Author: circumference360

I don’t really want to dampen the enthusiasm for fundraising or “friend” raising events, but the reality is too many fundraising events are disconnected from the mission and purposes of  organizations to the point few participants can even recall the charity they are supporting.  Very often people are attending because they were asked by friends (that they remember!).  Another fact, few event attendees actually become donors on a monthly or annual basis. If in doubt look at your donor and event lists.

When I hear people suggest they need a fundraiser to raise awareness of their charity or to identify supportive “friends” but start talking about a golf tournament or some other activity (gala, fun run, etc.) unrelated to their mission, I ask them the simple question, “how does this really advance the mission of the organization?”  What is the plan to engage people in the work you do and the outcomes your organization creates?  (BTW, raising awareness is not the same as raising money).

From incubation of an event to delivery to post-event activity, the fundraising event organizers need to ask this question.

The cost of special events typically runs in the 50% or more range.  So for every $1 dollar grossed, 50 cents or less comes back to support the organization.  That is a pretty high fundraising cost and a low return on the investment of time, energy and effort.  And typically it is a small group of staff and/or volunteers putting in a lot of work with precious resources.    That is a good way to kill off good board members or underutilize time and skill of staff.

Compare the costs of raising money with an event that to a mailing campaign like the annual fund – the cost per dollar raised is only $.25-.30 cents on the dollar. And the most efficient way to raise money of all is face-to-face solicitation focusing on major gift donors – that’s only 5 cents to 10 cents on the dollar.

If you can’t scrap fundraising events, consider revamping and reducing the number.  Create a bigger event with greater sponsorship opportunities linking the right sponsor with the right audience and cause.  Link it back to your mission and demonstrate how the event helps the organization create impact.  Think of the event as a starting point, not an ending point.  Follow up personally with a minimum of ten participants who attend the event to see if you can engage them in a meaningful way as a donor.    The journey from participant to donor can be very powerful for both the donor and the organization.

 

This is one of my favorite topics — could even be considered a rant — so I have broken it up into “rant” bites.

Part 1 introduces my thoughts on how we demonstrate our “love” for donors and how we communicate meaningfully with our donors to be truly more donor centric.

A few years ago, I came across a very insightful book titled, The 5 Love Languages: The Secret to Love That Lasts.  The author, Reverend Gary Chapman wrote the book to explain how people give and receive love and, maybe more importantly, how they feel unloved when a partner or spouse doesn’t understand or speak their particular language fluently.

Chapman has identified those love languages as affirmation, acts of service, affection, quality time and gifts.  Chapman’s book sold over 5 million copies and was translated into 38 languages.  He subsequently wrote another book about love languages in the workplace and even wrote a version for teenagers, singles, children and those in the military.

So what does Chapman’s book have to do with what I am calling “Donor Love” and the donor relationship?

Consider for a moment one of the love languages: gifts. For some people in a relationship, gifts may be very important expressions of love, but a donor might shun the idea of receiving a set of coasters, framed photos or other types of gifts to “remember the charity”. Yet charities often use token gifts to engage and keep donors.  Does it work?

A 2013 study of seventy-three German charities by researchers from the University of Hamburg “donors have different motives for their donations and their donations and different wishes need to be satisfied.”   This study found that charities that do employ a stratified donor recognition system outperform organizations that treat donors equally.  Increasing benefits with increasing donations may be appropriate for improving the fundraising performance of nonprofit organizations. However, the study’s researchers caution that further work needs to be done to see if the advantages of a donor priority strategy are amplified and may have an impact in future total revenues, such as legacy gifts.

There are also cautionary tales that must be told, especially about “thank-you” gifts.  To be clear, I am talking about “thank-you gifts” that are given after the gift is made; not in advance of the donation, as in the case with many charities that send out pre-printed address labels, stickers or fridge magnets as part of a direct mail appeal.

These kinds of notional recognition gifts actually prompt donations out of a sense of reciprocity.  In a recent study on the effects of thank-you gifts on charitable giving by researchers George Newman and Jeremy Shen at Yale University, the offer of thank-you gifts actually reduce charitable donations. The study identified that donors feel a sense of obligation to send in a donation when coupled with a gift.

Charities sending “thank-you gifts” in association with making a gift or after making the gift is a different game.    And those doing so are not doing their research.  Charities that practice this believe it is another way of expressing gratitude to a donor.    The Yale researchers offer a few explanations of why the token gifts are a turn off for donors.  One of the most interesting findings is that participants thought the gift was inferior.  Junk in effect.  Not surprising, other findings were that the token gift undermined the donor’s altruistic motivations; or the gift actually served as an anchor on the value of the donation, as a suggestion of the value of what the donor should give in return.

And there is more evidence that token gifts are not right for everyone.  Penelope Burk in her research on donor-centered fundraising found a similar response from donors, prompting her to exclaim: “Pins, plaques and fridge magnets to the back of the bus; information take the front seat!”

In my experience, donors often say please don’t send me anything.  They just want the assurance that we received the gift; that we are using their gift as intended and using it to have impact; and they want to be thanked — promptly and thoughtfully.

But, like Chapman’s love language of gifts, there are donors who still like “things”.   Some donors appreciate receiving a replica of the plaque on the room that they have donated.  Still others like receiving a photobook describing the project or program and how their gift has made a difference – the measurable result of their gift at work.  We just need to be careful and ensure a donor does, in fact, want a thing.

Next installment takes about other love languages and what donors want.

