October 8, 2009

Creating A Dialogue In Religious Fundraising

By Tom Pope

Two-way conversations with donors are helping religious nonprofits with fundraising results. The UJA-Federation of New York’s annual Generosity event this year drew approximately 700 young Jewish donors in their 20s and 30s, up from 500 people at the first event in 2006. These donors found out about the event from the online social networking site Facebook.

“Giving was up 30 percent,” said Stuart Tauber, vice president of fundraising. UJA contacted more than 3,000 people through Facebook to find the 700 attendees. While people were eating, they took out Blackberries to text pledges and sent messages during the event.

“We never incurred the expense of mailing,” Tauber said. “And we reached people we never contacted before because we didn’t have an address for them. Someone else had an address.”

How to harness social media is one of the biggest issues for Rick Dunham, president and CEO of Dunham+Company, a fundraising consultant in Dallas. Dunham has been a member of the National Religious Broadcasters in Manassas, Va., and conducted workshops for the organization.

“Most nonprofits have a monologue rather than a dialogue with donors,” he said. “Very few are actually turning social media aimed at youth into fund development.”

Dunham explained that many in the ministry use Christian radio to attract new donors. Christian radio helps by narrowing the demographic through the “talk” format that draws a 45+ female audience. Some fundraising specials display a magazine format meant to engage the “theater of the mind” of listeners.

Instead of airing a two-hour special, the organization might focus on 30 to 60 minute versions that in some cases result in a return on investment (ROI) of $2/$1. One nonprofit has acquired more than 1,000 new donors at a net cost of only $1.10 per new donor. “This is far greater than we experienced in the past,” he said.

One problem limiting innovations is the focus on the organization rather than how the organization achieves the mission. “The donor doesn’t care about the organization. He cares about how the nonprofit completes its tasks,” Dunham said. “People are getting enamored with the medium and are losing sight of the fundamentals of fundraising.”

As a contrast, the international nonprofit ministry Open Doors, in Santa Ana, Calif., sends donors a monthly newsletter describing how lives are being transformed because of the mission. Open Doors supports Christians in countries where oppression of faith occurs.

“They’ve seen a 7 percent increase in donations to their newsletter in 2009 compared to 2008,” he said. “That generates more revenue than actual direct mail appeals because they’re showing the program, as opposed to details about the organization.”

Creating a dialogue rather than a monologue was on the mind of the UJA’s Generosity event planners. “We used our leadership base of natural social connectors to invite their own broad networks,” said Michelle Waranch, director UJA’s emerging leaders and philanthropist (ELP) division. “We have found that a personal invitation from a friend is more compelling than an invitation from the organization, so we used our lay leadership to maximize the effectiveness of Facebook outreach.”

The use of social dialogue has changed the dialogue method at the UJA. A signature part of interaction used to occur when the chair at the head of the table would encourage people to voice their pledge. For example, people might announce they could be counted on for $10,000.

“That was very effective all the years we’ve had the event,” Tauber said. “That changed with the younger generation, which doesn’t like the idea of standing up to announce the gift.”

Now, the young generation texts a pledge that appears on screens around the room during the event. “Now, we see people announcing in a different way because they may want to impress, although they’re doing it with texting,” he said.

The UJA always recruited young donors, although the focus of the division on Facebook is recent and prompted the creation of the Generosity signature event. The giving grew 30 percent between June 2007 and June 2008. The growth was due to ticket sales and also increased gifts from donors.

Dunham worries about reaching out to the younger generation. “Sustainable revenue comes from the demographic of 50+,” he said. “They are going through the highest earning years.”

Dunham recognizes the need to constantly repopulate the 50+ segment. That isn’t the same as seeking a significant funding vehicle from them. “Don’t expect the same loyalty and commitment to the organization from the younger segment,” he said. “They don’t have the same disposable income level.”

Waranch challenges the notion that the 20-and 30-year-old audience isn’t a good target for fundraising. “Many people in this age bracket are making vast sums of money,” she said. “Many of them have fewer expenses as they don’t yet have families to support, which actually makes them prime targets for giving.”

Waranch explained that ignoring the 20s and 30s means turning away future major donors. “The earlier you can connect someone to an organization with events and programs around issues, the easier it will be to build a relationship,” she said. “We are creating a space for young donors that is a long-term program, and while we have seen amazing returns in just the last few years, we believe in the long-term process.”

An appeal letter from Catholic Charities USA in Alexandria, Va., shows another innovation with audience dialogue through direct mail. The July lapsed donor appeal, individuals who had given between January to July 2008 without responding after that date, provided the nonprofit with a list of people to call on the telephone. The conversations resulted in information to frame the later appeal.

“The current return from that letter was around 2.18 percent,” said James Howell, director of development. “The return rate for the 1,000 individuals phoned has averaged just less than 9 percent because we reengaged lapsed donors by learning why they weren’t able to give, and how we could change that.”

Catholic Charities depends on direct mail for 80 percent of its fundraising effort. Everything changed during the first six months of 2009, according to Howell. “Standards based on years of work didn’t succeed anymore,” he said. “We needed to learn more about our donors and become smarter about who those people were.”

That meant finding a way to segment the audience. Now Howell is planning on having four to five variations of an appeal. “When our financial staff called the 1,000 people, we found they were concerned about local issues,” he said. “Some donors now were clients.”

Instead of mentioning national issues, the creative aims to address key regional concerns that affect the donor population.

The dialogue aims to develop a long-term donor engagement and loyalty. “Many fundraisers are quick to jump on the donor who gives the $10,000 gift for two years in a row compared to the donor who gives $100 for 14 years,” he said. “We’re trying to engage that person for his loyalty and we’re trying to spend more time to say what the money is doing to help.”

Tauber echoed the strategy. “Some have the notion that 80 percent of the money comes from 20 percent of the people, while some think that 10 percent provide that amount,” he said. “Now we’re coming to the point that charity is more democratic. We have to reach the majority of the people.”

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This article is from NPT Instant Fundraising, a publication of The NonProfit Times.

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