Relationship Fundraising – What’s Not To Like?

handshakeApparently quite a lot, according to the recent review by Plymouth University’s fundraising think tank Rogare. In their conclusion they question whether a ‘transactional’ form of fundraising may be more appropriate in individual fundraising, leaving relationship fundraising to those areas where there is much more involvement in the charity such as major donor or company fundraising.

Transactional events are simply where we buy a service or item and use it but have no commitment to buy again or to support the company offering the item. In the same way a donor may give once because they want to help at a certain time, but there is no reason to suppose they may give again or, more pertinently, to increase their donation and steadily be drawn up the classic fundraising pyramid. Witness the increasingly desperate calls to upgrade reluctant donors which is at the heart of many peoples’ current problem with charities.

Event fundraising, for another example, is probably the classic transaction where people pay because they want to go to a concert and have a great time, not necessarily because they want to support the charity.

All of which is not to say that classic donor care is not highly appropriate, and this is where the discussions get messy, Rogare and those who take a critical look at the review like Craig Linton are clear that “all fundraising is relationship fundraising, it is not a choice” and so how that is defined becomes the issue: but let us sidestep this morass for now with a look at practicalities.

It is clear – is it not – that we are deluded if we believe that our donors all read our newsletters and become increasingly knowledgeable about our organisations, leading to higher donation from what Oxfam used to call ‘the educated pound’. Instead, perhaps we are obliged to send out newsletters because our donors give to several charities and if we don’t we become invisible compared to our competitors. Just sending appeals for money, whilst hitting the transactional button, is never a good look for a charity. Newsletters, however, serve another purpose for fundraisers which is to introduce a range of other kinds of giving from legacies, to events, to local group activity. So, we are back in the area marked ‘more practical research needed’ to see if we are wasting time and money on trying to create relationships with people who just walk on by, and this is probably a charity by charity game as we all practice relationship fundraising (over and above mere good old fashioned donor care) very differently.

The review also talks of retention (which is now critical for large numbers of charities) saying that social psychology theory indicates that once the donor has passed the stage of being emotionally moved by the beneficiaries plight and made their initial donation(s) they will be more interested, to put it crudely, in what the charity / relationship can do for them. At that stage a focus on the donor rather than the beneficiary is indicated. So, Rogare suggests that fundraisers need to pay attention to identity theory where the donor begins to identify with the charity and move beyond thinking about the costs and benefits, to feeling that the charities concerns are truly their own (a communal relationship) – nice work if you can get it.

Indeed, Rogare puts the social psychologists emphasis on commitment, trust and satisfaction above mere financial value as expressed in the usual recency, frequency and value calculations or the annual income budget. So keen are they on the satisfaction concept that they suggest charities should reward their fundraisers according to this metric, which would certainly mean it was both built and measured a lot more than at present, and indeed may help to prevent the waves of media criticism which are very far from over.

Turning now to companies, the creation of a relationship with the CEO or chair of the board etc. is obviously a good thing as they can bring lots of different items to the party; but when you are going after their marketing budget its usually a simple transaction and we neglect to consider what they need back at our peril.

High net-worth individuals too are all about relationships but our abiding sin is taking this too far. Over and over I see major-donor fundraisers who hesitate so long to ask that they build quite the wrong relationship with potential donors who come to believe that they grace the charity’s events by their presence and, far from suggesting to anyone that they are ready to give, have long ago lost that intention.

And when we come to the multi-millionaire and billionaire philanthropists another transaction kicks in which is that they want to see their millions transforming the lives of people in a significant way and they don’t trust the charity to spend their money in just any way it wants no matter how much the charity has invested in building a relationship. Indeed, time for them is precious and they will only pay attention to cultivation events etc. that very directly serve their purposes.

Finally the Rogare review comes up with the very useful concept of ‘total relationship fundraising’ to build a ‘culture of philanthropy’ in the organisation. They point out that fundraisers are often neither given the budget to implement relationship fundraising nor are they supported internally by good relationships within their organisations. This, however, is usually out of the hands of fundraisers and rests with the senior management in particular the CEO in league with the chair of the board to set a culture of philanthropy / fundraising in the organisation which embraces all the stakeholders internally and externally.

So, where finally does this leave relationship fundraising? Perhaps like Craig we should go back to Ken Burnett who said in 1996:

Relationship fundraising is, after all, just a currently fashionable piece of jargon … I wish I’d paid more attention to its subtitle – “A donor-based approach to the business of raising money.” Those ten words, I believe, are ultimately much more important than the two words that precede them.

And to quote Craig again:

I firmly believe relationship fundraising is an evolving concept that takes the best of business, marketing and behavioural theories and applies them to the fundraising world.

…A close look at theories behind customer experience, experiential marketing and contemporary marketing books could all prove fruitful areas for review to improve levels of trust, commitment and satisfaction in the fundraising world.

I think it is high time to step back and re-evaluate our commitment, trust and satisfaction with relationship fundraising, not to abandon but to build on it using the research based social science theories to help us create appropriate, efficient and effective relationships with our donors.

 

John Baguley, CEO, IFC Group

 

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