Donor Cultivation

Colleague Pam Grow forwarded a question to me from one of her subscribers. That inspired me to write about giving societies. So here goes:

Giving societies or gift clubs or levels of donor recognition with benefits — no matter what you call them — they’ve been around forever. I imagine that lots of organizations find these useful. I suspect that it appears as if these societies / clubs work.

But – and this is a pretty big but – like so much of fundraising, we have only observation but no real research. No extensive, quality-controlled academic research to prove to us that whatever is happening is happening because of the gift club/society/etc. I remember asking fundraising research guru Adrian Sargeant about giving clubs and research. His response was, essentially, “Ah yes, another thing that the fundraising profession has not actually researched.”

So here’s what we intend these societies/clubs to do: Retain donors. Help donors move up the ladder of giving. Of course, the question is, does a society or club help do that? Or did something else produce that result?

What we do know – from research – is this: Loyalty is the holy grail of fundraising. (Thanks to the the Agitator for that glorious statement.) Loyalty is the holy grail of any business. It costs an estimated 10 times more to acquire a new donor than it does to keep a current donor. Loyal donors do, when treated well, often increase their investment. And loyal donors (even giving $50/year for 10 years) are the best bequest prospects.

Research tells us that that loyalty depends upon operating as a donor-centered organization and nurturing relationships with those donors. Read Adrian Sargeant’s research (Building Donor Loyalty, authored by Sargeant and Elaine Jay) to learn about why donors remain loyal. See also, Fundraising Principles and Practice by Sargeant, Shang, and Associates to learn about donor psychology. Read Keep Your Donors by Joyaux and Ahern to learn all about nurturing relationships with donors through donor-centered communications and cultivation, which I now call extraordinary experiences. Check out Pam Grow’s Donor Retention Project, which includes 12 action guides, 12 interviews on CDs, and more – from experts in donor retention.

Just to whet your appetite, here’s a bit of what Adrian’s research tells us about what builds donor loyalty.

• Donors are aware of consequences, e.g., believing that “someone might be hurt if I don’t give.”
• Your service quality (to the donor) is good, e.g., anticipating questions, acknowledging gifts promptly, easy to work with, focused on the customer (donors are the customer!)
• Donors are learning, e.g., you’re taking them on a journey … like through extraordinary experiences that help them feel your impact.
• And there are more reasons and strategies to build donor loyalty. It’s your job to learn this stuff. Read the resources mentioned above.

If you don’t operate as a donor-centered organization, you will lose donors. If you lose donors, you won’t have any loyal donors who will increase their gifts over the years. If your don’t have an intentional relationship-building program, you will lose donors – and donors will not increase their gifts.

Nurturing relationships (donor-centered communications and extraordinary experiences) is how we show and tell donors their impact. Nurturing relationships is how we produce the 4 bullets above – and everything else that the research shows.

Some relationship-building strategies must apply to all donors, e.g., the donor newsletter that tells donors what a great impact they have. If you don’t tell the donor of $25 how important she is and what impact she and her gift produced, why would she ever give again or give more? If you don’t regularly keep in touch with stories and offer experiences to “live” your mission and donor impact, how will the donor feel and engage more?

Some relationship-building strategies should focus on loyalty. For example, when you recognize donors (by name) on your website, in your newsletter and annual report – wherever – use a special icon to designate loyal donors. Loyal donors are very important. Remember, loyalty is the holy grail. In fact, I might even say that loyal donors are more important than Ms. Big Bucks. I just might say that.

Obviously, you have to balance workload and resources. Blah blah blah. You figure it out.

Now back to gift societies / clubs specifically: I don’t like them. Yes, I might choose to recognize donors in “categories” by gift amounts. But I don’t attach benefits. I want maximum flexibility. I want to ask those loyal $25 donors to the insider update along with a bunch of donors who gave $1,000 and a $10,000 donor, too. I invent relationship-building strategies and invite various donors at different times for different reasons.

I don’t do big monstrous parties. I nurture some relationships one-on-one. Some some in small groups of 5 or 10 or 20. And maybe some annual appreciation event. I invite a few people over for coffee and tea and an insider update about how we’re spending their money. You’ll find tons of ideas for relationship-building … a big long list (with no gift societies) … in my book Keep Your Donors. See more ideas in my blogs. See other ideas in my NPQ web column, Unraveling Development.

