Could There Be a Simple Solution to Over-Solicitation?

Donor Acquisition, Donor Attrition / Why Donors Stop Giving, Donor-Centered Fundraising, Modernizing Fundraising / How Fundraising Works versus How it Should Work • Views: 16694

I’m sitting here watching the data roll in and the number of donors climb in our current research study.  As of this moment, 21,613 Americans have told us about the effect that the economic crisis has had on them so far and, as a result, what will happen to their philanthropy in 2009.  As I scroll through the data and scan more than 12,000 additional comments, I am simultaneously fascinated and frustrated.

I’m fascinated by the number of donors who have taken the time to join this study and by their important information and thoughtful comments.  But I’m frustrated, too.  Yet again, over-solicitation tops the list of donors’ concerns and feeds heavily into their decisions about who they will support this year and how much they will give.

Donors’ Concern Is Growing

The first time I documented the statistical impact of over-solicitation was in 2000 when I published my company’s research study[1] on why donors stay loyal or stop giving.  By 2003, when the second national study[2] on the subject was published, over-solicitation had become the second most prevalent reason why donors stopped giving or gave less than they could. (The first was “lack of measurable results on donors gifts-at-work.”) But while our independent and client-based research and testing have consistently shown that profitability rises when donors’ two main complaints are addressed, over-solicitation still remains rampant throughout the fundraising industry.

Why is that, and will this issue ever be dealt with to donors’ satisfaction?  I sure hope so because if you think donors’ giving patterns and preferences have been changing in the past few years, wait till you see what’s coming.  In our current survey, over-solicitation is scoring much higher than anything else for its ability to negatively impact donors’ giving decisions.

Who Is Responsible for the Problem of Over-Solicitation?

I think that the solution to over-solicitation is right under our noses, but because it’s counter to ingrained fundraising thinking, it’s not getting serious attention.  Donors are experiencing over-solicitation in direct marketing appeals, and those appeals emanate from two sources — internal direct marketing operations inside not-for-profit development offices, and external direct marketing suppliers servicing the fundraising industry.  So, is over-solicitation the fault of direct marketing staff and suppliers, then?  No, it’s not that simple.

When managers and budget-setters require direct marketing to do something it is not designed for — ie, make a profit — direct marketing staff are forced to take a program designed only for acquisition and use it for retention.

Donors Think Like Investors

Direct marketing programs are excellent at getting donors to start giving…and soon thereafter, equally excellent at getting donors to stop.  That’s because donors who have invested in not for profits think in terms of “return on investment” when deciding whether or not to give again.  And, it’s easy for donors see the value of their initial investment reduced and then wiped out as the parade of follow up appeals with multiple inserts and token gifts keeps coming.

What managers should be asking their direct marketing staff to do is acquire a reasonable number of donors at any one time, solidify their loyalty, and move them “upstairs” as quickly as possible.  Solidifying their loyalty means giving them measurable results on their last gift before asking for another one, and not over-soliciting.  Leave the profit-making to the major and planned gifts officers.  They’re much better at it because they’re working with programs that are designed for profit, not volume.

Are We Paying Suppliers for the Wrong Thing?

It’s a version of the same thinking for external suppliers.  They get an awfully bad rap for aggressive solicitation techniques, but a quick glance at their contracts will show you that they are not wholly to blame.  They are paid for activity, not for results.  The more appeals they execute, the more money they make; the more pieces and trinkets they produce, the more they can charge.  But, what if NFP managers paid suppliers to retain donors instead of contracting for volume.  Overnight, aggressive solicitation would be replaced with meaningful communication on gifts at work, because that would be the only way to boost donor retention.  And, just like that, the problem would be solved.

Donors Are in Charge

In the time it’s taken me to write this blog, 116 more donors have completed our survey on the impact of the economy on their philanthropy.  47 of them made references to over-solicitation.  We’re going to close down this survey tonight.  But even before we start analyzing the results, I already know one thing — the days of fundraisers as the gatekeepers of philanthropy are over.  Donors are in charge now, and they are making independent and provocative decisions about who they will support and how much they will give based on whether or not charities address their growing concerns; and at the top of their list is over-solicitation.

Stay tuned for the results…and fasten your seatbelts.  It’s going to be a very bumpy ride.


[1] Thanks, A Guide to Donor-Centred Fundraising (Canada, 2000)

 

[2] Donor-Centered Fundraising (United States, 2003)

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10 Responses to Could There Be a Simple Solution to Over-Solicitation?

  1. Susan Bresler says:

    I just wanted to weigh in on over-solicitation. I work in non-profit fund development, but this comment is from me as a donor.

    There number of nonprofit organizations that I have supported for many years. Occasionally I add a new organizations based on a direct mail appeal or at the request of someone I know.

