraising

Russ: And I’d like to speak to something Sam mentioned, you know, when we talk to organizations about building their donor files, you know, some small organizations might only have two or 3000 people on the file that are that are actively engaging with that nonprofit. And I think it’s important for those smaller organization in big organizations, for that matter, to think about the new annual giving, you know, as we discussed in our white paper in our previous podcast about whether annual giving is dead. You know, donors aren’t necessarily on a 12 months cycle, especially nowadays, when everything is just so accelerated. So it’s really important to think about annual giving kind of two levels. The first is kind of your baseline level where you’re going to be running a consistent program, you’re going to have maybe 3456 mailings a year. And you’re going to you know, reinforce those mailings across channels on email and maybe do some targeted advertising to generate some prospects. But that’s your baseline, you also want to set yourself up to leverage any episodic giving opportunities. And that’s really, really important nowadays, you know, your organization might only get one, maybe two chances a year, to really leverage what’s going on in current events, what’s going on in the world, and convert interested people into your mission and then convert them into supporters, you might only get them onboard as warm prospects, you might be able to get someone to maybe sign a petition or somehow interact with your organization that isn’t about giving money, but that’s okay. It’s okay to be generating warm prospects and building your internal list of prospects. So that when the time comes, where everything aligns where you can deliver them a really effective fundraising message, you’re going to be much more likely to convert those people. You know, back in the day when we used to look at building an organization, it was all about, you know, renting lists and getting people on board through direct mail prospecting, and you know, you’re looking at really, really low levels of of engagement on a lot of that. And that’s that’s still the case, it’s still very difficult, very expensive to get people on board, just out of the blue, you know, it’s it’s it’s akin to having people respond to a cold call, basically, they might not know, your, your, your work, they might not know your organization. But what you want to look for, again, you know, you have your program just cruising along in your baseline fundraising. And then if you can look for those episodic giving opportunities, that’s the way to really get a lot of people at once interested in your organization and convert them into supporters.

Samantha: Just to piggyback on that, Russ. That brings up a very good point, which I also love to talk about, which is donor stewardship. So when you are investing your time and your money and your organization’s resources and bringing on new donors, don’t let it be a one and done transaction as much as possible. Once they’re on make sure you’re communicating with them, you’re providing value, and encouraging them to continue giving, so that you can continue to realize the value that that donor is bringing to your organization.

Hi, this is Curtis from IPM Advancement jumping in for a moment. If you’re a nonprofit professional who has questions about your program, or maybe you feel like you’ve taken your advocacy, fundraising, or membership effort as far as you can and you need some fresh ideas, then we have a special offer for you today.

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Just enter a few details, and an IPM team member will contact you to follow up. It’s that easy. That website again is ipmadvancement.com/free. Thanks for listening, and we hope to talk to you soon. Now let’s return to the Q&A.

The Importance of a Strong Donor/Member Value Proposition

Curtis: Moving on to our fourth and final recommendation: Revisit your donor value proposition or if you’re a membership based organization, your member value proposition.

Russ: Yes, so let’s back it up even more to what drives people to give. So engagement in philanthropy really falls into two categories. You have intrinsic drivers and the extrinsic drivers. So intrinsic drivers are kind of the touchy feely, you know, the warm fuzzies you get by supporting a cause you love. And they are generally kind of what everybody thinks of in ideal philanthropy. But they actually don’t drive giving as much as you would think. It’s it’s much more likely that people are driven by extrinsic drivers. And those are things that we typically associate with externship efforts, your case for support. And what we’re talking about here, which is a donor or a member value proposition. And so you know, when you think about this donor member, value proposition, you really want to put yourself in the shoes of the donor, you know, take it from their point of view, it’s a very donor centric way of looking at the experience of engagement with your organization. And so you want to consider the case for support, you know, think about your donor promises, what are you promising that you’re going to do with their contributions? What are they getting in return? Think about your donor benefits? Do your stewardship efforts really live up to the hype that you’ve kind of set yourself up for with these folks? In and I would say that it’s a good time, you know, we’re talking about CYE fundraising calendar year end, it’s a good time to kind of take stock of like, you know, what is the experience that someone’s going to have, if they give to us, before calendar year end, you know, go through step by step and figure out that donor journey, so that you understand from their point of view, some of that value that you’re providing, and it’s a great time to just go through that point by point and see where your weaknesses are, you know, Are there areas where you can improve that experience for donors, to maximize retention, to maximize donor loyalty and member loyalty? This is an extremely important time to do this. And just in general, it’s so important to as Samantha alluded to, to maximize donor retention, because it’s much, much cheaper to keep a donor than to get a brand new donor.

