Acquiring New Donors – Plan B
The Agitator has talked a lot in the last week or so about donor retention … and in particular, how to get that crucial second gift.
That discussion drew some comments about, in effect, the quality of new donors entering the cultivation pipeline in the first place. So I wrote New Donors … Garbage In, Garbage Out … with a cheeky conclusion: “If you can’t get a second gift out of 40% of your first time givers, you’re ‘growing’ too fast.”
Which naturally drew more comments. Today and tomorrow, I’m featuring two of those comments.
Both writers proffered new ways to look at and approach donor acquisition. I’ll call them Plan B and Plan C, assuming that Plan A is your conventional direct response (really, direct mail) approach — rent/exchange lists, subsidize initial acquisition, hope to recoup and profit via donor cultivation.
Today, Plan B, courtesy of online fundraiser Rick Gentry at Common Knowledge, who asks …
“But what if the donors are changing?
What if the Ken Burnett “relationship fundraising” and the fundraising pyramid era are moving into history?
I say the days of getting a donor for life are done, there will be no second gift.
The new generation of donors, highly exposed to masses of information and marketing-savvy will not give $100 a year to the same group for the next decade. They will give $10 to 10 different groups each year – supporting 100 groups over a decade.
They will give to the issue of the hour that touches them and then move on. And they will give via mobile and portals that deny you their contact details, and they will cut you off if you hassle them (not that you can as they only use Facebook messaging and priority inboxes).
So maybe it’s time to stop fussing over the second gift and how you raise $1 million from a 1,000 supporters over 10 years, and start freaking over how you get $1 million from 100,000 supporters in a day.”
Yikes! “…there will be no second gift.” Rick proposes the ultimate in what some of us call “catch and release” marketing. So far, It’s failed in every other form of marketing, but maybe it has a future in fundraising.
Yeah … I’d love to raise $1 million in a day in $10 gifts … if I could do it once a week!
But even then, any fundraiser in his/her right mind would attempt to hang onto at least some of those folks. Rick, are you serious … do you not want to try?
I hate to think that the “new generation of donors” would be so fickle, and so clueless about the sustained effort (and donor support) required to produce real change/results , as to actually flit about the charity landscape like a bunch of sparrows, leaving nothing but sparrow droppings behind.
Or let me put it this way, if that’s the way younger donors start out their giving careers — sample what’s out there … see what works, etc — fine … consider it training wheels. It’s better than no giving at all. But I would still hope that they discover at some stage that continuity of support will reap far superior dividends on the charitable investment they’re prepared to make.
Rick, in my book, Plan B earns an ‘A’ for audacity, but I’ll go for repeat donors any day.
And if I’m sitting in a European NGO, I’m probably thinking … Is this guy nuts?! Because many of those NGOs are sitting on monthly giving programs that put American nonprofits to shame and generate tons and tons of Euros!! See The Agitator … Eat Your Heart Out, America!
Tom
12 responses to “Acquiring New Donors – Plan B”
Behavioral Science Q & A
Integrating an individual giving appeal with other communications from a charity can have both positive and negative effects, and the outcome largely depends on how it’s executed. Advantages of Integration Brand Consistency: Maintaining a consistent appearance and messaging across all communications can reinforce the org’s brand identity and strengthen brand recognition and trust among your […]
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I’m not aware of any in-market tests specifically comparing recurring vs. gift frequency language. I suspect the answer might not be the same with all gift frequencies, nor with all people. It sounds like a great opportunity for you to test and find out what works for your audience. Based on the literature, here’s a couple […]
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Based on what we know from existing data, those renewal notices can actually be pretty effective in getting people to donate. They tap into our psychology – creating a sense of urgency, reminding us of past support, and using personalization to make the message hit home. They’re playing on our natural tendencies to feel obligated […]
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Interesting question. I had a quick look at the testing done on this topic. On the positive side, in all cases, over half of donors decide to cover the fee. In some cases, it goes as high as 65%. Not a negligible percentage at all. Here’s another test from iRaiser showing consistent results (see point […]
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There’s just one thing to consider when designing a supporter journey: the supporter. More specifically, you need to take into account: Who the supporter is i.e. their identity, which is the reason they support this cause, and their personality, which describes the way they “see” and process the world. These will determine the kind of […]
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I’m not an expert in this but a quick search surfaced this article on the effect of tax reforms on 2019’s charitable giving. The researchers didn’t find a reduction. Actually, they observed an “increase in charitable contributions in 2019, even with the lower tax rates and the dramatically smaller number of taxpayers who itemize their […]
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This is a good example of why online giving doesn’t work very well and shouldn’t be used as a model from which we draw broader conclusions about donor behavior. The online “community” is a million miles wide and about an inch deep. There is very little loyalty and the audience jumps quickly from one new hot topic or app to the next. This is the nature of online activity. If you let that environment dictate your strategy you will spend all your energy (and money) chasing the latest fads instead of building a solid donor base.
