Being donor-centric is not function of volume (even though volume biz model horribly broken)

May 16, 2016      Kevin Schulman, Founder, DonorVoice and DVCanvass

Let’s be provocative from the start; donor-centricity used to be an empty, vacuous, platitude.

This, in and of itself, is not a big deal and in fact preferable to the definitions that seem to be filling the empty, vacuous void.

First and foremost, volume (i.e. cadence) seems to have quickly stepped in to become “a”, and probably “the”, defining trait of donor centric; namely if you send a lot of solicitations you are not donor-centric and if you send less or want to or are open to it or don’t reject it out of hand you are on your way to being more donor-centric.

Not to be outdone however, one large, prominent charity claims to epitomize donor-centricity and so much so that it increased the number of annual mail solicitations from 24 to 27.

How to justify sending more in the name of being donor-centric?  Enter the relevance red-herring; often a built-in excuse to keep doing what one is doing and if possible, increase it. Nobody is arguing for sending out irrelevant so why in the world does everybody feel the need to make the obvious point that it be relevant?

More importantly who makes that judgement?  It is always an internal one with justification being we sent 3 more appeals and each netted money and we used the correct pronouns and storytelling and made the donor the hero and talked about the impact of their past donation and made a compelling, simple case for additional need with a very clear ask, repeated 6.3 times.

There was a seminal study done analyzing the language and style and structure of fundraising copy relative to other bodies of work (e.g. academic) and it was an indictment nobody read –fundraising copy reads more like an academic abstract than personal, emotional narrative.

Everyone thinks their copy is ‘relevant’ and we all apparently live at Lake Woebegon.

Most of it is crap – per this study – and even if it weren’t, nobody at this aforementioned charity is likely arguing for sending out 54 appeals. Why not? They are all, by their accounting, relevant? What line in the sand exists that says 27 is ok but 54 is crazy talk?

 

Let us stipulate for the record, sending 27 DM appeals in a year is a massive waste of money and yes, we know appeal 25, 26 and 27 all netted money. You can read the full, empirical case here but the short version is this reality,

Sending more raises more, with sharply decreasing ROI each time and it cannibalizes from future donations.  If you send 6 appeals and get 1.5 gifts a year and think you can send 12 and get 3 the next year you will be profoundly disappointed.  You will also be profoundly disappointed to see just how stubborn the 1.5 average gift per 12-month period is (for current, multi-year donors in particular) against the wave of asks you throw at it.  And by “it” we mean “them” – the donors you are frustrating the hell out of.

What is an alternative to send more, (sort of) make more?  Another charity did a year-long test with a 65% reduction in asking that resulted in almost the same total revenue and more net. Importantly, they advertised this change to folks at the beginning of the year-long test to explain the change and rationale; namely, they heard and are now being responsive to all the complaints. This sensitized donors to the new reality and they adjusted their giving behavior to give roughly the same amount despite 65% fewer requests.

Donors want to donate. They don’t want massive frustration and irritation in doing so, which is precisely what volume causes.  There is a study here proving that point.  And it doesn’t irritate some tiny, minority of folks who really aren’t “good” donors anyway, it irritates the majority of donors.

In short, most give in spite of the fundraising volume machine and the irritation it causes, not because of it.

The deceptively simple answer to how to ask less and make more is to give donors what they want and stop giving them what they don’t.

But, if a hammer (i.e. volume) is your only tool, everything looks like a nail.

However, as we stipulated at the outset, by defining donor-centric as fixing the mess we created it really misses the point, even though volume is horribly broken as a model and the “send less to make more” approach is a vast improvement in donor experience.

An alternative?  What if your entire business were built around answering the following types of questions and then building out product, offers, communications and dare we say it, journeys, based entirely on this intelligence about your donors?

What is their connection to your cause?

Said differently, what are the underlying motivations for giving to you?  What personal identity are they trying to reinforce and what specific activities do they want to undertake with your business to manifest that identity?

How good or crappy are your donor experiences?  Are they doing the intended job or not?  For example,

  • Is your donation process easy?
  • What was the quality of the recruiting process?
  • Is the welcome reinforcing their decision to give?
  • Is the ‘thanking” making them feel valued?

Don’t pretend you can answer any of these questions with behavior data.  You cannot.

Double negative alert:  If you can’t answer these questions your charity is not donor-centric.

The logic for why this matters is as simple as it is irrefutable.

Your donors have identities (e.g. bird enthusiast, cancer survivor, caregiver of someone with mental health issues, member of local community, religious person who is giving in concert with their faith) that explain why they chose to give to you.

You are simply choosing to ignore it.  The donor however, won’t ignore it.  They will very quickly realize your charity has no sense of who they are or what they want.

Your donors are also having experiences with every interaction – passive or active – they have with your business. These experiences are good, bad and in-between and include pedestrian un-sexy things like the registration process for Event X as well as actually participating in or attending Event X.  These experience matter, they are being mentally registered by your donors and totally unaccounted for by your business.

This total lack of alignment between your business model – volume – and their motivation and experiences driving behavior is the reason for lousy retention.  This is mindset and mindset drives choice.

Your charity, in all likelihood, has chosen to make the ask your economic engine, the volume model.  To make this engine “work” doesn’t require knowing anything other than some very, very limited past behavior to make some slight efficiency improvements for future volume.

In reality – your current reality – the ask deserves very little credit in actually raising money (16% by our attribution models) and more of the blame for current world order.

The donor is giving in spite of the asking machine, not because of it.  Simply reducing the volume and speed of the asking machine lessens the aforementioned irritation but it doesn’t do anything to get at motivation or the myriad of other, non-volume, related experiences playing out every day.   Your business model and why they give (and stop) are still out of whack.

This post is already way long so look for a Part II that offers more detail and specific examples of what should be your new business model.