Showing posts with label Fundraising. Show all posts
Showing posts with label Fundraising. Show all posts

Early American Fundraising

fundraising , fundraiser , american fund , american fundraising , american fundraiser
Historian Scott M. Cutlip ’ s excellent book Fundraising in the United States: Its Role in America ’ s Philanthropy (1965/1990) provides the most extensive account of the history of fundraising in the nineteenth century and the fi rst half of the twentieth century in the United States. According to Cutlip, organized philanthropy supported by systematic fundraising is very much a twentieth - century phenomenon. Before then, philanthropy was conducted on a much smaller scale and largely fi nanced by a few very wealthy individuals in response to personal appeals. Most individual giving was directed to the churches, to the pitifully poor, and to schools, colleges, and hospitals. No organized or formal fundraising efforts were recorded for the giving of these gifts.

That said, a number of key fi gures in the new American colonies did play a valuable role in instilling the culture of giving that is so prevalent in American society today. John Winthrop (1588 – 1649), William Penn (1644 – 1718), and Cotton Mather (1663 – 1728) were among early philanthropic leaders who saw giving as an integral part of their religious practice.

Their contribution lay in persuading the wealthier elements of society to regard giving as an obligation associated with their wealth, and over time this sense of obligation morphed to embrace not only the wealthy but all of American society. Quite a legacy — but it is important to recognize that this was a process that took many years to accomplish. Romanticized notions of the generosity of the early colonists are largely false. As Hall (1992) notes, “ legislatures in the colonial and early national periods were intensely hostile to voluntary associations of any kind ” (p. 181), and most colonial colleges were state enterprises funded through taxation, as were early churches (barring those in colonies that tolerated religious diversity). Giving, as we know it today, was largely unnecessary.


The American Revolution and the desire it created for a less interventionist state were to change this situation. By the dawn of the nineteenth century, a strong tradition of private philanthropy had begun to emerge and
has continued to this day, to become what Marts (1966) regards as one of the most durable factors of American life. When Alexis de Tocqueville wrote in 1835 of his travels in America, he was impressed by the willingness of the people to give freely of their own funds for social improvements (Probst, 1962). He observed that when a community of citizens recognized a need for a church, school, or hospital, they came together to form a committee, appoint leaders, and donate funds to support it. The generosity observed by de Tocqueville was not triggered by fundraising in any formal sense; rather, it was largely a response to personal solicitation for help from one individual to another. As Broce (1986) notes, systematic solicitation of the general public did not begin until the early 1900s.

That said, there were early campaigns. Among the earliest recorded were the major campaigns designed to establish the famous colleges of Harvard in Massachusetts and William and Mary in Virginia. Americans gave generously to create these opportunities for their children, but additional support was often sought from overseas. Because the colleges of that era existed to educate both laymen and clergy, ministers were frequently employed to fundraise on behalf of these great endeavors. The fi rst example of this is credited as taking place in the early 1600s when three ministers were dispatched from America to England to raise money
for Harvard College. One of them came back with £ 150 — a pretty good sum at the time; a second stayed in England as a minister; the third met his death on the gallows, which perhaps illustrates that fundraising has
always been a somewhat perilous profession!

Other early fundraisers included Benjamin Franklin, who undertook a number of campaigns and was known for the careful manner in which he planned them. When asked for his advice he was said to have remarked,
“ In the fi rst place, I advise you to apply to all those whom you will know will give something; next, to those whom you are uncertain whether they will give anything or not, and show them the list of those who have given; and lastly, do not neglect those whom you are sure will give nothing, for in some of them you may be mistaken ” (quoted in Gurin and Van Til, 1990, p. 14). Indeed, much of the fundraising of the day and
throughout the nineteenth century was conducted through the medium of personal solicitation, in some cases by paid solicitors. It was common practice at this time to raise funds by assembling a list of suitable wealthy
persons and inviting them to a special function or, more usually, dinner.


Early fundraising manuals typically suggested that, aside from potential benefactors, the guests for dinner should include a smattering of “ pretty young ladies, ” which was seen as essential if high - value gifts were to be solicited. It appears that male donors have always been keen to impress with the size of their charitable wallets.

Church collections and the writing of “ begging ” letters were also common. It was not until 1829 that the fi rst instance of committed or regular giving was reported. In that year a fundraiser by the name of Matthew Carey sought annual subscriptions of $ 2 or $ 3 to support a number of local institutions. Unfortunately, only small sums were raised, and although it was visionary, his drive was eventually abandoned.

