Understanding Donor Burnout

Donor Attrition / Why Donors Stop Giving, Restricted versus Unrestricted Giving • Views: 10720

The phrase, “donor burnout” has been in use in the fundraising industry for as long as I can remember, but it is a misnomer. Attributing a slowdown in giving to donors running out of steam deflects attention away from the underlying cause. “Donor burnout” also implies a condition from which donors suffer that fundraisers cannot mitigate, which is certainly not the case.

The dictionary defines burnout as exhaustion of emotional strength resulting from prolonged frustration. To consider why donors might be suffering from prolonged frustration, it helps to understand what causes them to be in the opposite state – one of prolonged satisfaction. Satisfied donors can be easily distinguished from their burntout counterparts. Satisfied donors behave differently. They are loyal longer and they can be counted upon to make increasingly generous gifts over time. Frustrated donors, however, give once or twice and disappear, and the value of their gifts is often too modest to be profitable.

In our research studies on donor loyalty and generosity, respondents have described what it feels like to give, vividly articulating what it means to be a satisfied donor. They tend to identify two points of tremendous emotional connection – an initial rush when they make the decision to give (or give again) and an even greater exhilaration when, later on, they learn that their giving has helped achieve some meaningful outcome. This fluid cycle – considering a request, making the commitment to give, learning later that the gift achieved something, being ready to consider another request – is the process of progressive philanthropy that makes fundraising increasingly profitable.

When it comes to scheduling appeals, then, the question to ask is not, “Do solicitations work better in October or November?” but “How soon after putting donors’ gifts to work will our not-for-profit have something meaningful to report back to them?” This means that even if fundraisers do not re-solicit their donors for an entire year after they gave, it will be too soon if donors do not know what they have helped accomplish. It also means for some not-for-profits that can provide evidence of measurable results quite quickly after gifts have been secured, they are waiting too long to ask again.

Because information is what inspires donors to stay loyal and give more generously, there is an obvious connection between asking for unrestricted gifts and donor burnout. If gifts are not designated to a particular program, project or service, fundraisers are forced to communicate with donors in general terms, continuing to sell the brand or mission when only measurable results will satisfy their donors.

Donor burnout is real – the result of failing to stoke the fire that keeps donors’ philanthropic spirit alive.

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In her just-published book, Donor-Centered Leadership, Penelope Burk explores key myths and misunderstandings that hold fundraising back and which contribute to the high turnover rate of professional fundraisers.

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4 Responses to Understanding Donor Burnout

  1. Graham H says:

    Penelope, WRT your video I can’t help but think that a contributing factor to the lack of focus by charities on planned giving has to do with how fundraisers are paid.

    A friend of mine told me recently that the best advice a mentor had ever given him as he started in the venture capital business was that to understand how management was compensated was to understand how that company would be managed. Similarly, in the fundraising profession, my experience has been that management may understand intuitively the long term value of planned giving, but because almost all compensation is tied to annual targets or finite campaign targets, there is little motivation to devote resources (being a short term expense) to planned giving with a delayed pay-off. Furthermore this is reinforced by a board that may be term limited such that they would not be around to see planned giving pay off either!

    regards,

    Graham Hallward
    President, Alva Foundation (Toronto)

    • Penelope Burk says:

      Graham, you are correct about the tendency to credit fundraisers only for cash in the door. Ignoring or “discounting” deferred gifts is common, yet seriously counter-productive. The various forms of planned gifts available to donors today are simply modern-day giving options and they are becoming increasingly popular with donors for several reasons. Donors realize that they can make much more generous gifts this way than they ever might have imagined and planned gifts are also smart options in poor economic times when people feel they need to hold onto their cash reserves.

      Cultivating relationships with donors takes time and talented gifts officers need every possible advantage at their fingertips in order to increase the likelihood of getting a yes. Developing a donor who is eager to give as generously as possible and then discouraging him from maximizing his philanthropy through planned giving exposes not-for-profits as non-strategic regarding fundraising and uninformed regarding the value of planned gifts and the actual time it takes for a well-run program to begin realizing gifts at a level way beyond investment.

      The fundraising industry invests heavily in training practitioners in the art of securing planned gifts; but the people who actually need the training are the decision-makers — the CEOs and Boards who are holding philanthropy and fundraising back because they simply don’t know the numbers — value of planned gifts, cost to secure them, and investment required to develop a winning, highly profitable program. Decision-makers are way behind donors and professional fundraisers on this, and it’s extraordinarily frustrating. We’re leaving billions on the table as we watch yet another generation — this time baby boomers — enter the final phase of their lives without having made the most magnificent gift of all.

  2. ssj says:

    Penelope, your point toward the end about the difficulty of meeting donors’ information needs when their gifts are unrestricted is one that I have struggled mightily with. We need those unrestricted dollars! How can we create those feelings of satisfaction about outcomes for our donors who give for us to “use where it is most needed”? I’d love to hear from others as well.

    • Penelope Burk says:

      @ssj: When donors say, “Use my gift where it is most needed”, they are not giving permission to NFPs to spend their money without reporting on where it is assigned and, later, what their contributions helped you accomplish; it is an admission by donors that they are not qualified to make the decision about what needs to be funded. This is the job of your CEO and your Board — to articulate a ambitious, compelling and achievable strategy, one which articulates your NFP’s programs & services that require funding, and how much of that funding needs to come from donors. (Many NFPs have other sources of revenue like fees, product sales, cash reserves, etc. which cover some of their funding needs.) Once that is accomplished, then one initiative at a time should be showcased to donors vividly, passionately, and with a strong intellectual case as well. Raising money this way is more successful that either insisting on “unrestricted gifts” (which leaves donors wondering why you are raising money) or selling a shopping list of all your programs and services (which makes donors suspicious that you have no strategy).

      Failing to understand the issue of restricted vs unrestricted holds fundraising back more than any other single factor. Fundraisers are not at fault here, but I am entirely confident that the problem will never be resolved until fundraisers take the bull by the horns and start teaching their decision-makers why insisting on unrestricted gifts from donors leaves so much money on the table. In my new book, I have explained the issue in a way that decision-makers can understand it. See Donor-Centered Leadership (pages 72-76).

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