Does being donor-focused have to mean giving donors choice?

Give donors more choice over where their money goes. It sounds like a no-brainer, doesn’t it? If we want to be supporter-focused, and help them feel genuinely close to the mission, why wouldn’t we let supporters direct their funding? And isn’t crowd-funding such a great idea to enable that?

Well, offering donors choice isn’t all that it seems. And if you are tempted to restrict the money for them, it may not be the right thing to do at all, or what they even want. Here are some things to consider.

It’s not just choice that matters, it is control.

Choice is good. Tactically, in direct response, it works. Or at least, the perception of choice works. Because we actually know that too much choice is bad and diminishes response – we learn to be focused, single-minded and guide the supporter clearly to the action. Keep it simple, stupid.

Marketing research has shown that excessive choice paralyses decision-making. People faced with too many choices of breakfast cereal buy less than those faced with a narrower selection, in spite of more choice being self-evidently more attractive. Worse, those selecting from a wider choice feel less satisfied about their choice. They suffer Fear of Missing Out! (I wish I’d had the chocolate pudding, not the cheesecake …) Choosing is good, but feeling secure and in control of our choice, is better.

It’s not just control that matters, it is transparency.

It’s interesting that the top-read 101Fundraising blog of 2014 was Simon Scriver’s ‘Why I don’t Donate to Charity:Water’, a critique of their 100% model in which nothing is “wasted” on admin, how this damages the sector, and how much better it would be if we transparently explained organisations need admin costs to run properly. It’s a heart-felt piece, and obviously something fundraisers feel strongly about. Others chimed in: choice is good; donors say they like it; if you have other donors covering the cost, why not? Charity admin was a sensitive topic for much of 2014. There were media exposés in Ireland and the UK on charity salaries; in the US, Dan Pallotta plan to take his “I am overhead” call to action on the road (something I weighed in on here); and the costs of fundraising investment is always under scrutiny somewhere.

The point is, admin is a distraction. No-one is really interested in it. Admin ratios and value for money have become a proxy for effectiveness and impact. When donors ask where their money goes, they don’t really want to know about salaries; they want to know about the difference made, the impact. The sector continues to be weak at showing that, which is why we talk about what we do: where the money goes and the activities we do, but not necessarily what they achieve. The less we are able to articulate what difference the money makes, the more we have to lazily fall back on talking about what the money has gone, and restricting money for some donors to leave no doubt.

It’s not just transparency that matters, it is connection.

The early success of virtual gifts was driven by the novelty factor of choosing something specific, such as a goat. Charities hadn’t explained well enough how it worked and had to move fast to reassure people it was a credible scheme. My youngest daughter, then aged four, burst into tears when she realised her goat was not in the garden. But the goat whose photo was stuck on our fridge was given a name and joined our family of pets, even if it was living with a family in Africa.

Transparency is essential. But being selective in telling supporters about what interests them isn’t being misleading, it’s just doing your job to engage and inspire. That doesn’t have to involve restricting the gift to show it went specifically on the goat, but not the paper clips, office rent or front line salaries. With my daughter’s goat, it wasn’t the money she thought about, it was what her goat was up to with that family.

With child sponsorship, people like being asked whether they’d prefer a girl or a boy to sponsor, and in which country. The vast majority of people however, leave that choice to the charity. People may have a perception that the money goes directly to a child and their family, but when it is explained that money is pooled to community projects or even to general funds, donors don’t generally mind. Knowing exactly where the money goes matters less than the closer connection they get to the difference being made, through the personal feedback from a child. It’s the same with choosing projects.

It’s not just connection that matters, it is impact.

There are some great programmes where you can choose where to put your money, such as Cancer Research UK’s MyProjects or Oxfam’s Projects, or Lend with Care. But in all of these cases, the choices are contained within programme parameters. All the projects have been selected to go ahead anyway, the charity is simply allowing you to choose from what they have already chosen, by mapping your money to existing priorities. You get to choose a project that might interest you, or mean something to you, and by getting specific feedback, you’ll feel more connected to the work, the progress and the impact.

And there we come to one of the best choices you can offer a donor: “where the need is greatest”. That’s not a cop-out, that’s a real choice. The donor does expect you, the organisation, to know where the need is greatest, and where you can make the biggest difference with their money. And the donor does trust you to make that decision. Crowd-funding is fun, but it does put important work at the mercy of what donors are attracted to. That happens already, of course, in the broad market place of causes and charities. Is it right for it to happen at the level of projects and priorities?

Offering “where the need is greatest” gives the donor choice and satisfaction in their choice, and gives you their trust and the flexibility to do what’s necessary. Make it count. And make sure you deliver on transparency, connection, and impact.