Influence is a Tool, Not a Reward

Recently, the Burk Donor Survey featured a report on why alumni do or do not give to their alma maters. I was intrigued to discover how big issues such as student debt or rating their education in terms of value for money made no meaningful difference in whether or not alumni donated to their college or university.

But I did find something interesting. How alumni were asked to become donors for the first time almost certainly played a role in their reluctance to contribute. Among those who could recall the last appeal they received from their college, 54% of non-giving alumni received a letter from a staff person in the Advancement office. Only 3% were asked to give by someone influential such as the Dean of the school they attended or a professor.

The power of influence features prominently in all our research studies with donors. Our inaugural Burk Donor Survey (early 2009) asked donors how they would be managing their philanthropy in the depths of the recession. (Fundraisers will recall that the biggest drop in giving was felt at the end of 2008 and into 2009.) While donors were trying to maintain support to not-for-profits to which they had given in the past, the majority of respondents were not willing to contribute to any cause they had never supported before. We wanted to know if there could be any exceptions and two responses were statistically meaningful. Acquisition appeals featuring matching gift opportunities were seen as especially smart strategies in a shaky economy. But another answer received the highest rating by far – If a leadership volunteer asks me to give, I won’t be able to say no.

And, then, there’s the work for which my company is best known. Twenty years ago, I conducted research aimed at shedding light on why early attrition, especially the loss of donors between the first gift and the second ask, was so high (50% at the time). That research eventually resulted in Donor-Centered Fundraising, a strategy that improves renewal and average gift value, especially among early donors.

In that research we asked donors what they would do if they made a first, modest gift and then received a thank you call from a member of the Board of the organization they had supported. They were effusive with praise about the possibility, which we then tested. First-time donors, who received a thank you call within a matter of days after giving, returned contributions in the next campaign that were 39% higher than in the control group. As well, long-term retention after a once-only call was far superior in the test group.

We have since conducted research and testing about who is most effective at influencing renewal and more generous donations. Leadership volunteers and Chief Executive Officers consistently outperform students or fundraisers in thank you call tests.

Are fundraisers using influence to best advantage?

Between that initial research and today, first-gift-to-second ask attrition has risen from 50% to 65% and acquisition rates have fallen a median 17% in only five years. Long-term retention is now 10% or less, depending upon how often donors are solicited. If any for-profit company experienced this extraordinary level of customer loss and disinterest, they would consider themselves to be in a crisis.

When businesses get into trouble, they can throw money at new product development and marketing, but they don’t have the single most powerful asset which is enjoyed, but under-utilized by not-for-profits: influence.

Fundraisers do use influence, of course, but most of the time they mistakenly equate influence with recognition. They ask their Board members and CEO to call donors, but only the ones who are giving over some magic threshold that most donors never reach and that, certainly, new donors are not attaining. They encourage their influential leaders to be present at donor recognition events and on-sites and then invite only donors to attend who are already giving at the top of the gift chart.

Traditional fundraising is passive; it waits for donors to make the effort to give generously first, then offers them influence as a reward. Active fundraising uses influence as a tool to move donors to the secure and lucrative state of giving generously within their own means.

Is there a better role for your influential leaders?

In our most recent study of over 5,000 Board members serving organizations that employ professional fundraisers, 87% agreed that they still have responsibility for fundraising. At the same time, the majority had no idea what they should be doing and most would rather drink hemlock than ask a friend, colleague or stranger for a major gift.

It is time to direct your Board members’ attention and that of your Chief Executive Officers, Deans, Professors, Doctors, Artists, Musicians, Humanitarians, etc. – to the bottom of the fundraising pyramid. Impersonal, heavy-hitting fundraising tactics plus the proliferation of charitable organizations have created this crisis. Not-for-profits need their influential leaders to overcome it.

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For more information on our research, please visit the Cygnus Applied Research website or contact my colleague, Kristen Hazell at k.hazell@cygnusresearch.net

 

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