01

How to Lose the Headlines and Keep Donors

An Open Letter to the UK Fundraising Community

Fundraising is broken and how to fix it.

02

The solution to the problems of angry and frustrated donors, negative press and

stagnant growth is less about changing what you do but how you do it…

Dear Fellow Fundraisers,

Our sector’s been hit by a vicious media attack. It’s been nasty, vindictive and even personal. But, if we’re honest, when it comes to the way fundraising practices have been reported, it’s been pretty accurate.

Putting aside the obvious media bias in favor of overstatement, who amongst us can provide any evidence

to prove the accusations are false? While all of us operate with the most noble of ends in mind, our means

have often fallen short.

We are paying the price for marketing at donors rather than partnering with them. For not listening to

them. When you boil it all down, isn’t that what we’re being accused of?

The virulent press and political reaction should come as no surprise. What we’re reading in the papers is

simply the inevitable backlash from years of pent up frustration over pressure-filled solicitation tactics.

Most suspected there was a problem. Few chose to ask and act on what donors would have told them.

We’ve been living on borrowed time. Sage voices have been warning us for years this would happen. The

day of reckoning has now arrived.

The tragedy of it all is there has always been a better, donor-focused way of doing business. This is not a

fluffy, pie-in-the sky ideal. It’s the simple, inexpensive process of listening to and learning from donors.

Had we listened we would have learned, years ago, the price we’d eventually pay for the tactics now

making headlines.

The Dual Price Paid for Failure to Listen

By not seeking and heeding feedback from donors the sector has paid a hefty penalty in two significant

ways:

1. We must now deal with the calamitous headlines further eroding donor trust.

2. We’ve missed out on the increased income that would have come from seeking and acting on donors’

feedback.

It’s time to change.

03

It Pays to Listen

Empirical evidence is quite clear that by listening to and acting on donor feedback, organisations improve

net income. Why? Because merely giving donors a clear opportunity to voice their feelings and interests is

proven to boost commitment and retention. Listening and acting on their concerns gives the organisation

practical insight into the steps it can take to improve donor experiences. And when donors have good

experiences they stick around, get more involved and give more money. A virtuous cycle.

There really is no legitimate or practical excuse for hitting the ‘mute’ button where donors are concerned.

Far from requiring more time, money and resources a solid donor feedback effort is likely to save both time

and money. And far from net income taking a dip it will sizeably grow.

Don’t change what you do. Change how you do it.

The solution to the problems of angry and frustrated donors, negative press and stagnant growth is less

about changing what you do but how you do it.

Let’s look at what happens when donors are asked to give their opinion. In one instance an organisation

randomly split its donors into two groups. Feedback was solicited from the Test Group. The Control Group

was treated the same way it had always been dealt with. After six months the results were nothing short of

“game changing.”

Compared with donors in the Control Group performance in the Test Group who’d been offered the

chance to have their say skyrocketed:

Attrition was down 50%

Net profitability was up 35%

The number of additional gifts trebled

None of these figures are typos! Rather they reflect the simple principle of delivering greater value to

derive greater value.

What’s most extraordinary about these results is not only they’re far better than the organisation normally

achieved. But also that they were achieved merely because the organisation gave the donors an

opportunity to participate by seeking their feedback.

Had most of the sector’s large and aggressive charities been listening to donors; routinely seeking their

input, we would not be under the media assault that we are today. Donors would have let us know how

they felt about certain techniques and tactics. Changes could have been made. Calamity avoided.

04

Why Don’t Most Charities “Get It”?

Seeking and acting on feedback is commonplace in the commercial world. Not (necessarily) because

businesses care more about their customers than we do our donors. Rather they listen intently to the

voice of the customer because it’s good business. Companies understand that at least 50% of a customer’s

decision to buy again has zero to do with marketing or brand techniques but rather with the experience of

the interaction itself.

At a time when trust in our sector is at an all-time low it is worth candidly asking ourselves just how

available are we to our donors?

Sure, we all have a donor services telephone number…

…but how actively do we promote it?

…Is it prominently displayed?

...or is it buried in the small print and hidden in some crevice of our website?

Sure, we all have a donor services team...

…but are they a well-resourced unit placed front and centre in the organisation?

…or chronically understaffed, under resourced, under trained and hidden in a basement?

05

The Tale of Two Donors

This story, based on reality, of two donors shows just how easy it is to lose a donors confidence, trust and

support. And equally just how easy it is to keep and grow it.

Charlotte and Emily have never met. They are the same age, live in the same area, have the same income,

the same number of children, and the same costs and expenses.

Three years ago both were out shopping when, independently, they stopped and spoke to one of your

street fundraisers. Both were moved by what they heard because it resonated with their own values. Each

made a text donation of £3.

A few weeks later each received a call from another of your organisation’s telephone fundraisers asking if

they would increase their support on a monthly basis. They both agreed to a regular gift of £5 a month.

