Feasibility Studies: Worth It or A Waste?

You have likely considered kicking off a major gifts or capital campaign with a feasibility study to examine the factors that could contribute to your campaign’s success or failure, such as leadership, target audience, brand impact, and costs. Some nonprofit leaders do not believe in the value of feasibility studies. James LaRose, founder of the National Development Institute, claims, “the studies… are outmoded and a colossal waste of money.”

In contrast, however, we at The Killoe Group consider feasibility studies to be capital campaigns’ best friends – and incredibly valuable investments.

While LaRose asserts feasibility studies are not worth the time, effort, and money required, these studies have a number of benefits. For example, a feasibility study enables you and your team to analyze your target audience and cultivate a deeper understanding of donor demographics. This information will enable you to more accurately and successfully target your supporters. Other benefits include identifying organizational strengths and weaknesses and creating buzz about your campaign.

Download Feasibility Studies: A Capital Campaign’s Best Friend to learn more about feasibility studies and how they can benefit your organization’s development efforts.

Why Legacy Practices & Assumptions Will Ruin Nonprofits

While legacy practices – the things that your nonprofit does year after year simply because “that’s how it has always been done” – make for easy planning and consistency, they could be preventing your organization from thinking strategically about each initiative and hindering your ability to keep up with the needs of today’s donors.

For example, imagine your organization has always sent three mail pieces per year. While you’re comfortable with this number and you have a positive return-on-investment (ROI), have you considered what impact adjusting the number of mail pieces could make on your organization? If you were to increase your collateral to four pieces per year, your printing and mailing costs would increase but you could bring in additional gifts. Alternatively, subtracting a print mail piece could reduce costs but also decrease donors or dollars.

Be bold! Constantly reflect on why your organization is doing things a particular way and determine if there are opportunities to strategically improve even just a small part of what you do. As you challenge the legacy practices within your organization, you will also need to confront the harmful assumptions that lead nonprofit organizations away from analyzing decisions strategically and preventing them from being bold decision-makers.

Here are five of the many assumptions created by the reliance on legacy practices and inability to be bold:

Donors will not give more than they already have.

If a donor has given your organization $50 every year for the last ten years, don’t assume that’s all they will give. Have you ever asked them to give more? Has your organization communicated what impact a larger gift could make?  Don’t be afraid to think outside of the box. Perhaps ask them to turn single annual gift into a monthly gift and increase their total donation.

Everyone loves your organization.

With millions of nonprofit organizations in our world, it is impossible for everyone to support your cause, and just because you love what you do, doesn’t mean everyone else does. Sure, we’ve all heard of incredible multimillion-dollar gifts that fell out of the sky but waiting for that to happen is an ineffective strategy. Instead, focus on the donors you have and as always, work to identify introductory level (below $100) donors that you can nurture in the future. 

Nonprofits are not businesses and shouldn’t act as such.

Your primary focus is to meet your organization’s mission and raise funds to support that mission, and your secondary focus is to worry about “the other things.” However, analyzing your procedures and vendors – such as your technology contract, retirement plan, and payroll services – and making necessary adjustments in the present can set your organization up for future success. A little bit of time invested today could result in significant savings going forward.

You can’t afford to hire a talented team.

Nonprofit salaries are notoriously low. However, that shouldn’t prevent your organization from hiring the right person. Take the time to conduct a needs assessment and identify the type of employee your team needs, rather than hiring someone solely because you can afford them. Remember to invest in your team for the long haul and don’t be afraid to get creative. Investing in a talented team could be as simple as allowing schedule flexibility, providing professional development opportunities, and even letting people bring their dog to the office. Sometimes, unique perks and policies will prompt a person to accept a lower salary, enabling you to stay within your hiring budget while adding top talent to your team.

The ship is going down.

Instead of focusing on what your organization needs, talk about the needs your organization is meeting and raise funds from a position of strength. Telling donors, “our nonprofit needs new computers because our old ones are dying,” is an extremely different message than, “if we had the resources to invest in new technology, our organization could double the number of low-income students our programs impact.”

