Monthly Archives: June 2010

Really. Donors DO care about impact. If we tell them the impact is theirs to make.

“So what’s to be done? The good news is that I think ultimately increasing donors is a shitty reason to care about impact metrics.  To the extent that there can be a culture shift to focus on impact among foundations and “professionalized” change makers, great. But I think the real culture shift is to get nonprofit leaders to recognize the intense responsibility they have for constantly improving impact.”  So says Nathaniel Whittemore in a post on change.org.  He’s responding to study results that show that donors don’t necessarily do due diligence when deciding to give, that “[m]ost people give because they feel a longing to be a part of something bigger than themselves.”

I gotta say, the author’s use ‘donors’ to represent current, past and prospective donors made this post a tough read.  This distinction is not a pedantic one, and it changes the effectiveness of his message. The story a nonprofit would tell to any of them will vary constantly, and it should vary as long as segmenting is possible.  Because the issue here is NOT if donors care — the issue is if donors care enough to give again.

In a normal fundraising year, the story told to past and current donors deserves more time, money, resources, love than the story one would tell to prospective donors.  The donors’ message would lead them to believe that THEY themselves made the service impact, that the organization was just the tool used. These donors are more likely to allow for some use gifts for non-service functions like salaries and office space if they know the people who run their charity.  Nonprofits do a pretty crap job of making the case for operational expenses in general, and measurement groups who apply arbitrary percentages to define a respectable maximum allowable operational expense for all orgs don’t help, but a lot of donors are pretty pragmatic about these expenses.  Sustaining this pragmatism by demonstrating the success of impact is a path to giving success.  And a retained donor and a retained dollar is a critical projection method for future gift revenue streams.  In a 2009 study across all 26 segments of the US nonprofit organization types as determined by a consortium of trade groups (AFP, CASE, Urban Institute, and others …), researchers found that, for every $6 an organization raised in 2009, more than $6 was lost due to donor attrition. Ack!

So, acquiring donors by means of friendships and relationships is in no way new — I ask the same folks to donate to my son’s charity walk every year, and they do because my passion demonstrates that I understand the impact of giving.  I retain these donors.  None of these donors ask if the charity meets its mission because they think I believe it does.  I wouldn’t even mind if one would be a cynical pragmatist and ask why give to this organization, right now, because I have a passionate case to make in response.  Network for Good and sixdegree.org’s research in this phenomenon describes me as a “superactivist,” a trustworthy case-maker.

Does this the superactivist system work in a cataclysmic charity environment like post-Haiti or the Michael Vick cruelty story?  The typical superactivist model does not seem to be as important, and giving because of a network matters, but not to the same degree. And in this model, acquisition is easier and often faster — but often the technological limitations (and possibly corporate net neutrality villainousness) of giving mechanisms reduces retention options.  It’s hard for a charity to collect donor data from a text gift due to lack of shared data, for example.  To text ‘Haiti’ was perceived by the public to be a gift to a critical need via a trusted delivery method portrayed in the media as well as by friends.  Did the majority of those who sent that text trust that it would all be used for Haiti, and by a reputable organization? Did they know that their phone provider could charge a fee, that the phone company would not likely share their address info with that organization, or that they wouldn’t get a ping-back thanks or even a message other than the charge total on their bill?  I found it hard to discern the answers to these questions in the weeks that followed the hurricane.  In an informal poll in the week following the hurricane, 100% of the 45 people I asked who did text ‘Haiti’ were not sure if they would text ‘Haiti’ again in a month.  Most were not sure who got their gift!

Donor retention in religious organizations is a fascinating story.  Why do Catholics give to the Church when the Church’s use of funds has been so widely portrayed as questionable? A family member told me that she continues to give because, although there has been abuse and error, the overriding sense that the Church is performing a greater good overall is a strong case for support. And she gets that message every week, without fail.  The Church is a conduit to actually achieving the work, in some ways in spite of itself.  In this way, donors do care about the impact, enough to overlook conflicts in mission and performance.

The pitfalls of mindless acquisition are many, especially when the acquisition is made to appease the potential donor’s pet interest without a full understanding of the implicit costs of a service change or re-focus.  I once asked a prospective donor for a 7-figure gift, and he agreed to make it as long as it served to create a new professorship in a field that was not in line with the university’s mission.  It was so tempting to make that gift (7-figures!), to find a professor to do that job!  But program service would have failed in the long run – the professor would have been insufficiently supported in the pedagogical plan of his department, and if he left after a program was built around him, the students were shafted.  I like to think of that donor, and one who would give to create a scholarship for what amounted to an imaginary student with impossible award criteria, as the Consummate Objection Statement Makers.  They will give only if the mission is sure to fail!

High performance in service and in fundraising is critically dependent on donor retention, on those who demonstrated that they have bought in to the operational success only as much as is needed as long as the service goals are reached.  Retained donors will continue to feed the revenue stream long-term so the mission is met.  New donors are only retained if they self-assess or assess a trusted casemaker’s claim that it will, and are assured that they made it happen.