to improve nonprofit income think like a donor

October 04, 2010 |

I know you’re busy with 4th Quarter madness so I’ll do the bottomline first: if you want to improve your net income, think like a donor. For our “for profit” friends, think like your customer to improve your net income. Simple as that. Now you can go back to putting the finishing touches on your 4th Quarter contact strategy or whatever is next on your list…or keep reading.

Hoots and I gave a gift to a local animal organization last year. I’ll leave it vague to protect them but let’s just say they are a small, regional nonprofit helping animals. Exactly who they are isn’t as important as what happened. I’ll call them “Animal Helpers” which is NOT their name.

We gave a $25 gift. We were first-time givers to Animal Helpers. We gave only because a friend asked that instead of gifts for her birthday, we give to her charity of choice. So we made a gift in honor of her. We made that clear.

We received a nice hand-written thank you and acknowledgment from the Executive Director of Animal Helpers. Really nice. And at this point, they “knew” why we gave.

And then we received a direct-mail appeal from Animal Helpers. No real surprise there, but the assumption was (and we know how bad assumptions are) that we were donors. While we’d given a gift we really weren’t donors. We love our friend and gave because she asked us to. We really didn’t know anything about Animal Helpers before or after we gave our gift. And they really didn’t make the case for why we should give again. So we didn’t.

Then a few months later, Animal Helpers invited us to a Tea. That was sort of cool, I don’t get invited to many Teas. We had the option to reserve seats for $30 a person or we could just buy the whole table for $210 (that’s for 8 seats so the quantity discount is helpful). It did sound like I could wear my tux which was a plus, but there was no information telling us what tea was about…or why I might want to go (other than getting to go to a tea in my tux). So we didn’t respond.

That was a month or so ago.

Over the weekend, Animal Helpers sent us our “2011 Membership Materials” in a big, heavy 9X12 business envelope. Wow! I didn’t know I was a member! It was excellent. Full color 2011 calendar with photos of animals helped. Rather nicely done. Not cheap in anyway. The letter began with a salutation (our names were nearly right) and thanked us for being members of Animal Helpers! Good letter. Good response device. Beautiful, big full-color calendar…but we’re not members. At least, we don’t think we’re members. But they did offer me the chance to make a $1,000 gift to be on a special council. A $1,000 gift? Where did that come from?

Which takes me to thinking like a donor. I know I’m not the average donor, but most people are going to wonder what’s going on with Animal Helpers.

I can tell you that Animal Helpers has spent at least $10 of my $25 donation so far trying to get me to give, rather than building a relationship. And if they don’t get good pricing on their print work or have small quantities, then they have spent more than half of my donation…and haven’t tried to build a relationship. They’ve assumed a relationship.

I can also tell you that Animal Helpers isn’t thinking like a donor.

If you think like a donor you won’t assume that a gift in honor of a person is a “real” donation.

If you think like a donor you won’t invite me to a tea which costs more than my first gift and never tells me why I HAVE to come in order to help animals.

If you think like a donor you won’t assume my membership and ask me for a $1,000 gift when my first gift was $25.

I don’t want to beat up Animal Helpers, they’re probably good people…they do have a great calendar. What I do want to do is remind you as you go into the 4th Quarter is that you have to think like your donors.

  1. Don’t confuse people on your mailing list with donors. Or even assume that all donors are the same–either in giving pattern or in motivation.
  2. Don’t confuse donors with single largest gifts (SLGs) above $250.00 with donors with SLGs of $15.00 and vice versa.
  3. Don’t assume they will give because you mail them a letter.
  4. Don’t suggest gift amounts that are unconnected to past giving.
  5. Don’t treat first-time time donors as real-live donors. They’re not. There is still a lot of wooing and relationship building necessary before a first-time donor becomes a donor.

Whew. That’s enough for now. I hope your 4th Quarter is shaping up well and that you’re blessed with the income you need. Think like a donor and income will be better. I promise.

So what about you, how do you “think like a donor”? Have you ever had the same experience of watching an organization’s strategy unfold and wonder “what are they thinking?” I love hearing what you’re thinking.


Steve Thomas
Partner, Oneicity


(photo credit: Liv Unni Sødem)

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21 Responses to “to improve nonprofit income think like a donor”

  1. Karen says:

    Eye opening! Nothing is more disappointing than seeing my small first-time donation come back to me in paper appeals.

  2. Steve Thomas says:

    @Karen — thanks. For me it isn’t as much about the paper appeals as it is the lack of understanding of who I am as a donor. Good people, but apparently not able to figure out how to separate me from the rest of their donors.
    Thanks you for your comment!
    st

  3. Pamela Grow says:

    Excellent points as usual Steve! Segment, segment, segment your list – all donors are not created equal.

    I’m curious though. You gave strictly in honor of your friend. What could Animal Helpers have done differently to engage your support? Could they have done anything differently (maybe animal orgs are not your *thing*:)? Do you have any hard and fast rules about how long to keep a donor who’s given a memorial gift or *in honor of* gift in the database?

  4. Steve Thomas says:

    @Pamela–boy do you ask great questions.

    First the easy answer: we would never delete a donor. Always know basic data about them: first gift date, first gift amount and what motivated the gift–those are minimums for us but never delete them. Just know who they are in terms of their relationship to the organization.

