The 100% Fallacy: 7 Common Presumptions That Hold Your Fundraising Back

July 5, 2018

Many common assumptions about donors are just plain wrong, hence charities shipwreck financially and fail to grow. Get it right from the start with this “truth stampede.”

AFP recently had a chance to chat with Tom Ahern, of Ahern Communications, about fundraising fallacies, or common misconceptions that nonprofits have about fundraising, along with ways to deliver happiness to our customers: donors! He provides a reality check when it comes to fundraising expectations and tips for organizations to generate more revenue.

Ahern also covered these subjects in much more detail during his recent webinar, The 100% Fallacy: Common Presumptions That Hold Your Fundraising Back. If you missed the live webinar event on May 23, you can still sign up and listen to the archived event.

There are almost 2 million charities registered in the U.S. There are a lot more charities now competing for a shrinking pool of U.S. donors. Ahern, “volunteer fundraisingologist,” explains that there are fundraising fallacies that can potentially hold you back.

Here are 7 common fallacies:

• We could get a 100% response rate. (Giggle.)
• The shiny new thing will save us (Delusional.)
• Anyone can be our donor (Values must match.)
• Any donor is a great donor (WRONG!)
• Once acquired, a new donor is likely to stay a long time: “Ours for life.”
• We need younger donors.
• “Fundraising is easy. You don’t need to know much to do it.” (Only true if stagnation and burn-out are your organization’s goals.)

“The biggest challenge in fundraising is holding on to donors,” says Ahern. “It’s important to give donors a sense of purpose, make them feel important, and take them on a journey – to places they would otherwise not go.”

AFP’s webinar also explores the following:

• Why should you hang your entire fundraising program on just one metric, Lifetime Value (LTV)?

- LTV tells fundraisers to focus on persuading more donors to sign up as monthly donors; moving mid-value donors into higher giving; and marketing charitable bequests.

- Looking at LTV helps you to prioritize your activities and investments. It’s the most important metric, according to Dr. Adrian Sargeant, the world’s foremost researcher into fundraising matters. If you look at LTV, you’re focused on retention.

• What are acceptable response rates for direct mail appeals and donor newsletters?

- Direct Mail is still vitally important in fundraising; the respectable acquisition response rate is ½ of 1% and up

- A good response rate for a print donor newsletter is 5%

• Why are monthly donors preferable to annual donors?

- The average monthly donors give to charity between 7-10 years

- Monthly donors are not as common in the U.S. as in other countries

• Why are bequest donors (usually) preferable to major donors?

- Gifts in wills (bequests) gives you the highest Return on Investment (ROI) – more than direct mail appeals, events and major gifts fundraising

- In 2016, 44% of U.S. households had wills

7 Key Facts:

• Of 10 new donors, 2 go on to make a second gift.
• A third or less of crowd-funding campaigns reach goal.
• How big was online giving in the U.S. in 2017? Modest: 5-10% of total.
• Volunteers are twice as likely to give money, compared to non-volunteers.
• Baby Boomers consume the most online content.
• Your legacy gift will arrive within 3 years after you begin a serious bequest marketing effort.
• Which is better, stats or stories? It depends on your audience.

“What I enjoy the most is finding a story that matters to potential donors,” he adds “Most of the money in fundraising (more than 75%) comes into appeals to individuals.”

Ahern encourages fundraising professionals to “pay attention to the work you do and learn from others. He notes that the environment has changed since the emergence of social media in 2005 and the smart phone in 2007. “Fundraising winners are the best trained people,” says Ahern. “The losers are those with a lot of open opinions.”

In November 2016, The New York Times called Tom Ahern “one of the country’s most sought-after creators of fundraising messages.” He specializes in applying the discoveries of psychology and neuroscience to the day-to-day business of attracting and retaining donors.

The archived version of Tom’s webinar, The 100% Fallacy: Common Presumptions That Hold Your Fundraising Back, is available for permanent download, or up to six months for streaming from time of purchase.

Download Ahern’s free how-to e-newsletter at www.aherncomm.com, and check out “20 Questions: The Donor Communications Test” on best practices in donor communications.