    Last December I received a call from the [organization made private by moderator]. I regularly give between $100 and $300 each year, and usually in December. I have been a regular donor for over 20 years. When they called I assured them that I had planned a $200 gift for the holidays and would be sending it soon. I used their phone call as an opportunity to let them know that I don’t like it when they use my gift to pay for what seemed like monthly solicitations and to please not include a solicitation with my thank you letter. The person I spoke to was totally understanding and asked if I would like to be on a list of donors who only receive limited solicitations. I thought this was a great idea. Since I usually give my gift between Thanksgiving and Christmas, limiting my appeals to the fall would be a wonderful solution. I told them I was willing to receive any newsletters or updates on their charitable endeavors..but please limit the solicitations.

    A few days later, I sent all of my end of the year gifts, including the [organization made private by moderator]. After the gifts were sent, I received a letter from the Director referencing the telephone call, thanking me for my pledged gift and asking me to send my gift in the enclosed remittance envelope (same division and address I sent to just the day before)

    A couple of weeks later I received another letter asking me to make good on my pledged gift. I let this go, thinking the gift processing was slow and they hadn’t recorded my gift yet. Then a second ‘dunning’ letter arrived.

    I decided to call, as my check was already cashed and I had already received a thank-you (albeit with another request for funds) :(
    I know some of these letters are generated from an off-site source, so I wanted the actual org to know there was a problem.
    I was transferred to the Director’s admin assistant..I explained my dilemma and wanted to make sure they knew that two dunning letters after a $200 gift was not donor friendly behavior. I did tell her I was a long time contributor. She did not take my name, phone number or ask for any information except to say “Oh, I know who you need to speak to, we have been receiving many of these calls.” After the transfer I received the VM of someone in development. I left a detailed message and about my concerns. I also phoned back to the Admin and left her a detailed VM with my contact information in case her director wanted to know about one of his contributor’s concerns.
    Believe it or not, I have yet to receive a response from development, the admin or the director.
    I truly admire the work that the [organization made private by moderator] has done in my community and in many communities across our nation.

    I tried to bring the matter of over solicitation to them during their appeal phone call, through direct contact to the organization, leaving messages with the director’s staff, and with the development department.

    I have received additional appeals, and dunning letters, but no response to my messages. It is hard to drop an organization that I have felt strongly about for many years.

    I am still debating and it is quite a dilemma.

    I am sensitive to the budget cuts and staffing issues. But someone needed to respond to my concern. A quick phone call goes a long way!

  2. I couldn’t agree more. I sent your article to my ED and Dev Committee chair to help them understand and not resort to conventional thinking. Our fall annual campaign resulted in 98% of the funds we brought in last year over the same period (with much higher restricted gifts that will be used for current programs). Interestingly, we had about 18% fewer donors than the previous year with a 20% increase in gift value! I’m not happy about the loss of 100 donors but I figure they were the least committed/involved ones, giving small amounts. We retained a huge % of our larger donors ($200 gifts and above) and they increased their gifts. We also had a few more new donors than we had the year before. So, I am feeling pretty good, considering the economy, and have a leg to stand on to ward off the “hit ’em again!” cries. Also, I got my ED very involved in stewardship so we spend one hour each week just for her to deal with thank yous. She is seeing the beneficial effects and feeling quite good about her relationships with donors these days!

  3. This stuff is gold! Thanks so much, Penelope and staff for this continuing ‘stream’ of valuable information and success related ideas for sharing with our key volunteers and staff departments.

  4. Thanks for the great post, Penelope. Some great comments, too. All bring to mind the following:

    1. Recent statistics show that the average household receives 848 pieces—approximately 40 pounds!—of junk mail each year. Nearly 90 percent of those households would rather be be on a Do Not Mail list (nonprofits would likely be exempt, but the sentiment is clear). Although none of us would consider our appeals to be junk, the average recipient might beg to differ, especially when deluged with redundancies.

    2. Good cultivation and stewardship practices suggest tailoring direct mail appeals to existing donors based on existing data/experience with each donor, thus encouraging greater involvement and faster movement up the proverbial donor pyramid. (Milestones and outcomes help fulfill this need in a way that little else can, once a donation has been made.) It follows, then, that the quantity and quality of mail directed at donors would improve with each “appeal.”

    3. Paying suppliers to retain donors instead of contracting for volume is simply brilliant. It would force direct mail suppliers to think in a more strategic manner, one consistent with donor cultivation and stewardship practices.

