Getting 'Relationship Fundraising' Right With Technology

"If you want loyalty, get a dog" — so said Sam Walton, founder of Wal-Mart.

That’s the attitude of some businesses, and sure enough, their customers roam from vendor to vendor seeking the lowest price, without demanding high levels of customer service.

These businesses are happy and indeed set up to comply — short-term relationships, no questions asked and no hard feelings when the relationship is over.

This is known as "transaction marketing." Tell a compelling story, make the sale and move on. But, "transaction marketing" is not what most nonprofits want to do; they instead value long-term donor relationships — at least that’s what they say.

The 2009 eCampaigning Review, however, found that although nonprofits were adept at attracting new supporters, many were unsuccessful when it came to staying in touch with them; a third failed to even send thank-you e-mails.

Does that mean we’re more interested in making a fast buck?

I don’t believe so. Nonprofits don’t intend to give a poor service, and if they do, it’s often that they can’t — rather than won’t — do better.

So, here’s my theory: Compared to commercial organizations of a similar size, most nonprofits face a specific challenge — that is, how to deal with the sheer volume of customers in a personal and timely way, and help build donor relationships. It’s not unusual for a small nonprofit to have 100,000 donors, whereas a commercial organization, with similar revenues, serves 500 customers.

At that level, only by truly embracing technology can the nonprofit hope to engage in true "relationship marketing" or "relationship fundraising." And, the investment in customer relationship management (CRM) and the Web is likely to be disproportionately large for a nonprofit compared to its counterparts in the commercial world.