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COVID-19 Crisis Alters Tactics for Fundraising Success

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In a previous post, AccuList joined other experts to stress the importance of nonprofit clients staying the course on fundraising despite the coronavirus crisis altering the social and economic landscape. But fundraising tactics will need to alter to navigate that landscape, of course. Recent fundraising pro articles highlight some smart ways to approach existing and potential donors during the crisis.

Adapt by Expanding Digital Communications & Events

In a recent NonProfit PRO post, for example, C.J. Orr, vice president, and Katie Nichols, senior associate director, of the Orr Group fundraising agency, put together some quick tactic shifts for fundraisers, especially those that had been counting on events to tap donors. First of all, don’t panic and cancel events, they advise, but reschedule or repurpose. If an event can be postponed, a nonprofit may be able to transfer tickets/table buyers to the future event instead of giving or issuing a refund, and can add touchpoints with donors and prospects along the way. Or, the fundraiser can switch to a digital event, perhaps with livestreaming. Indeed, this is an opportunity to go digital in multiple targeted ways, they suggest, starting with more social media ads, paid search ads and SEO efforts aimed at the target audience. For example, now is a good time for a digital forum, such as a virtual “fireside-chat” with a subject matter expert discussing COVID-19 and its impact on the mission and incorporating a fundraising ask. Or the nonprofit can tap top-of-mind concerns and promote itself as a thought leader with an article on the COVID-19 impact posted on social media as well as e-mailed to donors and prospects. Plus, remember that over 80% use smart phones, so that mobile-optimized promotion is essential. And don’t forget old-school, nondigital communications, such as direct mail and phone calls. The authors suggest building out a phone-call list of top funders, with strategic talking points, for example.

Seize the Opportunity to Increase & Improve Social Media Efforts

Michael Wasserman, CEO of the stream fundraising platform Tiltify, used another NonProfit PRO post to stress how the current crisis should push fundraisers to boost use of social media as people naturally turn to social platforms to replace the lack of in-person interaction. The potential audience is huge: almost 80% of the population uses social media, with Facebook and YouTube having over 2 billion users per platform. Even newer sites like TikTok boast 500 million, Discord gets 250 million, and Twitch attracts 15 million daily visitors. Note that the Facebook Fundraisers tool has already raised over $2 billion, Wasserman points out, while even newcomer Twitch has raised over $115 million for various charities. So charities that still use elementary fundraising pages with a simple donate button, some text and an image are missing big opportunities to compete for attention in a space that the crisis is making even more crowded. He urges nonprofits to focus more on enticing content, such as video, which can leverage YouTube, the No. 2 search engine in the world with 2 billion registered users. Nonprofits should also consider using social livestreaming events for fundraising. An effort of a few hours can generate more than a campaign of months, he notes, citing the example of a group that raised in a week the amount it costs to run St. Jude Children’s Research Hospital for a day, which is about $2.7 million. As an example of how to gin up donations, he imagines livestreaming a music celebrity connecting and interacting with fans online, perhaps asking people to donate in order to choose songs or get signed merchandise giveaways.

Social Distancing Doesn’t Stop Creative Outreach to Major Donors

What about the impact of “social distancing” on the traditionally face-to-face connections that engage major donors? Suzanne Hilser-Wiles, president of philanthropic consulting firm Grenzebach, Glier and Associates, offers some tips in a recent piece in The Chronicle of Philanthropy. Start by showing you care and reach out quickly to ask how the donor is faring and discuss how the nonprofit is responding to the crisis. Enlist top executives to communicate with major donors about plans for moving forward, with consideration for the appropriate communication channel; for example, e-mail can quickly provide a direct but formal assurance, while social-media platforms offer a more human touch. Ad hoc “investor calls” may be appropriate for smaller groups of donors. For major donors and prospects, consider developing a specific message with a more in-depth perspective and request for their input. Highlight the nonprofit’s expertise and how gifts support efforts relevant to the COVID-19 crisis. A museum might share national media interviews with staff members, or an academic medical center might point to resources on the university’s coronavirus webpage, for example. And don’t abandon events; get creative with virtual format substitutes, such as a conference call or webinar to let donors stuck at home see a presentation about a gift opportunity. For example, instead of a brunch with a scholarship recipient, donors can have a phone or video call with the student, she points out.

 

Most Nonprofits Upbeat on 2019 Fundraising Growth

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The most recent survey of nonprofits and donors by the Nonprofit Research Collaborative (NRC), a coalition of professional fundraising associations, finds that 60% of respondents expect to raise more money this year than they did in 2018! That’s encouraging news for AccuList’s many fundraising clients as they head into their key year-end giving campaigns.

Tax Law Impact Not As Averse As Expected

Many fundraisers feared the new tax law would undercut giving, but the survey found that only a 17% minority reported a negative impact from the tax changes, and only 16% of donors said they would change the amount or method of their gift this year because of changes to the tax law. It is true that certain continuing tax trends prove challenging for fundraisers, such as bundling or bunching, in which donors provide multiyear support but give a large donation for an itemized filing in just one tax year and then skip contributions in the following year or years. Since most nonprofits rely heavily on year-end gifts from loyal donors, the bunching is problematic. Still, only 30% of nonprofit respondents reported that some donors were bundling.

