Why are we fundraising and how can we do it better?

By Charlie Hulme
On September 19, 2016 At 2:00 pm

Category : Best posts Q3 2016, Latest posts

Responses : 6 Comments

Another year, another IFC. Another round of presentations ranging from the transformative (none more so than this masterclass, ‘Reinventing the Donor Experience’ by Kevin Schulman and Adrian Sargeant) to the tawdry (tempting but unfair to name but, like any conference, always plenty of choice).

And of course another jaunty slogan. So what is it this year? ‘Asking the right questions’. ifc-2016

So, what questions are you asking? Well, if you’re tired of running just to stand still; of investing time, money and effort into ‘new’ fundraising programmes that yield the same, predictably underwhelming, results, you’re probably asking:

‘What needs to change before my results do?’

There’s a very clear answer, one that’s already been adopted by a growing number of forward thinking charities. And it’s what I’m looking forward to co-presenting with two good friends and great fundraisers Rachel Hunnybun and Richard Turner in our session ‘How to be a fundraising changemaker’.

Is there any sector more resistant to change than ours? Medicine, science, technology, in fact just about any field you care to mention, are constantly changing their point of view. It’s fundamental to their evolution and growth.

When was the last time our sector changed its mind? change-mind

When was the last time we took a good look at our mindset, our ironically labelled ‘best practice’, and asked ‘Is this as good as it gets?’ Given that our results have stayed flat for many, many years, you’d think it was a question worth asking. Yet very few do.

The sad fact is that, for all their great intentions and noble ambitions, far too many charities don’t truly know why they are fundraising or how to do it any better than they’ve always done it.

In our session, Richard Turner will look at the ‘why are we fundraising part’. So let me briefly touch on the ‘how to do it better’.

Imagine for a moment you were starting a new charity, or business, and you needed to go to the bank for a start-up loan. And imagine your business plan was the same business plan that just about every charity currently operates on. You’d be laughed out the room! Why? Well, how would the conversation go?

Bank manager: So, tell me a little about your new venture.  bank-manager

Applicant: Well, we plan to systematically email, mail and call people about whom we know absolutely nothing and regularly ask them for money on an irritatingly frequent basis.

Bank manager: Hmmmm, I think I might be missing something here. Can you run over that bit about your audience again?

Applicant: Well, of course we plan to capture and store transactional and demographic information. And while it’s been conclusively shown that these give us zero insight into why people do what they do, we’ve decided to skip over that bit and just presume for them. We think they’ll find that more engaging.

Bank manager: Eh?

Applicant: You look a bit bemused. Let me explain. Instead of simply and scientifically capturing and acting on audience identity, preference and experience, we’d rather keep things simple and just guess. But don’t worry, we have every intention of increasing the volume of irritating stuff we send by sending them plenty of engagement pieces.

Bank manager: And what would they find engaging?

Applicant: We have absolutely no idea, but…

Bank manager: Security!

Farcical? Sadly not. Far too many charities are content to carry on with a volume based business model, that’s been proven to cause irritation. Their justification? That sending more stuff didn’t negatively impact giving (in the very short term of the study period).  And that it actually garnered incrementally more donations.

What could be wrong with that (aside from the screamingly obvious that knowingly causing irritation can hardly be sustainable!)? The bit where it actually isn’t raising more money at all. Just shifting donations. There’s no net increase in giving if you include the next period of time (i.e. where the money was shifted from).

In other words, squeeze a little more out of this year, piss off those who aren’t going to stick around next year, and do it over and over and over just to hit the same groundhog day number.

So, if you’re tired of nothing changing, the only question to ask yourself is ‘Which do I think will perform better; a journey where I don’t know my donors or where I do?’ 


ifc2016

This blog post is part of the IFC series. 101fundraising is proud to be the official blog partner of the International Fundraising Congress for the 5th year!

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Charlie Hulme (28 blogs on 101fundraising)

Charlie is MD of Donor Voice. He helps charities uncover what, of all the things they do, cause relationship strength and what is harmful. Partners see a massive improvement in performance, value and retention. Voted top speaker at the Institute of Fundraising's National Convention in 2013, he writes frequently for SOFII, 101 Fundraising, the Institute of Fundraising and many others.


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Comments

  1. Bullseye. How to point this out without being labeled the dreaded NEGATIVE EMPLOYEE?

     — Reply
    • Hi Erin, that’s the part Rachel will cover in session (and that I should have in this post!)

       — Reply
      • Hi Erin, yes, we’ll be covering off practical techniques to drive change upwards, downwards, side wards…one of them will be about how to use positivity to frame a problem. If you’re at IFC come say hello and if you’ve got a specific question we’ll be happy to try and help!

         — Reply
  2. There are a couple of important caveats about the research that Charlie cites that claims to prove that mailing people increases their levels of irritation.

    First caveat is that the authors state that negative feelings caused like this “do not propagate into stated or actual giving behaviour”.

    Second caveat is that to test whether people did feel irritated by increased levels of DM, the authors had charities deliberately send a cluster of “additional direct mailings on top of their regular mailing strategy in a single week”.

    They found only “that the experimental mailings increased irritation. At the same time, the mailings the charities sent according to their mailing strategies do not increase irritation.” They say that a “likely explanation is target selection used by charities for their mailing campaigns”.

    In other words – charities already know who to contact, when to contact them, and how to do it in a way that doesn’t irritate them.

     — Reply
    • Hi mate – thanks for weighing in. All I’d add is I’ve yet to do a commitment study where volume has not been raised by donors as an issue. I should add the pain point isn’t just “you ask me too much” but also “you send me too much” In other words all the comms designed to ‘engage’ etc are have a counter productive effect.

      But even if none of this were true, is ‘find the right number to send’ the best answer we have? If it is we’re screwed! We know we hit massive diminishing returns quickly, so status quo is will be limit for as good as it gets. Nothings going to get better that way.

       — Reply
    • Ian, all accurate points you cite though the picture is still incomplete.

      First, there is irritation created in the ‘control’ universe, the one that you suggest is perfectly calibrated based on knowledge about who to contact and when. The study merely found that as volume increased, so did irritation but this is not increasing from zero irritation in the control. And the irritation felt is by most people (control and test), not an isolated few.

      Additionally, what the authors found is that giving in the short term with the additional ask actually increased but that giving was very incremental and most importantly, merely shifted euros forward – i.e. robbed Peter to pay Paul.

      In short, volume creates irritation and this includes the ‘base’ amount being sent by these charities. The behavioral change is very short-term, shifting dollars forward and not creating ‘new’ money.

      We have further evidence of not measuring our failure – there is a negative correlation between amount of comms (any comms) received in a given year and probability of sticking around the next year.

      The sector is very good at measuring its “success” but not so good at measuring the failure.

      P.S. You should review the references cited in the Dutch paper, there is ample evidence beyond the Dutch study (from consumer studies and otherwise) that volume creates irritation.

      P.P.S. Ignoring all of that I can still make the case that the volume model (which is the predominate model) has massive diminishing returns, even if these were widgets on an assembly line instead of humans. The idea that they’ve figured out “optimal” ignores the year over year pressure to hit the number and the industry response, which is to send more asks. There is no such thing as optimal with the current approach, only the pressure to send more. The reason is simple, the cure more complicated; the “ask” gets all the credit for giving and deserves very little, the cure is getting to root cause on behavior (why folks do what they do) and building the business from there.

       — Reply