How to Survive — and Thrive — as a Neanderthal Fundraiser

Mark Phillips from UK fundraising agency Bluefrog put this charming cartoon up recently.

I’m a fundraising Neanderthal, and I’m not ashamed at all about it. I’m always hungry for more donors because I know that charities need to grow bigger for lots of very good reasons.

My feet are very good at chasing after new donors because I know that many of my current donors are going to stop giving even if I have the best retention program in the world. There is no such thing as 0% attrition. And I know that I need to replace those donors just to stay the same size next year and I need to add even more new donors if I want to grow and get bigger.

My ears work just fine and I can hear what donors say to me. But I also have eyes, and I can observe how donors actually behave. What donors say, and what they actually do, are often two totally different things. So I use both senses, not just one.

My eyes are very good at finding donors who are likely to say yes. I’ve observed over many years that a donor who gave last month is more likely to give again than a donor who gave last year. I can see that a donor who has given twice is more likely to give again than a donor who has only given once. And I know that a donor who gave $100 is worth more of my time and effort than a donor who gave $10.

My brain is not underdeveloped at all. In fact, Neanderthal brains are actually bigger. And I can tell when I’m being told nonesense — like when people say that fundraising is not really about money. Or when I’m told that you can raise more money by asking less often. Or when I’m told that if I “love” my donor, they will just magically start donating more money. I’m smart enough not to take slogans like that on face value and to recognise them as the silly rhetoric they really are.

And my hands are well trained at both grabbing and keeping donors. I know how to maximise income from fundraising programs so they raise the most possible money in the shortest amount of time and for the longest period of time with the lowest investment and risk.

And that is what donors expect a good fundraiser to do. At the end of the day, when you raise money for a cause, it is to help your beneficiaries. Ask any donor who you should care about more, them or your beneficiaries, they will choose the beneficiaries as well. Donors don’t usually need our help, it’s the other way around and they know that too.

Neanderthal fundraising is not backward or primitive. It’s smart fundraising. It’s nothing to be ashamed of. And when it is ridiculed like in this cartoon, it makes the critic look more stupider than the Neanderthal. Oink.

How a Lower ROI Raises More Money

Return on Investment is one of the most commonly used measurements of fundraising performance, and it is often misunderstood. A lower ROI actually raises more money and a higher ROI raises less. Here’s why and how:

ROI is the same as an interest rate. Take a fundraising program that returns an ROI of 500%, meaning for every 20 cents spent, you raise a $1. That is the same as having a bank account that pays a 500% interest rate.

What would you do if a bank offered you a rate like that? You would plow as much money as possible into the account. Let’s say you mortgage your house (at 8% interest) and put $1 million into that account. That would make perfect sense.

What if the bank then said that for the next $1 million you deposit, they will “only” give you a 200% interest rate. Would you mortgage your mother’s house at 8% and put that extra $1 million in too? Of course you would.

In fact, even if the bank only offered you 16% interest, it would make a lot of sense to borrow at 8% and put it into that account earning 16%.

Lower ROI = More Money

ROI does not measure how much total money you raise. It’s just a percentage of profit divided by cost. It’s not a dollar figure at all.

You can have a fundraising program that spends $20 and raises $100, giving you an ROI of 500%, but you only raised $80.

Or, you can have a fundraising program that spends $500 and raises $1,000. Your ROI is lower, five times lower in fact. It’s only 100%. But your net income is $500, instead of $80, which is over five time more money.

So whenever you see ROI being used as a “measurement” of fundraising performance, always ask how much net income did each program raise. A program with a 50% ROI that raises $1 million is far more attractive and worth much more of your time and effort than a program that has a 500% ROI that raises $10,000.

Could you add a zero to that donation please?

Back in the 1990’s, British fundraiser Ken Burnett wrote a book called Relationship Fundraising. In that book he advised, among other things, not to ask for money in a thank you letter. Too pushy.

He advised not to ask for too much money at the beginning of the donor “relationship”. Don’t look grasping or desperate. If a monthly donor quits, wait a year before asking again.

I first encountered this theory working in the UK from 1997 to 2000. I had come over to London from San Francisco to take over the fundraising for the British office of PETA. The financials between the two countries didn’t compare well. Even after adjusting for the smaller population of the UK, the British PETA office was raising far less money than the US.

Following standard direct marketing testing methodology, we broke our donor base into a set of test groups. One group was asked for a monthly gift in the thank you letter. With another group, we waited a month. With another group, we only asked for a monthly gift after they had given to us twice. And so on. The group that was asked immediately gave more money than anyone else.

In addition, they also gave more bequests (we tracked it over several years). Asking aggressively, early and often raised more money during the donor’s lifetime, and after they died.

Did more donors complain too? They sure did. Bitter complaints about being “bombarded” with appeals. Nevertheless, over any given time period (a month, a year, even many years) we raised more money when we asked for more, and more often.

When people rang to complain, we didn’t ignore their problem. We put them on a once-a-year mailing schedule if that’s what they wanted, or we took them off our list entirely if that’s what they wanted. Whatever they wanted us to do, we did it.

We just didn’t change our strategy because of them. Less than 5% ever complained, the other 95% just kept giving. When many of these folks rang or wrote, they’d swear they’re never giving to us again, and then they would.

The £1,000 Ask Strategy 

This testing was in full swing when we got an unexpected £1 million gift. It was from a well known billionaire. As it turns out, this bloke had been giving us £20 a month for many years. I started to wonder: how many people like that are giving us only £20 a month?

