Volume: The Fundraising Assembly Line to Nowhere
Few topics yield more heat and shed less light than the debate over how frequently we should communicate with donors.
Some fundraisers take the stance “mail more, make more.” Others –like The Agitator—feel the evidence is clear on the side of “mail less, make more”. Here, here, here and here.
This week we’re wading back into the fray, prompted in part by a recent Paying Attention to Retention post by Steve Daigenault of M+R, the online consulting firm. In his post Steve, acknowledges the likely importance of volume/frequency and its effect on retention. And to the credit of M+R promises to study the subject and make data available. Good on ‘em.
Quite mistakenly however, Steve states that “the conventional wisdom … says ‘bombarding’ your list with appeals will drive down your donor retention.”
In fact, “conventional wisdom” is, sadly, just the opposite: that volume works. And, the more the better. You can see this in M+Rs own annual benchmarks showing steady increases in email volume year over year.
I’m not about to quibble with Steve (Nick will do that in his post tomorrow). What’s important is that we address this critical topic with some facts, research and case histories.
Let’s start with the current situation. Leaving out startups and most small organizations that generally don’t contact their donors frequently enough, the modus operandi for the preponderance of large and mid-sized brands is to rely on increasing volume to increase income.
This more-is-better logic seems to go something as follows. Donors give because they are asked. The more they’re asked the more they’ll give. Ergo: The factor causing our success is all the asks. That’s the conventional wisdom.
Let’s pause to think about this. If you were starting a new organization and your goal was to get donors to give you two, “one-off” or cash contributions a year (which would put you at top of pack in benchmarking) and repeat that pattern year after year would you start by saying “let’s mail them 23 times a year and send them 50 emails”?
Of course not, but that’s what dozens and dozens of large organizations are doing right now because they have either run out of strategic alternatives or they truly believe volume is the critical lever in steering toward maximum income, “closing the gap” or “meeting the numbers.”
As I hope you’ll see in this week’s series it’s not that simple. The reason the volume model ultimately fails is that it isn’t based on why people give, it is based on what is convenient, available and “understood”.
But understanding is never absolute, or the learning task completed. And yet, the sector operates the way it has for decades with no discernable change (evidenced by flat to declining trendlines) other than applying the highly limited understanding of human behavior to more channels, that not surprisingly, have us running faster to stay in place.
In short, the path to a sustainable growth model comes from subject matter expertise in human behavior (which is unlikely to come from reading the latest, business book bestseller on the topic) and the ability to not only apply that understanding but increase and evolve it over time.
And it sure doesn’t come from applying platitudes like “mail more, make more” or “ask-thank-report back” or my personal favorite, “people like to give so we should ask a lot to give them what they want”. This treats the act of giving, which often (but not always) delivers positive, emotional highs as equivalent to the act of sending/receiving ask after ask after ask. For those to whom this distinction is lost then the volume hamster wheel awaits.
Not only is this issue nuanced, it also requires some understanding and insight into the status quo forces that resist any change in the conventional volume model.
There are the internal silos: direct mail folks must care about incremental costs, while online folks think the more the merrier because email is “free.” And then there are the external forces whose incentives often run to volume: printers and mail houses, CRMs, consultants with volume-based fees, not to mention my sainted brothers and sisters in our copywriters’ guild who are always delighted to write yet another communication.
So, over the next four parts of this Agitator series Nick takes us through DonorVoice research about volume, best testing methods, case histories demonstrating how organizations cut volume and improved revenue and retention.
We’ll end the week with 5 Tips on how you can benefit by turning down the volume.
As we go through this series I urge you to share your thoughts, experiences and questions.
Roger
9 responses to “Volume: The Fundraising Assembly Line to Nowhere”
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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In our testing, it’s not a “one size fits all” answer. For those loyal, high value donors, the right mix is less solicitation and more cultivation and stewardship type communications. However, for lower value donors, more solicitations and “asks” generate higher gift frequency and more net revenue.
Use analytics and test what makes sense for you.
I would say this covers only two boxes in the 2×2 matrix that you’d get looking at value versus volume. There are high-value donors who don’t mind a large number of mail pieces and you’d be surprised at how many people want to make sure that their five dollars (or Euros or whatever) is only asked for once per year.
In fact, we’ll be talking about a case study Wednesday of a nonprofit who found that their most committed donors wanted fewer cultivation pieces (with comments like “why are you trying to sell me? I already love you”) and their least committed donors retained best when they got a better introduction to the organization. (For those who want to skip ahead, there’s more on this at http://www.thedonorvoice.com/increasing-face-to-face-donor-retention/, but beware spoilers for about 20% of Wednesday’s post.)
Whether it’s the approach you outline of fewer asks to high value and more to low value, the RFM approach of “if they are recent and give a decent amount, throw them in the select,” or even the above approach of measuring by commitment, however, this only gets us to, at best, 2-3 sizes fit all.
One of the central things I want to address this week is how to get to a place where the organization’s mail amount is simply a default value for those who you haven’t yet been able to get more information about, whether through predictive modeling or long-term seasonality patterns or even (gasp) asking them.
You’ve raised an important and, as you suggest, complex and nuanced issue. What I wonder is whether measuring volume across multiple organizations, more or less in a vacuum (i.e., other variables such as quality of messaging, other types of stewardship touches in between appeals, etc., are not taken into account), can yield results individual organizations can reliably use as benchmarks. It’s tricky.
I do wholeheartedly support the ideal of applying greater understanding of human motivation and behavior to fundraising and nonprofit marketing. “Ask, thank, report back” is indeed simplistic, UNLESS you color within and without the lines. The same could be said for the number of times you mail. Numbers don’t always satisfactorily answer questions such as who, what, when, where and why. Of course, nothing’s perfect — and I very much look forward to the series.
Claire, as ever, you are one step ahead. I think you’ll like this week of pieces; I promise I didn’t take anything from this comment to add to the posts, not that I wasn’t tempted… 🙂
I just unsubscribed to Sen. Kamala Harris, a politician I admire and have financially supported; someone I hope to call President Harris some day. Her robot asked me WHY I unsubscribed. My answer: “Happy to contribute a couple of times a year; don’t want weekly solicitations; good luck with that.” When I was working on a PBS TV project I learned that the “average” supporter gave 1.3 times a year. In other words: everybody gave once and a third gave to some other appeal. We have machinery in place. But do we have brains?
Tom, you’ve touched on a dynamic here that I think is underreported. As with premiums, if you have a one-or-two-size-fits-all approach to communication, you will keep the types of donors who like the way you communicate. If you send tchotchkes, you will keep donors who require tchotchkes to donate. If you communicate all the time, you will keep donors who require frequent comms to donate.
Cutting back is just taking the opposite position of the send more camp based on a few feelings. I am ‘quantity agnostic’- I don’t believe that is the metric to be measured. With today’s ability to segment, then segment, then segment again, there are ways to get a lot closer to the communication/donation optimum. But few are willing to invest the time or money to look at the data and make changes. If ‘auto-delivery’ of foods can be adjusted to consumption, so a good NPO should be able to vary the asks according to history and many other nuanced points. Optimizing using number of asks and dollars as the sole variables is short sighted.
Mark, I think you’ll like tomorrow’s post…
Nick, you can borrow from me if I can borrow from you. 🙂
And Tom, I sadly agree. The DNC has lost its brain when it comes to the volume of appeals they send. Also… they are the antithesis of donor-centered. I must have received a dozen over two days to “Help us meet our fundraising deadline.” It just makes me want to cry. And not tears of joy.