Advances in technology and communications over the past two decades has made it easier than ever for nonprofits to directly contact their donors. Unfortunately it seems like bad habits have formed out of the digital conveniences in the 21st century.
Case in point – I am subscribed to a mailing list of a nonprofit. I received 18 emails from their fundraising campaign over a 6 week span – that’s almost an email every other day!
While I don’t question whether those emails generated donations for the charity (I’m sure they did), I do question whether this approach maximizes the long-term expected value of total donations for the non-profit.
The reason some foundations use the brute force approach for soliciting donations is that it works, and it’s easy to justify. If the email campaign sent Monday was lost in the donor’s inbox, then the email on Tuesday will be a fresh reminder. If a donor didn’t want to donate on Wednesday, maybe Friday they’ll be feeling more generous.
The problem with this approach is that people start to become desensitized to these messages, or even worse completely ignore them. Foundations are not tailoring their messaging to optimize for each individual donor, or at least for each archetype of their target audience. At the end of the day, donors are overloaded with requests and solicitations, and feel like their donations are not making a significant impact in the world.
The totality of this problem is referred to as “donor fatigue”. Donors are not tired of giving – but they’re tired of being asked.
Foundations are reaching their fundraising targets with brute force strategies but are not considering the opportunity cost of donor fatigue and how it’s negatively impacting their future revenue.
A fact that may be surprising to some people is that offline fundraising still accounts for the majority of donations – and it plays just as big of a part in donor fatigue.
A personal experience I’ve had is going to LCBO to buy a bottle of wine and being asked if I would like to donate to a charity, and then crossing the road to visit Rexall where I was asked about donating to the same exact charity!
Again, I don’t question whether it’s generating revenue in the short term - I’m sure it is. But I do question whether it’s the optimal approach for maximizing donations in the long term.
Donor fatigue is not a problem nonprofits are unaware of. Most of them recognize the issue, but finding a solution is difficult. There are multiple factors at play:
1. How do we come up with new, innovative fundraising strategies that are feasible, measurable, and have high rates of success?
2. How do we accurately measure and compare the efficacy of different strategies, with limited time horizons?
3. How do we deal with multiple layers and groups of organizations that have their own budgets, targets, and initiatives, when there is a zero-sum game aspect to fundraising?
The second point is difficult to answer: the nature of donor fatigue is that it’s negative impacts manifest themselves in long time horizons. Foundations need to keep up to their targets with minimal disruption, and cannot justify bringing in less revenue in the short term without indisputable evidence that long-term projections will make up for it.
The latter point about dealing with internal organizational culture concerns larger charities and is a complicated situation that I will discuss in another article. While there are always opportunities for growth, there is also an upper limit to the total addressable market for a particular fundraising cause, so new initiatives and strategies will inevitably cause some internal cannibalization and redistribution of money raised between different groups in the foundation.
Putting the more complicated questions aside for now, the first point is something we do have answers for.
Coming up with new fundraising strategies should be a joint effort between the nonprofit’s internal team & contracted consultants. Consultants bring in a wide variety of experiences, helping identify innovative approaches that have worked in other industries. They also usually bring a fresh look from outside of the organization, an often necessary catalyst to help in-house teams with their knowledge and expertise in the nonprofit’s niche to generate new ideas.
The second objective of being measurable is key to understanding which strategies are effective.
Gathering data and analyzing it can be both simple and extremely complex. On one end of the spectrum, we can utilize tools such as Google Analytics on digital properties to produce a well-documented journey of how users are consuming information and the effect it has on their decisions to donate.
On the other end of the spectrum we can have “black-box” offline fundraising, where we have very little information about who, why, when, where, and how someone donated. Gathering more detailed data is not as easy as it sounds – it very often involves adoption of new processes, agreements with third parties that are fundraising on behalf of the foundation, solving data-matching problems, and more!
The answer to the third objective of ensuring high rates of success when designing innovative fundraising strategies is user experience expertise.
User experience design is more than wireframes and mock-ups. It’s about researching and understanding user behaviour. At Blackcreek we run Design Thinking workshops that function as a collaborative approach, where we focus on deep customer insights to map all aspects of the user experience and business needs. Through these exercises nonprofits can identify target personas, what influences them to donate, and use these insights to design an amazing donor experience.
By matching fundraising strategies to their donor behaviour, nonprofits can not only meet, but exceed their revenue targets.
Is your target audience shopping online? Consider building an eCommerce platform.
Are your donors adopting mobile payment solutions? Explore hybrid online/offline donation channels such as Apple Pay.
Are your templated email blast engagement rates falling off a cliff? Implement personalized messaging that is tailored according to the donor’s archetype and underlying motives for donating.
Most important of all, make sure user experience design and technology are at the heart of your next fundraising strategy. Instead of asking donors more frequently, ask donors differently.
