Archive | Individual Fundraising RSS feed for this section

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?

 

 

Advertisements

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 is 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.

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

Have website, will fundraise? Not necessarily.

21 Feb

Creating a website and waiting for donations to pour in is a bit like buying a car and expecting it to drive itself.

So we put the website URL on visiting cards, brochures, annual reports, and email signatures, and then wait. Those with some resources to spare dabble in social media (read Facebook) and post the website URL on Facebook with an appeal. When that still doesn’t pay, we shrug our shoulders and tell ourselves, “Well, as a small/ medium not-for-profit, we can’t afford to advertise the way these big organisations can, so this is the best we can do.” The enthusiasm for the website wanes, and in no time, the website is dead. But we know that we should be doing more on the web, so every three to five years we fiddle with the website and make cosmetic changes.

This cycle is all too familiar for us who have been working with not-for-profit organisations of all sizes for the past 16 years.

So here it is, in simple, unequivocal terms: Just a website will not raise you money or supporters online.

Simple promotion tactics – while important – are not enough.

  • Putting your URL on print materials is a good start, but people have to key in your URL into a browser, and that calls for serious interest or commitment.
  • Putting your URL on your email signature is slightly better, but most people tune out your email signature, unless you force them to read it in some way.
  • Posting an appeal, even a well-written one, on Facebook is good, but if you haven’t built the relationships, no one is reading.

In last week’s post, we talked about how it’s not what you do with the donate button, but what you do around it. This week, we talk about how it’s not about just having a website, but how you drive donors to visit and give on it.

What you need is a digital pipeline that drives potential donors to your website, engages them in conversation and gets them to give again.

Here are three ways in which you can do this:

  1. Put in place a regular email marketing campaign to build and nurture a list of warm donors. An email newsletter can become your #1 tool in driving online donations. It can get people to give for the first time, and one-time donors to give again and give more.
  2. Get donors who have given even once to engage with you on social media, say Facebook. This gives you a low-cost method of regularly communicating with and retaining donors.
  3. Tie these three channels – the website, Facebook and the email newsletter – into a digital loop that powers your acquisition and retention engine.

Now that your basic loop is in place, you can add elements (such as advertising) according to your budget.

To find out how to put this digital pipeline in place, write in to us.

A cold, hard look at the Ice Bucket Challenge #icebucketchallenge

20 Aug

Two weeks ago, I hadn’t heard of the Ice Bucket Challenge.

Three days ago, I stared goggle-eyed at the tweets piling up on #icebucketchallenge.

Two days ago, YouTube went crazy with vids of famous people dunking buckets of ice water on themselves.

Yesterday, I watched every single one of them.

Well, almost. Awww, wasn’t Bill Gates the best? Wasn’t Tim Cook’s the most boring IBC (ice bucket challenge for the uninitiated)? WTF was Melinda Gates thinking, wearing that top hat from Toyland? And Satya Nadella, Jeff Bezos, Mark Zuckerberg, Sheryl Sandberg, Conan O’Brien, Sania Mirza… how sporting of them! Not to mention the scores of lonely hopefuls who dunked themselves in their living rooms, shot it on a shaky handycam balanced on the TV, set to the sound of canned applause (they must have had to do the cleaning up afterwards, unlike Nadella, Bezos and the others).

This morning, as I crawled into work suffering the chilly after-effects of my IBC Youtubathon, sense returned. I asked some questions. Was the IBC a brilliant campaign that would forever change the face of ALS research and care? Or was it a one-trick-pony that would go the way of #nomakeupselfie and others?

But first, what is it?

The Ice Bucket Challenge is a fundraiser to raise money for ALS (amyotrophic lateral sclerosis, known as Lou Gehrig’s Disease in the US). Most people are unlikely to know the full form, but most do know that Stephen Hawking has lived with it for most of his life.

What the Ice Bucket Challenge has done is capture the public imagination, catapult ALS from being an unknown (and unpronounceable) disease to one that’s widely recognised (the acronym, not the full form) – at least among netheads. And it has raised tons of money.

There are some professional doubters quibbling about the punctuation, of course.

Their No. 1 quibble is:

The IBC is not really raising awareness on ALS – people are doing it as a fad, and will forget all about it when it dies down. It’s a fake campaign.

Sure, Thomas, but the money is very real. And that will support research into this disease that has a life expectancy of two to five years, and ensure better care for people living with ALS.

While numbers are mounting day to day, an August 19 report said that the IBC has raised more than $15 million since three weeks ago, when Pete Frales, former Boston College baseball captain who has ALS, posted the challenge video. 

In the same period last year, the charity raised $1.8 million.

Go figure.

Quibble No. 2:

It thrives on peer pressure.

Peer pressure. One of the first lessons we learn in fundraising class. Tell us fundraising folks something new.

Quibble No. 3:

It feeds the narcissistic side of people.

Hmmm. If people are doing something to raise money for a cause, why deny them their moment in the sun (or in ice water, in this case)? Be generous with giving donors the credit and the glory. And take a deep breath.

I do have some worries, though.

One, the Ice Bucket Challenge is raising more money than ever before raised in a campaign by the ALS association and related charities, but is it enough? Research into life-threatening diseases needs a bottomless bucket. I hope all these $100 donations (except the likes of Charlie Sheen who gave $10,000) add up to enough and more money to support path-breaking research on ALS.

Two, I hope the recipient charities are holding emergency meetings and staying up late at night inking their donor relationship and communication plans.

That’s the only way to make sure that long after all this ice has melted, there will still be a steady trickle coming in.

%d bloggers like this: