Fundraising Reading Round-Up - November 2017
Fundraising Reading Round-Up

Criticisms of relationship fundraising (and why they are wrong)

At 13.00 UK today, I’m going to be interviewed on Facebook Live by Ravinol Chambers of Be Inspired Films. This is the third edition of the Institute of Fundraising’s #FRED talks and I’ll be talking about why relationship fundraising is more important than ever.

Do tune in and ask any questions you might have!

To whet your appetite, here is a short edited extract from Donors for Life: A practitioner’s guide to relationship fundraising, that looks at some of the major criticisms of relationship fundraising.

Three major criticisms of relationship fundraising – and why they’re wrong…

  1. Not everyone wants a relationship/you can’t treat everyone the same

The argument that not everyone wants a relationship with a nonprofit would be a valid one if you take too literal a definition of ‘relationship’ and compare it to that of husband and wife, brother and sister, etc. Similarly, some people take relationship fundraising to mean that you treat all donors the same and give everyone the same levels of service and personalisation regardless of their level of giving.

Let us be clear. Nowhere in the literature is it suggested, or even implied, that this is the sort of relationship you should try to nurture with all your donors.

The definition of relationship we use is much looser. A relationship exists (whether you like it or not) from the moment a donor or potential donor interacts with your nonprofit. Your job is to make sure that the interaction leaves a good impression and makes the donor want to continue to support your cause or takes him or her a step closer to making a first donation.

Different donors deserve different levels and types of relationship depending on their own personal values, needs, wants and desires. The good relationship fundraiser will be aware of this, will act accordingly and do nothing that will harm the donor’s support for her or his cause.

I’ve written about this over at Rogare when they published their review of relationship fundraising, which is well worth a read.

2 Relationship fundraising is too soft and woolly

Another argument we often hear is that relationship fundraising is used as an excuse for not asking for donations, or it takes too long to see the results so is not worth the effort.

Again, let us be clear, relationship fundraising without asking is like a Formula 1 car without petrol. They both look the part, but fail as the key component of their success is missing.

It’s  crucial that you measure and record the impact of your relationship fundraising efforts. This means you can demonstrate the improvement on lifetime value and return on investment to your chief executive and board. If you don’t do this, then short-term decisions can be taken that damage the relationship but boost immediate returns.

Remember, relationship fundraising is only worth doing if it raises more money in the long term than pursuing alternative strategies.

  1. Relationship fundraising is great in theory, but hard in practice

There is no doubting that relationship fundraising is challenging to implement. It requires hard work, focus and a commitment to create a fundraising team culture where long-term results outweigh short-term priorities.

We also recognise that there are other ways to raise money. Some of these can undoubtedly be successful. For example, we know of many charities that have raised millions of pounds by pursuing a very transactional, incentive-led direct marketing programme.

When donor recruitment costs are low there is also little incentive to improve the lifetime value of supporters and build long-lasting relationships. You can simply treat donors like a commodity and get some new supporters in to replace those who stop giving. Although effective, it is, perhaps, not very satisfying.

It’s our steadfast belief that soon charities won’t have a choice about whether to improve the donor experience and service. As donors stop giving in larger numbers and the costs of donor recruitment become ever higher, then the only way to fundraise cost-effectively will be by retaining donors for longer periods and maximising their lifetime value.