The nineteenth century was to see one last event of major signifi - cance for the fundraising sector: the emergence of the fi rst cooperative or “ federated ” fundraising campaign. The organization we know today as
United Way began as an effort to coordinate activities among local charitable organizations. The fi rst such activity appears to have taken place in 1887 when a priest, two ministers, and a rabbi recognized the need for
cooperative action to address their city ’ s welfare problems. They created the Charity Organizations Society to serve as an agent to collect funds for local health and welfare agencies, as well as to coordinate relief services, counsel and refer clients to cooperating agencies, and make emergency assistance grants. The idea of a coordinated fund drive for local charities soon spread to other communities. Separate organizations have been created in most communities in the United States to handle fundraising for local charitable organizations. United Way is the largest example of federated fundraising, but there are others, including federated campaigns for categories of cause such as human services or the arts.
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Online Fundraising

online fundrasing , fundrasing online , how to donate online , fundraising online tips
Sargeant (2008) estimates that around 5 percent of total giving by individuals in the United States is presently done online. Hart (2009) offers a similar estimate for 2008: a total of $ 14.64 billion in the United States and $ 29 billion worldwide donated online. The percentage of income generated for specifi c organizations varies widely, however, because some do little or no fundraising online whereas others have made a significant investment and are beginning to reap the reward. The analysis fi rm Target Analytics, for example, collates data from a number of its clients, including the Alzheimer ’ s Association, Amnesty International, and CARE. They have shown that approximately 9 percent of donors to these organizations give online, accounting for a median of 11 percent of all the revenue raised in 2008 (Target Analytics, 2009). Their data also indicate that the percentage of newly acquired donors who are recruited online (rather than from other media) has grown dramatically in the past four years. In 2004 the percentage of new donors recruited online to these organizations stood at 3 percent of their total; in 2008 it was reported to be 16 percent. The percentage of new revenue accounted for by new online support grew from 6 percent to 27 percent in the same period. In
plain English, the significance of the Internet as a source of revenue is growing rapidly.

The same study also sheds light on the behavior of online donors. They begin their support at much higher levels of giving than donors recruited through other channels, and they give much larger gifts when they renew or reactivate in subsequent years. Target Analytics ’ study data are reproduced. The success of the Internet as a fundraising channel is not surprising but it is relatively new. Charities discovered the opportunities of the
Internet in earnest only following the September 11, 2001, tragedies and the wave of giving that resulted. The fi rst Web site designs for most charities were typically nothing more than an online version of offline materials and content; articles were printed online just as they were offl ine. Some charities even prepared content that matched word - for - word what was distributed in their direct mail campaigns.

These early Web sites refl ected a charitable Internet that sought to talk at people. In the years following September 11, 2001, the online charitable world grew quickly and by mid - decade deployed a wide variety
of interactive strategies. These advanced Web tools and services allowed users to generate content themselves, create communities, and connect with people around the world.

In particular, we examine Web site strategy and how to drive traffi c to nonprofi t sites by employing elements
of an electronic fundraising (e - fundraising) mix, including search engine optimization and online public relations. We begin, however, by exploring the wider topic of electronic philanthropy (e - philanthropy) and how nonprofi ts can use the Internet for much more than just asking for money.


Web Site Strategy
A thorough examination of Web site design is beyond the scope of this text, but there are many excellent books that can provide guidance for an organization looking to create or develop its online presence (see,
for example, Beaird, 2007; McNeil, 2008; Lloyd, 2008; Bates and Massey, 2008). A brief consideration here of Web site strategy is warranted, however, because nonprofi ts need to think through the forms that content can take, the categories of activity they will embrace, and how these elements might enhance or support fundraising. As we shall see, these decisions are pivotal in designing an approach that will build successful relationships and raise funds.


Michael Dell (1999), speaking at the Detroit Economic Club on November 1, 1999, defi ned several principles or concepts necessary for successful Internet businesses. Much of what he suggested is now standard practice and in some cases has been taken much further than he might have imagined. According to Dell, an effective online presence includes the following three key elements, and an organization that is able to integrate all of them into a single strategy will likely succeed online:

  1. Content. Good sites act as a hub for all categories of information on a topic. Thus, nonprofi ts need to bring their information online by posting forms, manuals, documents, briefings, annual reports — in short, anything that might add value for one or more groups of stakeholders.
  2. Commerce. The ultimate goal of a Web presence, as Dell saw it, was to deepen relationships, so from his perspective sites should encourage “ transactions ” in the broadest sense of the term. These could be purchases or donations but could also include any interactions an individual might have with an organization. If sites are to raise funds successfully, they must be “ sticky ” and give people a reason to stay and engage with the nonprofi t and its work.
  3. Community. The final stage is developing an online community. Community can be built through discussions, forums, “ ask the expert ” pages, and blogs, and by leveraging opportunities to engage in or support social networking. The American Cancer Society, for example, has one of the fi nest online communities; it provides information for patients, relatives, survivors, and caregivers. Users can also interact with the organization to fi nd help in their local community, to learn about the cancer experiences of others, and to share their own experiences.

More recently, Sargeant, West, and Jay (2007) have explored empirically those aspects of site design that drive fundraising performance.
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Direct Response Fundraising

direct fundraising , direct response fundraising
One of the pioneers of mass marketing, William Hesketh Lever, famously remarked that he knew that half the money he spent on advertising was wasted, but he did not know which half. Even when he was making this comment, one group of marketers had a pretty good idea how their advertising was working. For some time, early direct - response marketers had been testing consumer responses to various media and had been using this information to tailor both their media selection and the  creative approach they employed. Direct - response activity has the advantage of being infi nitely measurable. Whereas mass marketers can only make
educated guesses about the impact of a traditional advertising campaign, the customer response to most forms of direct marketing can be measured and direct - response marketers rolling out an expensive campaign are now in a position to predict with a high degree of accuracy the response that will ultimately be achieved.