References:

Newman, G.E., & Shen, Y.J. (2012). The counterintuitive effects of thank-you gifts on charitable giving. Journal of Economic Psychology, 33, 973-983. Retrieved from http://www.elsevier.com/locate/joep

Burk, P. (2000). Thanks! A Guide to Donor-Centred Fundraising. Toronto: Burk & Associates Ltd.

Scherhag, C., & Boenigk, S. (2013). Different or Equal Treatment? Donor Priority Strategy and Fundraising Performance Assessed by a Propensity Score Matching Study. Nonprofit Management & Leadership, 23(4), 443-471.

Scherhag, C., & Boenigk, S. (2013). Different or Equal Treatment? Donor Priority Strategy and Fundraising Performance Assessed by a Propensity Score Matching Study. Nonprofit Management & Leadership, 23(4), 443-471.

Check out this article about donor centricity:

From the Agitator Donor-Centric or Faux Donor-Centric? Check the Plumbing

This is perhaps one of the most common reasons for a phone call to me from a nonprofit or charity.  Very often the call is from a nonprofit’s Board member following a board discussion that goes something like: “We just can’t raise enough money for the organization. We just lost a grant and are thinking of hiring someone on a commission basis to raise money for us.”

This are red flags for me.  Questions that comes to mind:  What is the organization currently doing to raise funds?  Just how comprehensive and diversified are current strategies? Are all the proverbial eggs, like grants, in one basket?  What is the Board doing to address the situation?

Second, while it might seem like a logical approach to hire a fundraiser with the expectation of raising what they earn and more for the organization, good fundraising does not happen on a commission basis.   Why not?   In essence, it is not just about the money, it is about the relationship between the organization and donor. The commission approach demonstrates a lack of understanding of a good fundraising process, of the fundraising profession and about donors.  Donors are not ATMs from which funds are simply withdrawn. Good fundraising is about building a culture of donor trust, support and loyalty. This simply takes time and genuine efforts. But the benefits are worth it.

Increasingly donors are looking for greater accountability around impact of their support.  Fundraising and administrative costs are under close scrutiny as never before.  Donors will simply not accept expenses that show a significant percentage of their support going to pay a fundraiser’s salary. In Canada, those expenses are identified on a charity’s tax return (T3010) and are addressed in guidelines on Canada Revenue Agency’s Charities Directorate.

Finally, fundraising is a profession.  Commission-based fundraising is strongly discouraged by the Association of Fundraising Professionals (AFP) in its code of ethics. A CFRE (Certified Fund Raising Executive) accredited professional may be disciplined for working on a commission basis.  All holders of the CFRE credential pledge to abide by the CFRE Accountability Standards, International Statement of Ethical Principles in Fundraising, and the Donor Bill of Rights.

Would you expect your doctor, engineer or dentist to work on commission?  No, so beware of a “fundraiser” willing to accept a commission. It is not in your organization’s best interest to bring in a person with questionable professional skills and/or no relevant experience, just to save the cost of a fundraiser’s salary.

Instead….

1. Look at what resources already exist.  Are board members participating in fundraising themselves?  Is there a volunteer or staff member who has the potential to enter the fundraising field, especially if receiving some training and coaching? Can job responsibilities be reviewed to create dedicated time for fundraising?
2. Start Small.  If you can’t afford the cost of a more senior fundraiser, begin by hiring a less senior professional, such as a grant writer or a donor relations coordinator on a part-time basis to develop some areas of fundraising. You may find that your junior fundraiser grows in expertise and you can justify adding additional hours and salary.
3. Hiring Counsel to Help With Strategy and Coaching: A dedicated in-house fundraiser can be a longer term goal. However if you can’t yet get there, you may want to consider working with a consultant to develop a fundraising strategy and provide training and coaching.  Perhaps start with an analysis of your existing funding model.

Fundraising is a profession. Good qualified fundraisers are in high demand and command fair compensation. You need to look at all the fund development options for your organization before you jump to conclusion that you need to hire a fundraiser to solve your problem.

 

 

 

We spend a lot of time, energy, effort and money to acquire a donor.  But somewhere between 70% to 80% of first-time donors NEVER make a second gift, multiple studies confirm.  In the commercial world, a 70-80% loss rate would say one thing loud and clear: new customers aren’t falling in love with us. Something’s wrong.

Plymouth University Researcher and Professor, Dr. Adrian Sargeant shares this insight: “Even small improvements in the level of attrition can generate significantly larger improvements in the lifetime value of the fundraising database. A 10% improvement in attrition can yield up to a 200% increase in projected value, as significantly more donors upgrade their giving, give in multiple ways, recommend others and ultimately perhaps, pledge a planned gift to the organization.”

Have a look at this summary of what you can do to keep donors.

https://bloomerang.co/blog/dr-adrian-sargeants-7-principles-of-donor-loyalty/

I see this one a lot.  The letter, if there is one, usually starts with “with our appreciation, please find our charitable receipt.”

Truly an opportunity not to be missed, the way we thank donors, even in the smallest organizations, is a gift in itself. I recently received a donation receipt along with a copy of an impersonal newsletter for a donation that I made ten months earlier.  I had actually forgotten about the donation and the organization.

Even if you only have a few hundred donors, it makes a big difference to provide a meaningful, genuine letter or card out to donors that tells a story of the impact you are having. People want to see how their gift is making a difference. Tell your donor how they are part of the solution through their support. How they are heroes. Stories should not be about the organization itself, but tailored to the audience to make them as personal and meaningful as possible.

Some other suggestions: hand-write thank you notes (a great Board member activity). And telephone them (another great Board member activity). Donors will feel a greater connection to your organization through this personal touch.

Keep the tax receipt mention at the end of the letter. There’s no excuse for not thanking donors well.