Fresh approaches:

Creating a fundraising strategy

from scratch

Scottish Fundraising Conference, 5 October 2016

Paul Stein – MQ Director of Fundraising & Engagement

@mqmentalhealth

@paulstein4

mqmentalhealth.org

Presentation Footer in Lucida Sans 10pt 01

Fresh Approaches:

Introduction

My aim today:

To convince you to try doing things differently

We will cover:

• An assessment of the current state of fundraising

• Guidelines to running a lean-start up

• Challenges and opportunities posed by the above

02

Fresh Approaches:

Introduction

Who am I?

03

Fresh Approaches:

Introduction

What is MQ?

• A major new mental health research charity – not yet

launched publically

• To give hope and improve the lives of people with

mental illness

• A long-term project to achieve a lasting impact by

leveraging public support

Part One:

Assessment of Fundraising in

the Third Sector

joinmq.org

04

1. Assessment of Third Sector

Fundraising

06

How has your organisation

responded strategically?

07

1. Assessment of Third Sector

Fundraising

The root of the problem:

• Transactional fundraising – not cause-driven fundraising

• Short-termism rather than maximising long-term success

• Market saturation

Sir Stuart Etherington:

‘There are three practices to blame here: the sharing of

personal data, ‘not taking no for an answer’ and a loose

interpretation of how and when people can be contacted.’

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1. Assessment of Third Sector

Fundraising

Part Two:

Transactional v Cause Related

Fundraising

joinmq.org

09

2. Transactional v Cause Driven

Fundraising

• Transactional

donors – one off

givers, the cause is

secondary

• Not targeted – e.g.

chuggers

• Often product-led

• Quantity, not quality

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2. Transactional v Cause Driven

Fundraising

Eric Ries: ‘Create a customer archetype and

source early adopters’

• People who love your cause

• Pull, not push

• Find them by:

o Analysing existing database

o Market research

o Live testing (especially digital)

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2. Transactional v Cause Related

Fundraising

• Female

• Largely urban

• Mid 30s – Mid 50s

• High-brow

• Families affected

by mental illness

The MQ Supporter Archetype:

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2. Transactional v Cause Driven

Fundraising

Optimum Supporter Mix Model:

Part Three:

Short Termism v Long Term

Success

joinmq.org

13

3. Short Termism v Long Term

Success

• Too much emphasis on annual

results (often from transactional

products)

• Insufficient analysis & evaluation

• A narrow approach to

acquisition – donations mainly

• Could implement major donor

techniques broadly

• More emphasis on legacy

pledgers required

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3. Short Termism v Long Term

Success

Eric Ries: ‘Carry out iterative validated learning from

real customers – ‘Build-Measure-Learn’ feedback loop’

‘Long-term success is key - actionable metrics, rather

than vanity metrics, or those over just one iteration

cycle’

• Actual engagement, rather than website hits

• Genuine supporters, not just transactional

• Legacy enquirers and pledgers, not just legators

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3. Short Termism v Long Term

Success

MQ Approach

• Multi-faceted acquisition

• Continuous testing

• Gradual conversion to

donors

• Building a legacy

programme from day

one

Part Four:

Market Saturation

joinmq.org

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4. Market Saturation

• Commission

emphasis on how we

engage, steward and

respond to the

preferences of

donors, but little

attention to type of

donors

• All targeting small

cash donors with

same old techniques

• It’s works….a bit…

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4. Market Saturation

Mark Rovner and Elia McKee ‘The Missing Middle’:

‘New donor acquisition has fallen every year since 2005….

and overall retention is hovering around 25 percent. The

decline of low dollar mass fundraising has arguably

accelerated the use of gimmicks [and]…the habit of using

baubles and banal techniques to solicit donations has

infected online fundraising as well. These practices

dominate the landscape because they “work”— in the short

term, at least. But we continue to wonder whether a donor

relationship built on tote bags and gimmicks can really lead

to long-term committed donor relationships. The latest

research on the subject would in fact suggest not.’

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4. Market Saturation

Fundraising expert, Roger Craver:

‘Frankly, when you see the amount of money that is left on

the table by these organizations— I mean tens of millions of

dollars—sooner or later they are going to have to deal with

[this neglect] because they can’t squeeze any more blood out

of the particular business-as-usual stone they are currently

working’

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4. Market Saturation

Eric Ries: ‘Usually companies are very good at

creating improvements to existing products and

serving existing customers – sustaining innovation –

but struggle to create breakthrough new products –

disruptive innovation – that can create new

sustainable sources of growth.’

• Before Crick capital appeal – CRUK raising just 1% of

£600m annual income from major donors

• Factary estimates mid value market value between just

£16m and £25m per annum of £10 billion donated by

British adults every year (0.2%)

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1 I am the one true

donor – there are no

others quite like me

2 Thou shalt phone

them

3 Thou shalt invite

them to cultivation

events

4 Thou shalt hand

sign all letters

5 Thou shalt use an

“inside track”

approach

6 Thou shalt use

stamps on envelopes

7 Thou shalt update

donors regularly

8 Thou shalt ask

people to “invest” –

not “donate”

9 Thou must remain

flexible – test and

learn

10 Thou must ASK

THEM

4. Market Saturation

Mid Value Ten Commandments

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4. Market Saturation

Mid Value and Major Donor Success Stories

Mid Value

• Marie Curie 26% growth in mid value over 18 months

- £794k to over £1m

• WJR 28% growth in two years - £485k to over £620k

Major Donors

• MQ – £750k+ in donations and pledges in 18 months

Fresh Approaches:

Summary & Conclusion

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Summary & conclusion

A fresh approach required for us all:

• To end ‘me too’ syndrome

• Don’t accept a downward trend in ROI

• Focus on quality of supporter & long-termism

• More personalised engagement

• More commercial (and more accountable)

• Go for it... ‘Most entrepreneurs’ biggest fear is not that

their vision will prove to be wrong. More terrifying is

the thought that the vision might be deemed wrong

without having been given a real chance to prove

itself’

Summary & conclusion

Thank you!

Any questions?

Keeping in touch:

• pstein@mqmentalhealth.org

@mqmentalhealth

@paulstein4