Understanding the Power of Authority in Fundraising
Question Authority. You’ve probably seen that slogan on bumper stickers or T-shirts, often with a rebellious undertone. It was a rallying cry during the Vietnam War protest movement in the 1960s. But while questioning authority is sometimes necessary, the truth is that we’re hardwired to respect it. Social psychologist Robert Cialdini explains that our upbringing is steeped in messages about the importance of authority. From parental guidance and school lessons to religious teachings and societal structures, we’re taught to submit to and respect legitimate authority. This is why Cialdini includes the principle of authority among his six principles of persuasion. Why Authority Matters in Fundraising Over the years, many fundraisers have successfully applied Cialdini’s principles to achieve transformational results. So, how can the principle of authority be applied to your fundraising and marketing efforts? Cialdini suggests three simple ways to establish authority: Titles Clothing Other Trappings Titles are a powerful symbol of authority. They’re easy to acquire but require careful use to ensure they lend credibility to your arguments. A well-used title can make your subject matter experts’ positions more convincing. Clothing also plays a significant role in how authority is perceived. Consider the uniforms of law enforcement officers, military personnel, or even commercial airline pilots. What they wear conveys their authority and builds confidence. The same goes for your donor meetings. Dressing appropriately can give your arguments more weight, while poorly chosen attire can undermine your credibility. Trappings are the third element. Cialdini notes that finely styled and expensive clothes, jewelry, and even cars can carry an aura of status. The same principle applies to the appearance of your workspace, the quality of the meeting room, or the reading materials you distribute. These elements all contribute to how others perceive your authority. Applying Authority to Your Fundraising Work Think about how you can use titles, clothing, and trappings to project authority in your fundraising efforts. Whether it’s through the way you present your team or the environment in which you meet your donors, leveraging authority can significantly enhance your ability to persuade. Remember, you’re an authority, too. You may be an expert in a specific aspect of your organization’s mission or have specialized knowledge in fundraising. How persuasive you are with your expertise depends on how well you apply the principle of authority.
The Power of Retention: How a Small Increase Can Lead to Big Gains
Ready for Some More Math? Let’s use the example of a shoe salesman who finds more value in a second-time buyer than a first-time buyer. The logic is simple: a second-time buyer is much more likely to return for a third and fourth purchase than a first-time buyer is to make that crucial second purchase. The same principle applies to your financial contributors. While just under half of first-time donors might give a second time, 80-90% of those who do will go on to give a third time, and 80-90% of those will give a fourth time. These retention percentages are not unique to your organization—they tend to hold true across the board. But what if you could take special actions to improve the likelihood of that second gift? The Impact of Improving Retention Imagine this scenario: This year, 10,000 donors make their first $100 contribution to your organization. For comparison’s sake, let’s split these donors into two lists: List A and List B. List A follows the usual pattern: 45% of these donors give $100 again, 85% of those give a third time, and 85% of those give a fourth time. Now, let’s say you take some smart actions to boost retention, and 55% of List B gives $100 a second time, with the same 85% giving a third and fourth time. Here’s where the math comes in: With List A, you would generate $578,400 in subsequent revenue. With List B, you would generate $707,500. Did you catch that? By simply improving the retention rate from 45% to 55% for first-time contributors, you generate at least $125,000 more. That’s a significant increase, and it only becomes more impactful over the long run. Why Retention Should Be Your Focus By reallocating your resources to focus more on retention, you’re not just maintaining your donor base—you’re driving greater profitability. It’s a smart strategy that pays off in both the short and long term.
The Smart Choice: Why Retention Trumps Acquisition in Fundraising
Focus on Retention? When it comes to fundraising, many organizations place a strong emphasis on acquiring new donors. And while acquisition is important, there’s something even smarter about focusing on retention. Let’s start with the math. Consider the analogy of a shoe salesman. A successful shoe salesman knows that while a first-time buyer is valuable, the second-time buyer is even more so. Why? Because a second-time buyer is significantly more likely to purchase a third and fourth pair of shoes than a first-time buyer is to buy that crucial second pair. This principle applies almost identically to your financial contributors. The Value of Repeat Donors From recent discussions, we’ve highlighted a critical fact: fewer than half of first-time contributors will make a second gift. This means that while you must invest resources to nurture all first-time donors, the likelihood of them giving again is uncertain. However, here’s the key insight: Once a donor makes that second contribution, 80-90% of them will give a third time. And 80-90% of those will contribute a fourth time. The pattern continues, making each subsequent gift easier and less resource-intensive to secure than the one before. This creates a compounding effect. The more times a donor gives, the more likely they are to continue giving. That’s why retaining donors is so crucial—it’s about building a sustainable, long-term relationship. The Financial Consequences of Acquisition Now, let’s take a quick look at donor acquisition. Typically, less than 1% of the prospects you ask will contribute for the first time. This means you’re essentially paying for the 99% who ignore your plea. While prospecting is necessary and valuable, the return on investment (ROI) for retention is significantly higher. By reallocating resources to focus more on retention, you can achieve greater profitability and long-term success. The Bottom Line Focusing on retention isn’t just a smart strategy—it’s the key to building a strong, sustainable fundraising program. By prioritizing repeat donors, you’ll spend fewer resources while increasing your long-term financial stability. As you consider your next steps, think about how you can shift more of your focus toward retaining the donors you’ve already acquired. It’s an investment that will pay off in dividends.