Here’s the bottom line: If you think some gift club is a quick and easy way to offer a few benefits to get donors to stick around and increase their gifts — then gift societies won’t work. If you think of your donors as ATM machines that finance your mission — then nothing will work to retain donors and increase their gifts.

This is about actually caring about your donors. This is about helping your donors fulfill their aspirations. First get your head on straight about donor centrism and donor loyalty. Then decide if gift societies is a useful strategy.

Hi there. It’s Simone, your information curator. Have you seen / read these? You might find them reaffirming or informative. You might use them with your executive director or board.

• Interview with Roger Craver, 1/2 of The Agitator duo. Donor retention. Social media in fundraising. Changes in the profession. And more. To listen, click here to download the audio file or visit the Fundraising Is Beautiful page here, where you’ll find several listening and subscription options. Thanks to Jeff Brooks, May 23, 2013.

• New! I want something new. Read Tom Ahern’s e-news about “new” and other variations like (secret and insider and launch and…) But also read Seth Godin when he talks about “neophilia.” And check out Jeff Brooks’ reprise. The bottom line: What works matters more than what is new.

• And that leads to this next item, “When your common sense leads you astray,” another Jeff Brooks posting. Some uninformed person – knowing nothing about fundraising – criticizes a fundraising letter. This makes me so angry. Stop the ill-informed and uninformed expression of opinion when expertise actually matters!

• Now here’s an amusing little tale for your board members who “don’t like your fundraising.” It’s the story of Green Eggs and Ham by Dr. Seuss…translated into fund development. It actually goes along with the opinion versus expertise issue.

• Here’s another amusing little tale, “Snow White and the Seven Small Woods People.” A fairy tale of fundraising from our Agitator pals.

• I just received my copy of the Donor Retention Project. Action guides. 12 interviews on 6 CDs. 2 CDs with mp3 and pdf files. Advice from Adrian Sargeant, Marc Pitman, Lisa Sargent, Simone Joyaux… Good stuff.

• I just finished this book by Dan Ariely: The (Honest) Truth About Dishonesty: How We Lie to Everyone – Especially Ourselves. I liked it. I learned. It’s part of professional development to learn about life and community and the economy (yes), etc.

• Check out this blog, “Why Social Media Hasn’t Replaced the Traditional Marketing Funnel,” by Dianna Huff. Remember, fundraising is really good marketing/sales. By the way, Dianna is a really good search engine optimization specialist. She changed my website to the well-organized, easy-to-use site that it is now. And Dianna introduced me to the web designers who created my wonderful site.

• Another by the way, based on Dianna’s blog: Subscribe to the Stanford Social Innovation Review. And, read Jen Shang‘s work about social proof. Jen is the world’s first PhD in philanthropy – and the world’s only philanthropic psychologist.

• And finally: Check out Bloomerang if you need a donor database. Designed with Adrian Sargeant’s donor loyalty and lifetime value research. Coupled with Tom Ahern’s donor communications expertise. And the ease and intuitiveness of iPad and iPhones.

Loyalty is the holy grail of fundraising. Thanks to The Agitator for that great statement.

For us fundraisers, loyalty means donor retention. Focus on donor retention! Now! Stop treating donors like ATM machines. Stop rushing around trying to acquire new donors. First, keep the ones you have.

Do you want to retain donors? Then learn from the experts. Check out Pamela Grow’s Donor Retention Project.

Experts like Adrian Sargeant and Gail Perry. Marc Pitman and Lisa Sargent. John Lepp and Jonathon Grapsas. Pamela Grow herself. And me, too.

Pamela’s Donor Retention Project gives you proven donor retention strategies and techniques. You can follow templates and step-by-step instructions. You’ll hear expert interviews.

Get your own copy! 12 action guides. 12 interviews on 6 CDs. And more.

Please please. Keep your donors. Focus on retention. Remember, loyalty is the holy grail of fundraising – and all businesses.

