Blue Sky Collaborative's Viral Fundraising Blog

Online Fundraising Software Tip: Don't let software companies handle your money

If you're considering an online fundraising website for your viral fundraising campaign, walkathon, or any athon, you should avoid software vendors that take your donations before disbursing the funds to your organization.

If you already have a merchant account and credit card processing company, any software that you use should support your own merchant account vendor.  This ensures that the money goes from the donor to the credit card processor and then directly to you.

Avoid software vendors that take your money and then deliver it to you in batches for the following reasons.

1. Security.  The more people that have your hands on your money and data, the greater the risk for something going wrong.
2. Keep software vendors from skimming off the top of your donations.  Software vendors that get your donations first before sending them to you can easily deduct percentages from your donations for themselves.
3. Cash flow.  The more vendors that you put between your org and its donations, the longer that you will have to wait to get your money.

In this age of extensible platforms and APIs, online fundraising software should be able to support a number of payment processors.

SWEET online fundraising software, for example, works with:

• Paypal
• Google Checkout
• Linkpoint (now part of First Data)
• Authorize
• Cybersource
• Acceptiva
• Entango.

This means that you could fit an online fundraising software around any of these payment processors and you get your money faster and more securely, without losing a percentage of it to Blue Sky.

If you're looking for efficiencies, ways to cut costs, and improvements to cash flow, your online fundraising software is a great place to start.

Marshall University Foundation Starts a Viral Fundraising Campaign

Marshall University has added a viral fundraising campaign to its development portfolio.

The newly launched campaign is called Give to Marshall and can be viewed online here: http://www.givetomarshall.com/

The goals of the campaign are to:

1. raise funds in support of the University
2. raise alumni participation rates among our graduates
3. raise awareness of the continued growth and advancement of Marshall.

We've always wondered how SWEET Viral Fundraising Software would work in an alumni/university setting.  This will be a good test case.

The people who are asking for the money will be alumni...and that's all we really know at this point. 

Things that we don't know yet; who will the givers be?  Will the givers exclusively be alumni?  Or, will people who did not attend the university give as well?  This will be the most intriguing question that needs to be answered.  If the answer is yes, then the prospect of generating revenue from non-alumni would would be an exciting result of a viral fundraising campaign.

The University will also have concrete and usable marketing data about alumni who are participants in the campaign.  The alumni are willing to make "asks" for Marshall.  A campaign like this will at the very least, provide Marshall with some information about the profiles of these actively participating alumni.

Hopefully we can all learn a great deal about the value of viral fundraising campaigns in the university setting.  We will keep you posted.

Habitat for Humanity Chapters Collaborate to Save on Build-athon Software

Habitat for Humanity in East King County, Washington and Seattle/South King County collaborated on an a-thon http://habitatbuildathon.org.

Pooling their resources resulted in:

1. increased participation for both chapters
2. more revenue for both chapters
3. lower costs for both chapters

No sacrifices with their a-thon web site

Neither chapter had to make special arrangements with their online fundraising site.  Participants and registrants were able to designate which chapter they were supporting.  Each chapter had its own payment processors connected to the SWEET Pledge Fundraising site.  Money raised by participants was routed DIRECTLY to the corresponding chapter - no middle men, no transfers, no skimming off the top.

Both chapters received all the benefits of having their own site at a significantly lower price. 

The nonprofit sector is highly fragmented.  Collaboration like this is good for everyone including the orgs who are trying to save money and the donors who are inundated by invitations and solicitations.

Collaborating is something more nonprofits should do, especially orgs with regional donor bases that won't be competing against each other.  It makes sense and is a proven technique. 

Stay Away From Gimmicks

All too often, orgs look for the gimmicks and use tools that are "FREE" but charge 10% transaction fees (see fundable.com).  If it sounds to good to be true, then it is.

Why not just work together?  The Habitat folks in Seattle proved that it works.  Soon I will share a story about 300 (!!!) different orgs sharing a SWEET site.  Extreme collaboration.

Association of Fundraising Professionals Code of Ethics Should Apply to Fundraising Software Companies

The Association of Fundraising Professionals mandates that its members abide by an extensive code of ethical principles and standards http://www.afpnet.org/Ethics/EnforcementDetail.cfm?ItemNumber=3261.

These guidelines were adopted in 1964 and have been updated many times since then.  AFP is a good organization that protects nonprofits and their donors from unethical fundraising practices. 

Recently (2007) AFP expanded their guidelines to apply to business in the fundraising industry.  http://www.afpnet.org/Audiences/NewsReleaseDetail.cfm?ItemNumber=3799

Kudos to AFP.  I've always believed that AFP's ethical guidelines should apply to fundraising software businesses (my industry) as well.  Now that AFP has expanded its guidelines, the next challenge is to get the leadership at these fundraising companies to actually give a crap.

There are two clauses in particular, that fundraising software vendors absolutely need to adhere to.

The first,

"Members shall not engage in activities that conflict with their fiduciary, ethical and legal obligations to their organizations, clients or profession."

Replace "Members" with "Vendors" and we would be all set.  Software vendors that are publicly traded companies would inherently violate this clause.  Their fiduciary obligation is to their shareholders.  That's the law.  Period. 

The second,

"Members shall not accept compensation or enter into a contract that is based on a percentage of contributions; nor shall members accept finder’s fees or contingent fees."

All vendors that charge based on a percentage of contributions would fail to meet this standard.  And there are a lot of them.  Some good, well-intentioned companies fall in this category of offenders and they need to change their practices.

For decades, AFP's code of ethics has protected nonprofits and donors from unfair fundraising practices.  Now that these guidelines to the technology companies that are in the fundraising industry, its time to get the vendors and customers to care. 