Communicate Like a Leader: Mastering the Art of Nonverbal Communication
Do You Communicate Like a Leader? We all know that words are powerful. But did you know that unspoken signals—like posture, pacing, and pauses—can predict the success of your communication with astonishing accuracy? According to researchers at MIT, these nonverbal cues are critical, whether you’re pitching to venture capitalists or leading a team. Understanding Honest Signals Dr. Morgan identifies four key “honest signals” that play a crucial role in how we communicate: Influence: How much one person dominates the conversation. Mimicry: How one person mirrors another’s behavior. Activity: The energy level a person brings to the interaction. Consistency: How steady or even-keeled a person is. By mastering these signals, you can enhance your effectiveness as a leader, fundraiser, or communicator. Whether you’re engaging with donors, leading a meeting, or making a pitch, these cues can significantly impact how your message is received. Practical Tips for Harnessing Honest Signals Dr. Morgan offers actionable advice for those looking to improve their communication through these honest signals: Increase Influence: Enhance your positional power, express more emotion, or control the tempo of the conversation to boost your influence. Enhance Mimicry: Consciously mirror others’ behaviors to build rapport, and then lead the interaction. Elevate Activity: Focus intently on the conversation or presentation to increase your energy and engagement. Adjust Consistency: Maintain consistency to gain support, or reduce it to show openness to new ideas. Using Nonverbal Cues to Your Advantage As leaders and fundraisers, our ability to communicate effectively is paramount. By focusing on these nonverbal cues, you can ensure that you’re not just heard—but truly understood and trusted. Remember, it’s not just about what you say; it’s about how you say it. These subtle signals can help you project confidence, build trust, and ultimately, achieve greater success.
Communicate Like a Leader: The Power of Nonverbal Cues
Do You Communicate Like a Leader? When we think about effective communication, we often focus on the words we say. But there’s so much more to it than that. True leadership communication combines spoken words with powerful, nonverbal cues—signals that often speak louder than words. This week, let’s explore how you can enhance your presentation skills by focusing on these subtle yet impactful signals. Dr. Nick Morgan, author of Power Cues, provides fascinating insights into how our nonverbal behavior can predict success in everything from business pitches to leadership interactions. The Unspoken Signals of Success Researchers at MIT have discovered that the success of an entrepreneurial pitch to venture capitalists can be predicted with remarkable accuracy—just by analyzing unspoken signals. That’s right, without even hearing the details of the pitch, factors like posture, pacing, and pauses can reliably forecast whether a pitch will succeed or fail. In recent discussions, we’ve touched on important “power cues” like how you walk into a room, the resonance of your voice, and the impact of nonverbal communication. But there’s more to uncover. Honest Signals: The Truth Beyond Words In Power Cues, Dr. Morgan introduces the concept of “honest signals.” These are nonverbal cues and patterns of behavior that reveal our true intentions—signals that are difficult to fake. Here are the four honest signals Morgan identifies: Influence: How much one person dominates the conversation. Mimicry: How one person mirrors another’s behavior. Activity: The level of energy a person brings to the interaction. Consistency: How even-keeled or steady a person remains. By consciously harnessing these signals, you can project power, control, and confidence in any situation. Whether you’re leading a team, negotiating a deal, or pitching to a potential donor, these cues can significantly enhance your effectiveness. How to Use Honest Signals to Your Advantage Morgan offers several practical suggestions for leveraging these honest signals to become a more powerful communicator: Increase Influence: Boost your positional power, express more emotion, or control the tempo of the conversation to enhance your influence. Enhance Mimicry: Consciously mirror others’ behaviors to build rapport, and then take the lead in the interaction. Elevate Activity: Focus intently on the conversation or presentation to increase your energy and engagement. Adjust Consistency: Maintain consistency to gain support, or reduce it to show openness to new ideas. The Power of Nonverbal Communication The more we delve into this subject, the clearer it becomes: mastering nonverbal communication is crucial for effective leadership. Dr. Morgan’s work offers invaluable insights that can help you transform how you present yourself and connect with others. As you continue to develop your communication skills, remember that it’s not just about what you say—it’s about how you say it. By refining your nonverbal cues, you can become a more persuasive, influential leader.