Read Larry Johnson’s book, The Eight Principles of Sustainable Fundraising. Use the principles to help guide your fundraising. For example:

Principle #1: Donors are the drivers. That’s donor-centrism. And how many times have I told you that you have to focus on donor interests and their aspirations? Read my blog, Simone Uncensored. Read my NPQ web column and my book Keep Your Donors. Begin each day by reciting Larry’s first principle: Donors are the drivers.

Principle #2: Begin at the beginning. Larry talks about “know thyself,” e.g., the impact that your organization has. He talks about donors as investors. And he makes this important statement: “Investors trust your organization with more than their financial resources. In fact, they trust you with their values and higher life purpose.” As I always say – and so do so many others: Donors give through your organization to achieve their aspirations and fulfill their desires. Donors don’t give to your organization to meet your needs.

Principle #3: Leadership leads. This is another favorite of mine. And Larry reminds us of what Woody Allen said, “Eight percent of success is showing up.” The principle focuses on the role of board members in fundraising. Always useful. Sadly, too often not done very well. Just remember the UnderDeveloped Report released in January 2013. Check out my response to this report in my January blogs, and also posted as an article in the Free Download Library.

Lots of good stuff in The Eight Principles of Sustainable Fundraising.

This is an amazing video. For your personal and professional life and for my personal and professional life. I collected so many important tidbits… About the purpose of research. About the the concept of connection … which is, of course, relationship building … which is an essential part of fundraising and board development and nonprofit management and life.

Ms. Brené Brown describes herself as a research storyteller. She studies vulnerability, courage, authenticity, and shame. Her work has been featured on PBS, NPR, and CNN.

Her research and her stories can help us understand how and why people do or don’t connect. Her research and stories can help us as human beings – which helps us as professionals, which helps us as fundraisers… By the way, you’ll find a number of YouTube videos from Ms. Brown.

Remember that pesky UnderDeveloped Report… A national study of challenges facing nonprofit fundraising. Did you read my 3-part blog posted in “Simone Uncensored” on January 19, 21, and 23? 

Wondering what to do about those problems identifed in that report? Check out this special UnderDeveloped Webinar Series. Join the national conversation! Hear ideas about how to respond. Add your comments. Invite your boss and board members to attend, too.

This 3-part webinar series will explore the root causes of chronically under-developed fundraising capacity among nonprofits from three perspectives – nonprofit leaders, consultants and capacity builders, and funders.

• Part 1: What it Really Takes to Create a Culture of Philanthropy (March 6, 12pm – 2pm PST, $45) for executive directors, senior development staff, and board members
• Part 2: First Do No Harm: Are Consultants Part of the Problem? (April 11, 12pm – 2pm, $45) for nonprofit capacity builders, consultants, and sector academics
• Part 3: Investing in Grantee Fundraising Capacity, What Really Works? (date TBD, $45) for grantmakers and funders

These conversations – convened by CompassPoint, the Evelyn and Walter Haas, Jr. Fund, and the Nonprofit Quarterly – will help develop a set of clear, nuanced, and actionable recommendations available for the entire sector. Register today!

And here are a few other resources for you:

— Check out the 2012 Atlas of Giving Report, highlighted by The Agitator in its post of February 5, 2013.

— Read this interesting finding from Case Western Reserve University… “We have a built-in neural constraint on our ability to be both empathetic and analytic at the same time.” In summary, “scientific accounts leave out the human touch.” Good fundraisers care about this neuroscience stuff. Mostly beware of the analytic type stuff. Pay attention to the emotions. Hey, do you read neurosciencemarketing.com? Check it out. Subscribe for free.

I’ve just spent three days presenting at the AFP Toronto Congress. This is a great conference with speakers from all over the world. All these people bring different experiences and insights and observations. But, of course, there are commonalities because there is a shared body of knowledge. Otherwise we couldn’t call this a profession.

Donors are heroes: Over and over – during the conference and in my own work – I am reminded that donors are our heroes. Without donors, how can vision happen? Without donors, how can we save kids and families? Without donors, how can we save the whales, and ensure clean air, and gaze in awe as dancers float across the stage? Without donors, how can we pay the people who do the work to make the change?

