Why do mystery shopping results always shame fundraisers?
Fundraising Reading Round Up

Is fundraising income increasingly fragile?

A talk I attended at the RSA by Nassim Nicolas Taleb (the author of the Black Swan and Fooled by Randomness) has got me thinking whether fundraising is about to hit a crisis.

In his talk Taleb talked about nonlinearities, optimisation and fragility and the idea that when businesses, governments, projects etc reach a certain size then the consequences of any problems increase exponentially. 

To illustrate the point he gave the following example. 

With 10,000 cars on the streets of London it might take 30 minutes to drive across the city.  Increase that to 50,000 and even 75,000 and the journey time might hardly change, but at some point, lets say 90,000, the journey might suddenly take an hour as that is the point that saturation is reached and jams ensue.

The following graph illustrates the point:

Non-linearities and fundraising

Looking back at the results of the mystery shopping research I talked about last week and the evidence of increasing donor attrition, acquisition costs and fundraising fatigue*, then the point is approaching where it will become too expensive to continue to rely on badly applied fundraising methods and the impersonal, transactional approaches taken by the majority of our profession. 

Using Taleb's language, the point of over-optimisation (and the resulting chaos) may be closer than we think...

I live in hope that the result of this will be a paradigm shift - from rhetoric about relationship fundraising, loving our donors and listening to their needs etc, into action.

*Here are just a few anecdotal examples of fundraising in crisis:

Direct debit cancellations hit a record high in August 2011.

Some of my own recent research revealed that the cost of recruiting a regular giver door-to-door has doubled in the last 10 years, whilst attrition has increased by over a third.

CRUK  has seen it's fundraising income drop for the first time since it formed and has cut the number of Race for Life events in 2012.

Overall giving in the UK is static and it would be interesting to see if fundraising costs overall have increased.