Avoiding Transactional Terms in Fundraising

There are two words in fundraising that cause my stomach to tighten every time I hear them: “prospect” and “annual” (as in “annual fund”). These two words live together in the minds, discourse and language of thousands of fundraisers.

I don’t know how their use got started. I suspect that it was before the age of enlightenment. Because enlightened folks have discovered that donors are real live human beings with hopes and dreams for a better planet; people who want a relationship with a nonprofit that does the important things they care about, rather than having a relationship based on transactions and money.

Take the word prospect. What does it mean? According to Dictionary.com:

noun

• Usually, prospect
  • an apparent probability of advancement, success, profit, etc.
  • the outlook for the future: good business prospects.
• A potential or likely customer, client, etc.

Except for the “possibility of success,” the word prospect defines a potential or likely customer, client or donor.

A potential donor. A likely donor.

Does that sound like an adequate description of that donor on your caseload who gave $1,000 last December? Is she a potential donor or a likely donor? No, she isn’t. She is a donor. A real live human being who has trusted you with her money to do something that matters to her. There is nothing “likely” about her. She is today, in the present, not in the future.

By the way, the donor who gave $25 in the last one to two years is also a donor, not a prospect. A lapsed donor is a donor, not a lapsed prospect.

Here is why Jeff and I so aggressively object to using the word “prospect” when someone talks about a donor:

1. First, it is a wrong label. The person is not a prospect. They are not someone who has not given. They are a donor — someone who has given. Think about this in a commercial context. Bill (the owner of a retail store) sees that his customer has come in the store (that would be a person who has been in the store before and bought stuff, or it could be a person who came into the store yesterday and bought something for the first time). Bill sees the customer come in the front door and introduces him to another customer by saying: “I would like you to meet my prospective customer.” The right introductory language would be: “I would like you to meet my customer.” Or to put this same scenario into a fundraising context, would the major gift officer introduce the donor this way? “I would like you to meet Mary, a good prospect of ours.” No, that would not happen. And if it did, it would be very offensive.
2. It reduces the donor to an economic unit — a source of cash rather than a partner. If you call a donor a prospect, it means you only think of the person as a source of money. He gave last time, so I guess the day he gave, he was a donor. But as soon as he gave and the transaction was complete, then our institutional gaze now looks forward to the next transaction. He moved from being a donor to becoming a prospect for another gift. I understand the logic of the use of this word, but I don’t agree with it. It is transactional. It forces us to think about the donor and his or her economic potential. It even suppresses our gratitude for what the donor has given, because now, as a prospect, the donor needs to give again. Our focus is not on what the donor has done and how we addressed a societal problem together. Rather, our focus is on what the donor will do for us economically. The donor is a prospect in our minds. Now of course, we are planning for the donor to give again, but because we label and think about the donor in this way, our attitude toward the donor is transactional rather than relational. 

This is why Jeff and I so dislike the use of the word “prospect” when it is attached to a donor. The proper use of the word is when the person has never given to you. That person is a prospect. But once the person becomes a donor, that is what the person is.

Let me be clear: There is a place for finding people who have never given before and asking them to give to your organization. But using your valuable time to prospect for donors is not what any MGO should be doing. MGOs should be focused on current donors.

Now to the word “annual” as in “annual fund.”

Jeff and I dislike this choice of words because, again, it reduces the donor to an economic unit. These words describe an annual institutional activity whereby we set an expectation that a donor will “do their annual thing” with us. The focus is on an annual transaction.

Here are what some leading consultants say about the annual fund:

“Gifts that fit the annual gift definition: A check from an individual in response to your annual fund mailing or phone call.”

“The annual fund is the money raised from a nonprofit's annual giving campaign.”

“Annual giving is the cornerstone of any strong fundraising program... Summer is the best planning time for an annual giving program, both in terms of coordinating mailing lists.”

“Many institutions aim to ‘ask’ all their donors at least once a year by whatever the most effective method they have at their disposal.”

This is an ancient concept that needs to be discarded. Here’s why: Contrary to the statement above that “annual giving is the cornerstone of any strong fundraising program,” the truth is that making annual giving your strategy for fundraising will weaken your fundraising program and place it on a foundation that will reduce the potential for donor giving, not to mention increase donor and value attrition.

Donors want to be on a lifelong journey to address their concerns about the world around them. That’s why they gave to you in the first place — they want to get something done that matches their passions and interests. This is not an annual thing. It is an everyday, every week, every month, every year thing. It is a lifelong passion. It does not have time boundaries either short or long. It is about addressing a need.

You might want to argue that different donors choose different times to give their “annual gift.” Not in our experience. Over the last 40 years of working in this sector, both privately and as an agency serving some of the major nonprofits in the U.S., Canada and Europe, we have seen that average giving frequency is between two and three times a year. Many donors give four and five times. Some six. We’ve even seen donors give as frequently as 15 times in a year.

Why do donors give more frequently? Because they care deeply about what the nonprofit is doing, and they are asked to help more than one time a year. Notice the focus that the donor has in this scenario. There is important work the nonprofit is doing that grabs their interests and feeds their passion. It is ongoing work, not a one-time event. And in the best cases, they are asked to help multiple times, and they’re quickly told how their giving is actually making things happen that they care about.

Believe me, if you are on the “annual fund” train, you could be wasting organizational resources and not giving your donors hundreds of opportunities to support your work throughout the year. This is why Jeff and I feel so strongly about this strategy and the use of the words.

Jeff and I feel strongly that donors should be honored and regarded as full partners in your mission, and that if you are doing fundraising right, you are presenting your donors with many opportunities year round to fulfill their interests and passions by giving to your organization.

Give us your input. What words would you use instead of “prospect” and “annual fund”? Share your thoughts with us so we can keep the conversation going.