Bring balance to your fundraising

Right now, the NFL has a wonderful example of a somewhat esoteric topic:

  • The Raiders have more yards per pass than the Panthers
  • The Raiders have more yards per run than the Panthers
  • The Raiders have fewer yards per play than the Panthers

How can this be, you say?  After all, there are only two ways to gain statistical yards on offense in football: running and passing.  (You can also gain or lose penalty yards, but those aren’t counted in these stats.)

The answer is in balance.  An average pass gains 7.7 yards per play for the Raiders (7.6 for the Panthers).  An average run gains 4.4 yards per play for the Raiders (4.2 yard for the Panthers).  Yet the Raiders pass 50% of the time and the Panthers pass 58% of the time. 

In other words, the Raiders are more efficient at running and passing; the Panthers more than make up for this by being more efficient at balancing their running and passing.  (Of course, no team is fully balanced — even the worst team at passing gets more yards per play (Jets, 5.9) from passing than the best team at running (Cardinals, 5.2) — but that’s a topic for another time and blog.)

This is called Simpson’s Paradox — you can get one result from all the subgroups of something but have the opposite result for those groups put together because of the composition of the group.

This holds true for fundraising as well.  You can and should put a great deal of effort into that mail piece, DRTV spot, telemarketing, or digital ad to make it as efficient as possible.  That’s like the Raiders coaches and players working hard to improve each play.

But it can be undone if you are looking to see that your first dollar, last dollar, and each one in between is put to its best use.  That includes:

  • Among channels.  Sometimes this inefficiency is even codified by boards or managers — digital must break even in X months but mail must break even in Y months or the like.
  • Between modeled lists and list rentals.  Many folks will go in with a set portfolio — they want X% modeled lists, Y% rental lists, and Z% commercial and stick to that even if they are leaving money on the table.
  • Between lapsed reactivation and new donor acquisition.  I’ve seen many organizations spending more in the mail to acquire new donors even though reactivated lapsed donors have a greater lifetime value.  If you are willing to spend more to get something of lesser quality, this holiday season, I hope you’ll shop at my new online store Schmamazon.  Our business model definitely isn’t charging more for things than you can get on Amazon and using them for a bit before sending them on to you.
  • Looking only at cost to acquire.  Congratulations — you got all your CTA to be the same across channels, list types, donor types, and more.  But some donors perform better in the long-term than others; you must pay more to get those.  One that boggles my mind is in canvassing, it generally costs the same to acquire a donor through door-to-door than street canvassing.  And yet donors acquired through door invariably retain better than those in the street (you know they own homes, they could sign up for EFT more easily, they tend to be older because the canvasser doesn’t get to pick who they talk to).

All this is tough to manage to be sure.  At best, they are on different Excel worksheets.  Modern science has yet to name the phenomenon where we think things on different worksheets are in entirely different universes — may I suggest the Ellinger Conundrum? — but we do.  At worst, they are managed by different people in different departments on different floors with different budgets spent on different vendors.  And those different people hate each other.

There are barriers.  But those barriers must fall.  Carpe donum is our marching motto — we seize the donations where they are, not where we wish they were or budgeted for them to me.  And we do not pick from the top of the tree until the low-hanging fruit are denuded on all the trees.

Because we don’t need to pick between being the Raiders or the Panthers.  We can be good at each individual tactic and how they are balanced.  Lives will be saved if we are.

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