I keep hearing the excuse…”the donors are changing”…but it’s the fundraisers that are the problem. They are investing all their time and money looking for flashy social media campaigns and ignoring the basic nuts and bolts of donor relationship building. It’s just not flashy and exciting like a new app for your iPhone or a fake gift on FB.
There is good news. With all the instantly disposable electronic communication flying around, it’s fairly easy to stand out with a few hand signed letters and handwritten notes. When was the last time you received a letter with any human handwriting in it? …Yep, that’s what I thought.
There will be no second gift? Truly? To me this comment trivializes the generous spirit, caring and compassion behind the gift itself… when my neighbor, who knows I write for nonprofits for a living, comes out to talk to me about the letters she’s received (holding them out so I can see, and pointing out the key information in each) and which she gives to REGULARLY… and my physician does the same, by the way… when I hear how the latest issue of a newsletter brought in a call for bequest information or an acquisition letter yields a note with a legacy intention or a four-figure donation (all true)… this, at least from my side of the monitor, indicates that Relationship Fundraising is indeed alive and kicking. It’s also the reason why, at least as of last year, nonprofit executives (at least the dozen or so I spoke with for a survey) said that for retention to take place, online donors need to be moved into the direct mail communications stream.
As Denisa said, it’s the nuts and bolts that are missing. There are plenty of donors who want nothing more than to connect — on a long-term basis — with a good organization and its good work. But as Stephen Hitchcock said in Fire Fundraiser #84? it does take discipline. There must be regular, relevant, well-crafted communications that follow the “big acquisition push”… beginning with a decent thank-you letter, welcome pack, and donor newsletter. If those aren’t in place, then maybe there’s a reason for no second gift.
Bullsh*$! Seriously? No second gift?
No, no, no, no, no. “Relationship fundraising” is not passe. The key lies in our ability to understand the possibilities inherent in every tool – Facebook, email, direct mail, Twitter, YouTube, etc. – for engaging the donor long-term.
Maybe I’m going out on a leap here when I say that the very reason business and nonprofits alike are in such dire straits these days has much to do with adopting a very short-term focus for the past 30 years or so.
I’m joining Denisa, Lisa and Pamela here. Relationship fundraising is the point, really. Because it’s not about us (fundraisers, or even our organizations) it’s about donors. And I do not believe that donors give, hoping to avoid a connection to the cause that they supported.
If the “relationship” is failing, we can only look toward ourselves. People – of all ages – are still looking for connections. They’re just demanding that those connections, those relationships, are relevant and effective.
It’s like dating, maybe. You can play the field, go on a lot of first dates, and never have to trouble yourself with actually being vulnerable or exposing yourself. Or you can commit to someone, risk rejection, keep trying – and hopefully be rewarded with a relationship.
I don’t think fundraisers should be looking for one night stands.
Rick’s experience with Greenpeace and online fundraising have been completely different than mine.
As a former supporter of Greenpeace, I became infuriated by their list-selling and other Machiavellian tactics to achieve whatever end they hoped to achieve with a specific campaign. Not to say they don’t have a valued place in society, they do. They just didn’t prioritize my second gift.
In my own experience, the second, third, and fourth gift are like, well, gold! So maybe some will drop off the list. That’s inevitable. But we just don’t have the luxury to run through donors like wildfire.
Maybe it’s because we can’t get people fired-up like Greenpeace. Oh well.
I do not agree with Denisa. Since January 2010 I have had a policy to make ALL my gifts online – and I encourage others to do the same. I fill a shopping bag every 2 weeks w/junk mail from non-profits that have apparently bought a list with my name on it. Most of it I never open. A handwritten card? Not important to me at all – in fact, a problem. I can’t save it (unless I scan it first )- whereas I can save and even file a personal email.
