The Key to More Revenue? Moving Out of a Transactional Fundraising Mindset
Sometimes, you don’t realize you’re missing something until you have a different kind of experience. Recently, I attended what I assumed would be a standard orientation for a nonprofit for which I volunteer. Instead, I ended up being so moved that I cried — not once but twice.
Why was I so touched? Because I experienced true authentic connection and community instead of the normal download of “here is what we do and here is your role.”
Instead of conducting a lecture for volunteers, this organization allowed its future volunteers to experience how it — a Black- and brown-run organization — creates a space of love for authentic and sometimes challenging conversations, as well as its incredible work giving grants to local nonprofits. The orientation’s main focus illustrated the nonprofit’s commitment to relationship and community and then covered the specifics of the volunteer work.
I realized in that moment that my heart and soul were hungry for this kind of community. I didn’t know what I was missing until I felt and experienced it. Similarly with transactional fundraising, it is something so deeply rooted in many traditional fundraising practices that we may not really know what we are missing and the harm it's causing to us and our donors until we feel and experience transformational fundraising with authentic, mission-driven donor relationships.
When you’re in a transactional fundraising mindset, your actions are ultimately in service of getting the money — not developing relationships. It’s impersonal and donors are not engaged in meaningful ways with their heads and their hearts.
Staying in a transactional mindset not only impacts how much donors give or their engagement over time, but it also impacts the fundraiser. You may experience feelings of frustration, guilt, anger and emptiness as you are pressured to bring in the money without any investment in authentic relationships. Donors feel used, unengaged and either give less or go away. It is simply a transaction.
You shouldn’t treat your donors like ATMs, so let’s talk about what that really means in your day-to-day work.
Internal Structures Do Not Support the Donor Journey
There are a number of places where we can see this occur in a nonprofit. Maybe at your organization, gift processing takes a significant amount of time. In this scenario, donors feel used when they don’t hear back from an organization for months when they gave a gift that was significant to them.
Maybe fundraising occurs in a silo and there is competition for donors instead of supporting donors across the organization seamlessly. When systems are optimized, an event donor interested in giving to a program is connected to the major gift officer. For example, there may be internal conflict related to soft and hard credit, so the event manager might not want to introduce their donor to a major gift officer for fear of losing sponsorship revenue. That donor may now feel blocked from engaging across an organization in a meaningful way, so they don’t ask again.
Donors Only Receive Communications About Giving
This can be challenging, especially when you are understaffed or lacking resources. But if, other than a “thank you” for the previous year’s gift, the donor only hears from you when it’s campaign giving time, the donor won’t feel like they’re in partnership with you and your organization.
You may have a membership or campaign model that raises funds each year and feel good when you reach a goal. However, you may have donors giving $5,000 or $10,000 annually over 10 years, but could give so much more if they were connected as a mission-driven donor. Donors are used to this, too, but it gets tiring. Instead of being a spiritual experience of giving stretch gifts to something they love, it’s just a transaction.
Donors’ Preferences and Interests Don’t Impact Strategy
When you don’t know the donor’s interests and passions or aren’t customizing their communications to be relevant and of value to them, they feel disconnected from the mission and what they care most about. Have you ever forgotten to ask for a donor’s communication preference and kept trying to get a meeting using a method the donor didn’t prefer?
Ultimately, this method results in wasting time chasing donors and feeling frustration about your progress. Additionally, donors don’t feel seen and heard, their hearts and passion aren’t connected to your mission, and it is just an exchange, not a meaningful partnership.
Money Is Pursued at the Cost of Long-Term Thinking
Leadership says, “I want you to ask this donor for a significant gift because the donor gave a generous gift to another nonprofit,” even though the donor doesn’t have a relationship with your organization. Now you feel the pressure to ask. It feels wrong.
When do you ask, you are in conflict internally so you can’t ask with authenticity, passion and joy. Your donor feels used. They may give the gift, but it harms your creation of a long-term partnership built on trust. They definitely won’t give transformationally in the future.
When you approach fundraising transformationally, donors experience joy in giving as they learn regularly about the impact they are making. You, as a fundraiser, feel good about your work each day because you get to connect meaningfully with donors as individuals, learn about their hearts and passions, and connect them as partners in impactful ways to your mission. In this partnership, you not only increase the revenue of your caseload but also connect and create a plan with key individual donors who then give transformationally.
Now that you know how transactional fundraising comes up in your work and how that can negatively impact your organization and your donors, here’s what it looks like when you move into a transformational, relationship-focused approach.
Donors’ Inclinations and Preferences Are Honored
Over time, you are asking with authentic curiosity and great open-ended questions about donors’ passions and interests related to your mission. Your communication to donors is affirming of the partnerships, and always relevant to what they care about and how they want to receive information.
Now these donors feel heard and appreciated. They see the organization cares about their perspective and preferences. Donors now want to partner with the nonprofit in deeper ways since the organization is not just chasing their money.
Donors’ Impact Is Regularly Reported and Celebrated
You create a 12-month plan of touch points that includes a mix of communication, like invitations to a small group meeting with a program coordinator, impact reports and newsletters with notes referring to stories you know your donors will care about. Your donors will get more and more engaged. They want to know more and give more.
You also feel confident and good when asking if they want to discuss supporting a program because you have established the program’s need, shared the impact they have made and engaged with them in meaningful conversations about their passions.
Donors Are Treated as Vital Community Partners
Giving to an organization should never mean that a donor has power over an organization. They are not making decisions about what programs your organization runs or where fundraising should focus, but you are having authentic conversations about how institutional systematic issues, like racism or classism, impact those your nonprofit serves.
You are challenging donors’ notions of those you serve as victims and educating donors on their self-reliance and wisdom. You are also honest with donors when a program they have supported isn’t growing at the expected rate. And when you reach out to a donor asking for their expertise, it isn’t a ploy to get a meeting — you really want to pick their brain and learn from their experiences.
When you approach your donors this way, they feel the real and authentic community where truth is spoken to them and they are included in meaningful ways. You learn and grow in your skills in having difficult conversations within a context of compassion and truth. Your donors trust you and feel a part of a meaningful experience.
I hope you’re inspired to shift your mindset to create transformational relationships with your donors. This is not something you can do alone, but you can be the one who advocates for embracing your donors as partners. If you do, you will have an even greater impact on addressing one of the world’s greatest needs. Prepare yourself — you may also have moments of your heart feeling full and some tears may come to your eyes, too.
The preceding blog was provided by an individual unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of NonProfit PRO.
Karen Kendrick is the senior director of learning at Veritus Group. She has a master’s degree in education and counseling and more than 28 years’ experience in nonprofit fundraising — both in the education market and for social service agencies.
Karen has served as program director and executive director of a nonprofit, giving her both programmatic and administrative experience. She has created strong comprehensive fundraising programs from the ground up and served as a director of development and major gift officer.