Sell to Me or Ask for My Support. Pick One.
I have a favorite charity that regularly demands I buy from it, but rarely asks that I support it. Since September, I have received 23 emails from this organization. Eight of those emails had the word "buy" or a cash prize for something in the subject line. Only one email, under the guise of a "thank you" was a direct solicitation for a donation without some offer of goods and/or services in exchange. Every other email sought to entice me into a purchase.
Of the 23 emails, the most overt "buy me" subject line examples are:
- Save $10 when you buy [X number of] tickets now!
- Price bump on Sunday!
- Want to Win $100 Visa Card?
- Are you entered to win a one-night stay at [location]?
- Want to Win $5,000 in cash?
- Only 5 days until the price bump for [the event]!
There is one clear issue, and one less clear but more important issue. The easy one first.
A review of the contents of this series of email offers reveals a complex web of retail opportunities designed to extract margin to yield profit. And profit is fine, if that is our business model. We must ask, however, are we selling something for a high enough price and margin that we will raise sufficient funds to impact the mission? When all costs are included, like staff time, rarely do we raise enough money through margin-making efforts.
Here is one of the offerings from this nonprofit:
Dinner, live music, two drink tickets, one prize ticket and a $700 casino voucher is included with your registration fee.
Additional prize tickets will be available for a donation of $5 each and will include a $1,000 casino chip at no charge. There will also be a cash bar.
Enjoy two craps tables (novice and experienced), three black jack tables and a roulette table, a silent auction, free photo booth and cornhole!
You must be 21+ to attend!
Clearly the organizer has, in excellent-for-profit form, decided to extract cash in every way possible by creating multiple revenue streams.
Let's move on to the second, more important but less clear issue with this method. By raising money through selling, we preclude the majority of the opportunity to raise money through soliciting gifts. Buying something and giving something don’t really happen in the same environment, and getting into a relationship with your donor characterized by a transaction will impact later income. Here’s how:
To put it in psychological terms, I quote my beloved and Turnkey’s psych expert, Otis Fulton:
People live in two worlds—one governed by social relationships and one governed by market relationships. Ideally, nonprofits are engaged in social relationships with their supporters. People who are in social relationships report doing pro-social behaviors (donating, fundraising, etc.) because "it is the right thing to do." Introducing cash or cash equivalents into the equation conveys the unmistakable message that you’re not involved because "it’s the right thing to do," you’re in it for the stuff (gift card, free trip, complimentary buffet dinner).
And as behavioral economist Dan Ariely explains in his book, "Predictably Irrational," when market relationships and social relationships compete, market relationships almost always "crowd out" social relationships. Once people frame their relationship as a market-based exchange, it is very difficult to get them back into a social relationship. As Ariely says, "once you have offered to pay for her delightful Thanksgiving dinner, your mother-in-law will remember the incident for years to come."
By inspiring a market relationship, you unwittingly indicate to the person to whom you are selling that no gift is needed, because the terms of the deal have been met. By putting a purchase price on supporting your mission you undermine the connection of the person to your mission. They unconsciously replace the idea that they support your mission with the idea that they simply want to buy what you are selling. That kind of a relationship means that if you want more money you will have to make better offers. You’re going to have to give me a deal, because you’ve made me a buyer.
When selling on margin for a nonprofit, you leave money on the table and destroy relationships. You’re just running a sale.
Otis Fulton, Ph.D., spent most of his career in the education industry, working at the psychometric research and development firm MetaMetrics Inc., Pearson Education and others. Since 2013, he has focused on the nonprofit sector, applying psychology to fundraising and donor behavior at Turnkey. He is the co-author of the 2017 book, ”Dollar Dash: The Behavioral Economics of Peer-to-Peer Fundraising” and is a frequent speaker at national nonprofit conferences. With Katrina VanHuss, he co-authors a blog at NonProfit PRO, “Peeling the Onion,” on the intersection of psychology and philanthropy.
Otis is a much-sought-after copywriter for nonprofit fundraising messages. He has written campaigns for UNICEF, St. Jude’s Children’s Research Hospital, March of Dimes, Susan G. Komen, the USO and dozens of other organizations. He has a Ph.D. in social psychology from Virginia Commonwealth University and a Bachelor of Arts from the University of Virginia, where he also played on UVA’s first ACC champion basketball team.
Katrina VanHuss has helped national nonprofits raise funds and friends since 1989 when she founded Turnkey. Her client’s successes and her dedication to research have made her a sought-after speaker, presenting at national conferences for Blackbaud, Peer to Peer Professional Forum, Nonprofit PRO, The Need Help Foundation and her clients’ national meetings. The firm’s work is underpinned by the study and application of behavioral economics and social psychology. Turnkey provides project engagements, coaching, counsel and staffing to nonprofits seeking to improve revenue or create new revenue. Her work extends into organizational alignment efforts and executive coaching.
Katrina also regularly shares her wit and business experiences on her and Otis Fulton's NonProfit PRO blog “Peeling the Onion.” When not writing or researching, Katrina likes to make things — furniture from reclaimed wood, new gardens, food with no recipe. Katrina’s favorite Saturday is spent cleaning out the garage, mowing the grass, making something new, all while listening to loud music by now-deceased black women, throwing in a few sets on the weight bench off and on, then collapsing on the couch with her husband Otis to gang-watch new Netflix series whilst drinking sauvignon blanc.
Katrina grew up on a Virginia beef cattle and tobacco farm with her three brothers. She is accordingly skilled in hand to hand combat and witty repartee — skills gained at the expense of her brothers. Katrina’s claim to fame is having made it to the “American Gladiator” Richmond competition as a finalist in her late 20s, progressing in the competition until a strangely large blonde woman knocked her off a pedestal with an oversized pain-inducing Q-tip. Katrina’s mantra for life is “Be nice. Do good. Embrace embarrassment.” Clearly she’s got No. 3 down.