In addition, I’ve asked those orgs that I do support to severely restrict paper mail. I do not have the time or space to manage it all, and vastly prefer keeping digital copies. – One exception – those conservation or humane organizations whose magazines or newsletters provide useful education, which I pass on to my local Boys & Girls Club or library – which helps to promote both the cause and the organization.
And I almost always give a second gift – because I research those orgs that I give a first gift to. Why wouldn’t I give a 2nd gift? Do you know how many non-profits do not provide contact info for their staff or development staff on their websites? So when I do have a problem, or question, about giving or an issue – I am forced to send one of those general emails to “info@….” THIS – above all – makes me reconsider giving a second gift to an organization — OR renewing an annual pledge.
My point is this: we talk a good game about “relationships” but if your donors can’t reach you – what kid of relationship is it? (To those who would complain about being overwhelmed by emails, I say, please! Don’t tell me there’s not a management/email/technology solution!)
Other things that have made me reconsider supporting an organization: exorbitant salaries for leadership, payments to board members, exorbitant spending on direct mail services, continued – as in weekly! – requests for support. (But I rarely give such orgs a first gift!) Finally, I rarely give a first gift to those orgs that offer gifts for a minimal donation, or that send frequent packets of greeting cards, wrapping paper, etc etc etc. . I wonder – if I ever gave them a gift – at what $ point would my donation ACTUALLY go to serve the cause they are purportedly addressing?
I cannot believe that your guest blogger suggests that the day and age of “donor loyalty” is over.
RD professionals must never forget that donors are not ATMs. We are not transactional agents of our charities. Instead, we are “dream makers” who work equally for our organization as we do for the donor by helping connect donor dreams and passions with opportunity.
Our future is not “catch & release” … it is about completing our transition to becoming more “donor-centered”.
MD Anderson analyzed all donors acquired and retained fom 1990-2005. During this time they acquired 248,971 at $1.01 CP$R. Of this group, 50,103 were retained and have given $49,271,014.00!!!!
Shout out for donor retention!
I believe Rick is far from getting the point. Yes, younger donors (myself included) are currently giving small amounts to many different charities. One year you may get one, and one you may not. But, how that nonprofit treats my small, but meaningful to me, gift speaks volumes! It will determine if I continue to give to them or not.
I may only have $10 to give you this year. But you can bet if I feel that you truly appreciate and value my $10 and you let me know that it did make a difference, as I grow in my career and become more financially stable, your organization will be the one to reap those benefits.
Younger people want to make a difference in the world. They want to see the impact they can have. If you treat them as though “there will be no second gift,” you can rest assured that there won’t be for you. There will be for others though.
I think Rick may be referring to the event-based fundraising phenomenon. It seems everyone at home, work, and in your family is involved in a walk, run, bowl-a-thon, garden-a-thon, swim, bike, hike, extreme event, etcetera that requires just a small donation.
In that way, many of us will give to that event toward that friend or family member’s team; but we won’t become repeat donors to the organization because it’s not typically us that have a connection with it.
However, that does not negate the fact that we still do have connections with other organizations, and those will receive our support year after year.
Interesting. This is not my experience with online donors at all. We have an extremely robust online fundraising program, with 10 years of significant revenue from our online program, built on top of our 30-year direct mail and telemarketing program.
We actually find that the donors we acquire are MORE loyal than those acquired via direct mail or telemarketing. Over the last decade, our donors acquired online average 1.6 gifts in the first year, compared to 1.5 for direct marketing. Over a 5-year period, this disparity is amplified, with an average of 3.7 lifetime gifts for donors acquired online, compared to 3.0 for those acquired in the mail. (Coupled with a $10 higher average gift for online donations, this means that donors acquired online have a significantly higher lifetime value.)
We have also built up a fairly substantial pool of online sustainers, with 15% of our online revenue coming from monhtly sustainers, compared to only about 10% for direct mail. This is with only about 2.5 years of work to build the online sustainer program, vs. 20+ years of ongoing investment in the offline sustainer program.
Because of this, we are moving some of our budget allocation for direct mail acquisition over to paid online name acquisition. Not getting out of direct mail or telemarketing acquisition altogether — diversification is important, and we reach an audience with DM/TM that we can’t reach online — just realloating our resources to take better advantage of the online acquisition model.
http://www.google.com/onetoday/