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Incentive-based fundraising is less effective, shows NYU Stern study

19 Sep

Who is more sincere – a volunteer or a paid fundraiser?

Here’s what research shows.

A study conducted by NYU Stern Professor Alixandra Barasch along with Jonathan Berman of the London Business School and Wharton’s Deborah Small revealed that fundraisers paid to raise money for charity were less effective than volunteers.

This, in essence, was the study.  Paid and volunteer fundraisers were asked to videotape their pitches to donors. These videotaped pitches were then shown to target donors (who were not aware of whether the fundraiser was paid or a volunteer). Here’s the interesting bit. Donation levels in response to pitches by volunteers (of fundraisers who did not receive a personal incentive) were higher than those where fundraisers received a personal incentive for securing the donation. The donors felt that the pitches by the former were more ‘sincere’.

“We found that tainting intrinsically motivated persuaders with a personal incentive reduces their persuasiveness,” the authors write. “Observers detect reduced sincerity and contribute less as a result.”

What lessons does this hold for face to face fundraising or tele-calling? The practice of charging a flat fee to raise funds – compared to a percentage or success-based fee – might not just be more ethical, but now, as this study shows, more effective.

Thoughts?

 

 

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How to get your donors to stay

25 Apr

In April 1992, 25 years ago, a book was published that should have changed the course of non-profit fundraising: Relationship Fundraising, by Ken Burnett. I say should have, because what the book talked about was common sense: Treat the donor like a person and forge a respectful, listening relationship, and the donor will stay with you for a lifetime.

Sounds simple, right? But as it turns out, common sense is awfully hard to implement. In particular, when faced with the compelling attraction and urgency of acquiring donors.

In an article to mark the 25th anniversary of the book, Ken warns against the kind of fundraising that the UK subsequently pursued: “Data swapping, mass direct mail campaigns, unscrupulous tactics and short-term income targets have all had their entrails publicly and painfully examined.”

We in India don’t have look very far to know that we are exactly on this path.

Data theft (aka swapping) is already here. Donors for one cause being solicited by tele-calling agencies for another. Face to face fundraisers diverting donors to causes based on targets that they need to meet. Not paying attention to basic calling courtesy to the donor – or, for that matter, attention to the dignity of the cause or person for whom donations are being raised. Not listening when donors say they do not want to be disturbed.

Here are five ways in which we can still steer this ship on to the right course:

  1. Look at communication as an investment, and not as a cost.

Investing in donor relationships requires good, i.e. effective and sustained, communication. “Good” does not mean glossy. But it does mean putting yourself in the donor’s shoes. What does the donor really want to know? What would make the donor’s eyes light up, strike a ray of the warm and fuzzy that we all need? What would it take to make the donor feel special and feel a part of the cause?

Communicate, consistently, professionally, warmly, and well, and keep doing it. There’s no other way of building long-term relationships.

  1. Technology should make relationship fundraising better, not push us further away from the donor.

We have donor databases, mailing systems, ways of personalisation, and means of communication more advanced than any generation of fundraisers. All of this can make relationship fundraising easier and better.

When we accept that the fundamental premise is to treat the donor like a person, we can customise all these forms of technology in ways that make our communication respectful, courteous, and open to dialogue and feedback.

  1. Plan for the short, medium and the long-term.

A fundraising strategy needs to span the short, medium and long-term. So, while we plan for acquisition – and before the donor walks in through the door – we have a plan for how to nurture the donor in the medium and long term.

  1. Budget for institutional strengthening.

Organisations also need to plan for institutional strengthening, a vital part of which is income diversification. One way would be to have a conversation with long-term donors and sponsors about the need to invest in building capacities in fundraising and communication. For this to happen, donors need to get off the impact bandwagon that seems to be the guiding principle these days and look at strengthening the institutions they fund.

  1. Build in ethical standards for fundraising.

As an agency working exclusively with not-for-profits, we’ve listened to dozens of problem statements from our clients on the way fundraising in currently being done. All this has resulted in us putting in place a system of checks and balances that are firsts for the not-for-profit space in many ways. We find that putting it down in writing – so that everyone understands what our ethical obligation to the clients and donors and people we serve are – and ensuring that these are legally enforceable, helps.

