Are We Getting Roasted?
Yesterday, in my post Who’s Fibbing?, after suggesting that somebody is not ‘getting it right’ — consultants or nonprofits — if retention rates keep declining, I gingerly posed the possibility … is it the donors’ fault?
I thought I might be throwing red meat to the sharks, but only one commenter took on that possibility … Rod Taylor.
Here’s what he said, in part:
“I do suspect that there is more to this story of declining retention rates and I’m skeptical that we as an industry have really figured out what to do about it. Or even if there is anything that can be done. We’ve seen a generational shift in donors and different generations have different attitudes. We’ve also seen a huge change in the way emerging (or fully emerged) technology has changed the way we communicate. And of course we can’t forget the explosion of more competition for the charitable wallet. I hate to be fatalistic but I think we’re fooling ourselves if we think that the solution to this problem is fully within our control … Times change, whether we like it or not.” [Editor’s emphasis.]
Now, to consultants, that’s pure heresy! Treason!
And Rod points that out:
“Of course as consultants we have a vested interest in selling a solution. ‘You’ve got a big problem and there is nothing you can do about it’ is rarely a winning way to start a new business pitch.”
Thank you Rod!
I hope Agitator readers know I wasn’t really suggesting that donors are actually to blame for anything. Even I wouldn’t go there.
But, as Rod says, times change.
I can remember when a strong first-year renewal rate was considered to be in the 40-50% range, and a good multi-year rate was 70%+. That was in the 1980’s.
So what happened then to bring us to the lousy rates we have now?
Did everyone in the nonprofit fundraising sector go to the same conference where we all took a stupid pill or amnesia potion?
And as a result, did we all somehow forget how to take care of donors, starting the downward trajectory?
Did acquisition get so easy we all simply slid into ‘churn and burn’? I don’t remember acquisition ever being that easy.
Maybe some of us did lose our way, or get lazy or bored.
But, as Rod observes, donors — and the environment in which they give — have in fact been changing too … and not necessarily in directions that encourage bonding to and relationships with the organisations to whom they occasionally pay attention and give money.
What are some of the adjectives I’d use to describe today’s tougher-to-cultivate donors?
- More discerning (they’re awash in self-acquired information about the things they care about, including information about your competition).
- More pro-active (related to above, they have multiple ways, opportunities and tools to fulfill their generosity urges at their own initiative and on their own schedule/impulse).
- More jaded/less trustful (they’ve heard every pitch, gimmick and claim of urgency there is to hear).
- More demanding (of results, performance).
- More spoiled (by technology-induced expectation of instant responsiveness, and by commercial marketers super-adroit use of data and customization).
Should it be harder to retain today’s donors? I would suggest … Hell yes! I think it would be foolish to say fundraisers are working in the same environment as thirty years ago.
But we can’t let that be an excuse.
Of course donors can be cultivated and retained, as the examples given yesterday by Roger and other commenters make clear. It’s just damn hard work. Harder than just fine-tuning your 6- or 7-contact renewal series. That’s why Roger hammers away, for example, at donor service.
What donors have done is steadily raise the bar for their trust and commitment.
They’ve slowly but steadily turned up the heat.
And so fundraisers are only belatedly understanding we’re getting roasted in the pot.
Tom
7 responses to “Are We Getting Roasted?”
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Tom,
Though struggling to get up to speed with recent comments on this I feel compelled to point out that the basic cause of our dilemma is simple as well as blindingly obvious. The statistics of our industry have got so much worse because so many donors have stopped enjoying doing business with us.
To suggest that there’s nothing fundraisers can do about flagging donor interest and declining retention and responses is nonsense. As an 80 per cent pro bono consultant already well into his declining years I hope I can say this without implying vested interest.
Could the problem be that donors see fundraisers as far more concerned with squeezing the last dime out of them than they are with providing an inspirational, enjoyable donor experience?
I’m just asking. Like Roger and others, I’ve been trying to change this paradigm for some time, with depressingly patchy success.
