In Episode 71, we venture into another aspect of eCommerce: how it can benefit nonprofits with their fundraising efforts. And to help us understand how critical it is to have the most effective strategies in place, we are talking with John Haydon, long-time fundraising expert, coach and speaker.
Running a nonprofit it a lot of work. John helps nonprofits who are looking to raise more money, improve marketing, and increase engagement. So if you are running or involved with a nonprofit in any capacity, in today’s show John shares some great tips in all three areas.
We chatted about:
- John’s top three strategies for fundraising
- The number one mistake that nonprofits make when they begin their fundraising efforts
- What a nonprofit should consider before starting to sell products as part of their fundraising plan
- How much of a viable solution is crowdfunding for a startup nonprofit
- What is on the horizon in tech that will play a critical role in helping nonprofits fundraise
You can also download a pdf of the full transcript here: WordPress eCommerce Show Episode 71 April 26 2017
Bob Dunn: Hey everyone. Welcome back to the WP Commerce Show. Bob Dunn here, also known as BobWP on the web. Today on the show we are talking non-profits, eCommerce, and fundraising. And I can think of no one better to bring on than my longtime friend, fundraising expert, speaker and coach John Haydon. It’s great to have you on the show today, John.
John Haydon: Thank you, Bob, I’m so glad to be here. Thanks for inviting me.
Bob: You know, you and I have been trying to get this podcast together for a bit, and between our two schedules it’s been a little crazy, and life gets in the way. Finally I got you here so I’m a happy camper.
John: Awesome. That’s great. Yeah, I feel like we’re- in a way we’re brothers. You’re in Washington and I’m in Boston. So we’re on the West and the East coast.
Bob: Yeah, exactly, and we’ve known each other for, it seems like, many many years. I won’t say many, many many years.
John: Lots of conferences.
Meet John Haydon, speaker, coach and fundraising expert
Bob: So John, can you tell us a little bit more about who you are, and the work you do in fundraising?
John: Uh, sure, yeah. I work with nonprofits. I help them with anything online. Online marketing, online fundraising, online communication. I work with organizations with their goals, whatever they are. Some organizations want to reach more people to provide impact. Other organizations they say, “We want to increase our volunteers.” Other organizations want to raise more money. Other organizations want to engage. So, each one has a different goal.
My job and my passion is to help nonprofits make a bigger impact, but use these communication channels- these new communication channels in ways that are smarter and more efficient, based on the somewhat limited resources that they have. The other thing I notice about nonprofits is that they don’t tend to be natural marketers. So, with my background, my career is mostly for profit side sales and marketing, I’m bringing all that experience plus now having done this for about nine years on my own, working with hundreds of nonprofits, I feel like I can offer a unique perspective and insight that a lot of organizations kind of miss.
So that’s what I do. I do speaking training, strategy development, consulting, all that stuff, and love it.
Bob: Very cool. I know that Judy and I, in our previous marketing business that we had for more than 20 years, had a lot of nonprofit clients and it’s true. They really have unique challenges, but in other ways their goals apply to any regular business. But hat marketing part of it is really tough for them. I can’t tell you how many jobs I’ve done pro bono way back when I was first starting graphic design and marketing, and there were so many nonprofits- so much need out there.
It’s very rewarding work, and it’s very challenging at the same time, so I really respect what you’re doing.
John: Oh thank you. I love it. I sleep very well at night, compared to how I used to sleep when I worked for a software company, for example.
What are your top two or three fundraising strategies for nonprofits?
Bob: Oh, yeah. I can imagine. So let’s dive into these questions. The first one’s going to be kind of broad. But in a nutshell can you give us your top two or three strategies that you look at for fundraising for these nonprofits? You know, kind of the big picture type of thing.
John: Yeah. So … big picture. And I’m speaking mostly from experience. In other words, what are the biggest areas of impact that I’ve seen nonprofits make to get to raise more money, to improve marketing, to increase engagement, whatever they’re looking to do.