Nonprofit consultants can help your organization challenge legacy practices and harmful assumptions.

Because consultants are outside your organization, they ask the hard questions without express knowledge of your legacy practices and assumptions. An audit will enable your consultant to identify areas for improvement, challenge you and your team to think deeply about why you’re doing certain things, and encourage you to be bold.

Industry Insights: Data-Driven Decisions

It’s no secret that we at The Killoe Group are big fans of data. We believe data is important to drive sound decision-making and avoid the “see-what-sticks” approach on which many organizations rely heavily. We utilize data when helping clients with their fundraising strategies; however, organizations can extrapolate the concept to support innovation and new ideas with evidence, ultimately leading to a higher success rate.

Despite the plentiful benefits of data-drive decision making, many organizations still struggle with incorporating data and analysis into day-to-day decision-making.

According to David Waller, the author of the Harvard Business Review article linked below, data-driven decisions must become a component of organizational culture for their use to become commonplace across the organization.

Waller provides ten tips to guide organizations in developing a data-driven culture, many of which align with the process we use when working with clients on data-driven fundraising and donor retention. Our top three tips from the list: choose metrics wisely, train your teams, and explain your choices.

Choose Metrics Wisely

When making the connection between data and decision-making, you should be sure the metrics align with the challenge at-hand and can support your teams in making actionable decisions.

Train Your Teams

To successfully roll out data-drive decision-making across your organization, provide your teams with background information that will help them understand why you’re implementing this new step, what it means for their specific workplace functions, and how it will enhance their performance. Additionally, provide technical training to help employees identify how data findings can improve decision making.

Explain Your Choices

As your teams begin relying on data more frequently to drive decision-making, practice having all members explain what data caused them to make the decision they did. These types of discussions not only create accountability but encourage collaborative analysis of your organization’s data.

To learn more about data-drive decisions and explore how you can transform your organizational culture, we recommend David Waller’s article, “10 Steps to Creating a Data-Driven Culture.”

Industry Insights: Monthly Giving

Subscription-based shopping for common products like toothpaste and cleaning supplies has increased exponentially in popularity over the past few years. For example, I receive a bulk order of dog food from Amazon every eight months. Before I recognize the food is running low, Amazon automatically ships the refill and “ta-da!” it arrives at my door just as Toby needs it.

Your non-profit can tap into this “set it and forget it” culture through automated monthly giving programs.

These types of programs can minimize the hesitancy donors may have by breaking larger donations into smaller, equal contributions over a set period of time. For example, ask a donor to make a $10.00 per month donation over a 10-month period, rather than $100.00 upfront. The monthly contributions become revenue you can count on without having to expend resources to secure.

Automating philanthropy and stewardship can be extremely successful…as long as you are cognizant not to take your donors for granted.

There will come a time when monthly donors must update their credit card information so you must consider donor retention throughout the length of their automatic monthly donation period. Creating a branded program for this subscription-style giving can help your members feel as if they are part of something special. Provide exclusive content – such as an email newsletter, videos, photos, or handwritten notes – to keep these donors engaged and increase the likelihood they’ll stay with you.

To learn more about Monthly Giving Programs and how to get yours started, we recommend this article on the Re:Charity website.

Play It Again, Sam: Repetition in Non-profit Communications

When you’re working in development and non-profit communications, you live and breathe the message (and story!) of your organization.

After endless conversations with donors, writing newsletter articles, blog posts, social media pieces, and other communications, the professionals within your organization are often the first ones to get ‘message fatigue.’

Maybe it’s you, or a CEO or board member, who’s getting a little bored with the talking points. They grow restless with saying the same thing over and over, and want to change the tune.

While it’s great to be creative in how you present the message, don’t let your main story get lost! There’s nothing wrong with continuing to hit the high points of your story for your donors and supporters. In the advertising world repetition is key, with an old adage that it takes seven presentations for a message to stick. There’s a good reason why brands with nearly 100% market recognition (Coca-Cola, McDonald’s, Rolex) still spend millions on advertising every year.

