Finding Budget Dollars for Fundraising Innovation in FY21: RNL Experts Chat
Vice President of Research
June 4, 2020
We recently launched a poll of fundraisers about their expectations for staffing, budget and goals in the coming fiscal year. In the first 100 responses, we heard that over three-quarters of fundraisers believe they will lose staff in FY21 and two thirds expect a budget cut. However, 85 percent expect the same or higher fundraising goals.
It’s clear that “business as usual” is not going to be the plan for the coming year. It’s time to challenge the norm, look closely at resources, and maximize ROI if we’re going to meet goals.
You can take the poll here: 2020 Advancement Leaders Speak Pulse Survey
RNL’s Greta Daniels, Meg Weber, and Shad Hanselman have all organized donor outreach programs at universities during times of budget stress. I asked them to offer ideas and advice for fundraisers for meeting goals, trying new things, even when resources will be tight.
What are your suggestions for securing budget dollars to try new things, innovate, or make shifts necessary to make FY21 fundraising goals?
Meg: I’d start with looking at budget resources that will go unused because of social distancing. The first is travel funds. The majority of gift officers are planning virtual meetings, at least for the first part of the fiscal year. And our travel to events will be low or non-existent for a while. Even professional development conferences have moved online, and are discounted. So that’s a big chunk of change that can potentially be repurposed.
Have a conversation with your leadership, expect that they do plan to use some of that savings to help respond to budget cuts, but a portion should be used for platforms and communications that will help make up for the lost in person impact with donors. Much of that can be digital outreach.
Greta: I agree. The second place I’d look is event dollars. For years we’ve had successful but very high-cost events. Those won’t be happening. Galas, reunions, and homecoming will all likely have a significant online component. That may take some new platforms and new costs, but there is likely significant budget that can be repurposed. Some of that will go to the cut, but when the discussion comes up about new platforms, annual, leadership and special project giving should be at the table for the discussion. Some of those platforms can be dual use, event and giving. Like our own RNL platform, QuadWrangle. This is a great time to evaluate which events your constituents really miss and which ones they don’t. This will help identify dollars that can be used to engage people in other ways that are more meaningful to them.
Meg: That brings up a great point. Some of those events, like galas, have corporate or business sponsorships. or even major donor sponsorships. It’s time to talk with those funders about how they can support other donor engagement efforts. Don’t be shy—they are used to sponsoring, and while they have their own budget crunches in this economy, they’ll likely want to stay involved. The chance to sponsor a new platform or a new campaign could really energize these supporters. Ask for the gift to be a matching gift in a digital campaign, perhaps for a student emergency fund, and feature the donor or company prominently. Use those funds to pay for the platform and campaign communications.
Greta: The next place to look is in staffing. We’re hearing that many institutions will cut positions or not fill open positions, at least for a while. It takes between three and 10 months in most cases to make a hire, so if you’re under even a six-month hiring freeze, that probably means that a full year’s salary and benefits, which can be between $50k and $100k. We all know those funds are accounted for differently at each institution, but there’s an important question to be asked here. We’re going to save those funds, but some key things we do will also go undone without that staff member. Can we take a portion of those funds and put them into engagement activities that keep us connected to donors in the meantime? If those positions were frontline donor engagement, how can you still engage at scale with a portion of the investment, like with a Digital Engagement Center?
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Shad: If you have a budget or staff cut but the same or higher goals, you’re going to need to do things differently. If you’ve been slow to adopt new technology, you now have no choice. One place to start is to really analyze your audience and do better with targeting and personalization. You can’t do that alone. Leverage AI technology to identify the best prospects to target for solicitation and which channels to put them into—you’ll maximize your ROI and reduce budget on higher cost items.
One example is to look at low-cost channels first for both renewal and new donor acquisition, like low-cost direct mail, email and, texting. Then, proceed over the course of the year to utilize higher cost channels to targeted groups.
Greta: I think that’s really important. I’ve talked with fundraisers who admit that 20 to 30 percent of their direct mail is just a waste. They know there will be no response, but they’ve “always sent that letter.” Just stop. Engage those potential donors differently, and start with lower cost channels to engage, following up with those who show interest at the next cost level. Please, please stop just soliciting everyone because “we’re supposed to send this to everyone.” It’s just silly, and frankly, it creates a horrible donor experience.
I’ve talked with fundraisers who admit that 20 to 30 percent of their direct mail is just a waste. They know there will be no response, but they’ve “always sent that letter.”– Greta Daniels
Shad: It’s time to right-size your channel mix by prospects who perform better in each channel. Pay really close attention to amplification channels that are relatively low cost: digital advertising, P2P texting, and email. These have been shown to improve effectiveness when used in concert with other channels like mail and phone. Shift to higher-volume, lower-cost channels for select audiences. Watch what they do, and then spend more to convert them.
Meg: This is where analytics can come into play as you build the right mix for individuals. Don’t blindly use the same approaches for everyone in your list. Make more expensive channels, like phone, channels for donors who need it to convert. It’s time to stop making immovable plans at the start of the year and move to constantly adapting to seeing what donors are doing, how they respond, and where you can turn the levers for specific channels to be donor-responsive. That’s a key shift that fundraisers need to make during times of budget crunch. Actually, we should just do that every year.
Shad: You can’t do this alone. Looking for outside help with analytics and platforms to execute the donor-responsive communications will be necessary for most shops. And working with providers who have their fingers on the pulse of what everyone else is doing and what is effective can be of huge value.
Greta: When budgets get tight, these can be really tough conversations. We’re going to have to advocate for a view that the Advancement budget is one connected source of resources to meet immediate goals and build pipelines. It’s time to challenge the norm, ask questions, and consult with peers in your shop about how you can pool resources, and redirect for at least now some of the tight budgets to maximum effect. This can lead to really great conversations, and put you on the path to innovation.
Let’s talk about your fundraising budget ROI
RNL’s team of donor engagement experts helps institutions maximize budget ROI every day. Reach out to us now to find out what your peers are doing as well as how to integrate high-impact, next-generation tactics that fit into any budget. We’re ready to help you have the challenging conversations that will take your donor engagement to the next level.