Direct Mail—The Best Worst Form of Fundraising
Is Direct Mail Really the Worst? You’ve probably heard the criticism. Direct mail is outdated, inefficient, and not worth the investment. But before you dismiss it entirely, let’s borrow a line from Winston Churchill: “It’s the worst form of fundraising, except for all the others.” Direct mail may have its detractors, but the truth is, it remains one of the most leveraged, efficient, and effective tools for allowing potential donors to self-select as supporters of your work. Why Direct Mail Still Matters Direct mail is a powerful way to connect with potential donors on a personal level. It gives them the chance to engage with your mission in a tangible way, something that digital methods can’t always replicate. And when done right, it’s not just a way to acquire new donors—it’s a strategy for building lasting relationships. But here’s the key: it’s not just about getting that first donation. It’s about turning that one-time donor into a regular, dedicated, repeat donor. That’s where the real magic happens. Retention: The Secret to Long-Term Success If you’re serious about maximizing long-term profitability, you’ve got to focus on retention. Why? Because convincing a one-time donor to give again is the tipping point of successful retention. So, what can you do to increase the likelihood that your one-time donor will become a loyal supporter? Here are some tried-and-true strategies shared by successful fundraisers: Say Thank You, and Say It Fast: Reach out within 24-48 hours with a heartfelt, genuine expression of gratitude for the gift. Pick Up the Phone: Call the donor to express your thanks directly. A personal touch can make all the difference. Get to Know Your Donors: Build in-person connections whenever possible. Understand who your donors are and what they value. Show Them They Matter: Focus on demonstrating to the donor that they are important and that you understand their motivations. Align with Their Goals: Your connection to them is about helping them advance their giving objectives and find fulfillment through your work. The Bottom Line Direct mail isn’t perfect, but it’s far from obsolete. When used effectively, it’s a powerful tool that can help you build lasting relationships with your donors, ensuring long-term success for your organization. If this resonates with you, think about how you can refine your direct mail strategy to not only acquire donors but to keep them engaged and committed to your cause.
2,232 People at 2,832 Feet…
…meant a day full of syrup and great lessons in marketing. What does this mean? Let’s explore. In a competitive world where it’s tough to stand out, positioning is the key to success. It’s how organizations carve out their unique place in a crowded market and capture the attention of the people who matter most. This idea applies whether you’re selling syrup or securing donations for your cause. Why Positioning Matters Positioning is about identifying what makes you unique, something only you can claim. It’s what sets you apart from the competition and makes you memorable. When done right, positioning doesn’t just help you stand out; it helps you attract and keep a loyal following. Imagine a small, mountainous community that draws tens of thousands of visitors for a festival. It’s not just the event itself that pulls people in—it’s how they position it. They’re not just offering syrup; they’re offering the only official festival of its kind in the region, in a picturesque, high-altitude setting. It’s an experience that visitors can’t get anywhere else. Applying Positioning to Your Cause Every organization has something that makes it unique. The key is to define what that is and communicate it consistently. Whether your mission is about community service, youth engagement, or public policy, the way you position your cause can make all the difference in gaining supporters. Ask yourself: What category do you own? What makes you stand out from everyone else? By answering these questions, you can develop a powerful position that not only differentiates you from others but also inspires action. Next Steps Positioning is just the beginning. Once you’ve clearly defined your unique category, the next step is communicating that position effectively to attract supporters. This is how you create loyalty and long-term success, enabling your organization to grow and make a bigger impact. Use positioning as a tool to highlight what makes your cause special, and you’ll be on your way to building a brand that stands out and draws people in.
