Why would you continue to do something that is obviously not productive and doesn’t contribute to your objective? Why would you do this in light of the facts that are right in front of you?
This is one of the great mysteries in our work. Sometimes I just shake my head in amazement that intelligent, competent, well-meaning adults can toss their good judgment and wisdom aside, as they either continue doing a fundraising activity that is not profitable, or they fail to add profitable strategies to those activities.
Let me give you some examples:
- Membership Programs — This is where a non-profit creates a society or membership program where the donor gains entrance for an annual gift of a certain size. The donor promises to give $5,000 annually and they are now members of the “That’s It” Society. All they have to do is give $5,000 and the assumption is, “That’s it – we will not ask you for more.”
Now, persuading a donor to give that annual amount and belong to a membership program is not a bad idea. The bad idea is that the non-profit does not set the expectation that the entrance fee is only the beginning of this amazing relationship. So, the donor gives the set amount and assumes “that’s it!” – and they give the rest of their money to other organizations. This is just not good. (Jeff and I talked more about this in this blog post and on this podcast episode.)
- Annual Funds — A non-profit has an annual fund that donors are asked to give to. Donors are asked to give their one gift each year and “that’s it.” The donor givesthe rest of their money to other organizations. We don’t understand why you would take this approach. (Read more here.)
- Turf battles — We recently heard a story about an exasperated VP of Development at a major university who said that his Annual Giving Department and Major Giving Department are having a tug of war about a recent $50 gift from a donor. Here’s what happened: One of their researchers looked up the donor and found out the donor had a net worth of $1.2MM. So, they took the $50 donor and gave her to an MGO to qualify and took her out of the “Annual Giving” Department’s hands. Now the VP is wondering if he did the right thing because his “Annual Giving” team is upset they took away someone they could cultivate for a larger gift. And the Major Gift team probably is not going to spend much time with this donor because the MGOs all have full portfolios, plus “it’s just a $50 donor.”
This turf battle isn’t helping the situation or serving the donor. But the core problem is that the donor should never have been moved to major gifts in the first place. In this situation, the VP should have let the direct-response or mid-level team cultivate, nurture, and QUALIFY that donor. Once they become qualified, then move them into a major gift portfolio. Why ask a highly paid MGO to take time away from their caseload to qualify a donor? This approach suppresses giving from their portfolio of qualified donors.
- Events — Oh, organizations LOVE to do those events! And they find it SO much fun and so fulfilling to just fill that room or do that 5K Run. And they think it is SO productive to spend hundreds of hours of staff time to organize and pull it off. But they believe that it’s worth it, notbecause of the net revenue it brings in, but because it feels so good. And the donor comes to the event, buys a table, or gives their gift, and “that’s it.”
The event organizers do all the math to report up-line how the event did – that it netted $X. But they leave out of the calculation of all the staff time, so the real net was Y (a lot less than X). And because the donor was told “that’s it” when they bought the table or sponsorship, the donor gives the rest of their money to other organizations. (We have a White Paper on events – get it here.)
- Capital campaigns — Most of the non-profit world is pretty good at these. Hundreds of donors are enlisted. Millions of dollars are raised. The project is funded. And “that’s it.” We are done. I can’t tell you how many capital campaigns we have followed where very good donors are not properly followed up with – even for the campaign itself – and they simply lie fallow in the non-profit graveyard so that those donors can give the rest of their money to other organizations. (If you’re looking to create a successful capital campaign, we highly recommend reaching out to the team at Capital Campaign Toolkit.)
All of this is truly a disease in the non-profit world. It is a fatal flaw. We keep doing things that, essentially, tell the donor to give the rest of their money to other organizations. So, they do – and the organization suffers.
Jeff and I think this situation is caused by faulty thinking that is driven by:
- A blind commitment to the past. We have always done it, so let’s keep doing it. (It doesn’t matter that it doesn’t work.)
- A lack of understanding that fundraising and mid, major, and planned gifts are not about the money. I could go on forever on this one. But I won’t. (But you should read our book!) Fundraising and mid, major, and planned gifts are about helping a donor fulfill their interests and passions. And if you do that correctly, then the donor will be with you for life. They will give more frequently, and they will give larger amounts. When it’s about the money, all we do is focus on getting it. And that is unproductive and off-putting.
- Using membership programs and the annual fund as stand-alone programs vs. a starting place. This limits giving since the donor believes that all they have to do is fulfill the contract they were asked to accept.
- A poor relationship with program and finance. This results in a failure to provide program performance information, so the donor does not know she made a difference. It also contributes to a lack of specific donor offers which, if done correctly, would increase giving.
- Leadership that is not involved. So, there is no cohesive plan or support for a true philanthropic culture. This hurts fundraising and donors.
- Lack of a healthy donor pipeline. This means that mid, major, and planned gift officers are not provided with enough qualified donors to relate to. The result is lower revenue.
- A lack of understanding of how fundraising and mid, major, and planned gifts really work. This relates to point #2 above, but it merits its own billing. When you understand that fundraising and major gifts are about relationships, not money, you don’t create a membership program – or have an annual fund, or organize an event, or pull off a capital campaign, or allow turf battles – because this leads the donor to “do their one transaction” or give to a dying concept. You do NOT want to do that. You invite them to join you in solving the problem your organization is addressing and you treat them as a partner and colleague, not a source of cash. As they join you on the journey, they start to give the rest of their money to your organization instead of to other organizations.
Think about all of this, and get rid of those strategies that are hurting your fundraising and your mid, major, and planned gift program. Your donors are partners. Do not turn them into transactional givers by maintaining these limiting practices.