Feared Donation Drop Doesn’t Materialize

Based on various reports of reduced giving, many nonprofits were concerned about fundraising growth, yet the NRC online survey of individual donors in March of this year found 56% said they gave the same amount in 2018 as in 2017, 33% gave more, and only 11% gave less. As a result, 63% of fundraisers said their charities did raise more money in 2018 than the previous year. Overall, 73% said they met their 2018 fundraising goals. It’s no wonder most fundraisers (60%) are confident they will raise even more in 2019. Not all charities participated equally in 2018 growth, of course. Charities with budgets of $3 million to $49 million reported the most fundraising increases in 2018 over 2017 levels. And environmental and animal charities in particular were most likely to meet 2018 fundraising goals.

Multi-Channel, Multi-Contact Strategy Remains Key

Melissa Brown, author of the report and manager of the NRC, stresses that the upbeat forecast for fundraising needs to be undergirded by targeted, relevant, engaging direct mail and e-mail contacts. While most channels remained essentially flat in 2018 in terms of dollars raised compared with prior years, direct mail fundraising growth dipped slightly, with 41% of charity respondents saying they saw growth in fundraising through direct mail compared with 50% in 2017. Overall, the survey supports both the need for a multi-channel fundraising strategy and frequent contacts with donors. On average, after the first gift, organizations send about 3 more appeals by mail, an average of 4 appeals by e-mail, and invitations to events, including stewardship/recognition activities. However, both direct mail and digital communications are most effective when they go beyond dollar demands to provide meaningful connections with the mission and explanation of the impact of a gift, per the survey “One of the biggest reasons people stop giving is they feel like they’re becoming ATMs instead of being partners,” Brown warns. See the full survey 

E-mail, Social Lead Nonprofit Event Marketing

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AccuList’s direct marketing services support both event marketers and nonprofit marketers, and, of course, there’s an overlap since many nonprofits use events for fundraising. So we try to keep up with what works in not-for-profit show business, and a recent survey of 500 nonprofits by Eventbrite, a leading event management and ticketing services provider, offers some interesting benchmarks.

No One-Size-Fits-All for Nonprofit Events

The “2019 Eventbrite Pulse Report” found that since nonprofits have multiple purposes, they host multiple event formats besides those geared exclusively to fundraising; in fact, just 32% reported hosting galas and fundraisers aimed at tapping donors. Instead, events for cause, community and educational promotion were cited by 78%, networking events by 37%, training and workshops by 33%, food and drink events by 31%, and arts and entertainment events at the tail end with 22%. Of course, revenue production was still seen as a key to success regardless of event goal.

Ticket Sales Swing Between Big and Bust

And when it comes to event revenue, ticket sales, sponsorships and grants/donations were the top sources reported. However, while ticket sales were seen as a key revenue driver by most (75%), the portion of revenue delivered by ticketing varied widely—from 80%-100% of event revenue for just 15% to less than 20% of revenue for a larger quarter of those surveyed. This underscores the need for both diverse revenue sources and more effective marketing to deliver attendance.

E-mail and Social Media Lead Marketing Efforts

Nonprofit event organizers told Eventbrite that their most effective marketing tactics were e-mail (34%); word-of-mouth and referrals (24%); and social media marketing (22%). In the social media arena, nonprofits relied most on organic posts (23%), paid Facebook ads, and video (9%). Among the tactics deemed less effective in the survey were third-party listings, search engine optimization (SEO), and display ads.

Audience Building Is a Top 2019 Challenge

The perennial “insufficient budget” was seen as a 2019 issue by 45% of nonprofit event planners and securing sponsorships as a problem by 46%, but the top 2019 challenge, cited by 73%, was reaching new attendees. And that is the kind of targeted marketing issue that AccuList can help address! For more benchmark data, see the post on the Eventbrite report.

Arts Fundraising Study: Invest to Reap More

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Any of AccuList’s performing arts marketing and museum and zoo marketing clients that fret over investing in fundraising efforts in 2019 should take a look at the recently released “DataArts Fundraising Report” from Southern Methodist University. Basically, the report concludes, arts and cultural organizations that make smart investments in fundraising reap more dollars, with individual donors a “vital source” of contributions.

Mixed ROI by Sector, Higher Individual Donor Dollars

Looking at fundraising by 2,421 organizations across 11 different arts and cultural sectors between 2014 and 2017, the study found good news for many marketers even though the overall ROI on every dollar spent on fundraising declined from $8.80 in 2014 to $8.56 in 2017. This reflected issues in select sectors. Seven sectors—including performing arts companies, orchestras and operas—actually saw an increase in return on fundraising over the period. The biggest ROI gain, adjusting for inflation, was a 28.8% bump for community-based organizations. But gaining sectors were offset by ROI declines for art museums, dance companies and theaters. Another encouraging sign was an increase in the average individual donor contribution over the four-year period. The report attributed some of the improved donor generosity to a shift toward investment in donor relationship building, with the average organization allocating 62.4% of fundraising expenses to staff in 2017, up from 54.4% in 2014, and thus allowing for more donor development.

Size and Location Make a Difference

For arts and cultural fundraising, size matters, but in an inverse fashion, the report found. Small- and medium-sized organizations increased the returns on their investments in fundraising over the four years, while larger organizations had steadily declining ROI. Individual donors are important for success, per the report, especially outside of the big metro areas where government support, foundations and corporate donors help foot expenses. But locations vary widely in terms of revenue successfully tapped. For example, New York organizations had the highest average number of corporate donors at 12 and also had the highest percentage of expenses covered by government support (9%). Compare that Big Apple haul to the lowest metro-area average of four corporate donors in Los Angeles and Chicago’s low of 2% expenses covered by government funds. On the other hand, Chicago reaped the most from foundations, with 7% of expenses picked up by foundation support, way ahead of New York organizations which, though they had more foundation grants than any other market, only saw those grants cover 3% of expenses.

For details, go to the SMU DataArts Fundraising Report.