Marianne Pelletier interview: “We assume we don’t share prospects, but of course we do”

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Marianne

Marianne is Senior Consultant at Cornell University, and formerly worked at Carnegie Mellon and Harvard Universities.  She is a leader in advancement services, donor modelling and data mining and understanding donor engagement, speaking regularly at conferences and seminars on these subjects.  She tweets at @mpellet771.

A few points from the interview:

The use of insight can have powerful effects, increasing income and allowing not-for-profits to build stronger supporter relationships.  In the UK, prospect research has traditionally involved less quantitative or statistical methods.  However, ‘prospect research’ is different in the US, where it is largely data-driven.

Wealth screening: we all know it and use it.  And yet, even vendors admit that their information only covers around half of the millionaires in the population (and that total is probably an underestimate).  So, here will be a significant portion of the HNWI population whom charities are not aware of, sitting on their databases.  If not-for-profits modelled and analysed the level of wealth in more detail, they would almost certainly raise more form these groups.

Social media is coming to the fore in gaining valuable, ‘soft’ information on supporter preferences and interests.  Marianne’s team includes a full-time person scraping information from the web (and hand-connecting this to relevant supporter records), including network information, which is mapped in NodeXL.  Text analytics is also in vogue.

The web has fundamentally changed customer care, and Marianne describes some of the key ways in which this has happened.  First, Amazon “spoiled it for us” by raising the bar for the level of customer service users now regularly expect.  Next day delivery, automated, ‘you might like’ suggestions, and hugely responsive customer service are now all par for the course, whereas before they were considered exceptional.  Charities must keep up with these developments or be left behind.

There is lots more in the interview — I hope you enjoy it.

Tennis and the Rich List

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The 2015 Sunday Times Rich List was published yesterday.  It reminded me of tennis.

The world’s top 100 tennis players (male or female) have about the same levels of talent, skill and motivation.  Yet, they are paid wildly differently for their efforts, with the top three male players earning around one quarter of the total available prize money from 2009-2012.  Inequality in this group is severe, and has increased in recent years.

This trend uncannily mirrors recent UK wealth patterns, namely, the further up the income scale we travel, the more gains accrue.  So, the top 0.5% benefit more than the top 1%, the top 0.1% more than the top 0.5%, the top 0.01% more than the top 0.1%, and so on.   The graph below is indicative, and more detail, using US data, is here.UK 61-11 wealth pic Is this reflected in how charities seek support?  In some cases.  Should we work even harder to bring in truly big gifts more consistently from the wealthiest?  Absolutely.  The maths are simple: the 2015 Rich List estimates that the wealthiest 1,000 people in the UK are worth £547bn, up 5.4% on 2014.  So, even if the estimated value is accurate (and it’s almost certainly too low), gifts over £1m account (at £1.36bn in 2013) for around 0.2% of total top wealth.  Getting this to 1% would quintuple the value of UK high-value philanthropy to around £6bn.  However, a 2013 study by the University of Manchester suggests this is not happening, as the poorest 20% gave 3.2% of their gross monthly income to charity during the four weeks before they were interviewed, while the richest 20% gave 0.9%.  And, the Coutts Million Pound report estimates that the value of the largest gifts has increased in the last decade, but only incrementally, while this year’s Rich List calculates that the wealth of Rich List entrants doubled between 2009-2015.

And, among the ‘merely wealthy‘, it is hard not to agree with research consultancy Factary who concluded in June 2014 that “Middle England is neglected”, ie, that charities leave significant sums from this group ‘on the table’.  The space between Individual (roughly, £3-£20 per month) and Major Giving (cash gifts of around £5,000-£10,000 and up) is one which could receive more attention.  Factary estimate that this market could grow to be worth more than the £20m value they currently assign to it.  Many in this group would have featured in Rich Lists just a few years ago, but are now excluded by the explosion in top wealth.  However, they can still make a really significant contribution, and many will be passionate advocates of causes we represent.