Strategy 1: Person, problem, payoff
Probably the number one strategy is storytelling. Nonprofits tend to start using these, you know, Facebook, Snapchat, email, blogging, whatever it is, and they start doing what you could call bragging. You know. Look at how great we are. This is our hundred-year anniversary, nobody cares about that. Look at this great check we just got from a funder. Look at how awesome we are and how efficient we are using your money to make a really great impact.
The nonprofit puts themselves, kind of unintentionally or unknowingly in the role of the hero. That’s not the right way to approach it. A storytelling framework that I work on with my clients, actually is, I call it, “Person, Problem, Payoff.” So in order to get people’s attention, you have to talk about an individual person. You talk solely- take the spotlight off your organization, and put it on the impact, because that’s what donors want. Donors don’t want to give money to a nonprofit. They want to give money to make an impact. “Feed hungry children.” “Give clean water.” “Fight for justice.” This is why donors give. This is why they support. This is why volunteers volunteer, right?
So the framework is, you start with the impact, but you tell the impact in the way of the story so a person, for example a- we’re talking about the cause, let’s just say, is feeding kids who are kind of poor in school, and providing a good healthy lunch so that they can concentrate in school, right? So we might talk about jargon and all that junk. Nonprofits tend to do that. They tend to get very jargony about what they do.
But rather, the storytelling framework is: now, we’re talking about a child, his name is Max, and Max has all the passion and dreams, and he really wants to be an astronaut. You know?
Bob: Mm-hmm (affirmative).
John: So that’s the person, right?
The Problem is that Max can’t pay attention in class because he’s always hungry. He’s starving. And his family- his parents were- they’re unemployed, “blah blah blah,” one thing led to the next. And now Max has a problem.
Now the Payoff, right. Person, Problem, Payoff. Payoff is, “You can do something about this. You can feed kids like Max. You can make sure the kids at school can focus and become happier, more productive people in our community. You can do that.” When I say “you,” I’m talking about the potential donor.
So this is the framework. This is the first thing; is to kind of reconfigure how you’re communicating in a fundamental level going from bragging to this kind of story structure of Person, Problem, Payoff.
Strategy 2: Focus on donor retention, not acquisition
The second over-arching strategy I would recommend is to focus mostly on retention, not on acquisition. In other words if we were going to talk about Pareto, you know the 80/20 rule. I didn’t know this, but he was a pea farmer. He found that basically 20% of his pea pods grew 80% of the peas. So that’s kind of an interesting thing. So to follow that- and this isn’t more of- it’s a principle- it’s a kind of a law, almost, like a business law. My recommendation to all my clients is focus 80% of your marketing and communication efforts on retention, keeping your existing donors happy. Then focus 20% of your time on acquisition. The reason why? This is a simple cost-benefit type of situation. It’s five to seven times more expensive to acquire a new donor as it is to keep an existing donor happy and giving again.
So a lot of my work is focusing on this retention because that is where, from a financial perspective, it actually just makes sense to focus on keeping your people happy, and then of course getting them to tell their friends about you as well. They’re not going to tell their friends if they’re not happy, if you’re not making them feel pretty amazing.
Strategy 3: Organize your content and events
That would be the second one. And then the other piece, the third one is to be organized. I often work with organizations around creating editorial calendars, content calendars, and that way they can map the stories, their content, everything. Makes sense based on the events that are coming up.
A lot of the nonprofits I know- and I’m sure this is for you too- they have a lot of fundraising events: volunteer recognition, fundraising galas, walkathons, this and that. There’s always something going on. The event is really one of the main tools that a nonprofit has in terms of its marketing asset. I think that’s absolutely important.
Anyhow, those are the three strategies.
Bob: Yeah. Those are good. And it’s interesting that that’s what a lot of people talk about, you know, the business side of things too, is too many people try to get new businesses and then it’s like, “Why don’t you cultivate your existing customers?” So, those are excellent.
Now, based on those three things you shared with us, is there one mistake, or one large mistake that you’re seeing nonprofits do when it comes to fundraising that you didn’t mention in those three strategies?
What is the most common mistake you see nonprofits making?
John: Yeah, that’s great, because obviously within these three strategies there’s an implied wrong way to do it. You know what I mean?
