Data Insight + Relationship Building = Fundraising Gold

There's been an intense and fiery debate raging over on the SOFII group on Linked In over whether you should send an ask with your thank you letters.

The initial debate widened to a discussion on the merits of relationship fundraising and the need for data analysis - to me the two aren't mutually exclusive, though some people seemed to think so...

Fortunately the rhetoric and mudslinging has died down a bit and some insightful and thoughtful analysis has come out of the discussion.

The consensus seems to be that the best fundraising is a combination of relationship building and data insight. 

Anyway, the discussion has got me thinking how you can represent this graphically and I've come up with the following:

I've put intuition and data insight on one axis and taking a relational or transactional approach to donor care on the other.  By charting how you go about fundraising, you will fit into one of four categories.

I'll give you a quick overview of each one, starting with the worst:

 Bad Fundraising:  Unsurprisingly the worst type of fundraising.  I'd hope there weren't many charities operating here.  This organisation is likely to have an underutilised database, appalling attrition rates and a high turnover of fundraising staff.  Amazingly, some donors will still give to these organisations!

Amateur Fundraising:  I've seen a lot of charities in this space.  They are filled with good intentions and do create meaningful relationships with some donors and are generally well liked.  However, they let mailing dates move, don't have proper processes in place for capturing information and many opportunities slip through the net.  The worst extreme of this is when you get fundraisers who are scared to ask for money.

Churn and Burn Fundraising:  Treating donors as ATM's, constantly asking, using data insight to maximise short term income and the optimum number of 'asks' can be surprisingly effective (especially in the short term).  You 'churn' through your donors as quickly as possible and are constantly looking for new donors.  However, as response rates to cold mailings have decreased and the costs of recruiting donors has increased, this is increasingly hard to pull off.

Relationship Fundraising:  The best of both worlds.  You treat people with respect, listen to them and try to engage them for the long term.  However, you also use data insight to target donors appropriately, have a rigorous approach to testing to maximise your returns and monitor things like lifetime value.  This is the space I want to be and it is the combination that I believe will raise the most money. 

If anyone has any feedback on this or some better names for the segments then I would love to hear from you!