The Problem With Giving Societies and Membership Programs
Giving societies and membership programs suppress giving from major donors.
Here’s how it works.
You create a giving society or membership program. The entrance fee is $5,000, $10,000 or even higher. You put a great name on it and list the benefits of belonging and you make sure you let the donor know that this is an exclusive club that not many can belong to and has its privileges.
And then you are done.
Now you move to enrollment – getting donors to join.
All of this is good.
But here is the problem: When Jeff and I analyze donors who belong to giving societies and membership programs, we invariably find flat giving.
It is the entrance fee repeated year after year.
The good part about that is that it is repeated, so there is donor and value retention.
The bad part about it is that the donor is not asked to increase giving or give again in the same year. We have trained the donor to give your society or membership gift and you have done all that is needed this year.
And because of that, you walk away for hundreds of thousands, or, in some cases, millions of dollars that those donors could give to you, but instead give to others.
This is a fact.
This is like the “give your annual gift” debacle where you ask the donor to do their thing for this year.
And then there are the events that surround this whole concept. Part of belonging to the club is to hold events where donors will meet each other and connect. Nice idea on the surface. The reality is the major gift officers (MGOs) end up developing the event, inviting the caseload donors who qualify to the event and then treat the whole effort as a valid touch point in their moves management for that donor.
Some of this is good in that one major donor being with another major donor on the same journey in support of the organization is useful and beneficial to the donor and the MGO.
But it is not useful if the MGO has to spend all of their time organizing it, which then takes time away from properly managing their caseload of donors, not to mention the cost of doing it. Most of the time the event is a distraction and time suck — and the idea of donors connecting does not pan out in reality.
Now, don’t get excited and wound up as you read this. I am not dissing the concept. I am suggesting you look at this a bit differently as follows:
1. Don’t let the club concept hide or diminish the fact that you are dealing with an individual donor.
This means that you modify the messaging around the membership and entrance fee so that it is clear that getting in is the beginning of an enhanced individual relationship — not an annual target to maintain. And that you will, from time to time during the year, be presenting other opportunities for the donor to express their passions and interests. Just because your caseload donor belongs to the club does not mean you abandon your individual relational journey with them.
2. Be very careful to control time and money spent on events and other club activities.
There is some benefit — although, in my mind, very little — to getting like-minded people together, but try not to spend your time doing it. Have someone else in the organization be the club manager. Regardless, keep it simple. Why have a full-blown dinner with cocktails and music if a smaller coffee in some donor’s home will do. Be aware that events, uncontrolled, will suck the time and money out of your organization.
3. Remember that your long-term objective is to fulfill your caseload donor’s passions and interests.
It is not to keep the club going. Big difference.
Giving societies and membership programs have their benefits. But you need to manage them carefully with each individual donor’s interests and potential in mind.
If you’re hanging with Richard it won’t be long before you’ll be laughing.
He always finds something funny in everything. But when the conversation is about people, their money and giving, you’ll find a deeply caring counselor who helps donors fulfill their passions and interests. Richard believes that successful major-gift fundraising is not fundamentally about securing revenue for good causes. Instead it is about helping donors express who they are through their giving. The Connections blog will provide practical information on how to do this successfully. Richard has more than 30 years of nonprofit leadership and fundraising experience, and is founding partner of the Veritus Group.