John: It’s kind of implied in all of these recommended best practice strategies. But I think another one, like a common mistake I see is just not listening. We live in a world, today, for the first time in human history actually, people can talk to the world. Anybody can get a Twitter account, an Instagram account and basically publish their own stuff to the world. This is the first time ever in human history this has ever happened, right?
Now, human beings haven’t changed for a couple hundred thousand years. So emotionally, in psychology, we’ve kind of had the same hardware that we’ve had for many, many years. We need to really listen and understand people first, before we start just talking. So, and Bob, when I went to school, even in middle school, they were talking about the model of communication. You have a sender, you have a receiver. And then there’s a message. Also, there’s feedback. The receiver will give the sender feedback on that message. I mean this is basic stuff I think that everybody learned in middle school, right?
But yet … we are faced in the world today with social media where actually people can talk back at you. They can give you feedback all the time, all day long, 24/7. They have the information. So for example on Facebook- I kind of view Facebook as a vehicle to listen and understand people and basically test out story ideas. So over time, an organization can actually find out, “Well what are people interested in?” For example, an animal shelter. There’s so many different topics you can explore with your audience.
They’re interested in stories about dogs being rescued from neglect. Are they interested in pet care tips? Are they interested in seeing cute puppies? Are they interested in funny videos of dogs riding around on a tricycle?
So, with this sort of information, we can really understand our people. So that’s Facebook. We can always test out different topics and find out what’s really getting the traction. Often, again, nonprofits make the biggest shift when they realize, “Wow, we need to start talking about the things that our people care about.” Once they realize that, then things start changing. So one of the biggest mistakes is to not listening. To just kind of assume- and we all know what that means- assume what people should hear about or getting into the business of, “We need to educate our donors.” For something like that, it’s just not really wise.
What do you think about nonprofits selling products online?
Bob: Do you have any thoughts on when the nonprofit says, “OK I’m going to start this fundraising, and I’m thinking I should start maybe selling products as part of the fundraising.” It’s calendars, maybe it’s T-shirts, something that they think might be another good integration into raising a bit more money. Anything they should consider before jumping into that?
John: It depends upon the size of the organizations. The first thing I would recommend is, “Don’t become a T-shirt store.” OK? That’s not your job. It’s not to sell T-shirts. Your job is to change the world and do the impact thing. That’s what you’re trying to do.
You can sell product, but be really careful about what you choose to do internally versus what you choose to outsource. I know today, there are in fact- and, Bob, I can send you some links after- there are some companies out there- and you can simply do a Google search- that do the whole thing. Go to our website. Create a T-shirt. Start a fundraiser for this T-shirt for your organization. So there’s that.
But I would also recommend that the product makes sense for the cause. In other words, it should be something that people want to make themselves look a certain way to their friends. OK?
Bob: Mm-hmm (affirmative).
John: An example I can think of right off the bat is a T-shirt, selling T-shirts that really just do two things: that you raise money a little bit, but also you’re getting your name out there; this brand recognition kind of thing. That’s what I would focus on.
Bob: Yeah. More of awareness of what they’re actually doing.
Bob: Instead of just pretty T-shirts.
John: The perfect example would be a Goodwill store. Should you be selling stuff online? Yes, you should be selling online. You should have an eCommerce store. That is the core part of your business. That would make more sense to have that- you know have the website be much more of an eCommerce thing and making an impact is actually selling clothes, then definitely sell it online.
Should a potential nonprofit consider crowdfunding as a way to generate income in the startup phase?
Bob: Yep. Now I’m going to take this in a little bit different direction and I might actually put this as a question to you coming from somebody that’s asking you about fundraising, especially around a startup nonprofit and I’m not sure if you’ve had a lot of experience with that or not. But just your perspective or how you might approach this.
If somebody comes to you and says, “Hey, I’m a new startup, I see all these crowdfunding things out there happening. And I’m thinking, maybe instead of just getting online and starting the traditional way, maybe I should start my nonprofit by crowdfunding to get some money generated.” What would you say to that?
John: I would say, “Go for it, 100%.” If you’re an organization, or if you’re just starting up a nonprofit and you have an idea, and you say, “Wow this is such a great idea, I don’t know why anybody else hasn’t thought of this. I’m going to start a nonprofit.” It’s a lot of paperwork to go through, and all this, so I would highly recommend doing something like a GoFundMe or a Kickstarter.
