Donors

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.

You might remember the blog below, from December 2012. A brief conversation between Tom and Simone. Well, Tom just sent out an e-news that explores this issue a bit more. Read my blog below. Then read Tom’s newest e-news, “Major gifts or more gifts: Which is better?”

Remember the Pareto Principle, 80/20? And now we know that, at least in a capital campaign, the rule is more like 90% of gifts come from 10% of donors. I want more love than that. I want more donors. I want that broader base. I want that broad base of donors to demonstrate community support. I want a broader base because I believe that philanthropy can (and should) be a democratizing act. I want that broader base to be so loyal that they will give bequests. Loyalty from many. That’s what I want.

So read the old blog below. And read Tom’s e-news. Think about it.

“The rich are irrelevant,” said Tom back in December 2012. And so started a very interesting conversation.

Tom is my life partner and a donor communications expert. We often talk about our shared experience in philanthropy and fund development. Our respective work takes us down similar paths, often diverges, and then reconnects. This philanthropy thing is our life’s work – each of us along and both of us together.

“The rich are irrelevant,” Tom repeats. “You and I are not interested in the rich people. We aren’t interested in the money and the transaction.”

“Instead,” Tom continued, “you and I see giving as the chance to balance the scales of selfishness. Of course, all humans are selfish. Our own biology demands self-care, self-protection, fighting for our own safety and our own way of living. And if history isn’t enough to show us this selfish truth, neuroscience now documents our selfishness.”

Tom continues. “Of course, human beings are insightful enough to know that we’re built for selfishness. Neuroscience proves this, too. So we try to balance the scales of selfish and unselfish.”

Think about it. People balance the scales of selfishness by giving. Giving friendship. Giving advice. Offering time. Investing money.

Philanthropy, voluntary action for the common good, is one way we balance the scales…selfish…unselfish.

But fundraising gets off track. Too often, fundraising focuses on money. Fundraisers and their organizations (too often desperately) search for money…and the bigger the bucks the better.

The bigger the bucks the better. “Fundraisers and their organizations keep searching for the top of the pyramid,” Tom said. “They don’t spend enough time moving the base up.”

Ah yes, the pyramid – and its top. The pinnacle of the pyramid where so few donors reside. And fundraisers focus on the top. Fundraisers and their organizations keep looking up. Too few fundraisers pay too little attention to too few people.

The fundraising pyramid focuses on the rich. The pyramid devalues people. Ascending the pyramid forces fundraising into a particularly narrow focus, big bucks – and only the rich have those big bucks.

There’s an irony in the pyramid…that the people at the top are special and better. The pyramid gives off a certain echo…royalty, for example. Slaves built the Egyptian pyramids for the pharaohs. Talk about “better” and “special!”

Why do we call it a “pyramid?” At least we could call it a “triangle.” There’s no negative echo with a triangle. Maybe we could somehow and somewhat avoid what I call “philanthropy’s moral dilemma” if we called it a triangle.

But more importantly, aiming for the top of the pyramid – or even the triangle – is so limiting. How about we re-conceptualize? Visualize the triangle with a big bulge somewhere in the middle, above the base and below the pointy top. Maybe the bulge looks like cloud cover surrounding the middle of the mountain. Maybe the bulge is like a big donut pushed down over the top, settling around the middle section of the triangle.

“A bequest is usually the largest gift a person ever makes,” noted Tom. And fundraisers know that loyal donors (not necessarily rich ones!) make bequests.

What if fundraising focused on rejecting the pyramid, embracing the triangle, and building the bulge?

What if fundraisers spent more time and energy and expertise and experience moving the base of the triangle into a big bulge right in the middle? Sure…if you can get to the top, go for it. Embrace the rich. Just don’t focus on them.

What a luxury for Tom and me. We can encourage our clients – and those who read our writings and attend our workshops – to transition from pyramid to triangle. We can promote a big bulge.

Yes, the rich can be irrelevant.

P.S. Watch for Tom’s e-news. I suspect he’ll be talking about our talk, too.

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.

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.

Ah thank-you notes. As Tom says, a great thank-you note is the start of the donor’s journey.

The other day, Tom and I received a thank-you note for a gift we made to the Foster Libraries. Tom and I live in a small town in rural Rhode Island. Curiously, we have two libraries in our town: Foster Center Library and Tyler Free Library. Old homey type buildings that have books and DVDs. And, host Halloween parties and workshops and programs for kids. Our libraries are gathering places for our community.

So Tom and I receive a thank-you note from the Board president. And enclosed in the envelope is a story, a memory by one of our townfolk, Eva Szosz.

I started to read Eva’s story. Then I rushed into the kitchen where Tom was cooking dinner. And I read it aloud to him.

Tom and I stared at each other. We smiled. And simultaneously we said, “We have to get permission to use this marvelous story. We have to use it in our workshops and in our e-newsletters and…well, just everywhere.”

Here is a very special memory. Thank you Eva. Thank you for capturing how I feel about libraries. Thank you for writing such a moving and memorable story.

 Library, Memory by Eva Szosz

“When I was young, my mother drove my brothers and me down roads lined with fewer houses than there are today, past woods and pastures and my elementary school, until we reached the little red library and opened the door to find, in the very best Narnian tradition, that its inside was larger than its outside.

“Every shelf was packed with books of every size and color: fat books, thin books, blue and red and yellow and orange, each one containing a world between its covers. I would hold the books to my nose to catch the odors of printing ink and paper; I smoothed the glossy illustrations with my fingers; the pages riffled under my thumb.

“Here I could read anything, learn everything! I could take a stack of books~ as many as I could carry, was my mother’s rule~ home for two whole weeks, to be mine, to read as often as I liked, to devour or abandon as I pleased! The library, small and undistinguished as it might have appeared to someone from New York or Chicago, or even Cleveland, was a treasure house, a stronghold of delight.

