Zero to $1.7M in a Year
I am lucky to be able to spend time with smart people who have great experiences to share. One such person is Jim Leighton, vice president of events and partnerships at Children’s Cancer Research Fund. He straddles management of two sibling events—a virtual, do-it-yourself (DIY) cycling event that is about a year old and has raised $1.7 million already, and a 14-year-old walk that regularly raises between $200,000 and $300,000. Imagine the ruckus if those two were your kids. Here’s the family story.
The Great Cycle Challenge is about to kick off its second peer-to-peer fundraising season in June. The event is structured as a virtual, DIY cycling event. Registrants register as an individual or as a team, pay no registration fee, set their own athletic and fundraising goals, and pedal throughout June. The experience is enhanced with a free app that tracks exercise and fundraising, and integrates with other apps to track exercise.
Some facts and statistics from the 2015 event:
- There were 12,000 registrants.
- There was no registration fee.
- There was a 50 percent activation rate (for those who fundraised).
- The average fundraising amount was $350 (for those who are fundraising at any amount).
- There was a 50/50 split between men and women.
- Ninety-seven percent of funds were collected online.
- Investment (direct expense required to raise $1.7 million) equals less than $400,000 and is spent primarily on social media.
- Event is one-and-a-half years old.
On the other side of the house is another peer-to-peer event, the Time to Fly walk/run, which Jim describes as an activity for key constituents at the hospital at University of Minnesota.
Some facts and statistics:
- The registration fee is $35 for the 5K run and $45 for the 10K run.
- Walkers avoid a registration fee by pre-registering but pay one if they show up on site the day of the event without a registration.
- Runners, by and large, do not fundraise.
- Fundraisers average $250 in fundraising.
- Its total income is between $200,000 and $300,000 each year.
- The walk/run is 14-years-old.
You have to ask, what’s up with this? How can this virtual event shoot to $1.7 million overnight, with a 14-year-old walk stagnating at a $300,000 maximum? That’s like taking piano lessons for years to gain some semblance of proficiency, then having your toddler sister sit down at the keyboard and put forth a concerto on day one.
Here’s how the Turnkey team sees it for for the Great Cycle Challenge. First, Jim and his team almost completely have eliminated two barriers to entry that most cycling events possess—financial and physical. For this event, you can participate on your Big Wheel if you want, and your goal could be to cycle around your front yard. This is very unlike the kind of event that requires an expensive bike and three days off of work to either do the event or recover from the event.
Second, there is no registration fee for this cycling event, nor is there a minimum required fundraising amount. At Turnkey, we’ve pontificated a lot about the registration fee. Social science tells us that registration fees or minimum fundraising amounts can put participants in a transactional relationship with us. The Great Cycle Challenge is structured an awful lot like a successful walk: no registration fee, no minimum fundraising, no physical barrier to entry. And the statistics look as good as or better than a walk—$350 average fundraising for activated fundraisers and a 50 percent activation rate.
Third, the event relied on two things to acquire participants: altruism-inspired happiness and the activity itself.
"The vast majority of registrants do not have an affinity or direct connection to children’s cancer," Jim said. "They had an affinity to cycling and to being good. The altruism and the activity was the draw. The specific kind of altruism did not seem to matter. We see this as being about a movement, and that movement is roughly defined as 'Cycling for Good.' Our goal in 2015 was $1.2 million. We ended at $1.7 million."
What is this "altruism-inspired happiness"? According to Turnkey’s in-house behavioral specialist, Otis Fulton, here’s how altruism makes people happy:
"Humans have evolved with a need to feel socially connected. The reason for this is simple—the 'rugged individualists' amongst our ancestors didn’t live long—the African Savanna was an unforgiving home. Working together in groups conveyed huge advantages; those who were more socially adept were the ones who survived. So our brains are wired for reaching out to and interacting with others. It turns out that helping others feels good whether we expect something in return or not. When we engage in altruistic behaviors, the same brain regions that are associated with loving the taste of chocolate—or other physical pleasures—are activated."