The Transformative Power of Giving Clubs in Fundraising
“I love giving clubs!” That was the subject line of Rick’s memo. It grabbed my attention immediately, but little did I know just how much that memo would transform not only my life but the lives of so many others. And not just a little bit. It made a significant difference—a transformation for the better. This all started more than twenty years ago, and since then, the concept Rick introduced has helped raise hundreds of millions of dollars. Yes, you read that correctly—hundreds of millions. For great causes. Transforming tens of thousands of lives along the way. Pretty cool, huh? Let me tell you more. This story is about how you, too, can take up a strategy that could supercharge your fundraising efforts in a truly transformative way. It’s about giving clubs and why they should be a part of your “One Thing” to focus on in your fundraising strategy. The Beginning of Something Big: My friend and colleague Rick Hendrix first brought the idea to me in a memo, urging that we start a giving club for the nonprofit organization where we worked. This was after Rick and I attended one of Mal Warwick’s famous fundraising sessions in Berkeley, California. We both heard a compelling presentation from Bill Rehm, a member of Mal Warwick’s leadership team, about the benefits of giving clubs. Rick, ever thoughtful, took what we learned and converted it into a compelling plan—a path forward that he laid out in his memo. And why not? The potential upside was massive, and the risks seemed minimal. We just needed a solid plan, and Rick provided exactly that. The Power of Giving Clubs: Now, let’s talk about the reasons giving clubs are such a powerful tool in fundraising. These insights come directly from that session we attended, and they’ve proven to be incredibly valuable over the years. Here’s what giving clubs can do for your organization: Enhanced Communication: They provide a highly effective way to communicate with your best donors under the guise of the giving club. We all know how important list segmentation is—giving clubs allow for even more targeted communication. Increased Engagement: Direct mail is one of the most effective ways for donors to self-identify as supporters. Giving clubs encourage donors to raise their hands even higher, both in-house and in acquisition, boosting response rates and average gift sizes. Meaningful Recognition: Giving clubs offer a way to provide recognition and benefits that strengthen donor relationships without creating a sense of elitism. Community Building: They create a comfortable space for major donors to connect with their peers, fostering a sense of community and shared purpose. Personalized Attention: Giving clubs ensure that major donors don’t slip through the cracks but receive the individual attention they need. Encouraging Upgrades: Annual reports that showcase giving clubs not only serve as vehicles for recognition but are also highly effective in encouraging donors to upgrade their giving as they see the levels their peers have chosen to support. Why This Matters: If you’re looking for a way to truly transform your fundraising efforts, giving clubs might just be your answer. They offer a structured, strategic approach to engaging and retaining your most valuable supporters while also providing them with the recognition and community they deserve. The results speak for themselves. Over the past twenty years, the implementation of giving clubs in various organizations has led to the raising of hundreds of millions of dollars—dollars that have gone on to create meaningful, positive change in countless lives. Moving Forward: So, what’s next for you? Consider how you can integrate giving clubs into your fundraising strategy. The potential for transformation—both for your organization and for those you serve—is enormous. The journey to better fundraising is ongoing, and giving clubs can be a significant part of that journey. It’s about more than just raising money; it’s about creating lasting relationships with those who believe in your mission.
Why Prospecting Should Be Your Top Priority in Fundraising
Why prospecting? If we really want to supercharge our fundraising efforts, why should prospecting be the first thing we focus on? Prospecting is the foundation from which all other fundraising efforts grow. It’s the seed that brings in new donors, fuels direct mail programs, and often leads to higher-dollar contributions, events, and even planned giving. But let’s dive deeper into why prospecting is so crucial. The Expert Perspective: To explore this further, I reached out to two of the most talented direct marketing professionals I know, asking them why prospecting should be considered the “One Thing” for any fundraising strategy. John Griswold, a veteran of multiple presidential campaigns and national party organizations, shared his thoughts: “For me, prospecting is always my ‘One Thing.’ It is your seed corn from which all other fundraising can grow. It provides the source of donors for direct mail programs and many times the higher-dollar efforts, events, and even planned giving. What’s more, acquiring donations from cold prospects is the most difficult of fundraising tasks. If through testing you unlock the keys to prospecting, you have also unlocked many of the keys to donor retention and upgrades. Finally, the design of prospecting offers and the targeting significantly impact the characteristics and future responsiveness of your donors. Prospecting is the ONE THING!” John Davis, who has dramatically increased the number of active donors at the Leadership Institute, added: “In 2011, Morton Blackwell gave me a challenge. He believed prospecting was so important to the future of the Leadership Institute that he would be willing to borrow money in order to invest it in prospect mail. His challenge to me was to find a way to send enough prospect mail to put him in a position where he had to actually do that. I’ve been working to meet that challenge ever since. The good news is that we’ve greatly increased the amount of prospect mail we send. The bad news? The new donors are giving so much to the Leadership Institute that I haven’t been able to run Morton out of money yet!” This relentless focus on prospecting has had a tremendous impact on the Leadership Institute, as seen in the significant growth in donor numbers. And this growth excludes all major donors giving $10,000 or more. A good prospecting effort not only brings in new donors but also helps identify potential major donors, whether they give a higher amount immediately or over time as trust is built. Why Prospecting is Non-Negotiable: Prospecting is not just another task on your to-do list—it’s the lifeblood of a sustainable fundraising program. When done right, it can transform the future of your organization. Prospecting brings in new supporters, which is critical for long-term growth. These new donors can evolve into major contributors who play a key role in your organization’s success. Moreover, prospecting is a skill that, once mastered, can improve other areas of your fundraising efforts, including donor retention and upgrades. It’s a continuous process that requires careful planning, testing, and adjustment, but the rewards are well worth the effort. Taking Action: So, what’s the one thing you should do first? Start developing your vision and strategy for prospecting. Assess your current opportunities, and think about how you can implement or scale up your prospecting efforts. If you’re looking for further reading, consider exploring Ben Hart’s Fund Your Cause with Direct Mail or Mal Warwick’s Revolution in the Mailbox. Both offer valuable insights into effective direct mail strategies that can enhance your prospecting efforts. Remember, prospecting is the key to unlocking your fundraising potential. It’s the one thing that, if done right, can set your organization on a path to sustained growth and success.