Ken concludes his article with a dire warning: “If you are reading this in a country that isn’t part of the U.K., watch out. There’s a regulator about. He or she could soon be coming after you, as ours did for us.” Nuff said.

Can you guilt a donor into giving?

12 Apr

The short answer is, “Yes, the first time, you might be able to.”

The better question is: Will a donor who’s given to my cause because of guilt become a long-term supporter?

The even shorter answer is, “Probably never.”

Let’s see how guilt plays out in the place where it’s used most often in fundraising in India: Tele-calling.

The other day I get an agency call raising money for a medical emergency to do with a child. The caller painted a picture that was graphic and designed to press the guilt button. The inference was: “If you don’t give right now, this child will die.” All designed to evoke extreme emotions that are uncomfortable, to say the least.

Guilt in such circumstances might induce a donor to give right then, if only to just get away from the call and its associated feelings of discomfort. But think about it: What is the common human response to anything that provokes feelings of extreme discomfort? Avoidance. Cross the road, close the book, turn the page, not pick up the call, kind of avoidance.

When our communication uses guilt as a recurring motif, our donors will avoid us with a “oh no not these guys again” kind of fervour.

So, if the donor will not stick with the cause in the long-term, why do tele-calling agencies use such guilt-inducing scripts again and again?

Because, most agencies get paid on acquisition. Aka the number of donors they recruit. Not on whether the donors stay with the cause in the longer term. In fact, if the donor drops out, it’s to the agency’s advantage, because they can now be “re-recruited.”

In the long term, overuse of guilt as a motive leads to empathy fatigue, where people start to tune out genuine appeals for help as a matter of course. And that has huge consequences for the entire fundraising sector.

Ponder over this before you sign off on your tele-calling script. I’m off to delete a message from a friend on my Facebook wall that reads: “I’m gonna unfriend some people this week. Let me see how many on my friends’ list copy, paste this message exactly and post it on their timelines, while turning cartwheels at the same time. Do this within 12 hours, or you’ll be unfriended.” Hmm… threat-based fundraising, anyone?

Fundraising is more than just getting donors in. It’s about retaining donors.

5 Apr

Plan for it now – or never.

Did you know? Research shows that the donors you worked so hard to get in through the door in the peak fundraising season – from Dussehra last year right up to 31st March this year – are already leaving, or have left.

Consider these findings, from a study on Fundraising Effectiveness Survey conducted by the Association of Fundraising Professionals and The Urban Institute in the US.

  1. A gain of every 100 donors in a year is offset by the loss of 105 donors who just stopped giving.
  2. For every Rs 100 raised, not-for-profits lose Rs 96 because of a drop in other donations.

Let’s unpack these facts for you.

  1. A gain of every 100 donors in a year is offset by the loss of 105 donors who just stopped giving.

Which means that you end up spending more money every year replacing the donor who just left.

And the sad part is: These donors didn’t need to, probably didn’t want to, leave.

Donors don’t just stop giving. They stop giving because we stop listening to them, or paying them attention. When we treat them like real people – rather than numbers on a database – they stay.

  1. For every Rs 100 raised, not-for-profits lose Rs 96 because of a drop in other donations.

Which also means that you worked hard to raise money to replace the money you would otherwise lose.

And why do you lose that money? Because most not-for-profits pay more attention to donor acquisition, and not as much to what they call donor retention.

Acquisition is what’s in fashion. Acquisition is what consultants and agencies sell you. Acquisition is what the leadership wants to see to decide next year’s fundraising budget.

And that’s the trickiest chicken and egg problem we’ve seen. So here’s a word of advice.

This year, when you present your fundraising plan and budget, take a long-term view. Plan for donor nurturing, in addition to acquisition.

And this is the right time to do so. Most non-profits tend to look at post March giving, leading up to May and beyond, as a “dry” period. But in our experience, it’s anything but. Giving tends to continue over the summer months. But more importantly, it’s when donor nurturing can be at its peak.

As the ink dries on your fundraising plans, ask yourself this. Issues of long-term development and social justice require committed, regular and continued support.