So I took a test group of donors who had all given for the first time at least £20 or more and I asked all of them for £1,000, straight off.

Of course, I needed a good reason. PETA is an animal rights charity. There was a donkey sanctuary in Ecuador we wanted to financially support, so I asked these donors for £1,000 each to help save the donkeys. 100 responded.

Feeling a bit more confident, I asked them all for £1,000 again. This time, we needed to launch a new anti-fur campaign featuring supermodel Christy Turlington. 70 people responded and PETA’s “I’d rather go naked than wear fur” ad campaign is now probably the most notorious and legendary in non-profit advertising history.

We created a whole series of “test groups”. Some people were asked for £1,000 once. Some were asked twice, three times, and some not at all. Another group was only asked for a monthly gift, like we had always done (this was the “control group”), and so on.

We raised the most money, both immediately and over time, if we asked donors – straight away – for £1,000 no less than three times in the first 3 months after receiving their first contribution. Once we “found” all the potential major donors, we asked everyone who was left over for monthly gifts.

Back when I did those tests, there were a lot of people who thought I was crazy, and it took a lot of courage to give it a go. But now, my only regret is that I didn’t try it sooner.

Regular Giving in Margaritaville

Start with:

● 1 or 2 limes, juiced.

● 2 shots of Tequila,

● 1 shot of Triple Sec

Mix with LOTS of ice. Rub the leftover lime peel over the rim of the glass, and dip it into a bowl of salt. Strain the ice as you pour the drink into the salt-rimmed glass. Find a comfortable chair, settle in and have a sip amigo. Mmmm.

That’s the “classic” recipe for a margarita, but you may have altered it. Perhaps you don’t like salt on your glass and left it off. Others crush the ice in a blender and make it slushy. Perhaps you don’t care for tequila right now and opted for a glass of wine or a cup of tea. You might even be thinking that indulging in a margarita and reading a fundraising article don’t even go together.

Regular Giving’s Secret Recipe

Nevertheless, when I look at the world’s most successful monthly giving programs, I often think of “Margarita Ville”. In particular, the “child sponsorship” recipe served up by groups like World Vision, UNICEF, Save the Children, and others. A bit like browsing a cocktail menu, you can select the country you want to help, select a child to sponsor, or choose to fund specific project areas, like education or health care. Children send you postcards, letters and photos.

It’s a concoction that works great. Hundreds of thousands of monthly donors sign up at $30, $40, sometimes $50 a month. They respond by television, radio, press advertising, online, direct mail, telemarketing, face-to-face and all sorts of other ways. Definitely my kind of party…

A few years ago, we successfully adapted this model for Seeing Eye Dogs Australia. We matched donors up with adorable Labrador puppies in training to become seeing eye dogs. Puppy sponsors get cute-as pictures (plus a picture frame), letters “written” by their dog, and even an open day when they can visit the dog they are sponsoring.

Leigh Garwood, Seeing Eye Dogs Australia’s General Manager, told us: “In just over 3 years, we grew an existing donor base of 750 regular givers to nearly 7,000, thereby creating a vital source of long-term recurrent income for the organisation”.

The Smith Family’s monthly giving program is another exceptional adaptation of the child sponsorship model for disadvantaged children here in Australia. When you sign up, you’re giving an Aussie child his or her fair go in life. Hard to knock that back matey.

The Taronga Zoo’s Zoo Parent program is worth taking a closer look at too. You can adopt something traditional like an elephant or a gorilla, something exotic like a binturong, a bongo, or choose something uniquely appealing to you from the heaps of other animals on their list. You can also visit the animal you’ve adopted any daythey’re on display.

Missing Ingredients

But what if you don’t have poor children or cute animals to match donors up with? For a lot of charities, their mission is not suited to this highly productised form of marketing a monthly donation scheme. It’s just too much to swallow.

Amnesty International Australia’s monthly givers, ‘Human Rights Defenders’ are an interesting case in point. Supporters are often asked to take online actions or send letters and emails to governments, ministers and ambassadors on a wide range of subjects such as the release of political prisoners or calling for a human rights act. But it’s not unique to their Human Rights Defenders. Amnesty wants all their supporters to do that.

Mix and Match 

You can also improve the financial performance of your monthly giving program with good old fashioned testing, tinkering, and trial by error. Start by deconstructing the whole concept of a “cash ask” and a “monthly ask”, and then re-mix them together until you find a combination that works better for you. Experiment with:

Testing the monthly giving amount – not everyone can acquire donors at $50 a month like World Vision does, god bless ‘em. Nevertheless, a “measly” $15 a month donor is still worth $180 per year. Even when you factor in attrition, it’s still a lot more money than a typical cash gift of around $40. Do some tests and weigh up the trade offs.

Asking for a Monthly Gift and Cash – give donors the option. The cash contributions subsidise the cost of the monthly donors. Test the asking strings of both asks. How much you ask for per month can affect the cash response rate, and vice versa.

Developing a strong Conversion to Regular Giving program – Not every charity can acquire monthly donors on the very first ask. Many programs are more geared to cash giving, by the nature of their work. The Red Cross is a great example. Consider developing a strong conversion to regular giving program, using telemarketing, direct mail, email and other methods. Experiment and find the right combination for you.

There are many ways you can mix yourself a successful regular giving program. Be true to yourself first and foremost. Don’t blindly ape the competition or try to be something you’re not. Find the way that works best for you. Create your very own special recipe!