So, what do we mean by direct response? The Direct Marketing Association (DMA) defi nes it as “ an interactive process of addressable communication that uses one or more advertising media to effect, at any
location, a measurable sale, lead, retail purchase, or charitable donation, with this activity analyzed on a database for the development of ongoing mutually benefi cial relationships between marketers and customer, prospects, or donors ” (DMA, 2009a, p. 2). Direct response is characterized by four primary elements (DMA, 2009b):
  • An offer
  • Suffi cient information for the consumer to make a decision about whether to act
  • An explicit “ call to action ”
  • A means of response (typically multiple options such as a toll - free number, Web page, and e - mail)

The term thus embraces direct mail, direct - response press advertising, direct response television advertising, telephone fundraising (or telefundraising), and most forms of digital fundraising, including the use of e - mail and text messaging. It will be impossible to do justice to all these forms of communication in one chapter, so we instead focus here on what many professionals refer to as the traditional direct marketing media and save a discussion of fundraising through electronic channels for the next chapter.

There are two distinctive forms of direct response communication — one intended to attract new members, donors, or subscribers, and the other to solicit these individuals again for further support or, in the case of
sustained givers, to keep them in touch with the work of the organization. These two types of communication are very different from each other. As one of the sector ’ s leading authorities on direct response, Mal Warwick (2004, p. 16), notes, “ it ’ s the difference between [soliciting] the love of friends and the casual kindness of strangers. ” In this book we refer to these two forms of communication as donor acquisition and donor development communications. The terms donor resolicitation and donor renewal are also commonly used for the latter activity, but we prefer the word development because it implies the existence of a relationship rather than a series of exchanges.


Cornerstones of Direct Response
Holder (1998) argues that direct marketing comprises four components: continuity, interaction, targeting, and control . Continuity contrasts with the approach of “ mass marketing, ” in which contact with a donor is standardized and regarded merely as a series of one - time exchanges. All customers are treated alike, and very simple, “ give now ” messages are employed to stress the urgency of a situation and thus the necessity of giving or renewing. The emphasis lies in maximizing the immediate return on investment (ROI), and budgets
and communication strategies are developed accordingly.

In direct response, the goal is to use customer information to develop an ongoing relationship with each individual in the database. Direct response fundraisers recognize that it is not essential for the organization
to make a profi t on each communication with a donor, provided that over the full duration of the relationship a respectable ROI can be generated. Thus the costs of recruitment become less of an issue for direct response fundraisers as they recognize the future potential (or lifetime value) that will accrue from each donor. Indeed, the concept of donor lifetime value lies at the core of successful direct response activity and drives both what the organization is prepared to spend on recruiting each new donor (the allowable cost per donor) and what it is prepared to spend on developing a relationship with those donors over time.


The interaction component of direct marketing emphasizes the fact that direct channels afford fundraisers numerous opportunities to engage the customer — creative opportunities that are far superior to those that would be available through traditional channels. A mailing for a visual impairment charity, for example, contained an appeal to raise funds for cataract operations, including a photograph of a victim and a response mechanism (and reply envelope), but also a small piece of frosted Perspex (hard plastic) that the recipient could hold up to his or her eye, look through, and get a sense of what it is to see the world through cataracts. This is a wonderfully powerful and creative example of direct mail at its best!

The concept of targeting stresses that direct response activity is characterized by a unique ability to use lifestyle lists to target donors or potential donors with increasingly relevant communications. Once donors have been recruited, information about their behavior can be used to develop ever more refi ned communication in the future. Donors who want to give only once a year can be solicited only once per year, and donors who are interested in just one aspect of the organization ’ s work can be addressed only with communications that focus on that interest.

The control component of direct marketing draws attention to the ability of direct response fundraising to pretest almost every dimension of a direct communication. In the case of the visual impairment mailing described earlier, for example, the nonprofi t could conceivably have tested the impact of the following:

  • Including or not including the hard plastic Perspex
  • Including or not including the photograph
  • The presence of a message on the envelope
  • The choice of colors to appear in the cover letter
  • The impact of asking the donor for a specifi c sum (for example, $ 20 buys an operation to restore her sight)

In practice, perhaps three or four versions of a mailing might be developed and mailed to a small sample of the database. The pattern of response can then be assessed and the most effective version of the mailing
can be rolled out to the remainder of the donor or prospect base. Not only does this test allow an organization to select the most appropriate mailing, but it also allows the organization to predict with a high degree of accuracy the performance of the overall campaign. It is these four elements that combine to make direct response a unique discipline within marketing and fundraising.

Read More : Direct Response Fundraising