Optimize the Decline . . . While You Get Online
The company I founded back in 2002, Analytical Ones, helps a lot of nonprofits analyze their donor giving database and conduct primary research (like survey studies) to give a comprehensive report of the nonprofit’s current picture of their donor base. Like reading a map to get to a destination, you can’t know where you are headed until you know where you’ve been and your current location.
During the past two years, there has been a roiling of the waters, so to speak, in fundraising strategy throughout the nonprofit industry. This shouldn’t be a surprise to anyone who reads Mike’s blog regularly: We are in a transition period in fundraising. We are moving from the way we used to raise funds (primarily via direct mail) to how we are going to raise funds in the future (online).
So strategies throughout the nonprofit space have been adapting to strategic initiatives of what I refer to (in a Johnnie Cochran-esque manner): Optimize the Decline While You Get Online.
In case that isn’t straightforward enough, let me explain.
If I did a database file analysis of your organization, I would bet that most of your donations are still being driven by your direct mail appeals. I’d also bet that in the past 5-years you have seen revenue from this channel start to slip. More concerning, you have fewer donors each year.
In addition, I bet you have seen an increase of your donations from online giving rise during each of the past 5-years.
But here is the rub: the rise in online revenue isn’t covering your decline in direct mail. Yet.
So you are stuck in the fundraising purgatory. You are still dependent upon the old ways of fundraising, but smart enough to read the writing on the wall: unless you adopt a new online fundraising strategy, your organization’s future is in peril.
The temptation is to do one or the other. But you can’t. You need to optimize your net revenue from direct mail today, even as your direct mail fundraising declines, while you begin to invest in your online future.
Nobody said it would be easy.
But it’s the only way to manage this paradigm shift.
-Mike (And Bill)
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