The Warm Glow Commodity
Some English words have become their own opposites. “Dust” can mean to add dust or remove dust (so, technically, I have dusted my office bookshelves). “Sanction” can mean to permit or to penalize. “Fake news” can be news that is fake or news that one wishes were fake.
I mention this because “commodity” is one of those words. It can be something useful or valued. Or it can have little marginal value because it is so widely available and undifferentiated.
My concern, in reflecting on the retention numbers we saw earlier this week, is that the warm glow of giving is moving from the former to the latter type of commodity.
You want that little hit of dopamine? Get the brand that is donating a part of their profits to charity. Use the “donate a dollar” at check out. Buy something from the neighborhood kid selling something for some club.
But that’s not the real commodification. There are over 1.5 million nonprofits in the United States. Let’s say there are a third of those you’d find a waste of time and money. And let’s ignore the rest of the world (because I’m an American – “ignore the rest of the world” is our foreign policy). So we have “only” one million nonprofits to which you’d feel good donating.
The point of all of this is when you are in a meeting where someone says “our target audience is people who want to do good in the world,” you are now a commodity. And not the good kind.
There are a few nonprofits that may be able to get away with this because of some combination of size, inertia/history, and good branding. But that’s about .001% of nonprofits. If you are in the other 99.999%, you must pick your donors or, more accurately, give the donors you’ve selected a compelling reason to pick you.
If you are a bookstore, you will not beat Amazon on selection or price. ‘Twould be folly to try. Rather, those who have succeeded have burrowed into a niche. That can be a genre niche – mystery, sci-fi, etc. Or an experiential niche – book clubs and discussions, coffee, personality of staff, etc. Or a type of customer – at right is a bookstore in London that specializes in socialist and radical material.
Likewise, your organization can’t outbroad the United Way. I’ve been the guy putting tchotchkes into envelopes trying to get someone, anyone, to sign on the line that is dotted. And I’ve reaped the whirlwind when those donors go where donors who aren’t intimately connected to your organization go: away. If your acquisition strategy was “anyone will do,” when you ask again, your donors will reply “anyone will do.” These people can get their warm glow anywhere.
So the ur-question for your organization is how to move from the second type of commodity-for-all to the first type of commodity – something useful or valuable – for some. Who, among the million nonprofits they could choose, should choose you? And how do you prove to them you are absolutely perfect for them?
Because that is how people pick their causes. It comes, first and foremost, out of “tastes, preferences and passions, acquired as a result of an individual’s social experiences.” In short, donors donate to you because of who they are and how you match up with that identity. It’s true in retention and it’s true in acquisition. Only when you are a part of who they are will you be something valuable to them – a commodity.
Nick
7 responses to “The Warm Glow Commodity”
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 […]
Read Full Answer
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 […]
Read Full Answer
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 […]
Read Full Answer
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 […]
Read Full Answer
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 […]
Read Full Answer
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 […]
Read Full Answer
Totally agree. And you can’t become part of who they are until you learn, first, who they are. What are they worried about? What do they wish for? What are their values? Which means only nonprofits who invest in and plan for relationship building strategies will prevail when it comes to donor retention. Years ago Penelope Burk’s research showed donors really want just one thing: “Show me that you know me.” That’s how your nonprofit can differentiate yourself from all the others offering a short-term hit of dopamine. Show them you know them. You’re one of them. You enact the values they care about, and can be trusted to do so. Consistently. They can trust you. Love them, and they’ll love you. Sounds simple, but it’s not. You can’t just pay this lip service. You need a plan, and you need to work it.
Yep, agree! A donor picks who they support because the org’s work/mission authentically aligns with their values.
Great article and comments. I agree. I always repeat something I learned – they are not our donors, we are one of their charities. We need to be completely other-centered when it come to relationship building. We need to know our donors and their desires and come up with ways to serve them.
“And let’s ignore the rest of the world (because I’m an American – “ignore the rest of the world” is our foreign policy).” :’D
I love your blog and every article that comes out is spot on.
Sorry about the delay; traveling yesterday.
Tabitha, thank you. I was actually thinking about using St Jude as an example of an organization that was large enough to have a target audience of people who want to do good in the world. That’s probably true, but it’s also because St. Jude does an excellent job of making each discussion about what you do and who you are helping specifically. Full example at https://www.nonprofitpro.com/article/sidestepping-season-sameness/, but take two year-end emails, with the organization names removed:
1. “All gifts doubled. Give now >>
December is a big fundraising month for XXX, and right now, we’re behind. The 15th of the month is almost here, but we’ve only raised XXX—leaving us XXX behind.
Will you help?
2017 is going to be a big year for us, but only if we can hit our goals. The mid-month milestone is a pivotal moment for our fundraising. And if we start the second part of the month behind, it will be hard to catch up.”
2. “Your generosity gives hope to XXX cancer patients, like Kenlie, Devon and Marleigh. Thanks to friends like you, families like theirs will never receive a bill from XXX for treatment, travel, housing or food—because all a family should worry about his helping their child live.”
#1 could be anyone; #2 is clearly St. Jude. A great example of how even big nonprofits work to be valued by specific donors.
Melinda, thank you for the kind words. Often, I feel like my sense of humor is what I argue against in fundraising — I substitute quantity for quality — so I love to hear when a joke lands and when it doesn’t so I can improve.
The United States typically provides nearly twice as much net foreign aid than any other country, yet you think all we care about is ourselves?
Keep the politics out of these discussions and they would be more enjoyable to read.
Mostly was making a joke about my myopia. I’ve found in my writing that I often make allusions to US-centric things, to the point that I’ve asked DonorVoice’s UK staff to read some of my material to see if such allusions work (for example, Hungry Hungry Hippos, yes; Cliff’s Notes, no). In this case, I didn’t have nonprofit stats from around the world – if there are good figures, I’d love to be enlightened.
But if we’re going to go there, let’s go there. The US spends more on foreign aid than other Western country, yes: 43% more than the nearest Western country (Germany). I say Western here because China is catching up (https://apnews.com/5f816fec396a463cb3c130e1ec44c58f) but does not publish official foreign aid numbers, so it’s difficult to tell.
But those are gross numbers. One would expect the largest economy to have the largest aid budget because, hey, larger budget. When you control for that, however, we do not do nearly as well. The UN goal for foreign aid as a percentage of gross national income is .7%. Five countries meet this (Denmark, Norway, Sweden, Luxembourg, and Great Britain). The average among OECD members is .31%. The United States is at .18%, 22nd out of 28th. Thus, if a large foreign aid budget is the measure of our engagement with the world, and we agree that engagement would be positive, I’d arge we have work to do.
While I would fully support increasing our governmental aid, I firmly believe it isn’t indicative of the full measure of US involvement in the world. I would argue that US philanthropic institutions are strongly engaged with the world and (hopefully) a better indication of our national character than our government funding. I believe firmly in America and Americans — we can be a great and a good people, even if, to paraphrase Churchill, we try other things first.
That said, both supporters and detractors of our current foreign policy call it America First. Is it controversial, then, to say that that has as its goal a disengagement from the rest of the world? I’d thought most would agree with that and we’d just be arguing over whether that’s a bug or a feature.
Engagement with the world and the manner of that engagement is something on which smart people disagree (or I suspect it would be if I considered myself a smart person on the issue). It’s a part of many of our nonprofit missions. It’s a healthy debate. Let’s have it. We’re here on the Agitator. Let’s agitate.