Driving Generosity: Build a Responsive Fundraising Strategy
I’d like to put a notion out on the table: The fundraising models that drive most of today’s nonprofits were designed for a world that no longer exists.
The ways in which people communicate, connect, relate and learn has changed dramatically over the last 20 years. Technology and media companies have created a world where our brand experiences are now highly personalized. In 1994, AT&T ran the first digital banner ad, imploring its’ prospects to click “your mouse right HERE.” While that type of promotion may seem immature and even too aggressive by today’s standards, it kicked off an entirely new way of advertising — to an audience of one.
Additionally, for-profit companies from Amazon and Spotify, to Disney and Kroger, provide personalized brand experiences for each and every customer. This has created a world that means consumers (and donors) have come to expect highly personalized communication from the brands they care about.
Unfortunately, most nonprofits have failed to adapt to this modern approach. Instead, they have remained handcuffed to outdated fundraising tactics, and as a result, there has been an 18% decrease in nonprofit donors since 2006. This isn’t just a phenomenon driven by donors. It represents a fundamental shift in the way people interact with both for-profit and nonprofit brands alike. For example, poor personalization and lack of trust cost U.S. organizations $756 billion last year, as this caused 41% of consumers to switch companies.
In order to drive generosity in 2020 and beyond, it’s more critical than ever that nonprofits adapt new-world tactics in order to respond to the individual needs and expectations of their donors. Responsive nonprofits must become experts in continually listening to donors, connecting in a personal way and then suggesting next steps based on the needs of each individual supporter.
Demonstrate Appreciation and Build Relationships With All Donors
Based on observations with our customers, there are two essential principles of responsive fundraising that we believe can help bridge this gap. The first principle is to commit to building relationships with ALL donors, not just major donors. Antiquated fundraising tactics promote donor inequality, which is a huge shame, as well as a missed opportunity. The focus on who can give your organization the most money, or who has given most often, completely misses out on who has the most growth opportunity with your nonprofit. Focusing only on major donors assumes that the person who gives the most demands the most attention when in reality, a donor’s growth potential should receive as much cultivation and engagement.
I understand that having a relationship with every single donor can sound like an unattainable goal, but hear me out. We know that it’s logistically impossible to have in-person conversations with 10,000+ individual donors. But with modern technology, you can respond to donors in real-time, in a very personal way and with very little additional staff time.
Automation, CRMs and algorithms have made it possible for everything to be personalized. In addition to this enhanced personalization, more donors want to have relationships with the nonprofits they support. Donors want more inside information, updates on the good their giving has done, education and giving inspiration. They want to be part of a community, and they need to know that their time, effort and dollars are making a difference.
A personalized, intentional donor communications strategy will go a long way in supporting your relationship-building efforts. Successful donor communications strategies should always include: impact-focused storytelling, regular progress updates and opportunities for donors to participate in the conversation. By employing this strategy, not only will your donors stay up-to-date about your nonprofits’ good work, they’ll also consistently receive continued inspiration to remain involved and a legitimate understanding of their impact.
As a result, your nonprofit will also experience increased donor retention and loyalty, which leads to long-term sustainable growth and being able to do more good.
Trust Is Key
The second essential principle to building a responsive fundraising strategy is to focus on earning your donors’ trust, rather than attempting to maximize reach. Historically, nonprofits have hounded people with direct response messages, crossing their fingers for that 2% response rate. This batch-and-blast numbers game isn’t fun, and nobody wins. I don’t know any nonprofits that enjoy sending this type of outreach, nor have I ever heard of a single donor who appreciates receiving these messages in today’s world.
This approach has not only become intolerable, but it’s also increasingly ineffective as it can push donors away from giving at all. In “The New Nonprofit” by Nicholas Ellinger, he argues that the resulting 92% to 98% of people who don't respond to mass appeals isn't just because of irritation, but rather retaliation.
"The donor turns the dissonance back on the organization's specifically or on giving generally."
Turning back to for-profit businesses as a guideline, we see that 43% of customers will stop doing business with a company if the business loses their trust. Sixty-eight percent of customers will choose to leave if they feel that the company doesn’t care about their business. It’s absolutely crucial that your donors feel that they can trust you and also that they’re valued.
Donor-nonprofit relationships based on trust will yield a higher rate of return, equate to more giving on a more regular basis and lead to growth as they tell their friends, family and colleagues about your mission. This method of trust-based fundraising creates a virtuous cycle where constituents stay engaged and invite more people to your cause. Fundraising strategies that GIVE to donors first before asking for money help build trust, create pull and create loyal givers.
So what can your nonprofit do to build more trusting donor relationships? A great place to start is to begin asking more insightful questions in order to actively engage with your donor base. Nobody likes a one-sided relationship, and your donors don’t either.
For example, I know a donor, who, as a young parent, didn’t have much disposable income to be able to give to the causes she supported. However, the donor-nonprofit relationship she had with one particular organization was strong: She cared about their cause, and they valued her as more than a dollar-sign. Because of their collaborative and trusting relationship, she was able to mobilize a group of other mothers who were then able to collectively help in this nonprofits’ mission to aid refugees from Syria.
By virtue of connecting with this supporter and relating to her as a human-being, this organization was able to realize the true extent of her generosity — as an influencer in her community. Ultimately, she was able to rally more support for the organization than she ever could have given on her own through a donation form. Unfortunately, most nonprofits would have followed the antiquated approach of simply asking her for a donation at every interaction.
By actively engaging more often with your donors — while keeping monetary asks to a minimum — not only will these relationships build organically, but you’ll likely find ways that your donors can help your organization, even without traditional monetary donations.
Be social with your donors, encourage them to be social with each other, be consistent and, most importantly, show gratitude. By engaging with your donors on a regular basis, you’ll likely find that you naturally won’t have to “work” so hard to retain them. Listen, connect, and share thoughtful suggestions with your donors as to how they can participate with your nonprofit, especially outside of monetary giving. Create personal connections with all donors, not just a select few.
By putting these principles into action, we’re confident that your nonprofit can successfully build a responsive fundraising strategy that’s both engaging and builds trust within your donor base. This responsive relationship will allow for more win-win situations, allowing everyone involved to do more good. After all, isn’t that what this is all about?
Gabe Cooper is the founder and CEO of Virtuous Software, the responsive CRM and fundraising platform that helps your nonprofit easily create personalized donor experiences at scale that build lasting relationships with all their donors.
His drive stems from a passion to create market-defining software and help charities re-imagine generosity. He frequently writes and speaks about empowering nonprofits to grow generosity through technology.