Why Prospecting is the Game-Changer Your Fundraising Needs
Why prospect? It’s a question that comes up often. And the answer is always the same: Why not? Prospecting is one of the most effective ways to supercharge your fundraising efforts. If there’s one thing you can do this year to make a significant impact, it’s this: Prospect. But don’t just take my word for it. John Davis, one of the sharpest fundraisers I know, has done incredible work by adding tens of thousands of active supporters to the Leadership Institute’s donor rolls. His success is a testament to the long-term benefits of prospecting. So, why prospect? Let’s let John explain. The Importance of a Diagnostic: John suggests that the most impactful action a fundraiser can take is to run a “personality test” on their program. This diagnostic tool evaluates how your organization is doing, what’s working, and what isn’t. From there, you can build a custom plan to expand what’s working and fix what’s not. At the Leadership Institute, we use something called the Donor Performance Table (DPT). It’s a two-page tool that Morton Blackwell invented, and it’s been a game-changer for us. The DPT is like a health checkup for your organization, helping you figure out where to focus your time and resources. Understanding the Donor Performance Table: The DPT is divided into two main sections: Count of Donors Per Giving Year: This table shows how many donors start giving in a particular year and how many of them continue to give in subsequent years. It’s fascinating to see the progression and longevity of donor relationships. For example, we had 60 donors start giving in 1982, and amazingly, four of them are still giving as of last year. Donor Performance by Dollars: The second page of the DPT tracks the actual dollars given. It lists the initial prospect donations and the subsequent donations in each calendar year. This helps us see the financial impact of our prospecting efforts over time. Why Prospecting is Essential: The power of direct marketing lies in years of stable, sustained giving, supported by major and planned gifts in later years. This is how $17,000 in prospect income in 1982 turns into over $3.5 million in total giving over the years. Or how an investment in 2,895 donors in 1995 generates nearly $24 million in revenue since then. Your DPT results aren’t just numbers—they’re a powerful tool for making the case for prospecting investment to your organization’s leadership. It’s hard to argue with data that shows how a modest investment today can lead to massive returns down the road. Creating and Interpreting Your Own DPT: If your organization isn’t already tracking this, now is the time to start. Creating a DPT isn’t as complicated as it might seem. If you have a record of gifts made to your organization, you can build a DPT. And if you need help, we’re here for you. Once you’ve created your table, here’s how to interpret the results: Solid, Consistent Giving: If your DPT shows that your donors give consistently year after year, your direct marketing program is healthy. Your focus should be on how to scale up your prospecting efforts. High Donor Attrition: If your DPT shows a high rate of donor attrition—where revenue drops each year—this is a sign that something’s wrong with your marketing strategy. It might be an issue with donor acquisition or cultivation. This is a red flag that needs immediate attention. No Prospecting Data: If you don’t have any numbers because you’re not doing any prospecting, take a copy of the Leadership Institute’s Donor Performance Table to your boss. The future of your organization could depend on starting a program like this. Improving Your Prospecting Program: If your numbers are solid, the next step is to scale up. If your numbers show weaknesses, it’s time to re-evaluate your approach. Write down everything that might be causing problems, prioritize them, and start testing solutions. As soon as you find what works, focus on scaling it up. Every organization will have its unique challenges and solutions, but starting with a solid analysis like the DPT gives you a data-driven understanding of where to focus your efforts. It’s the foundation you need to test, learn, and grow. Final Thoughts: Prospecting might seem like a daunting task, but the long-term benefits make it more than worth the effort. It’s about building a sustainable future for your organization—one that’s backed by data and proven results. Fire away with your challenges, and let’s keep this conversation going.