“In these hard times, the library is more than ever important to us. Libraries are a place of abundance in times of scarcity. The library is a symbol and a reassurance that hard times will pass, that things will get better; that hope is not dead. In these days of instant communication and paradoxical isolation, the library has taken on the role of village elder, a storehouse of shared wisdom and shared humanity.

“The library contains the records of our inventiveness in the face of adversity, our compassion in the face of cruelty, our gravest mistakes and our most unlikely triumphs. Libraries have been passed to us from men and women and children of all nations, now long dead, as we will pass them on to those who come after us. This is what we have to give: the knowledge and experiences of our lives, the imagining of a future that we ourselves won’t see. It is why people have painted caves and carved words in stone and hidden books in barns. It is the most important thing.

“The library is a gift from the past to the future. We only hold it in trust.”

Isn’t that a marvelous and memorable story? Wouldn’t you be happy to receive a story like that in response to a gift you give?

What stories do you tell your donors? Do you collect stories from your beneficiaries and clients? Do you collect donor stories? Do you share them with new board member and new staff? Do you use these stories in your annual report and donor newsletter and solicitation letters? Will you share a story like this with me, one of your donors?

Please say “yes.” Please do it. Imagine the special box or special drawer of donor and client stories in your organization. You go there when you’re new and excited. You there when you’re tired and disheartened. You just go there. To the story place. Over and over. Like to a library.

Periodically I rant about social media, one of my pet peeves. Yes, sure, I know… Social media can be useful. Social media can be fun. Social media can help nurture relationships with some people.

But professionals – whether in fundraising or any other sector – are fully aware of the excessive hype about social media. Professionals are balanced and measured. Professionals read the research! So check out this information about social media:

1. Read www.theagitator.net for 12-15-11, “Which Mailbox Delivers Emotion?” Surprising, perhaps. 50% of U.S. consumers said they pay more attention to postal mail than email. 60% of U.S. consumers said they enjoy checking the mailbox for their mail. That’s an emotional connection. And the research found that the least trustworthy communications channels are social media and blogs. Only 6% of U.S. consumers trusted those sources! Read the rest of the research at the agitator or visit Epsilon’s Consumer Channel Preference Study.

2. Jeff Brooks (www.futurefundraisingnow.com) reminds us to avoid excessive focus on social media. Read his blog of 12-14-11. Jeff remarks that “one of the cool things about email fundraising is how cheap it is.” So you just keep sending stuff cause there’s no postage or printing costs.

But watch out. “The longer an emailer goes without responding, the less likely they are to respond,” says Jeff. (And Jeff reminds us that the same holds true for direct mail.)

So why does this matter…you keep emailing and they don’t answer but it doesn’t cost you any real money. But what it will cost you is being labeled as a spammer. Here’s the bad news: Internet service providers are closely studying metrics. Internet service providers know which messages aren’t being opened. And when messages aren’t opened, the sender can get labeled as a spammer. Do you want that to happen to you? Because then your marketing messages won’t get there at all.

Read more at The Big Fat Marketing Blog, “Unscrubbed E-mail Files Pose Risks to Marketers: Study.”

 3. Read Seth Godin‘s blog of 12-11-12, “The trap of social media noise.” Being heard seems to equate with the number of listeners and readers and followers. How many follow you on Twitter? How many read your blog? How many subscribe to your e-news?

But who cares? Who is really listening? Who is really interested in what you’re saying? It isn’t the numbers, it’s the quality. It’s the alignment of like-minded people with similar interests.

Stop polluting the space with noise. As Seth says, “Relentlessly focus. Prune your message and your list and build a reputation that’s worth owning and an audience that cares.”

In conclusion: “Build a reputation that’s worth owning and an audience that cares.” That’s the truth for social media. And that’s the truth for fundraising, too. Measure the right numbers…like those who care, those who engage, those who are interested in your message…whether it’s social media listeners or donors. It isn’t the volume of numbers; it’s the type of numbers and what they represent!

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.

A must-see for fundraisers – and anyone interested in marketing/communications. This Canadian documentary by Léa Pool (based on the book by Samantha King) puts cause marketing front and center…and questions its validity as a philanthropic tool.

This scary (yes, scary) story should force fundraisers to examine things like: corporate partnerships and who really benefits; picking partners (Do you really want a pink ribbon on a handgun? Do you really want to associate with a corporation that sells unhealthy food or whose products include harmful elements?); messaging (How do those with cancer feel about this “fight” and winning or losing it?) And so much more.

By the way, how much money does cause marketing actually produce? How does cause marketing increase philanthropy? Not so much. Not so good. Check out “The Hidden Costs of Cause Marketing,” by Angela Eikenberry. Hey, fundraisers. Watch Pink Ribbons, Inc.

Did you know? The richest donors are less likely to restrict their gifts. Research by Forbes magazine and Crédit Suisse finds that: 70% of donors with $1 – 5 million in investable assets prefer to give unrestricted gifts to charity. 45% of those with assets of $50-million or more feel they same way. 1/3 of those surveyed expected that a return on their philanthropic investment could take as long as 10 – 19 years. 44% expected returns in less than 10 years. Thanks to The Chronicle of Philanthropy for its reporting.

Have you seen the 2012 Stelter Donor Insight Report? Download the report What Makes Them Give? You’ll learn things like: The breakdown of current planned givers by age (21% are aged 40 – 49; 26% are aged 70%.) The best prospects for a planned gift (Age 40 – 49). Typical cash gift amounts (annual giving) before putting a planned gift in place (17% come from donors giving $200 – $499; 22% comes from people giving $1,000 – $4,999). Read the report!