Tennis is an extreme example of a handful of superstars driving revenue.  Those featuring in the Rich List will obviously play a crucial part in raising the overall amount given to charities in the UK — from the level spent on cheese to that spent on, let’s say, alcohol.  By broadening and deepening support from the wealthiest, and strengthening the base of so-called ‘middle donors’, charities can avoid tennis’s reliance on a handful of household names, and reach more of those in need of their services by raising more, more consistently.  If we agree that fundraising must change to survive, these opportunities are too important to miss.

Charity to serve.

PS: when will the Sunday Times publish another version of the expanded 2005/6 Rich List?  This is one of the most useful books in my library, especially as it now requires £100m to enter the top 1,000, excluding many wealthy people.  I have to assume they made a (big) loss on the expanded version, but surely 10 years is long enough to wait for another edition?

Charlie Hulme interview: understand the ‘why’ as well as the ‘who’

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Charlie H

Charlie is CEO of DonorVoice UK, who work with not-for-profits to reduce rates of donor attrition and in building supporter relationships.  He tweets at @charlieartful.

The interview is about retaining donors.  Retention has the coming idea in fundraising for…a long time. Ken Burnett published the fundraising classic ‘Relationship Fundraising’ in 1992, with Professor Adrian Sargeant’s ‘Building Donor Loyalty’ published in 2004, both books are well-known and acknowledged references on how charities can build strong and enduring relationships with supporters.  Charlie is a real evangelist for the cause, and opened my eyes to the danger that many charities are — often without knowing it — committing suicide through inertia.  We know that two things — the ‘functional’ and ‘personal’ connections to brands — are critical in determining the level and durability of charitable support, yet many not-for-profits routinely follow the mantra of ‘just ask more and it will be fine’.

But we still find ourselves hemorrhaging support. Around one third of first time supporters of charities in the UK do not give a second gift, and in the US around 70% of donors have not continued giving a year later. Acquisition budgets increase, but retention budgets do not exist. We furiously slop water into the leaking bucket, even while holes continue to appear.

In the UK this is especially important, as the generation who the CAF call the ‘Civic Core’ (the 9% of the population who contribute 66% of the time and money donated to charity) are now well into their 60’s and 70’s. This group have doubled their charitable giving in the last 30 years, as younger people’s engagement with charity has fallen off a cliff. To even sustain out current donated income, UK charities urgently need to reach new audiences, as well as building stronger relationships with existing supporters — no mean feat.

Charlie talks in the interview about the fundamentals of retention. He also speaks about recent work done to test how commitment works, the psychology of commitment to brands and organisations, and what people want from organisations they support.  Hope you enjoy it.

Clara Avery interview: “Where I’ve seen consistent success is where we’ve done the basics right”

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Clara A

Clara is Head of Supporter Insight and Development at Macmillan Cancer Support.  She joined Macmillan in 2003 and previously led their Direct Marketing and Sales teams.  She tweets at @claraavery.

Macmillan have been oneClara_Macmillan insight flow of the success stories of British fundraising in recent years, and Clara sets out why that is from her perspective. The diagram here sums up the process.  Evidence is required at each stage, from identifying the gap to assessing whether further investment is needed or the initiative has been successful.  Clara stresses in the interview that the challenge is not to never fail, but to make failure cheap, and to learn as much as possible from these ‘failures’.  As G. K. Chesterton said, “If it’s worth doing, it’s worth doing badly”.

Two things in the interview struck me as particularly significant:

First, decisive leadership.  Macmillan embarked on a “massive” restructure and investment programme in 2008, when many charities were cutting costs in the midst of the recession.  The results speak for themselves, with Macmillan’s voluntary income increasing by something like 50% since then.

Second, the importance of renewal.  The World’s Biggest Coffee Morning is now a byword for fundraising success.  But it really took off once Macmillan looked at what and who drove the event.  By integrating insight into the campaign it became what it is today.

However, we also talk about how the prospect research and insight teams are structured at Macmillan, how to understand donor motivations, and what one piece of information Clara’s team would like to have to raise more money.  Hope you enjoy the interview.