Resource Development

Relationship Funding: What Goes Wrong

I believe that relationship fundraising may be all but dead by the year 2000. Why? Because most fundraisers are doing it wrong.

For one thing, they often try to build relationships with the wrong people--with people who are not really open to having relationships with them. Start by looking at the history of your own donor file:

• What sorts of people on your file gave a second gift, and what sorts of people did not? What sorts of people renewed their annual support and what sorts did not?
• Which people made special appeal additional gifts and which did not?
• Which people left bequests and which did not?

When you start looking at the information that's readily available to you on your file, you may find some very surprising things. For example, you may find that, historically, women on your file have been more likely to make a second gift that men.

Or you may find that, where age profiles are available, older people have proved more likely to make a second gift than younger people. Or you may find that households with one adult have been more likely to make a second gift that households with two adults.

Why might that be? perhaps older women are generally more loyal than younger men. And it may also be that when you have two adults in the household, one of them made the first gift without consulting the other. When the request for a second gift comes in, the other person might first become aware of it and actually prevent the donor from doing what it was he or she would have done if he or she were living alone.

I'm not telling you that this is a fact. Rather I'm telling you to look at your file and see whether there are any such historical patterns. For once you discover any of these patterns, you can screen your acquisition lists to eliminate those prospects who are less likely to make a second gift.

The next thing that many relationship fundraisers are doing wrong is that they are trying to build relationships too late. They are trying to begin the process after the donor makes the first gift.

What, you may ask, is wrong with that? The answer is that if you first acquire donors by creating expectations which ultimately will not be met, they are almost certain to become unhappy and are unlikely to make additional gifts.

You can't bring them in by portraying the organization in one way and then attempt to renew their support while portraying the organization in another way. In the same vein, you can't acquire them by offering valuable incentive gifts or donor benefits and expect them to make subsequent gifts without offering additional gifts and benefits. If you acquire donors in that way, you are really just fooling yourself and creating what we call "churn and burn" on your life.

The third thing that relationship fundraisers do wrong is to treat everyone alike by making blanket assumptions about what people want. And often these assumptions are very wrong. What they are not doing is asking each individual what most interests him or her about the organization, and how he or she would like to be treated. Nor are they treating people differently, based upon what they learn from asking.

It has become clear to me that we should be using different copy platforms for different people. When individuals indicate that they are interested in certain aspects of your program, you should be providing them with information about those aspects of your program, not other aspects that don't interest them. And you should be asking them for support for those aspects of your program.

But what do you do when you've asked, and still don't know what will motivate each individual? The answer is that we should be looking to different copy platforms for different kinds of people.

For instance, we now believe that older people give for different reasons that younger people, and that women give for different reasons than men. As an example of this, if you are an environmental organization talking to a 75-year-old about cleaning up an environmental problem over the next 20 to 30 years, you should not be talking about how this solution is going to impact on his or her future. Instead, you should be talking about how it's going to impact on his or her grandchildren's future. On the other hand, if you are speaking with someone who is 25 or 30 years old, this would affect his or her future and you should discuss the issue accordingly.

The fourth of the relationship fundraising mistakes is what I call "all relationship and no fundraising." For relationship fundraising to work, you must take financial advantage of the relationship you are building.

You can't just cultivate and cultivate without ever getting a payback. It's far too expensive. So you need to have an effective upgrade strategy in place at the start. You need a definite plan to move people to larger gifts, to monthly giving, to open-ended giving and to wills, bequests and legacies. If you don't have such a strategy in place, you are wasting your money on building the relationship.

Similarly, if you ask your donors when they wish to hear from you, and they say "just once a year," how do you ensure that you obtain a gift when you go to them that once a year? I suggest that you write to them that once a year, pointing out that they made a covenant with you that if you contacted them just once a year, they would give. You should also point out that, because their support is so important, if you don't receive a gift or an indication that they don't wish to give, you intend to telephone them to discuss it further.

And by the same token, why not suggest to them, in that telephone call, that if they don't want to receive a fundraising appeal even once a year, they could consider creating a direct debit by which they can automatically give to you each month or each year without your having to contact them to ask for a gift. Thereafter, your communication with them could be purely informational and cultivational.

That would be taking advantage of the relationship you have built. You would be doing what the people wanted you to and, at the same time, you would be increasing their giving significantly and reducing the cost of obtaining those gifts.

Well, those are things that relationship fundraisers are doing wrong. But that's not the whole reason why relationship fundraising may die. It may die in part because even those who are doing it right often can't prove that it's working! And if you can't prove that it's working, you won't be in the job long enough to really develop and take advantage of a long-term relationship with people.

So how do you prove it's working? The answer is to test and track.

If you're starting a relationship-building program, it's critically important that you be able to assess the difference, better or worse, between the giving patterns and lifetime value of those donors who are being treated in a relationship-building way, and those who were not treated in that way in the past.

Unfortunately, the only way to know for sure is to track in a controlled setting, which is going to be very controversial.

I'm suggesting that if you have had a program in place up until today which is not relationship building, you can't just suddenly treat everybody in a totally different way. If you do, you won't know whether they are performing better as a result of the new way you are treating them, or because of other, unrelated factors.

How do you do such a controlled test? You have to continue to treat a small group of people in the same way you used to treat everybody, even if that means continuing to abuse those people.

You will then have that control group to match up against a comparable group of people who are now being treated in a donor friendly way.

Only by doing that will you be able to prove to your boss and to your board that it's worth all the effort and expense of changing your program in order to treat everybody in a relationship building way in the future. And only then will you have a relationship fundraising program that will not only be effective, but can also be proven effective.