A study done at the National Institutes of Health looked at brain scans of people when they were giving to charity. Some individuals were asked whether they would agree to receive $5 for themselves with no consequences for any charity. As you would expect, individuals were quick to accept this kind of reward. Other individuals were asked if they were willing to give up some of their winnings (for example, lose $2) so that a charity would receive $5. Amazingly, as a group, the individuals in this study showed even greater activity throughout the reward regions of the brain when they made the choice to give away some of their own money to help others. Humans are hardwired to find giving more rewarding (pleasurable) than receiving.
Jim and his team used the activity and altruism-inspired happiness to recruit. Then, through the activity itself, they installed a self-label into participants of being part of a movement loosely defined as “cycling for good.”
How does installation of that self-label work psychologically? Back to Otis, who said: "Every day we make inferences about other people’s beliefs by watching their behavior. In much the same way, when our attitudes are weak or ambiguous, we discern how we feel about something by observing how we behave. When I see myself giving up a day of my weekend to do a cycling event for the benefit of children’s cancer, my attitude about the cause changes. An unconscious calculation is made: If I’m out here doing this when I could be playing golf, this (children’s cancer) must be kind of important to me."
On the other hand, the statistics of the older sibling—the walk—are quite different, as is the structure. Time to Fly is both a walk and a run (10K and 5K). Statistics for each portion vary, with walkers having significantly higher fundraising than runners, who pretty much don’t fundraise at all. They just run. Income has been stagnant for a long time. Jim credits the walk/run as being a way to serve the constituents in their connection to each other and to the hospital. But, he acknowledged the same kind of community also developed around the virtual cycling event.
"I’m an old-school event guy, having worked at [Muscular Dystrophy Association]," Jim said. "I know how to get a group of people together to interact. We were able to do that digitally, via social media. There is an organic community that develops. It is exactly the same as what happens in a park at a walk. It can happen this way now through technology. That’s what we did with the cycling event."
One big difference between these event siblings, which has a huge psychological impact, is that the walk/run charges a registration fee most of the time, while the virtual cycling event did not. Participants who are charged a registration fee do not fundraise at high levels, or often at all, due to the transactional influence of money in their relationships with the nonprofit. Once a participant pays a registration fee, they have "purchased" his or her experience and are now in what we call a market relationship with the organization. Those who pay a registration fee feel they have performed adequately inside the terms of the "deal." Having paid for the experience, it does not allow the participant to create the same self-label as those who don’t pay a registration fee. The payers may think, "I am here because I bought this experience." None of this internal dialogue is conscious of course, and no participant could articulate these ideas if you asked. Surveys are not your friend in this regard.
In June, the Great Cycle Challenge is back. With great interest, we’ll watch things like retention rate, whether acquisition will trend as in year one, whether donors will retain in the same manner as other peer-to-peer acquired donors. But one thing is for sure—baby sister got game.
Katrina VanHuss is the CEO of Turnkey, a U.S.-based strategy and execution firm for nonprofit fundraising campaigns. Katrina has been instilling passion in volunteer fundraisers since 1989 when she founded the company. Turnkey’s clients include most of the top thirty U.S. peer-to-peer campaigns — Susan G. Komen, the Cystic Fibrosis Foundation, the ALS Association, the Leukemia & Lymphoma Society, as well as some international organizations, like UNICEF.
Otis Fulton is a psychologist who joined Turnkey in 2013 as its consumer behavior expert. He works with clients to apply psychological principles to fundraising. He is a much-sought-after copywriter for nonprofit messaging. He has written campaigns for St. Jude’s Children’s Research Hospital, The March of Dimes, the USO and dozens of other organizations.
Now as a married couple, Katrina and Otis almost never stop talking about fundraising, volunteerism, and human decision-making – much to the chagrin of most dinner companions.
Katrina and Otis present regularly at clients’ national conferences, as well as at BBCon, NonProfit Pro P2P, Peer to Peer Forum, and others. They write a weekly column for NonProfit PRO and are the co-authors of the 2017 book, "Dollar Dash: The Behavioral Economics of Peer-to-Peer Fundraising." They live in Richmond, Virginia, USA.