The cool thing about Kickstarter is it’s really changed this idea, it’s almost promoted this idea of a beta. Rather than spending millions of dollars on X, Y, and Z, throw a sample product out there. See if it has some legs, and then it will take off.
So this is real beta approach to a lot of stuff that we see for sale on Kickstarter. You know, hey it’s a great idea, but I’m not sure. Let’s see if people will actually pull out their wallet and spend money on it. So I would recommend it. If there’s an idea and you definitely want to test it out, and you want to know for sure if it’s interesting to people and if your idea is worth it in terms of a nonprofit, I would recommend putting it to that sort of test.
Bob: Yeah, before crowdfunding, nonprofits didn’t have that chance to actually test something like that. They just had to go ahead and go through the whole process. Your approach makes total sense.
John: Now, am I saying your whole nonprofit should be built on a crowdfunding idea? No. But I am saying that doing a crowdfunding type of campaign around it might definitely verify how viable the situation is. And then of course at that point then you might say, “Great, let me do a 501(c)(3). All the paperwork. Let’s start applying for grants. Let’s start doing this and that.” And you know, really kind of building something after that point.
Is there any service, tool or piece of technology do you see on the horizon to help nonprofits fundraise?
Bob: Exactly. All right. So the very last question, and I know we talked a little bit about this before the show, this jumping on the bandwagon with every shiny new object. But is there something in the tech area or something on the horizon that you see coming, that you’ve already started whirling around in your head and thinking, “Wow, this is going to be a great service, tool, technology, whatever, to help nonprofits fundraise.”
John: I’m going to give you two. One is live video, which is kind of already around, like everybody does Facebook Live, and so forth. That’s huge. I think nonprofits are getting a lot of gains in that area. That’s something that’s relatively new, but it’s happening now.
Something else that’s very new that I think is going to make a big impact on how nonprofits communicate with donors and supporters, is Virtual Reality.
Bob: I was just thinking about that.
John: I’m not kidding. There is an organization called “Nothing but Nets,” and I might have the wrong nonprofit unfortunately, and if I do I’m sorry, but it has to with- it’s an organization that gives mosquito nets to families in certain African countries. And they have Virtual Reality kind of- they have a 360 video, and they also are exploring some Virtual Reality aspects too which is so great. Because then, it puts the donor and supporters in the world of impact. And I believe “Charity Water” has even started experimenting with this. Like, you know, sharing at least the 360 video, so that you can- you’re there, you can look around, you can walk around this village and look at, you know, how do they live day to day with all the struggles. And they’re trying to get clean water, and so forth.
So it really puts the supporters right in the place of impact, I think, like no other- nothing else like it, you know? It’s pretty cool.
Bob: Yeah. It’s amazing what VR is going to do. I think we’ve just- probably some of the things we can’t even imagine. It’s going to be something else.
Well, this has been great stuff. Nonprofits have challenges. They’re always looking for resources, and I know you already give them a lot of great information through this particular podcast. But also, I want to ask you, “Where can they find you?” I know you have a ton of stuff on your site for them to access. And also where can they find you on social to connect with you there?
Where can we find John Haydon on the web?
John: Just go to johnhaydon.com; it’s J-O-H-N-H-A-Y-D-O-N .com. And I’m on Twitter, johnhaydon, that’s the Twitter handle. And then Facebook, I’m johnhaydon.marketing, you know facebook.com/johnhaydon.marketing. I do a Facebook Live video every Wednesday. It’s called “The Hump Day Coffee Break,” and it’s a mini- training session I do with nonprofits to help them get higher open rates with their emails. Very tactical stuff. And they can find out more about that if they go to johnhaydon.com/hdcb. It’s like Hump Day Coffee Break, HDCB.
Bob: Oh, cool.
John: So yeah. Lots of stuff.
Bob: All right, well, I know you have lots to do; lot of nonprofits to help, so I just want to thank you for taking the time to join us today, John.
John: Thank you, Bob, I appreciate it.