What is so difficult for fundraisers or consultants to understand? If you persist in treating donors like fodder for your marketing machines, how do you expect them to react? If giving is a good experience the human brain says, do more. If it’s a bad experience, it soon says stop.
Fundraisers don’t find this problem difficult because the answer is so complicated. They find it difficult because the solution is so simple.
All power to your ongoing agitations. And watch out for some detailed solutions coming soon from UK’s The Commission on the Donor Experience.
Ken
I think Ken nailed it with “If giving is a good experience, the human brain says, ‘Do more!’. If it’s a bad experience, it soon says, ‘Stop!’
That is exactly the results we see in our values-based estate planning process. 44 estate planners take donors into their story; never ask for a gift; but simply show them how to self-direct tax dollars from the government to their favorite charities.
90+ nonprofits in 33 states will raise $500,000,000 in estate gifts this year!
“If giving is a good experience, the human brain says, ‘Do More!’
Thanks Ken!
Tom, your list of adjectives refer to technology by commercial marketers and technology in use by the donor. Yes, that does mean the nonprofit world must keep up or at least not be more than a few years behind.
I was speaking to an executive of a very well known National NPO yesterday and this person is worried about the DOS based system they have in chapters across the country may be ready to fail. Folks, that was back in the 80’s when we were on DOS systems. How can anyone be able to communicate properly to donors and have any level of responsiveness with such tools in use!
There must be some level of priority in keeping up with the commercial world when so many renewal dollars are at stake with just a 5-10% increase in the retention rates…
We adopt a fundraising “Field of Dreams” mindset of “If we build it, they will come” and don’t put in the blood, sweat and tears to understand why they’re coming, where they’re coming from, where else they’re going or what will motivate them to come back again. As you’ve said so many times, in so many posts and as Ken Burnett, Adrian Sargeant, Tom Ahern, Kevin Schulman and others have also said, we have to be intentional about building relationships and understanding and caring for our donors. Setting up a year-round program and putting in on autopilot is not a sustainable solution. It’s about donor service and donor experience.
In 2014 I started an experiment we called ‘Two Gifts a Week.’ I made two online gifts to two separate organizations every week and tracked the process and follow-up. It was an eye-opener (I think I’ve learned more from the process of being a donor than I ever learned from years of books and trainings) – and dismally depressing. Overall, nonprofit organizations make it really really hard for donors to love them! This work is actually fairly simple, but we persist in making it complex. What ARE your donor’s motivations and passions? Do you know? And how are you fulfilling them?
Do I win some kind of prize for agitating the Agitators? A colleague was kind enough to point out that I was name-checked in your post today which I missed because I was busy helping clients improve their retention rates. 🙂 I’m a big fan of this blog and I actually really appreciate the focus on donor retention. And I certainly wasn’t intending to recommend despair as the appropriate response to declining retention. I don’t think anyone would disagree with Ken’s straw man argument that “to suggest that there’s nothing fundraisers can do…is nonsense.” However I would also argue that suggesting there is a simple solution to this complicated problem is equally nonsense. I’ll look forward to the “detailed solutions” that Mr. Burnett teases and continued dialogue with other esteemed professionals in this space. Meanwhile its back to the salt mines to try to turn such well-argued theory into practical, actionable steps.
Drawing from Eddie Thompson’s early experiences, I believe what was true 30 years ago still remains true today. 1. Donors know when all we care about is their money. That is why I practice a donor centered charitable estate planning process. 2. The really great organizations discuss gifts from net worth with their donors in addition to gifts from discretionary income. Until donors are satisfied that they know their answers to the BIG 3 Questions, they will be guarded in their philanthropy. After completing our comprehensive estate planning process, our clients’ donors know 1. they have enough to take care of themselves for the rest of their lives, 2. they have thoughtfully provided for their children and grandchildren in a meaningful way, and 3. they know how much social capital they have to direct to those causes they are passionate about.