So keep in mind two points:

  1. You’re not always writing for your best supporters, those who know your organization inside and out – you’re writing to invite people to become that best supporter, and they need to hear what you do!
  2. Stick to your organization’s main strengths, the compelling story of the life-changing work of your non-profit, and why your donors are the ones making that happen through their support.

When you get the itch to change the tune, just remember: “Play it again, Sam!”

5 Reasons Non-Profits Should Continue Fundraising – Despite COVID-19

Fundraising – like pretty much everything else – during a global pandemic feels confusing, uncertain, and slightly uncomfortable; however, it is critical you recognize that your non-profit organization continues to meet needs in your community and contribute to it in essential ways.  Frankly, you must continue to generate income to support your mission and work.

Don’t pull back from sharing your mission, your message and giving donors an opportunity to contribute to your organization and support their communities.

Here are five reasons we believe you should continue fundraising, despite COVID-19:

1. Fundraise because you CAN.

Donors see first-hand how non-profits positively impact their communities – when the world is running “business as usual” and when the world is in a crisis like the one presented by the Coronavirus. Many people desire to support their communities and turn to non-profit organizations as a vehicle to do so. Your organization can capture donors’ goodwill by enabling the community to support your organization through donations.

2. There is uncertainty in the future.

Many states have laid out clear plans for phased reopening and while this may bring some clarity around what communities can expect in the future, there is still an element of uncertainty that requires non-profit organizations to prepare for the unknown. Non-profits, such as food banks, animal shelters, and workforce development organizations, have all had increased need over the past few months and this trend could continue. No matter what the future holds, your community will continue to require the support your organization provides.

3. Non-profits are economic engines.

According to a recent article from Forbes Nonprofit Council, “nonprofits employ more than 10% of the [national] workforce [and] the nonprofit sector contributed an estimated $985.4 billion to the United States economy in 2015” (source). On both national and local levels, non-profit organizations are creating jobs, purchasing products and services, and contributing to the economy. Continued fundraising is critical to ensure your vital economic engine continues to contribute to your community.

4. Stay at the forefront of your stakeholders’ minds.

Stay relevant to donors, volunteers, and clients by continuing to communicate with your audience. Be transparent with your stakeholders and share how COVID-19 has impacted your organization and the necessary changes you’ve made to align with the “new normal” and everchanging community needs. Connect your organization’s mission, vision, and work to the current climate and share stories that exemplify impact.

5. Donors can decline.

Both in times of crisis and more “typical” climates, individuals can decline your organization’s requests for donations. Don’t miss the opportunity to solicit donations because you assume people don’t want to, can’t, and won’t support your organization. It is worth the ask – donors always have the option to say “no.”

If you have a mission that is relevant, shout it from the rooftops and if not, connect your mission and work to the measurable impacts your organization makes on your community despite the unparalleled experience we’re living through. Use this time to continue to connect with your audience, share your good work, and generate the donations that are vital to sustaining your organization’s work.

Blend: Using Science and Art to Build Relationships with Prospective Donors

I am a firm believer in using data and the science behind it to drive your fundraising results.  I encourage my clients to use giving data to uncover their best annual (sustainer) prospects, enhance donor growth using data-backed targeted gift asks and to use effective tactics to acquire new donors.  Instead of taking a buckshot approach, non-profit organizations must strategically focus their energy and efforts.

Prospect research and wealth screening allows organizations to get a feeling for their best possible prospects.  It’s important to run a batch screening annually to identify who is in your database, but it’s not as simple as “these are my richest donors.”  Identifying major donor prospects requires you to look at their affinity to your cause, their propensity to give, and how much they’ve given to organizations like yours and not like yours.  Start by looking at newly identified prospects who look like, on paper, major gift donors who already give to you.

But for as many times as I talk about “science” in fundraising, “art” is just as important – especially when raising major gifts.  When it comes to actually asking donors in person for a major gift to your organization, the “artful ask” is just as important as the science behind it. Wealth screening will allow you to identify who SHOULD give.  Building an authentic long-term relationship with a donor will allow you to identify who WILL give.