Direct mail - kill it. Slowly.

Direct mail still works.  It generates a lot more money than email/online donations despite the fact that email fundraising continues to grow quickly.

My biggest problem with direct mail is the lack of information that it provides.  You really don't know who has read it, if they've put it on their fridge, if they threw it away, or anything really.  Your postcards go out into the world and the only feedback you get is the amount of money raised. 

Email campaigns on the other hand can yield a wealth of information including read rates, click-throughs, unsubscribes, donations and more.

The other advantage with emails is that they don't have to be "asks."  You can use email for awareness building  or testing without worrying so much about the return on investment because the costs are so low.   When you send out a postcard there can be significant costs associated with it so you want to be sure that an "ask" is a major component of a direct mail campaign.

Campaign Monitor is my favorite provider, by the way.  www.campaignmonitor.com

Still, people are used to getting solicitations in the mail and until the return rates are next to nothing I would suggest keeping direct mailings in your fundraising portfolio.  But give it a short leash and work hard to collect emails so that when you are ready to switch to emails only you don't lose people.  Till then, use both.

Jewish Federation of Greater Atlanta launches viral fundraising campaign

The Jewish Federation of Greater Atlanta recently launched Community Campaign 2010, a viral fundraising campaign that hopes to use the dollars raised to aid the most vulnerable among us, ensure that Jewish culture and traditions live on, and strengthen the critical link between our local community and Jews around the world. 

http://urnext.jewishatlanta.org/jfcampaign/

Viral fundraising is catching on at Jewish charities.

http://www.jewishjournal.com/philanthropy/article/virtual_viral_fundraising_brings_real_donations_20071207/

Although many Jewish charities are still grappling with the notion that their message will be in the hands of e-philanthropists on fundraising platforms like SWEET Viral and Pledge Fundraising Software, they are coming to terms with the fact that "in five years online giving would dwarf the returns now" and "if they (bigger charities) don't embrace the newer technology, the smaller organizations will come in and we'll reap the benefits."

Viral Fundraising Ideas

Our clients are awesome.  We've had the good fortune of being involved with some very creative fundraising campaigns. 

I'm sharing a couple below.  Hopefully, this will get the creative juices flowing at your org. 

From time to time, we'll post more creative campaigns by our clients so check back in frequently.

Habitat for Humanity Build-a-thon

www.habitatbuildathon.org

At Habitat for Humanity, volunteerism runs through their veins.  They've extended this culture of volunteerism into their fundraising.  In the build-a-thon program, Habitat has asked its volunteers to build homes AND raise the money to finance it.  It's a great model and has been successful so far.   

The Darling Home for Kids Build a Wall Challenge

http://wall.darlinghomeforkids.ca/

Another "building" campaign, The Darling Home in Canada has put the fate of its renovation projects in the hands of its members by asking them to raise money to help finance the renovations.  Their goals are explicit.  The need exists, http://www.darlinghomeforkids.ca/index.cfm?id=9587, and the viral fundraising campaign is the vehicle that they have chosen.

If you are thinking of adding a viral fundraising campaign, walkathon, or any a-thon, you should ask orgs that have done so successfully.  You should reach out to the folks at Habitat and Darling Home to see how they pulled it off.  You'll probably learn that a successful viral fundraising campaign is an attainable goal.

Viral Fundraising Samples and Mini-primer

Durrette Consulting has created some good viral fundraising campaigns that can be found here:

http://www.durrette.net/viralfundraising

Also available at the link above is a brief explanation of viral fundraising.

Key takeaways include:

1. Viral fundraising campaigns can take many forms and are limited only by an org's creativity
2. Successful viral fundraising campaigns are done online
3. Most viral fundraising campaigns are centered around an event or specific goal

Data On the Utility of Donor Management Databases Is Not Favorable

In a Bain & Co. study 20% 0f 451 senior executives polled said the their CRM  (customer relationship management) initiatives had failed to deliver profitable growth and had damaged customer relationships

Do You Really Know What to Do with Your Customer Data? by Jean Ayers in the Harvard Management Update 2003

Shift gears now to the nonprofit sector.  If this study were done with nonprofit executives in 2008, the results would be the same.  Nonprofit executives polled about their Convios or Raiser's Edges would tell you that they are not working out as planned and certainly have not returned on investment.  I've yet to see any definitive, statistically rigorous data pointing in one direction or the other.  This is probably because people are afraid of what they will find and ignorance, we all know, is bliss. 

Nevertheless, marketing experts warn against the problems associated with having one large data repository, which is what Convio and Blackbaud tout. 

The danger is that the nonprofit director is presented with an "average donor profile" and is not given a more in-depth picture about individual donors and how and why they act.  This average donor profile may not even fit a single donor in the database, yet an org may base its strategic decisions on the aggregated data point.  They will try to build a relationship with this fictional average that does not exist.

In fact, it may be better to forget about integrating data.  GASP!  Separate data sets may give you a more well-rounded, holistic picture of your donors.  And if orgs look at their data in a broader context, meaning - how does the info we glean from our data sets fit into our donor knowledge management objectives - then orgs would get a more accurate picture of their donors AND spend less time with imports, exports and other data- corrupting practices.

Fortune 500 companies have long since abandoned the idea that a single, monolithic CRM system is the answer to their marketing challenges.  They have diversified their approaches to get a more customer-centric view of their patrons.  I think it's time that nonprofits followed suit.

Online fundraising with a 7.5% transaction fee

Online Fundraising Transaction Fees

If your software vendor charges a 7.5% transaction fee for your online donations, you are getting ripped off.

There is no way that a software vendor deserves $7500 for every $100,000 raised online for perpetuity.  No way.

If you are paying this, you should apologize to your donors.