The first step to solving a problem is admitting to it. So, here goes: Fundraising is broken. I’m to blame. And you probably are, too.
If we look at ourselves in the mirror, can we really say that we care about donors? Or, do we care more about their donations?
In my more than two decades of work with nonprofits, I’ve conducted thousands of tests and raised billions of dollars, just like many of you. I realize I’ve become addicted to, and trapped by, fundraising execution.
We are the hamster that loves to run on the wheel. It’s running for the sake of running, full of hope that if we run fast enough, we can solve the problem.
In their book The Generosity Crisis, authors Nathan Chappell, Brian Crimmins and Michael Ashley provide a startling analysis of the changing nature of philanthropy in the United States, which could result in the demise of philanthropy in less than 50 years.
We need to wake up and do something about it. All of us.
Nonprofits have lost the trust of donors. Nonprofits are now seen as less trustworthy than business [though safely ahead of government and media … but that is a low bar (https://bit.ly/3MW9ECk). Equally as disturbing is the continued trend of fewer donors — right now at a 10% year-over-year decline. And the decline gets worse … there are 20 million fewer donors today than 20 years ago.
Nonprofits are more reliant than ever on mega gifts from corporations and ultra-high-net-worth individuals — masking our slide by holding philanthropy at 2% of the U.S. gross domestic product, even with 20 million fewer donors.
We are fundamentally losing the connection to everyday philanthropy, and I’m not the only one who realizes it (https://bit.ly/3BPY8Ct). Deeper reliance on ultra-high-net-worth giving to replace donors loses the connection to the communal aspect of generosity.
I do not accept management of the decline as a solution to the problem. We are stewards of the communities we serve — including donors. When people give, we should fight like hell to make sure we build a relationship with them. We don’t. Maybe that’s why we retain just 29% of first-time donors (https://bit.ly/3MTvJ4u).
It’s not that we are idle. Hamsters are not idle. But we are stuck running on the wheel. We must reimagine how we think about fundraising — which means reimagining how we think about donors.
If we cared about donors, we would know them better. We would think differently about data — data not only to understand their financial value but to understand why they want to be a part of our communities.
Fundraisers (and their agency partners) for too long have focused on archaic decision-point metrics, like average gift and recency, to drive decisions — or regularly misuse the solutions offered by data companies through focusing only on transactional data. This perpetuates archaic marketing practices.
Plus, we allow solutions to exist as black boxes, with no clear link to delivering a better connection to a donor’s why.
It’s time for a better commitment to data — both to data collection and activation.
I am the CEO of one of the largest fundraising agencies in the United States. I’m just as culpable. As a sector, we must decide to invest in a better understanding of those who invest in us.
We can do better.
If we cared about donors, we would design better experiences for them. People have changed. Consumers now expect more personalized experiences from brands. They want brands to understand their individual needs and preferences and tailor their interactions accordingly.
Consumers are more likely to make a purchase when the experience is personalized (https://bit.ly/3WviIRS). The importance of digital activities (https://bit.ly/3BVGvB0) as a bedrock for relationship advancement has never been greater. Digitally-mature organizations are 3.5 times more likely to have exceeded goals but only 12% of U.S.-based nonprofits are categorized in the high level of digital maturity.
The experiences we give our donors must improve so they are treated as people, not transactions. The same goes for volunteers and other constituents. The donor experience is the only proxy a donor has to judge how we execute our missions.
We can do better.
If we cared about donors, we’d dramatically change. When the pandemic hit, our commercial marketing cousins were forced to innovate. And, they did so in a big way. Restaurants single handedly made QR codes relevant and also innovated logistics, distribution, payment and service. Retail created digital experiences that accelerated the bring-it-to-me economy. Streaming solutions, from hardware to software to content itself have surged.
The gap between commercial marketing and nonprofit is getting bigger. Commercial organizations have accelerated their innovation and digitization by three or four times in the wake of the COVID-19 pandemic.
When their livelihoods were on the line as a result of the pandemic, commercial marketers transformed. Evolved. As a result, they deepened their connection and built trust with their constituents.
Nonprofit leaders and their agency partners have not transformed. We have been saying “donor-centric” in one way or another for decades.
- As long as we are control-based in our decision making we won’t solve this challenge.
- As long as we keep data in silos we won’t solve this challenge.
- As long as we build strategy from the bottom up we won’t solve this challenge.
- As long as we focus on “optimizing” channels as opposed to unlocking generosity we won’t solve this challenge.
- As long as we even think of channels we won’t solve this challenge.
If we’re going to achieve the radical connection suggested in The Generosity Crisis, we have to fundamentally change our mindset.
Today’s mindset:
- Campaign: the need to deploy something in a given channel
- Offer: the point of asking for a certain donation
- Donor: the selection of the right “lists” that meet outdated metrics like gross income per name
Tomorrow’s mindset must be built on:
- Constituents: the people with whom we want to build a relationship
- Preferences: prioritizing, understanding and acting on why the constituent supports our mission and how they want to provide that support
- Engagements: points of interaction that are both meaningful and trackable
- Technology: investment in integration of people, processes and frameworks that enable us to achieve greater outcomes in both program delivery and fundraising
I‘m committed to change. Are you?