Simply put, people give to people.  The right person asking, at the right time, for the right amount, and for the right project ensures success.  Building relationships is an art.

The Right Person: I’ve worked with board members, executive directors, and even professional fundraising staff who think they’re great at asking for money, but they’re not. Either they get nervous about the idea of asking for money, don’t know how to handle rejection, or are just simply uncomfortable talking to anyone about money. I’ve worked with countless clients that say, “I don’t feel comfortable asking for money; that’s why we brought you on board to help us succeed.”  The most important step in beginning to build a relationship is to ensure that the right person from the non-profit is leading the relationship.

Learning how to pick up on non-verbal social cues, asking probing questions and matching donor passions with projects is step number one.  The only way to confirm donor interest is to ask them.  “Angela and Dan, you’ve shared how important your college education and experience was to you and how it set you up for the success you’ve had today. You’ve generously supported our scholarship campaign in the past.  Have you ever considered establishing your own endowed scholarship?”

The late Jerold Panas, an incredible force in the profession of fundraising, shares in his book Asking: A 59-Minute Guide to Everything Board Members, Volunteers, and Staff Must Know to Secure the Gift, “The only way to get milk from a cow is to sit by its side and milk it.”  While that might be a rather direct statement, it speaks to the importance of getting to know your donors in person.  Major gift donors are rarely, if ever, secured with a letter or an e-mail. Take the time to invest.

Consider investing in an outside consultant to train your board and organization’s leadership to build relationships and to help make “the ask”.  The Killoe Group is just one example of a consulting firm that can help organizations develop their talent and train their leadership to build relationships with major donor prospects.

The Right Time: Contrary to what we may want to believe, your organization and the needs they meet may not be a top priority to everyone else. As an example, prospects might say, “Mike, I understand the work your organization performs and I support it.  But it’s not a philanthropic priority for us right now.”  It is okay to hear that – that type of honest, direct feedback allows your organization to focus your time and energy on other prospects whose priorities are closer matched to your organization.

Professional fundraisers and organization leaders need to understand that just because people in the community have money, it doesn’t mean they have your organization in their priorities.  Yes – that can change, and building a long-term relationship can help.  But the sure-fire way to ruin that relationship is to not listen to the donor.

We also encounter prospects that just aren’t ready to make the gift now. Ensure you’re building honest, thoughtful, two-way interactive relationships to get to know your donors.

I’ve been a longtime fan of Jim Collin’s Good to Great.  Although it is primarily focused on companies in the for-profit arena and how some companies transition from being good companies to great companies and why some fail to make the transition, the lessons learned from these companies are very applicable to the non-profit world.  I encourage you to read it, and even if you have read it, re-read it with the lenses of a non-profit professional.  In the book, Jim and team stated, “Going from Good to Great is a quiet, deliberate process of figuring out what needed to be done to create the best future results and then simply taking those steps, one after the other, turn by turn of the flywheel.”  Apply this method of thought to your major gift cultivation process. Greatness does not just happen, so in that vein, major gifts do not just fall in your lap.

Take the time to set a deliberate course of action to build momentum to secure the gift. 

The Right Amount: “Well, when we did some prospect research we found out that you gave $250,000 to the Symphony, so we’re going to ask you for the same amount to the University.” The right amount is not what the prospect has given to others; the right amount is not what you need; and the right amount is not what you want.  The right amount is the amount of money you, as the professional fundraiser, have decided to ask for based on your research, their level of interest in your organization, their level of affinity to your cause, and their level of interest in the project you’re asking for.  The final piece of the “right amount” strategy is what your gut tells you, after all the above consideration, to ask for.  Building an authentic relationship, one that allows these prospects to get close to your organization and to learn more about it, will allow you to trust your gut.

The Right Project: Building a solid relationship with a donor allows you to learn about their passions and interests. You may find during conversations that a prospect had a specific life experience that they cherish and there’s an opportunity for you to match their experiences with the organizations’ needs.  Make sure that you have a few potential projects in mind as you build a relationship. Don’t hesitate to share, over time, all the projects your organization is working on, not just the one you’re hoping the prospect is interested in.

