charity:water is among the most dynamic nonprofits in the world. They’ve built their success on powerful marketing—marketing that creates a relationship and turns donors into champions of their work. An example is their birthday campaign, which encourages supporters to donate their birthday. Instead of getting gifts they give them to one of their favorite causes.
The birthday campaign is one of the case studies used in a significant study of relationship fundraising conducted by the Rogare Institute at Plymouth University in the U.K. The institute is associated with the Centre for Sustainable Philanthropy and has become one of the top fundraising think tanks in the world. Their four-part study, funded in part by LANO member Bloomerang, explored the way insights from social psychology and marketing might inform fundraising. The academic researchers partnered with leading fundraisers to ensure practical applicability.
The report has three key findings:
1) Fundraisers should have a clearer understanding of donorcentrism.
A donor-focused approach is a relationship-focused approach. Fundraisers need to think of developing an ongoing relationship from the very start. The first gift comes because a donor has been inspired by a cause. There’s an immediate opportunity to provide an exemplary donor experience. That lays the groundwork, according to marketing research, for a relationship that increases in satisfaction and trust over time and leads to increased commitment and engagement.
The key to this relationship is genuine two-way communication. This isn’t just talking, and it’s not listening to glean information. It’s listening for deeper understanding, particularly with major gifts donors. Fundraisers must learn what motivates the donor to give and what they value and need in their lives. When this work is done, according to social psychology and fundraising practice, it’s possible to build a profound sense of connection and shared identity. The donor can see how working to advance the organization’s mission helps them become their best selves.
2) Fundraisers should be supported by a “culture of philanthropy” in the organization—and support it.
The report confirms the need for staff members and board members to understand the work of fundraising and how they can be part of it. Board members, in particular, play a critical role in major gifts fundraising and engaging donors. But many staff members---from the finance office to the front line—interact with contributors on at least an occasional basis. It’s important for them to know how to make the most of those encounters. Fundraisers should invest time in those relationships as well as those with donors and board members.
3) Fundraisers should be evaluated based on donor satisfaction and the lifetime value of their work in addition to more common metrics.
The Fundraising Effectiveness Project has shown the relevance of donor loyalty to maximizing gifts. Nonprofits lose around 70% of their contributors between the first and second gifts, and donor loss is 30% year to year—a major challenge. Fundraisers should track donor retention for their organizations as a key measure of success. This report recommends two additional measures. First, it suggests fundraisers follow the example of marketers and measure donor satisfaction in order to identify potential issues with engagement. Second, the report argues for evaluating fundraisers based on the lifetime value (LTV) of contributions. LTV the best measure of return on fundraising investment and should be a part of evaluating fundraisers. Pursuant, another funder of the research project, has a free online lifetime value calculator.
LANO will offer two sessions on deepening donor engagement in upcoming weeks:
Monday, March 7, Shreveport
Tuesday, April 12, Baton Rouge
The training will provide concrete examples of building donor relationships to maximize the return on fundraising investment.