The Effects of Giving

PBS Newshour had an interesting segment during the show on January 7. A University of British Columbia research team conducted a small study on the effects of giving in toddlers and then carried it beyond to college students and adults. In the study, they found that even young toddlers express happiness when giving something to others.

I suspect anyone in fund-raising/fund-development will tell you, “duh” to the concept that it is actually a pleasurable experience to give. One of the interesting (and again, not new) findings in the study is that people who have the opportunity to see and/or experience the impact of their giving are even happier than those who just gave to a general “fund”. However, how often do organizations get caught up in trying to raise funds so that “we can accomplish our mission.”?

You likely saw the UNICEF and/or ASPCA commercials during the holiday season. What struck me about those efforts was the fact that there was no impact of my gift. All I saw was a portrayal of a very negative situation with a statement – help us help them.  I have to confess, I was extremely turned off by the ads finding them very ineffective at telling me how either of these organizations do anything positive. Where were the impact/results pictures?

Watch the PBS segment and then consider your own communications. What are you telling your readers/listeners/site visitors? Are you telling them why they should support you? Or are you telling them that their gift has changed the life of Samuel who now has his own bed or Mary who can go to school because now there is clean water right in her village?

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Stewarding the Mid-Level Donor

Most of us are well aware of the 80/20 rule of fundraising – 80% of your income will come from 20% of your donors. Major donor programs are built to focus on the 20% of donors who can and do supply that high level of giving. This is good. But how do you increase the number of donors that fit in that 20%?

The logic would lead us to understand that if you add a donor to the 20% group then that will increase the dollar amount that makes up the 80% of income. The goal of moves management in development is to move donors from their current involvement to a higher level involvement. However, the majority of your donors, those in the lower tier, will be resistant to moving. And in general, their annual giving is so low that it probably isn’t efficient to invest a lot of resources to move them up. Does that mean you ignore them? Certainly not. However, you also should not overly invest in efforts to increase their participation. But monitor them along the way and watch for natural movement.

I would contend that there is an optimum zone of opportunity to move donors upwards into increased giving. Often referred to as mid-level donors, these donors are giving at high levels but not enough to be counted in that top tier. They are often overlooked as they fall between the major donors and the “direct mail” responders. If your organization provides opportunities to support specific program areas, these donors will likely take that opportunity rather than support the general fund. “Unknown” major donors will often test an organization by giving an initial gift that falls in this tier. They have heard good things about the organization and think they may want to support the mission at significant levels but want to make sure that the organization is capable of responding to them appropriately.

Larger organizations often have sophisticated donor groups (President’s Circle, Insider’s Round Table, etc) but smaller organizations can also gain from just a little bit of extra effort. Here are some simple steps you might consider to steward this group in particular:

1. Watch for first time gifts that fall in this tier. Establish an acknowledgement process for that first gift that is similar to what you typically do for the top tier.
2. Consider special insider reports that are different from that which major donors receive but are higher quality or more detailed than the standard direct mail or newsletter that the lower tier receives.
3. If you have created recognition societies, consider an annual invite to upgrade their membership.
4. Monitor this group in particular for lapsing donors. If their giving pattern changes, consider a special contact to re-engage them.
5. Consider special planned giving/legacy giving communications to this group of donors, especially if you have donors who have given in this tier for a significant length of time.

Each of these are suggestions and are contextual to your organization in the sense that the giving levels for each organization may be significantly different. I have seen organizations that don’t quite match the 80/20 principle (they might be 80/10 or even 90/10) so you will also need to analyze your database to determine how many donors you have in each tier and how close your organization matches the 80/20 rule. Find the zone of opportunity within your particular organization.

If you have any questions about how to proceed with the analysis of your database or establishing a special program for acknowledging your mid-level donors, feel free to contact me and let’s start a dialog about how I can help.

WestJet Does It Again

Congratulations to WestJet again for going above and beyond expectations.

 

A Reflection On “Idol Gives Back”

I imagine this week’s show will be discussed ad naseum throughout the blogosphere today and tomorrow.  Oh well.  Thought I would add my two cents.

While I am impressed with the effort that is put forth into highlighting the plight of so many in Africa and here in the US, I still can’t help but wonder how the mix of celebrity “pitchmen/women” truly feel about the situation.  I suspect that combining one year’s income from 3 or 4 of them would outstrip the GDP of one country in Africa.  And yet they continue to appeal to “common” America to open up the purse strings and give.  Just seems a little disingenuous to me. 

Which leads me to a question.  Is it the cause, the pitch, or the show that leads people to give?  In development we often quote the phrase, “People give to people not to projects.”  But how does that play out in this case?  Are people giving because of the images they see on tv or because of the celebrity pitch?

Which leads to another question.  How do we in the non-profit world truly feel about the celebrity pitch?  A number of organizations use them to great effect.  But where do we draw the line and say, “Put up or shut up!”  Where is the break even point between the value of their giving and the value of their name associated with a cause? 

Okay, I am done ranting for the day.