Death by Committee: The Panel Discussion at UWA Conference June 29, 2005 By Steve Fafel

Mission Research is one of a few select companies here as part of the United Way of America's annual technolgy conference, held in San Diego this year. It's great to see all of these United Way techies from across the country. I sat on a panel on Monday as a substitute for a Blackbaud executive (Kintera isn't here either, and Convio left Tuesday), where I said what has become the term of the week: "death by committee". Too often, nonprofit projects suffer from death by committee because of the seemingly universal need for nonprofits to give everyone a voice in a decision, while painstakingly reviewing all the details all along the way. I also recounted the phrase: "Nobody ever lost their job buying IBM", and gave a possibly offensive nonprofit version: "Nobody ever lost their nonprofit job making a decision".

It's not meant to be insulting, and it's not universal. Many nonprofits have their decision processes well refined. But many more suffer from being too conservative with their decisions, dragging decision-making processes out for far longer than necessary to make well-informed decisions. When I said it I got both laughter and affirmative head nods--they know what I'm talking about. Many of the techies come from corporate backgrounds, where things must keep moving for competitive reasons. Without that same type of external driver, nonprofits must be self-driven, and frequently will allow good projects to stall.

Examination is good. Study is good. Know the details. But make decisions--move forward. Go for the 80% solution if you can't get the perfect one. Keep moving ahead. In retrospect, you'll realize how much more you accomplished by doing what you can instead of waiting for doing the absolute best. Don't give in to death by committee--trust each other, debate, make decisions, and move on. Take ownership. make mistakes, and don't fear the darkness around the edges--bring light to it.

I'm heading back in to the fundraising software sessions--it's a great time!

The Problem with Fundraising (Post by Mal Warwick) June 26, 2005 By Steve Fafel

I spend a lot of my time these days traveling across the globe, teaching fundraising to nonprofit executives, mostly in developing nations. There, where the nonprofit sector is often a recent development and where fundraising expertise is hard to come by, the biggest problem usually is that nonprofits lack access to practical, hands-on knowledge about how to raise money. That's largely because almost all of them are beginners.

Here in North America, though, the problem is different. It's not that we lack expertise -- we've got too much of it! Like the medical profession, fundraising has become overrun with specialists.

In healthcare, the problem is sometimes akin to the committee of the blind that examined an elephant. A gastrointestinal specialist is likely to see a patient's illness from the perspective of the stomach. A psychiatrist looks elsewhere. And it's not much different in the nonprofit sector.

Check out any large, successful nonprofit organization that's been around for a decade or longer. You'll probably find a fundraising, development, or advancement office or department that's staffed with specialists in major gifts, direct mail, telemarketing, "planned giving" (what I call legacy giving), special events, and godknowswhatelse. With too few exceptions, you're also likely to find that most of these specialists know little or nothing about the others' work.

This is a big problem at many organizations, because it means that the Big Picture is frequently lost in competing goals and turf wars (at worst) or general confusion (at best).

Like any human endeavor, fundraising requires focus. That means strategy. Forethought. Planning. And priorities -- real priorities, which may mean that some activities are starved for resources and others are given everything they need.

How often have you seen that in operation in the real world of the nonprofit sector?

Really, now?

Direct Mail Fundraising June 23, 2005 By Steve Fafel

We send out a lot of direct mail and we track response rates. Frankly, I hate sending direct mail because it wastes a lot of material -- you're very lucky (or good) if you get more than a 3% response rate, and while it's a great marketing tool, it does make me uncomfortable. as a socially responsible CEO. But not so much that we don't do it as we test different ideas for Mission Research--direct mail does work. Most of our sales are from word of mouth and direct mail (though that will change in the next 3 months).

If you're like most nonprofits, you send direct mail to raise money. If you aren't, you probably should start. It works. The broader your support base, the more stable you'll be. And like Mal says in his books, you need to test everything and measure everything. You might get 1% response rate from one letter and 5% from another. Do you know, or do you just have a feel for what works? If it's the latter, you might learn that you can improve on your gut (what I call "informed intuition") by adding some basic metrics to your mailings, tracking who gets the mailings, tracking what messages work, and tracking your return on investment. We're building some of this into GiftWorks, but it's likely it will take until next year to really get it right for our customers (they'll tell us, I'm sure).

