The tough economy is having some strange effects on fundraising and marketing in the nonprofit sector. Because funds are scarce, everyone wants to do more with less. There is a lot of pressure from donors about efficiency. Because of this, terms like Return On Investment (ROI) have made their way into nonprofit conversations. Now, there is more pressure than ever to measure outcomes, measure efficiency, measure marketing, and measure anything else that can be measured.

Testing vs Discovery

Fundraising InnovationIt’s all about showing numbers. In nonprofit marketing, testing has replaced innovation. When was the last time you tried to figure out a new approach for fundraising — I mean real innovation? Instead, organizations are substituting campaign testing for real fundraising innovation. As scenarioDNA’s Tim Stock puts it, “We confuse testing for discovery and do research too late.” As a result, there is little to no innovation in how we raise funds. I have to agree, we confuse testing for discovery and rarely conduct upfront research. We love testing because it produces defined results and confirms performance. That’s very reassuring. Since fundraising is a field fraught with uncertainty, it’s comforting to find reassurance. But too often, the comfort is temporary because the test results don’t prove out in real world use. Then, we are left wondering what happened because the market research said the results would be great. We confused testing for research and ran the experiment without understanding the context that created the test results.

The ‘Ask Letter’ Test

Fundraising InnovationFor example, an organization includes an ask letter and return envelope in their annual report every year. One year, they decided to test the ask letter. They wrote 3 versions and sent them to a sample of donors. The letter that got the greatest return was selected to be included with the annual report and was sent to their entire donor list. The response was significantly lower than was expected because it was tested out of context. The test was sent as a stand alone ask letter, not included in the annual report.

The Interviews on Annual Reports

Fundraising InnovationThe next year the organization conducted open-ended interviews with donors concerning their thoughts on the organization’s annual reports. Donors indicated that they wanted to see how the organization was doing and learn what happened to the money they had donated. The organization then sent a closed-ended survey to their list and got statistically valid confirmation of what they had learned in the interviews. The organization decided to send out individualized annual reports using variable data printing to create them. Each report included drawings done by a child that the organization helped that thanked each donor by name in the drawing.

Fundraising InnovationThe letter from the Executive Director thanked each donor by name and thanked them for the specific dollar amount that had been donated explaining what was done with that donation. To do this, the donor list was segmented to assign brackets to contribution levels and match them to a service provided for that amount of money. For example, a $1000 – $1999 dollar donation paid for a particular number of days in a shelter. The letter included a request to make a 5-year pledge to continue facilitating such a great success. You can see examples from the annual report at the end of the article.

The personalized annual reports were a huge success. Many donors kept them and were sharing them with friends as long as 5 years later. Donors explained that they liked it because it was made just for them.

The annual report generated 809% more money than it cost. This is fundraising innovation.

Discovering True Context

Only by taking the time to discover the true context in which your organization’s brand exists, can you participate in shared dialogue in a meaningful manner. You can discover their needs, emotions, touchpoints, abilities, motivations, and triggers in the context of your cause. By discovering their needs and connecting with shared emotions, you can become relevant to the group and understand the meaning of your organization’s brand – in context.

Fundraising Innovation in an Annual Report

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Incredible example of innovation--especially with a tool like the annual report. Your point about testing versus innovation is spot on. We feature an communications author, Tom Ahern, at CausePlanet who would agree with your point about relevance and context. Thank you for inspiring nonprofits to take on smarter expressions of their brand.

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