When I started my career as a professional fundraiser, the “rule” in the industry was that it took, on average, twenty-three unique touches over a period of time to secure a $1,000,000 gift. I’ve seen that number lower and higher over time, but I always remind my clients about this rule.  This statistic speaks to the need for building an authentic long-term relationship with your prospective donors.

Remember, rarely if ever does someone propose marriage on a blind date and receive a positive response! The first visit with a major donor prospect is just that, a blind date.  Blend the science of prospect research with the art of building a solid relationship over time to ensure major gift success.

Growth in Giving

As the end of the fiscal year approaches for most organizations, you might be feeling an intense focus on making your fundraising goals. As professional fundraisers, we live and die by achieving the dollar goals we committed to during budget planning. How many of us have felt an intense sense of relief once that number was achieved?

I have always believed it is important to think about both dollars and donors equally. Yes, achieving the cash goal that your organization expects is of paramount importance. However, increasing the number of donors is also important – you’re pouring water into the long-term pipeline.

A bigger question I challenge my clients to think about is if your organization is actually growing fundraising revenue?  It is admittedly a hard concept to consider when you’ve achieved your goal, allowed yourself five minutes to celebrate before already starting to panic about achieving next year’s goal. However, the Growth in Giving metric is a powerful metric that every organization should be using.

Simply stated, your organization’s growth in giving is the sum of gains from new donors, recaptured donors, and increases from existing donors versus the losses from downgraded donors and lost gifts from new or repeat donors.

Senior Leadership and Boards of Directors are infamous for subjectively setting goals. “Last year we raised $500,000, so… let’s shoot for $600,000.” Is it realistic for any organization to project a 20% increase in fundraising revenue ever, let alone in one year? Especially given the fact that the average growth in giving rate is 3%?

If your growth in giving rate is averaging 3.5% every year, you’re actually outpacing both inflation and average growth rate across all non-profits. If so, a more realistic goal in my example is $517,500. That doesn’t sound like a powerful number, but realistic goals that are surpassed are far better than ambitious goals that fall short.

I also cringe when leadership says, “Well, we have to raise that amount of money (in this case, the $600,000). We need it, and our donors will understand.”  Simply stated – donors do not care what your needs are. Donors care what needs you are meeting, how you’re fulfilling your mission and if you’re being a good steward of their support. And even if you’re able to create an incredibly persuasive case, is it fair to assume every donor will increase their gift an average of 20%?

Your growth-in-giving rate is a true indicator of the capacity of your program.

Establishing a Data Driven Culture in your Organization

Changing or establishing a culture at an organization can be a herculean task. More often than not, the culture of your organization was established well before you came on board. For many professional fundraisers, especially at smaller nonprofits, the idea of a shift in focus or priority can be daunting and the ability to make that change may be out of your control. So, when nonprofit leaders think about establishing a culture within your organization where data is respected, embraced and acted upon, it can seem like a daunting task.

Establishing Culture
The culture at your nonprofit includes:
– your mission and vision;
– how you value your team of people;
– your shared values.

Often times however, organizations confuse “mission” with “culture”. The mission is the work your organization does while culture is the way we behave within an organization and culture can be hard, if not impossible, to quantify. When professional fundraisers work to imbue a quantitative measure into a qualitative culture, a struggle may result.

Establishing or enhancing a data-driven culture must start with the philanthropy operation within your organization. This team must be the first to use data to make its own decisions and then seek buy in from other areas of the organization. According to a June 2017 article in the Harvard Business Review, “Culture change can’t be achieved through a top-down mandate. It lives in the collective hearts and habits of people and their shared perception of “how things are down around here.”  Someone with authority can demand compliance, but they can’t dictate opt.”

What does a Data Driven Culture look like?
A true data driven culture may be easy to describe but can be hard to recognize. Data driven cultures require:
–       Efficient gathering of accurate data;
–       Appropriate storage of data;
–       Ability to easily retrieve data;
–       Capacity to analyze data.

