As we all settle into this new (hopefully temporary) reality, our industry has been working double time to react, learn and gather as much historical context as possible in order to inform immediate, short-term and long-term strategy. In fact, we believe this crisis actually highlights one of the most powerful things about our industry – our ability to quickly (often in real-time) pivot, collaborate and information share, breaking down company and organizational silos for the greater good. Brava!
To that end, over the past 5 business days, our team has spent countless hours on webinars, client and internal calls, and reading the dozens of historic and current articles published about managing through challenging times. From this intense ‘learning laboratory’, we believe there are certain common themes, points of consensus, and additional questions where the path forward is yet to be clearly defined. One thing is for sure, if the past week is indicative of the coming few – by the time this article is out the door, things will likely have shifted once again. Communication and ongoing conversations and plan evaluations will be critical as we all attempt to remain one step ahead of this crazy new paradigm.
Don’t Panic, But Remain Vigilant
As Nick Ellinger shared in this article, history tells us that the economy is a lagging indicator of fundraising performance. For those folks that are fielding questions from finance and executive teams, we urge you to take a read of this content and share the compelling perspective of how past events may help forecast our future fate. In short, direct marketing, especially mail and digital, may be a saving grace for your organizations while other areas like events and major gifts, are likely to take the greatest initial hit. For even greater context, see this really fantastic piece written by Adrian White Slagle in which she brilliantly talks through triaphilia – the belief that incidents happen in threes.
In all of this additional background, a primary resounding theme is ‘don’t stop talking, but get louder and more strategic’. Our friends at M+R share about this here. Now is the time to further connect with donors and solidify your relationship with them even further. (More on that in a bit.) In fact, history has shown that decreases in fundraising as an outcome of economic factors often occur months (3-12) after the initial incident. Therefore – drastic changes to strategies based in ‘what if fears’ may be detrimental to your overall fundraising revenue. Your specific data may indicate adaptions to strategy in a few weeks/months – but now is likely not the time for massive changes to planned control strategies. For more on the benefits of ‘calm’, read Seth Godin’s uplifting reminder here.
Keep a Hawk Eye on Results Across Channels
While now is not the time for panic, it is definitely the time for careful monitoring of trends and cashflow. The data can be your best friends in situations like this – especially if you have a robust year over year sense of what is ‘normal’ vs. ‘odd’. Watching your specific programmatic trends will allow for data-driven decision making, enabling future decision making around investments, channel allocations and future testing plans.
Double Down on Stewardship
Now is great time to solidify donor relationships – especially among those most at risk in situations like this; mid level, major and monthly donors. Teletown halls, Facebook lives and video calls will be a great way to build relationships with your donors. While telemarketing (as a channel) has experienced softness over the past year for many, this new landscape we are living in may provide a resurgence of this channel as a powerful revenue and relationship builder for organizations. The demographics of the typical direct marketing donor is the primary age group for COVID-19, and therefore the cohort most likely to be home for longer periods of time, yearning for contact with the outside world. Direct conversations with donors will provide organizations with the opportunity to understand how donors are feeling – and even work through other options for donors that are looking to cancel monthly gifts because of economic uncertainty (i.e. offering a pause on processing for 3-6 months vs. a cancel, etc.).
To Test or Not to Test
One of the most frequently asked questions over the past week has been whether to test or not to test, and frankly we believe the answer to this question depends on how your tests fit into your long-term, or short-term priorities. Because the overall response of a campaign may be somewhat down, the test and controls will likely have relative outcomes regardless of this special circumstance. But if you think you may find yourself wondering if a test performed a certain way because of this environment – this might not be the right time. No one knows how long this situation will last – so sacrificing testing altogether could be a sacrifice of many months of valuable program learnings. So we say, proceed with a healthy dose of caution. That said, if current fiscal year net revenue is the ultimate priority, it may be prudent to preserve current investment in hopes of optimizing overall net revenue. This is especially true for small/medium size organizations who could realize significant production savings by shifting to a singular control package strategy per campaign, or by relying just on the best outside lists to maximize the number of new donors joining, while not using this time to test into new markets.
And What About Acquisition?
While acquisition efforts are (almost) always an investment for organizations, it can be especially scary to move forward in unknown situations like this. In our opinion, this decision really boils down to a) how much it would cost your organization NOT to generate the prescribed number of donors, b) if you can shift strategies to generate those donors later in the year, or c) if there is an opportunity to dial down acquisition efforts and pump up reactivation efforts for a lower overall investment per donor. These are all very individual decisions, so creating data-driven multiyear scenarios will enable relevant decision making. To that end, there may also be an opportunity to modify investment strategies to devote ‘unused’ acquisition dollars to enhance overall retention efforts – working to keep even more donors this year (to help offset anticipate losses in acquisition efforts if scale backs do occur).
And finally – the million-dollar question that really makes us wish (even harder) that we had a crystal ball …. HOW MUCH WILL THIS COST US? Everyone wants to understand one basic thing – how much will current events impact the bottom line. And frankly, the answer right now is … we don’t know … yet. This is likely very dependent on your organization’s vertical and mission (i.e. food banks and relief organizations are likely to see an increase this year), the investment decisions prioritized, the composition of gifts acquired by your organizations and finally, how flexible your organization/program is to change. It is very likely that reprojections will be needed this year, especially considering the convergence of COVID-19, the economy and the election, but it is too soon for estimates to be made that are based in data. That answer can likely change in relatively short order – but at this moment meaningful reprojections based in data are not possible. At this point, it’s all about getting the processes in place to collect the data that will inform this information in the coming weeks (i.e. raw data by state, channel and giving type when possible, etc).
So Now What?
Undoubtedly, the past week has felt like a year. And kudos to each of you for the work you all have done in this short period of time. The good news is that we are likely too busy to be bored at home … and the even better news is that together we make up an industry of committed folks who are even more determined to elevate important missions to make our world a better place for years to come. The future ahead is unknown, and our hope is that we are able to continue sharing information industry-wide so we can all learn and grow through this unprecedented experience.
If you have any questions, or there is anything additional that the MINDset team can do for you, please reach out to us by contacting either Candice Briddell at email@example.com or Erica O’Brien at firstname.lastname@example.org.