  5. I read about your study with great interest. Do you have it broken out by gender?

    Thanks,
    Sondra

    Penelope Burk:
    February 10, 2009

    Yes, Sondra, we will be looking at gender differences. We had such a robust response from donors to this research study that we have achieved statistical validity in each demographic category. FYI, the male:female split was approximately 30:70. We will look at every question through this filter, creating a companion report to the main national study on gender differences concerning philanthropy in economic turmoil. You might also be interested to know that even though this survey was conducted entirely online, hundreds of donors over the age of 75 participated, supporting our view that the transition of even the oldest donors (citizens) to electronic communication is speeding up. Also, we’re particularly pleased to say that we have a response rate from donors under 35 (and even under 25) that will allow us to report on the differences between young donors who are your philanthropists of the future and older donors who are your mainstay funders now.

  6. Noreen Leary says:

    What an interesting article. Makes me think long and hard on direct mail. Based upon your trailers for the study results, I can hardly wait to find out what our donors want.

  7. Michele Skinn says:

    Wow, I think you’ve really hit the nail on the head – and it’s as much an aha moment as a duh! I know that I have stopped supporting organizations to which I send a $25 gift and then get 10 solicitations over the next 3 months. I know which bottom line my solicitation has helped – expecially when I get a generic preprinted thank you – perhaps those NFP managers should consider investing in keeping current donors – rather than harrassing them.

  8. Lynn Hoy says:

    The proliferation of non profits has undoubtedly increased the volume of direct mail solicitations. Could it be that the concern expressed by donors is because they are receiving too much direct mail in total, rather than a concern about the practices of specific charities? I would also be interested in knowing how many solicitations donors think they are receiving as compared to how many charties actually send.

    Penelope Burk:
    February 10, 2009

    This is a critically important question, Lynn, one which we researched extensively a few years ago. When donors were asked what they meant by “over-solicitation”, they said they define it as both receiving too many appeals from a single NFP and being asked to give by too many organizations. However, since no single NFP can influence the solicitation pattern of other organizations, the practical solution to over-solicitation lies simply in addressing the issue in your own not-for-profit. (If everyone did that, universal over-solicitation would also be mitigated.) So, we then asked donors how they define over-solicitation by a single NFP within the space of a year. I was fully expecting donors to give me a number, like anything over 3 or 4 or, perhaps, even 1 appeal a year would be, in their view, too many. But, they didn’t. Instead, the majority of donors said, “Over-solicitation means being asked to give again before I’m satisfied about what happened with the last gift.” Of course, when I thought about it, that answer made perfect sense and is, in fact, the only useful answer to the question. Because donors have been telling us for the last 10 years that receiving measurable results on their gifts-at-work is the primary motivator for giving again, it stands to reason that failing to get those measurable results but being asked to give anyway will cause donors to feel over-solicited — even if you have waited an entire year to ask for that next gift. This has major implications on how fundraising operations are run, but the payoff is big for those that make this critical adjustment. Most solicitation dates are chosen for convenience and out of habit, when they should actually be determined by when the CEO and his/her programs staff can produce and report measurable results on how funds were used.

  9. Vernon Rose says:

    Penelope, I have read your comments with interest and also a long term view of fund development over twenty-five years. For many years, the “trade” has proposed that once a donor gives, that donor will give again and often. That “wisdom” always seemed to miss the very two points you have been making in this blog – measurable results and cultivation at an appropriate level. Solicitations always seem to drag out the same sad face and say, “won’t you help me xxxx?”. I say “hooray” to your research and comments and let us hope it is a new day for our field, finally.

    Penelope Burk:
    February 10, 2009

    Statistically, Vernon, the opposite is actually true. There are two ways of measuring donor retention — by calculating the net number of active donors at the same point each year without considering who those donors are; or by calculating the retention rate of a set group of donors (ie, specific people) over a longer period of time. If you measure the first way, it appears that about 35% of the donor group turns over annually (even this figure is rising, by the way.) As long as your acquisition program is effective enough, that loss can be made up. BUT, that’s not how profit is increased in fundraising, and increasing profit is the only real measure of a successful fundraising operation, because your CEO can only spend the net revenue, not the gross income. Profit is made by holding onto donors long enough for their gift values to increase in concert with a decline in the cost to secure those gifts. So, it really does matter which donors are being retained if profit is the objective. Although these figures are not talked about openly, more than 90% of donors stop giving within 5 asks after acquisition. And, early donor attrition — when donors are making the least valuable gifts — is highest of all. Attrition between the first gift and the second ask has risen over the last 8 years from about 50% in 2000, to 55% in 2003, to closer to 65% today. Since it costs much more to acquire a donor than to keep one, this means that most of the budget is simply going to churn volume in and out without contributing to bottom-line profit. This speaks to the problem I referenced in the blog — that suppliers and staff direct marketers are rewarded for volume regardless of who the donor is and regardless of the actual retention rate; but fundraisers need to hold onto a smaller but more committed group of donors in order for their efforts to be profitable. We’re working against our own definition of what it takes to make fundraising successful.

  10. Janet Popelka says:

    Thank you for your work and giving us the latest read on donor preferences. It really helps me shape our organization’s fund development plan.

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