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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 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?

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

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