How do we influence one-time supporters to become long-term investors in these issues?

How do we move them from being one-time charitable givers to committed donors and finally, investors in long-term development and social justice?

If you want to talk at length about this, feel free to email me.

April is coming. Have you inked in your fundraising strategy yet?

27 Mar

The new financial year is round the corner. Have you inked in your fundraising strategy yet?

No matter what the answer to that is: Keep calm. And now, kill the dragon.

Those of you who’ve spent the past month poring over numbers on an Excel sheet, just ask yourself: Is it doable? Depending on the answer to that, pore on.

Those of you who’ve not yet started on your fundraising plan for the coming year, you don’t have to clutch your hairbrush and do a rendition of All by myself. This post is for you.

Your fundraising strategy needs to answer five questions. All of which can fit on one side of a clean tissue. Once you’ve got these fundamentals answered, the rest is about following through.

Let’s go over each of these fundamentals.

  1. Where do you want to go?

This is your concrete goal in fundraising. Not your organisational goal or programmatic goal, though you will have to think about that to get a fix on this one. Write down clearly what’s the direction you want fundraising to take this year.

Do you want to increase the percentage of funds you raise locally by 5%? Or get your first Rs 1 lakh from individual donors? In other words, your target could be a percentage-based target for planned diversification of income. Or it could be an exploration of a new source.

If you’re able to, have a go at where you want it to go over the next three years, and work backward to set this year’s goal.

  1. What do you need the money for?

People will give to people, to state a fundraising obvious. And to get your work to be fundraising-friendly, you need to make it about people. Or cats. Or dogs. You get the drift.

Don’t make it about training workshops, electricity bills and capacity building. There’s a way to articulate all of that in a manner that is about people. If you don’t know how to articulate it that way, get help. Craft this ask, test it, sharpen it. Test again.

A word of advice: Resist the temptation to do advocacy and fundraising at the same time. I could say more about this – but another time. Just don’t.

  1. How do you plan to get there?

Choose three or four methods. If you’re doing this for the first time, fewer. You don’t want to put all your eggs in one basket. Make sure there’s a good spread of types of donors: large number of people giving you small amounts, and a few people giving you larger amounts (what’s called Pareto’s principle).

Who is your target audience? The general public? Wrong answer. The 1,000 people who have come to your events in the past two years? Better. The 250 working women who have clicked on your email newsletter? Even better. When you don’t have the budgets, draw the circle as close as you can.

  1. How much of it is like bungee jumping?

Does it feel like you’re standing on the edge of cliff, ready to leap into the wide unknown? It doesn’t have to be that way. Look at the two or three methods you’ve chosen in the light of the resources you have. How much of your time will each take? Are all of them new to you? If so, chances are you’re biting off more than you can chew.

Ideally, you want at least one or two methods to be trusted and tried ones that will take minimal effort to keep going. Those are the bungee cord. You can count on these, and even strengthen these, while testing out the ones that are absolutely new.

  1. What will it cost?

What do you need to get the two or three methods moving? Have you thought about getting them sponsored? Fifteen years ago, I worked with a whole lot of organisations who got their first annual report sponsored, often by the bank where they had their account. So, before you decide that you don’t have a fundraising budget, try and get some sponsorship.

You still have four days in March. Get started on your annual fundraising plan today. And get April off to a kinder start.

If you’d like to chat about how to refine your fundraising strategy, write in to us.

keep-calm-and-kill-the-dragon-14

We have news for you

20 Mar

Listen up. Barapani is a full service fundraising company now.

We’ve taken the past few months to think hard, work on the numbers, and get this together for you.

Digital. Tele-calling. Events. Major donor fundraising. Media planning and buying. Full on fundraising, as we’d say in Bangalore. And a research lab to back this up.

We’ve been around as Barapani for seven full years now. And there’s one thing we’ve been focused on: How to get you and your not-for-profit to raise more money year after year for your work.

We have been around as the funding environment has evolved in the past couple of decades.  We have seen the rug being pulled from under the feet of some of us all too soon, as priorities of countries and donors have changed.

We’ve walked along with those of you who’ve been truly visionary and recognised that the road to building a committed base of long-term support does not lie in a single viral campaign or a flash mob, but in the often mind-numbing task of filling out donor details on an Excel sheet (or its rich-cousin alternative).

Not all of you have causes immediately attractive to an evolving public. Not all of you have something to offer that can be captured in a soundbite. We’ve walked alongside you as well.

In short, we’ve been around long enough to know a couple of things.

  1. What works very well in fundraising.
  2. Even more important. What doesn’t work in fundraising.

And so, today we’re announcing the start of a new Barapani. One that’s bigger, better and more focused on what you need.

Thank you for walking with us.

Bharati

Writing for rights: Five pitfalls to avoid

8 Mar

Words are for free. And yet, they are loaded with meaning.

As writers exclusively working with the not-for-profit sector, we are conscious of the impact of the words we use. Words shape perceptions and opinion. Words signal to another that you’re of the same mind, or not.

Many not-for-profits that we work with have the programme and the fundraising teams working in separate bubbles. The programme team feels that the fundraising team dumbs down issues and strips it of nuance. The fundraising team feels that the programme team weighs down words with jargon so that it doesn’t make sense to a lay reader.

In much of the fundraising copy of the 80s globally, and the 90s and early 2000s in India, images and words were used to elicit sympathy. They spoke of sadness, wretchedness and urged the donor to lift the person out of that state. While most fundraising has thankfully moved on to using positive images – both visual and verbal – some things remain the same.

Just this week I got a call from a tele-calling agency that took me back to the 80s in the words used and most importantly, in the tone of the caller. The caller painted an overtly purple picture of a child that needed my help, right now.

Hence, to writers of fundraising and tele-calling copy everywhere: Here are five things to keep in mind.

  1. Do not take away agency.

“Geeta is an AIDS victim.”

The use of the word “victim” implies powerlessness and denies agency. Individuals and communities have the power to make decisions for themselves and to bring about change in their own lives, with a little help.

Do write, instead:

Geeta has AIDS”, or “Geeta lives with HIV”, as appropriate.

This states facts and doesn’t strip away Geeta’s dignity.

  1. Do not distort meaning.

“Geeta was fired from her job because of her sexual preference.”

The use of the word “preference” implies that how one identifies is a preference, a choice, or worse, a luxury.

Do write, instead:

“Geeta was fired from her job because of her sexual orientation.”

“Geeta was born a man, but identifies as a woman.”

  1. Do not impose judgment.

“Geeta and her friends were promiscuous.”

The use of the word promiscuous, to indicate sexual behaviour, comes loaded with a certain moral framework. Even where the writer may not necessarily share this moral framework, it’s possible to continue using these words and phrases because they are such a common part of language as it’s used by the general public and the media.

Do write, instead:

“Geeta and her friends had multiple sexual partners.”

This is much more direct and factual, without the weight of morality.

  1. Do not make objects of people.

“Geeta works with the disabled.”

The use of such a phrase strips away any identity that people might have other than the disability that they have. Surely there’s much more to a person than the disability they are born with, or live with? This is a pet peeve that objectifies people, and is often used by people who passionately advocate for the cause of people with disability.

Do write, instead:

“Geeta works with people with disability.”

This acknowledges that the people are people first; that they have a disability is a part of them, but not all of them.

  1. Do not attribute more – or less – weight to actions.

“Geeta decided to get rid of the baby.”

Phrases such as these are implicit with the judgment that abortion is a casual decision. It’s also inaccurate, tilting the meaning against the woman’s right to choice.

Do write, instead:

“Geeta decided to have an abortion.”

“Geeta decided to end the pregnancy.”

We’ll throw in an extra one, for good measure. This is for people who design materials for non-profits.

  1. Do not cram in every sq cm of space with words.

While we understand that print space is expensive, resist the temptation to fill every square cm. Keep in mind that a reader’s eyes can easily glaze over column after column of tightly packed text! Give the reader a chance to take in what you’ve just written, breathe, and form an opinion.

Do, instead:

Let the words breathe. Give them some white space.

As Mark Twain said, “The right word may be effective, but no word was ever as effective as a rightly timed pause.”

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