Diana: And I would like to piggyback on this and just take take a breath here, right? Because out of all the advice that we’re giving today with respect to calendar year n, this is probably, in my opinion, the most valuable. And the reason being is what can what has a tendency to happen with calendar year and giving is that like Giving Tuesday, it’s incredibly noisy and incredibly crowded. And what typically happens where some organizations make their biggest mistake, is they start fundraising around Oh, it’s the end of the year, give us money, and you know, set us up for success in the new year. And these are all great things. attitudes, right? But the fact of the matter is, they’re receiving tons of donor fundraising communications. And so what is going to compel a donor to give to your cause needs to be unique, it needs to break through that clutter. And one way to do that is to really go back to what do I get out of this? What is that donor value proposition, so that folks are understand why they’re motivated in the first place to support your organization. So everything that we leave you with today, this is number one. And it’s not just good housekeeping for calendar year, ed. But it’s good housekeeping for fundraising in general, as you embark on your annual fund.

Samantha: I couldn’t agree more. And I think the other thing to keep in mind here is, when you are revisiting your donor value proposition, be very careful to be able to bring it all together into a very simple statement that everyone in your organization can articulate. And ideally that your donor can articulate. So they should be able to receive your content and know, you know, exactly what it is that they’re giving to and why and how it’s making a difference and a very clear and simple way.


Takeaway Advice for Nonprofits

Curtis: Well I think we’ve covered the four recommendations we wanted to make today. But before I let you all go, I’d like to ask you for some listener takeaways. So what’s something that’s come up today, or maybe hasn’t come up yet, that you really want to make sure listeners take away from this episode?

Russ: So I’ll go first on that. And I want to point people back to a blog post that I did. Right after the 2016 election. The blog post was titled, “Post-2016 Election Tips: Surviving Trump’s America.” When you look at a fundraising program, it’s actually a healthy thing to have a “be prepared” mindset when you’re thinking about your program, and, you know, calendar, your end, fundraising is a good time to put that into use. And to think about it, as you’re thinking about next year. And what you’re going to do differently, it’s really important to just take some time to sit down with a blank piece of paper, and just workshop it out, just just think of all the things that could happen. And all the various scenarios in think of them both from your organization’s point of view, but also think of them from your donors point of view. And I think it’s really important to try to get ahead of those things. If you can, in in your best effort possible. think through what might happen. Think about what your responses to that would be, and plan for it, you know, put and put some strategies in place so that you can leverage those things as opportunities instead of having to respond to them as crises. And so that would be my takeaway for folks is to, you know, use this time, but also looking into 2021. Use this time to plan your program. But remember that annual givings change, you know, we want to keep a steady, consistent program, that’s kind of your baseline all year long. keep that going. But think about episodic giving, and how you might be able to leverage those opportunities for your particular organization next year.

Curtis: Thank you, Russ. Diana.

Diana: That’s a pretty great point for us. I would I would say, and I’d go back to what I said earlier, this is the takeaway. Think about what your donor proposition is, what’s that donor value proposition and be authentic and laying out that case for support donors can see right through the Misha gas. So be very, very authentic, and find ways to remind them why they why they support your cause in the first place through content that’s going to cut through the noise.

Samantha: And remember that it’s not too late. We talked a lot about planning and sort of how you can set yourself up for success here at the end of the year. But don’t let great be the enemy of the So if you’re short on time, money, resources, or possibly all three, it is time to ruthlessly prioritize your goals. Identify the opportunities for your organization that are going to give you the highest return based on what you can afford to invest and start moving on them. And then you can start rolling into the lower priorities as you have time, and resources and money. Make sure you keep everyone on the same page. Diana talked about that, getting all of your departments to talk to each other, and your people to talk to each other so that you all know what you’re working on. And you can be pushing in the same direction. It is not great to be sailing the ship while you’re building it. But it is better than never leaving the port. So go fundraise is not too late.

Curtis: Yes, go fundraise, it’s not too late, I love it.

So that concludes our conversation on Calendar Year-End Fundraising, and our last podcast episode of 2020. Thanks to the panel for sharing their insights and expertise. And thank you, our listeners, who have made our first year of podcasting so successful. If there’s any way we can help your fundraising, advocacy, or membership programs, please contact us at ipmadvancement.com. We also invite you to explore our free library of whitepapers, infographics, and blog articles in the Resources section of the IPM website. That address is ipmadvancement.com/resources.

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Thanks again for listening, have a great rest of your year, happy holidays to you and your loved ones, and we’ll see you in 2021.


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