So far they appear identically on your CRM system; all that differentiates them is their Donor ID number.

Over the next few months both were sent on the same ‘donor journey’, receiving the same set of pre-

ordained “touches”-- mail, emails, calls, newsletters etc.

Today, three years on, only two things have changed. The first is they’re three years older. The second is

Charlotte’s lifetime value is £207, whereas Emily’s is £33. Charlotte now sits in your ‘loyal’ file. Emily has

been moved to your “lapsed” file. Instead of contributing to your cause she is now costing you time, effort

and money in vain attempts to win her back.

“Why” the remarkable difference in value with two seemingly identical donors?

There’s an incredibly simple answer to why Emily left.

Six months into her ‘relationship’ she had a bad experience with you that went unrecorded because it’s not

something you record. It could have happened during one of any number of interactions she was exposed

to, but in this case it was the second upgrade call she received.

Emily had a couple of questions your telemarketing agent couldn’t answer. Nothing major, but her

frustration led to mistrust which led to her decision to leave and support an identical looking organisation.

And just that simply she was gone, along with all the money you had invested in trying to get her back.

Now imagine what would have happened if your approach had been “donor centric”. What would that

scenario look like?

After Emily’s upgrade call she received a short automated email asking how the call went; was the agent

knowledgeable? Was he able to answer your questions? And so on. Included with the email was an open-

ended comment box for Emily to let you know how she felt.

06

Fixing our negative press problem and growing net income involve

the same answer to two very different questions – collect and

act on donor feedback about their experiences with you.

When you heard about her bad experience you acted immediately with

a follow up call to smooth everything out. Rather than being frustrated

Emily is appreciative. She not only stays but she upgrades and keeps

her value identical with Charlotte’s.

The cost of that donor service interaction was £3.51. And Emily’s lifetime value rocketed from £33 to £207.

Simple. Powerful. Cost effective.

So why Don’t We Seek Donors’ Feedback? Let’s face it, our sector has far more ‘Emily’s’ than ‘Charlottes’. How many more years are we going to spend throwing hundreds of thousands of pounds at all those at poor ‘Emily’s’? How can we afford to lose so many like her, who continue to believe in the cause for which they gave that first gift, but no longer believe in the organisation they gave it to? No one denies the reality of mass donor exodus all charities face. How can it have gone on for so long? Because we’re working with the wrong mindset, metrics and an incomplete set of tools.

Far too many fundraisers continue to rely on the backward-facing metric of Recency, Frequency and

Monetary value. This tells them what the donor did. But in no way can it inform the fundraiser “why” the

gift was made and it certainly cannot predict the donor’s future behaviour.

Gaining a true sense of what is causing donor frustration (or joy) and homing in on the “why” of donor

attitude and behaviour is essential. All it takes is simply putting a donor feedback system in the fundraiser’s

toolkit.

Of course, those who resist the change—no matter how easy and inexpensive—of moving toward

becoming a truly donor-focused organisation – have nearly as many reasons for inertia as they have lapsed

donors.

“The idea of seeking feedback isn’t scalable or affordable.”

Nonsense. It takes far less money and effort to give Emily the opportunity to make her

views known –and for you to learn—than it does to continue vainly chasing and spending

with some mechanical “recapture” effort.

“You can’t let a vocal minority drive strategy.”

Double-nonsense. Most often “complaints” are really cries for help from donors who want

to continue supporting an organisation but can’t keep up with or understand the

mechanistic barrage of stuff that’s being churned out.

07

All the in-market data we

have indicates that those

donors who’d usually be

dismissed as

“complaining” are in fact

the most valuable and

loyal supporters.

Take a look at this recent

DonorVoice study from a

well-known charity

showing historical giving

broken out by key donor

segments and grouped

into over-soliciting

‘complainers’ (table on

right) and ‘non-

complainers’.

Can we really afford to dismiss these people without ever bothering to understand “why” they’ve stopped

giving or left the flock?

Is it any wonder that our having done so has landed us in the mess we’re in today?

How many more headlines do we need before we decide it’s time to start listening?

We have nothing to fear and everything to gain.

Sincerely, Charlie Hulme, Managing Director, DonorVoice UK chulme@thedonorvoice.com 07800 606 075 P.S. The new rules and regulations being proposed/imposed in the wake of this crisis are all well and good. But make no mistake, they do not address the fundamental problem. Yes, they will keep a stricter reign on ‘who’, ‘when’ and ‘how’ (who you can communicate with, frequency and method/channel), but they will not address the larger issue of ‘why’ and ‘what’ (why do they support and what would deepen that bond). If the latter doesn’t change it’s a sure bet the reality of a negative media barrage, low to no trust and continued stagnant growth will remain the norm. It’s not hard to fix this. We just need to be ready to listen to, and partner with, donors instead of marketing at them.