Consider this: if you spend $10,000 (crazy, right?) of your $100,000 budget on a single direct mailing that reaches 10,000 people in your area, including people in your database and people outside of your database from a decent list. Let's say you get a 2% response rate--just 200 people. If you get an average of $50 per person, you've covered your costs--$10,000. But that's just the beginning of your nonprofit's relationship with these new donors. Most will donate year after year, and it's likely some will increase their giving as your relationship develops with them. So that $10,000 investment now will pay back perhaps $50,000 over 5 years.

So your goals might be to raise money now. But sometimes it's important to plan for the future, and raise money, yes, but get new lifetime donors, too. I'm definitely no guru. Mal Warwick is a guru and has a lot of great articles he lent to us you should check out. But I know we do better here when we follow the same principles Mal talks about in his books and articles. Let me know what works for you--I look forward to learning what's worked for you!

United Way of America & Mission Research Form Nonprofit Software Alliance June 21, 2005 By Steve Fafel

Software is still to hard to use, and we're making it easy and inexpensive. UWA agrees, and they are working with us to make it easy for nonprofits to collect money through United eWay. Fundraising software just got a whole lot easier and much more convenient. Plus, the UWA doesn't partner with just anyone. We're pretty proud of this partnership!

http://biz.yahoo.com/prnews/050621/nytu079.html?.v=11

This leads to the question of whether online fundraising is effective or not. It can be, of course, but for so many nonprofits, it's not. Why? I suspect it's because nonprofits who make it work are committed to developing their support base--not their financial support base, but their topical support base. When you develop emotional and intellectual support for your mission, the money will come. This was true for the Dean campaign, Tsunami relief, and the 9/11 funds. Can it work for your mission?

I think so.

Mr. Coffee, Meet GiftWorks June 19, 2005 By Steve Fafel

Last September I bought the cool-looking, 4-cup black Mr. Coffee coffee maker with a clock that I can, ostensibly, program to make coffee so it's ready when I get up in the morning. I don't use the automated part, because I like the routine in the morning of making the coffee while my Thinkpad chugs awake with all the stuff I have on it.

Design matters. Mr. Coffee's designers developed a cool-looking, rounded pot. But every time I pour, the coffee runs down the sides (see 7th review). The lip of the pot isn't deep or wide enough and can't handle anything more than a small stream. It gives a new meaning to the term "drip coffee". What's worse is that for some reason a small amount coffee runs over the side of the pot while it' s brewing. The sizzling sound of the coffee hitting the hotplate under the pot gets on my nerves.

So what does this have to do with software? Design is everything. If people can't use your software, they won't buy it. That's why hundreds of thousands of nonprofits have chosen not to buy any software at all other than Microsoft Excel or Access. Or they'll buy it and then you'll charge $750 per day to train them on your barely usable software. If you're really shrewd you'll make them fly down to your company and make them stay at the only hotel nearby, which you happen to own (that's the rumor about Blackbaud, makers of Raiser's Edge).

At Mission Research we've invested a ton of time and money on design. GiftWorks is perhaps the easiest software to use that I've ever used, but we're not quite there--yet. We're spending extra time on the upcoming GiftWorks 2.0 to make sure everything is easily understandable, and easy to use, yet still powerful to handle even the most complex aspects of donor relationship management and fundraising. But it's not easy. Design keeps me up at nights. I'm not a great designer, but I'm a pretty good critic. If it's something that appears confusing or hard to figure out, we spend a little extra time on it. Design is everything.

We think we'll get copied (our lawyers are probably salivating at the prospect), and of course we might. But good design takes a commitment, and I don't believe our competition has the same visceral commitment to quality that we do. It's our mission. Software should be cheap, well-designed, and easy to use. Period. If it's not, it's not worth buying.

So I'm going to get another coffee pot. Any suggestions?