Most importantly, it requires that your organization use that data to make decisions that drive results forward. Results sometimes can be difficult to accept, but you must be willing to embrace them if you’re going to create change to increase impact at your organizations.

In early 2018 the Society for Human Resource Management released an article “Understanding and Developing Organizational Culture”. While the article speaks to an organizations’ overall culture, many of the advantages highlighted relate to the reasons to establish a data driven culture at your organization. “A strong culture can bring benefits such as enhanced trust and cooperation, fewer disagreements and more efficient decision-making.”

Data driven cultures do just that. When nonprofit leaders share factual information with other departments within your organization it builds trust between your department and others. Too often at nonprofit organizations, the rationale behind annual fundraising goals is simply the difference between program income and expenses. Data driven cultures allow professional fundraisers to honestly predict income and make positive strategic decisions.

Why are data driven cultures important?
Nonprofit leaders should work diligently to ascertain important data metrics and analyze the results. Two of the most powerful tools to utilize is the Fundraising Effectiveness Project or the Fundraising Report Card.  Both of these tools provide the user with both beginner and advanced metrics and allows for transparency and trust.

In my experience, I have found organizations that are driven, although not constrained, by data are the most creative and high functioning nonprofits. Having information at your disposal that can accurately tell you about your organization’s performance is empowering. These organizations are able to use their time more effectively – not worrying about “where they are” or “how they’re doing”. They know – because they’ve used the data at their disposal to find out. Certainly, a data-driven culture has an effect on the fundraising side of the nonprofit.

But if used correctly, it can also have a positive effect on Marketing, Communications, Finance and even Operations but above all else allows leadership to make smart, informed decisions at our organizations. In my experience, after the development office, the Finance Office benefits the most from a culture when data is respected and embraced.

For example, organizations that know their donor retention rate (the percentage of donors who gave in 2017 and 2018), know their average gift (total dollars raised divided by the number of gifts) and their growth in giving rate within that population can predict revenue. (Check out our free online calculator to determine your donor retention rate!) It’s certainly not an exact science, but your Finance team will appreciate some background for the budget numbers you’re providing. Conversely, you as a professional fundraiser can approach next year’s budget with an accurate prediction of revenue from fundraising.

Having the data is nowhere near enough – you have to create an action plan to drive towards increased efficiency and effectiveness. Understanding your data and having a plan to make positive change is one of the first steps to creating a culture that embraces data.

In a 2012 study in the Harvard Business “The Evolution of Decision Making: How Leading Organizations Are Adopting a Data-Driven Culture”, more than half the respondents said agreed or were indifferent about the statement “My manager relies more on judgement\gut feel than data to make decisions”. For how many of us is this statement true at our organizations?  While I would never advise to fully discount members of our organizations who are well aware of organizational history, in order for your organization to thrive, you must make decisions based on the information you have and that you know to be true – data.

In that same report, more than three-quarters of respondents said using analytics:
–       increased productivity;
–       reduced costs;
–       allowed faster decision making.

Seventy-percent of respondents said the outcome was “Improved financial performance”. Why as nonprofit organizations are we not embracing the data that we have to make decisions that will lead to positive outcomes?   Data driven nonprofits allow our organizations to focus as many resources as possible to our missions.

Getting Started
Establishing a data driven culture should start slowly.  Nonprofit leaders should embrace three to five simple metrics and imbue them into your work.  I recommend nonprofits should begin by looking at:

–       Overall average gift;
–       Donor retention;
–       Donor conversion rates for appeals.

Those three simple Key Performance Indicators (KPIs) are strong examples of basic metrics to establish goals around.  Make decisions using those first metrics and increase your efforts and you begin to see results and have “buy-in” from staff.  Keep adding additional KPIs as your program and your culture matures

Conclusion
Finally, I encourage you to personally strive towards being an “Analytical Leader” within your organization’s Data Driven Culture. As noted in the 2012 Harvard Business Review report, Analytical Leaders have “refined their decision-making processes as part of a data-driven culture and achieved superior financial results.” With a great deal of competition for donor dollars every day, establishing or growing a culture where data is captured, stored, analyzed and utilized will pay dividends.