Donors are our heroes, the heroes of philanthropy. The donor is a major star in your organization’s movie. Yes, of course, your clients are stars, too. Sure, your staff have starring roles. But without donors, there is no movie!

But sometimes some organizations get confused: They see donors as bank accounts doling out money. Some organizations see fundraising as a transaction that produces money. Sometimes organizations view their donors rather possessively…like you own me! (Check out Leslie Gore’s 1964 song, “You Don’t Own Me.” And keep in mind: You actually don’t own me or any of your donors. We aren’t just one of your many toys. We can go away. Treat us like heroes or we will go away! By the way, check out this great new version of “You Don’t Own Me,” made especially for the U.S. 2012 presidential election.)

All donors are philanthropists: Donors of time or money – no matter the amount – are philanthropists. The word “philanthropy” comes from the Greek “philanthropiea,” the love of humankind. This love extends beyond family and friends. This love translates into voluntary action for the common good, transforming communities and launching social movements.

Donors make change: All these people – donors – uniting through acts of love. It’s pretty amazing.

All we need is love: The Beatles tell us that “all we need is love.” (Watch kids from SOS Children’s Villages singing the Beatles.)

And love is all around: One of my favorite films, “Love Actually,” tells us that love is all around. In the opening credit sequence, Prime Minister Hugh Grant says: “Whenever I get gloomy with the state of the world, I think about the arrivals gate at Heathrow Airport. General opinion [says] that we live in a world of hatred and greed. But I don’t see that. It seems to me that love is everywhere. Often it’s not particularly dignified or newsworthy. But it’s always there… If you look for it, you’ll see that love is actually all around.”

Donors are our heroes: We have love. All around. Those acts of philanthropic love. Donors give that. Every day. Over and over. Donors are our heroes. It’s past time to make very sure that we recognize and honor and feature those heroes every day over and over and over.

P.S. Check out AFP Toronto Congress tweets about the conference’s closing plenary, “Fundraising Theatre.” A rather extraordinary extravaganza about this marvelous work that we do. You’ll see photos of break dancing and confetti and me in the red suit. And maybe you’ll see Darth and Luke fighting, too.

Sometimes I forget that “today’s kids” never met a vinyl record. Sometimes I realize that “today’s youth” barely (maybe not at all) know about the U.S. war in Vietnam. Oh wow, my 15 and 13 year-old nieces were unclear who the Beatles were!

My icons (people, places, things) are different than theirs. Indeed, each generation has its own icons and conditions (what’s happening in the environment…like WWII or the Cold War or the GEC or…)

Check out the Beloit College Mindset List for the class of 2016 (the kids entering college right now). What an amazing and insight list…put together by Beloit every August since 1998. For this generation, born in 1994: Kurt Cobain, Jackie Kennedy, Richard Nixon and John Wayne have always been dead. Women have always been airplane space shuttle pilots. Slavery has always been unconstitutional.

Why do you and I care? Because they are the next fundraisers and we have to communicate with them and they have to communicate with donors who come from different generations. And because we might be buying them birthday and graduate gifts, too!

So say authors Diana I. Tamir and Jason P. Mitchell from Harvard University’s Department of Psychology.

Yes, people love to talk about themselves – it gives our brains a dopamine high. Our brains are “wired for self-disclosure,” says neuroscience. (Think about Facebook!)

This is great information for fundraisers and their organizations. We want to hear the stories of our donors. We value donor-centrism. And neuroscience and behavioral psychology explain why.

We are in the business of collecting donor stories – and retelling those stories in our newsletters, annual reports, direct mail solicitations, on our website. Good fundraisers invite donors to tell their stories themselves – at the podium for that special event or program or in a small focus group.

Yes, people love to talk about themselves. Invite them to do so. Encourage them to do so. Welcome their stories.

Check out research on women’s giving from the  Women’s Philanthropy Institute. No surprise, women give differently than men. We know that. But wait till you read “Women Give 2012.” Very useful information for your fundraising program.

Sad faces, tough stories…the truth…. That’s what works with donors. Happy faces suggest you don’t need my money! Read Jeff Brooks, 07-25-11, “Sad faces make better fundraising.” Read Jeff’s 08-22-12 blog, “Don’t hide the rough stuff from your donors.”