News & Press: Member Insights

Responsive Fundraising: The Time for Change is Now

Tuesday, April 14, 2020  

By Gabe Cooper
Founder and CEO at Virtuous Software

"No one can see a bubble. That's what makes it a bubble."

This prophetic warning came from an investor in the critically acclaimed film The Big Short, a tell-all, true story about the mortgage collapse of 2008. The movie lays out the bleak story of the mortgage industry on the brink of meltdown and a few seasoned investors who used data to predict the outcome that no one else saw coming.

The nonprofit fundraising industry finds itself on the precipice of a similar bubble today. Depending on the research you read, the US has lost 20 to 25% of our mid-and-low-tier donors in the last decade. Our retention and response rates are at abysmal lows but major donors are covering the gap and keeping nonprofit giving consistent as a percentage of GDP.

For years, it was clear to me that we were only one economic recession away from seeing a drop in major donor giving, forcing us to reckon with the fact that the core "every day" donors who support US charities were starting to disappear.

What I didn't know when I started to formulate these ideas was that the future we were hoping to help nonprofits avoid was much closer than any of us would have hoped. We can't be sure what the long-term effects of COVID-19 will be on the country, the economy or nonprofits, but what we do know is that it won't stop the innate drive we all have to be generous. In crisis, humans want to do what we can to help our communities and neighbors. But, in order to bridge the gap and grow giving, nonprofits MUST find a way to reconnect with rank and file donors.

In our book, Responsive Fundraising: The Donor Centric Framework Helping Today's Leading Nonprofits Grow Giving we outline the current generosity crisis and begin to draw out the leading factors that stunt generosity. Our goal was to provide a playbook for creating predictable, sustainable generosity by responding to "every day" donors in a more personal, impactful way. We believe that nonprofits who are able to weather the current crisis are the nonprofits who are able to treat all their donors like major donors.

One blog post isn't enough to cover the full breadth of Responsive Fundraising. That said, I've tried to lay out three principles that will help forward thinking nonprofits flourish in our uncertain time.

1. Put Donors at the Center of Your Decisions

There is a subtle, but distinct, difference between responding and reacting. Being responsive will inspire generosity in uncertain times. Reactionary decisions will erode trust and likely lead to a loss in revenue.

How can you distinguish between a reaction and a response in your own organization? Reactionary decisions focus on the needs of your organization (e.g. "We need $100K this month to continue our work!") rather than the needs of your donors. If the donor's experience is not at the center, your tactics may get short term results but they won't lead to long-term giving based on a trusted relationship with donors.

Right now, we have unprecedented access to behavioral data of individual donors. We can see what they care most about via social media metrics, wealth data, website/email analytics, geo-location and conversion tracking. Nonprofits can listen to the needs, interests and values of each donor at SCALE in order to connect with each donor in a more personal way. If Amazon, Spotify and my favorite online store can provide personalized experiences, why can my favorite nonprofit?

Crisis Text, a suicide prevention platform, recently provided a great example putting the constituents at the center of the decision making. Since its launch, the platform has seen incredible growth in popularity — which also meant a growing need in volunteers and donors to give their time. Their story includes innovation that served volunteers, donors and program - but it's a helpful illustration of responding based on the preferences of constituents.

Instead of requiring more from their existing group of volunteers, or waiting to help distressed individuals until they could acquire new volunteers, they set up a Spike Team program. Members of the Spike Team were the highest engaged individuals who had both the interest and capacity to do more. Not only did it solve the immediate problem of wait times for those who needed support. Crisis Text Line was also able to bring their donors and volunteers closer to the cause they cared about, without alienating those who were already at capacity.

In times when it feels impossible to know the right way forward, keep your decisions as simple as possible. What do your donors care most about? How can you listen better to find out? What information are they looking to you to share? Can you better segment constituents by persona or interest to better respond to needs? How can you pull them closer to the good they are doing in the world? When you choose your campaigns based on your donors, the results will always lead to increased generosity.

2. Give Your Information Freely

In this hyper-connected era, donors expect real-time, trusted information. Trust is essential for the success of any organization, but especially nonprofits who are asking donors to part with hard earned money without a tangible product in return. To that end, it's more important than ever to be transparent and proactive with your donors. In times of uncertainty, misinformation or outdated information spreads quickly. Responsive nonprofits stay ahead of that by giving away information freely and on the proper channels. As nonprofits we should always think of ways to give to donors before we receive.

The Last Well exemplified this principle back in 2018. The founder set out to create buzz for the organization and meet an important fundraising goal by living on a floating barge. When he started, Todd Phillips assumed he'd be off the barge after a few days. Unfortunately, they weren't meeting their fundraising goals. But instead of giving up, or hiding their failures from donors, The Last Well started spreading more real, authentic and unfiltered information.

They did live video chats on Facebook from the boat, sent hyper-personal emails to their donors and replied to comments in real time across their social channels. Soon, the campaign picked up speed and became a massive success. Not only did The Last Well recruit new donors and meet their campaign goals, they established a broad base of trust and authenticity among their donors.

The most important lesson to learn from their example is don't shy away from any relevant communications. This includes admitting failures, asking for more than just money, and transparently drawing your constituents closer to the cause. Remember, you shouldn't send every donor all the information at once. Create a strategy for providing the most relevant information to each individual at the right time on the right channel. But never default to hiding information or leaving donors in the dark.

3. Work Together to Find New Opportunities

One of the major differences between leading, Responsive nonprofits and those that are struggling to connect with individual donors is collaboration. In the past, nonprofits created silos out of necessity. Fundraising was seen as a necessary evil and strong boundaries were created between the fundraising, communication and program teams.

This approach was tolerable in an era when donors had fewer choices and were more willing to blindly trust nonprofits without transparency or connection to the cause. But, in our hyper-connected world, donors are bombarded with thousands of marketing messages and they are experiencing increased demands on their time and money. In this quagmire of information and ads, it is almost impossible to determine who to follow or trust. Imagine the extra layer of confusion and mistrust your donors feel when they get a variety of information and CTAs from different teams in your nonprofit. It's inefficient, ineffective, and distracting from the real issue: doing good in the world.

To address this problem, it is critical that your communications and programs teams are working daily with fundraising to personalize communications and build trust. Modern donors expect a single conversation across all channels whether it comes from your communications or fundraising team. In the for-profit world, the term "smarketing" has emerged to describe the combination of sales and marketing to provide a singular customer experience. The same can be said for nonprofits. We need "commraising" (or "fundication") departments committed to a consistent donor experience.

It's also imperative that the program team work shoulder-to-shoulder with other teams to report on impact, tell stories, admit failure, and drive transparent change. More than anything, the program department at nonprofits must embrace the fact that donors aren't a means to an end. Healthy program teams see donors as part and parcel to the cause itself — and they feel a responsibility to bring donors in close to the good they are accomplishing in the world.

The added benefit of collaboration in a time of uncertainty is the new approaches to responsive fundraising you're sure to uncover. New demands result in new ideas, new processes and new milestones. Don't be afraid of the change. Embrace it, record all your learnings and use it to grow when things return to "normal."

Conclusion: Being a Responsive Fundraiser Is Easy with a Growth Partner

The truth is normal is always changing. Fundraising has seen many iterations just in the last 100 years and it will continue to evolve. Rather than react to the changes after they happen, we're working to help nonprofits anticipate change and use it to grow giving.


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