    I love animals…still can get weepy over my black lab Fitch who was killed 7 or 8 years ago. I’m a serious animal lover.

    The miss for me, and it is an easy mistake for any organization to make, is that they didn’t engage my imagination. They didn’t cast the vision of how I could make a difference…not Animal Helpers the org making a difference, but how I could make that difference through my support and partnership of Animal Helpers. They didn’t help me imagine how I could literally be an animal helper.

    For us, it is the key mistake that many make: not connecting the donor (or prospective donor) with the end goal. If I had a vision for how I was needed to save animals… and if I understood that I had an opportunity to make a difference…and if the vision were cast in such a way that I knew in the very fiber of my being that without my help something bad would happen to animals who needed me…then I become likely to give a “real” first gift.

    Whew… can you tell I’m passionate about this? Sorry for the long speech there.

    Love the dialog.

    Thanks.
    st

  5. Steve,
    I am so with you. In fact, I hate giving to sponsorship events for causes that my friends support for exactly this reason. I love my friends and will periodically give to the health or other charities that they ask me to “in their name” only.
    But I’m not their donor. And, in most cases, never will be. See my response to Pam for another suggestion about what the next conversation might be like.
    Gayle

  6. Pam I wish the organization, when following up, would simply ask me: We are so grateful that you gave to honor/support/ Jane Smith. She is a wonderful supporter of Animal Friends. Would you like to receive more information from us about our organization, or have us keep in touch, so that you can decide whether you might someday like to become our friend too?

    Or something like that (a bit more polished).

  7. Steve Thomas says:

    @Gayle–you’re so right. But few are courageous enough to ask. Many just mail. Great thinking.

    Pam? What’s your thinking?
    st

  8. Pamela Grow says:

    Steve, I love Gayle’s way of thinking! As a matter of fact, I’m going to incorporate it into my own individual giving system – it’s a great way to make sure that these individuals who gave as a tribute to a friend or in memorial don’t fall through the cracks. Thanks to both of you for putting this out there!

  9. Wonderful advice, thanks so much, I will pass it on. Bunnie

  10. I appreciate the comments on knowing the donors and why they gave. It would help a nonprofit target different segments of donors with different strategies, producing better results. As a CPA consulting nonprofit organizations, I will definitely point them to this blog post.

    Of the nonprofits I have personally supported on a one-time basis as described in the blog, none have handled this well. I am treated like a regular donor, receiving regular mailings. It also frustrates me to see my small gift used up in such a way. It is important to keep the donor management system current with such details.

  11. Deborah Gohrke says:

    Excellent, thought provoking blog and comments. If you want to successfully connect with others you have got to put yourself in their shoes. No matter what you are doing – unless you are alone in the woods communing with the trees – you’ve got to understand your audience. Not so easy to do.

    That’s why research is so important, or as Kris Hoots would say, “I love data!” I love it for what it tells me about how to do whatever I am doing – better. I heard an academic who specializes in “learning organizations” say, “Research is a form of reflection.” It is necessary for us change, adapt, grow. Sometimes research is as simple as asking what someone thinks.

    Thank you for your thoughts and the reminder to be diligent about checking my assumptions. Maybe the next time I am alone in the woods, I’ll try to think like a tree.

  12. Steve Thomas says:

    @Bunnie–thank you so much for comments, we love hearing from you.
    st

  13. Steve Thomas says:

    @Jeffrey — Thanks a ton for your comments. It’s funny how many of us have similar experiences, yet good organizations somehow miss out on handling this well. I have wondered why. I have to wonder if it is lack of courage or conviction that treating donors the way they want to be treated will work well.
    Any ideas why orgs don’t do the right thing?
    st

  14. Steve Thomas says:

    @Deborah–if you’re thinking like a tree and fall in the forest with no one there to notice…. (sorry that was nearly funny).

    Research as a form of reflection. Interesting, I like that concept.
    st

  15. My guess is organizations do not take the time to track the necessary details with their donors. Either they do not have the resources to keep a database with that information or have not taken the time to set up the database to track the necessary information. Or they feel hopeful that anyone and everyone on their list will contribute to their cause if contacted enough.

    I would guess proper education, proper tools and enough resources to properly track their relationships are all required.

  16. Steve Thomas says:

    @Jeffrey–yeah, Hoots does an entire presentation on Data that makes the point–funny how “boring” data is until they get how much it is the life-blood of the organization.

    I like the way you think!
    st

  17. A real paradigm shifter. It’s so important that fundraisers pay attention to who’s giving… and why they’re giving.

  18. Steve Thomas says:

    @Sherry–you’re right. There’s always that gap between theory and practice.

    So why do you think so many fundraisers don’t pay closer attention to who’s giving and why they’re giving.

    Thanks for your comments.
    st

  19. […] loved this post from one of my favorite people, Steve Thomas, who, together with his lovely wife Kris, run the […]

  20. […] loved this post from one of my favorite people, Steve Thomas, who, together with his lovely wife Kris, run the […]

  21. Betsy Baker says:

    What an engaging discussion! Thanks for clarifying a situation that I think many “would-be” donors run into. Thoughtful insight – I hope many nonprofits will incorporate it into their end-of-year appeals.

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