As a kid, I was enamored with watching Larry King. I’m not a suspenders guy. though he certainly knew how to rock them, but it was the way that King engaged his guest. King once said: “Nothing I say this day will teach me anything. So, if I’m going to learn, I must do it by listening.”
It’s time to listen — not solely to ourselves, but to our constituents. We’re here because of them. Let’s change to be here for them, too.
It’s time to intervene. It’s time to quit bad fundraising.
*****
Chris Pritcher is the CEO of RKD Group. His email address is [email protected].
A Confession: Fundraising Is Broken And I’m A Part Of The Problem
The first step to solving a problem is admitting to it. So, here goes: Fundraising is broken. I’m to blame. And you probably are, too.
If we look at ourselves in the mirror, can we really say that we care about donors? Or, do we care more about their donations?
In my more than two decades of work with nonprofits, I’ve conducted thousands of tests and raised billions of dollars, just like many of you. I realize I’ve become addicted to, and trapped by, fundraising execution.
We are the hamster that loves to run on the wheel. It’s running for the sake of running, full of hope that if we run fast enough, we can solve the problem.
In their book The Generosity Crisis, authors Nathan Chappell, Brian Crimmins and Michael Ashley provide a startling analysis of the changing nature of philanthropy in the United States, which could result in the demise of philanthropy in less than 50 years.
We need to wake up and do something about it. All of us.
Nonprofits have lost the trust of donors. Nonprofits are now seen as less trustworthy than business [though safely ahead of government and media … but that is a low bar (https://bit.ly/3MW9ECk). Equally as disturbing is the continued trend of fewer donors — right now at a 10% year-over-year decline. And the decline gets worse … there are 20 million fewer donors today than 20 years ago.
Nonprofits are more reliant than ever on mega gifts from corporations and ultra-high-net-worth individuals — masking our slide by holding philanthropy at 2% of the U.S. gross domestic product, even with 20 million fewer donors.
We are fundamentally losing the connection to everyday philanthropy, and I’m not the only one who realizes it (https://bit.ly/3BPY8Ct). Deeper reliance on ultra-high-net-worth giving to replace donors loses the connection to the communal aspect of generosity.
I do not accept management of the decline as a solution to the problem. We are stewards of the communities we serve — including donors. When people give, we should fight like hell to make sure we build a relationship with them. We don’t. Maybe that’s why we retain just 29% of first-time donors (https://bit.ly/3MTvJ4u).
It’s not that we are idle. Hamsters are not idle. But we are stuck running on the wheel. We must reimagine how we think about fundraising — which means reimagining how we think about donors.
If we cared about donors, we would know them better. We would think differently about data — data not only to understand their financial value but to understand why they want to be a part of our communities.
Fundraisers (and their agency partners) for too long have focused on archaic decision-point metrics, like average gift and recency, to drive decisions — or regularly misuse the solutions offered by data companies through focusing only on transactional data. This perpetuates archaic marketing practices.
Plus, we allow solutions to exist as black boxes, with no clear link to delivering a better connection to a donor’s why.
It’s time for a better commitment to data — both to data collection and activation.
I am the CEO of one of the largest fundraising agencies in the United States. I’m just as culpable. As a sector, we must decide to invest in a better understanding of those who invest in us.
We can do better.
If we cared about donors, we would design better experiences for them. People have changed. Consumers now expect more personalized experiences from brands. They want brands to understand their individual needs and preferences and tailor their interactions accordingly.
Consumers are more likely to make a purchase when the experience is personalized (https://bit.ly/3WviIRS). The importance of digital activities (https://bit.ly/3BVGvB0) as a bedrock for relationship advancement has never been greater. Digitally-mature organizations are 3.5 times more likely to have exceeded goals but only 12% of U.S.-based nonprofits are categorized in the high level of digital maturity.
The experiences we give our donors must improve so they are treated as people, not transactions. The same goes for volunteers and other constituents. The donor experience is the only proxy a donor has to judge how we execute our missions.
We can do better.
If we cared about donors, we’d dramatically change. When the pandemic hit, our commercial marketing cousins were forced to innovate. And, they did so in a big way. Restaurants single handedly made QR codes relevant and also innovated logistics, distribution, payment and service. Retail created digital experiences that accelerated the bring-it-to-me economy. Streaming solutions, from hardware to software to content itself have surged.
The gap between commercial marketing and nonprofit is getting bigger. Commercial organizations have accelerated their innovation and digitization by three or four times in the wake of the COVID-19 pandemic.
When their livelihoods were on the line as a result of the pandemic, commercial marketers transformed. Evolved. As a result, they deepened their connection and built trust with their constituents.
Nonprofit leaders and their agency partners have not transformed. We have been saying “donor-centric” in one way or another for decades.
If we’re going to achieve the radical connection suggested in The Generosity Crisis, we have to fundamentally change our mindset.
Today’s mindset:
Tomorrow’s mindset must be built on:
I‘m committed to change. Are you?
As a kid, I was enamored with watching Larry King. I’m not a suspenders guy. though he certainly knew how to rock them, but it was the way that King engaged his guest. King once said: “Nothing I say this day will teach me anything. So, if I’m going to learn, I must do it by listening.”
It’s time to listen — not solely to ourselves, but to our constituents. We’re here because of them. Let’s change to be here for them, too.
It’s time to intervene. It’s time to quit bad fundraising.
*****
Chris Pritcher is the CEO of RKD Group. His email address is [email protected].
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