OPINION: Relationship fundraising – so where should we go next?

Craig LintonCraig Linton offers his reflections on Rogare’s relationship fundraising review and recommends the direction we should be moving in.

 

Rogare’s recent review of Relationship Fundraising – funded by Pursuant and Bloomerang – gives much food for thought for the sector. Importantly, it suggests topics for further exploration to help improve the standards of fundraising and raising more money for the causes we care about. Screen Shot 2015-12-02 at 10.19.30

However, I think there are a couple of important areas that the review overlooked. For that reason, I believe it should be seen as an interesting starting point to discuss relationship fundraising. Below are some of my thoughts and suggestions for further thinking, clarification and discussion. I hope you find them useful.

 

1 Relationship fundraising is not a choice: all fundraising is relationship fundraising

Perhaps the most important line in the entire report does not feature in the final summary. This is disappointing. However, it goes to the heart of why relationship fundraising has been misunderstood over the years by so many practitioners. It also highlights an error (explained in point three) that I believe Ian MacQuillin and Adrian Sargeant have made in their recommendations.

In the introduction to volume two, the authors state:

…the process of fundraising is by definition the process of establishing new links or reinforcing existing ones. In this sense, all fundraising is relationship building. If one chooses to be a fundraiser, one chooses to build relationships. Building relationships is not optional in fundraising; it is inherent in the definition of what fundraising is.

From this clear statement it seems hard to leap to the conclusion that relationship fundraising is a choice.

So what happened?

What was originally meant by Ken Burnett has been wrongly (though understandably) compared to relationship marketing.

In volume one it is acknowledged:

In the non-profit context, Ken Burnett did not have the relationship marketing concept in mind when he wrote his inspirational text.

Burnett has been quite clear on the subject over the years, as far back as 1996 when he was discussing the publication of Friends for Lifethe follow up to Relationship Fundraising – he said:

Relationship fundraising is, after all, just a currently fashionable piece of jargon…I wish I’d paid more attention to its subtitle – “A donor-based approach to the business of raising money.” Those ten words, I believe, are ultimately much more important than the two words that precede them.

Other books from Burnett, such as Zen of Fundraising and George Smith’s Asking Properly, take a similar viewpoint. They talk about relationships in this high level sense and focus on how you build commitment, trust and satisfaction with donors, which we now know is so important.

In none of his writings did Burnett use an analogy with marriage or compare relationship fundraising to relationship marketing. Yet many still confuse the two concepts.

Before moving on, it is important to point out that relationship marketing may have some application to fundraising. As the review states, there are clear times when it is a useful way to consider fundraising and there are snippets of advice from the theory that all fundraisers would do well to heed.

So how do we overcome this problem of confusion of what we mean by relationship fundraising?

I’d suggest that we think of relationship fundraising as operating on three levels, as represented by the diagram below:

Levels of relationship fundraising

Level one uses the word ‘relationship’ in its widest, dictionary definition. This, I believe, is what Burnett intended in his original Relationship Fundraising.

Level two relates to relationship theory in social psychology and the ideas outlined in volume two of the review.

Level three refers to relationship marketing theory. Volume one of the review.

Sitting outside the circle is poor fundraising practice that discourages commitment, trust and satisfaction from donors.

Considering relationship fundraising in this way allows a clear understanding of what we mean by relationships and what level any recommendations in the review refer to.

So, my firm belief is that fundraisers don’t need to make “a choice between relationship fundraising and ‘good old fashioned’ customer care”, but need to choose between applying level one, two or three relationship fundraising.

This model also explains the different North American and British ‘schools’ of relationship fundraising described in volume 3 of the review. The British school is firmly rooted in levels one and two and the North American school is more focussed on level three.

 

2 Casting the net further – broadening the definition of relationship fundraising

If you accept the model above, then this opens up new areas for discussion and review of relationship fundraising. We do not need to confine ourselves to the realms of social psychology and relationship marketing.

I firmly believe relationship fundraising is an evolving concept that takes the best of business, marketing and behavioural theories and applies them to the fundraising world. Too much focus is on the word ‘relationship’ and not on the subtitle of the book ‘A donor-based approach to the business of raising money’.

A close look at theories behind customer experience, experiential marketing and contemporary marketing books could all prove fruitful areas for review to improve levels of trust, commitment and satisfaction in the fundraising world.

One of the few fundraisers who has documented such an approach is Richard Turner of Solar Aid. Turner’s proposed model of fundraising urges fundraisers to use the social capital in our own, and donors’, networks. The model applies 21st century marketing theory to how we build strong relationships with our donors and, ultimately, raise more money.

A robust testing of Turner’s proposals in a similar vein to volumes two and three could be a fruitful area for future study.

 

3 Language is important: transactional fundraising shouldn’t be encouraged in mass marketing terms

MacQuillin and Sargeant appear to inter-change relationship fundraising and relationship marketing techniques in their conclusions. This results in the following summary:

Rogare suggests that a more ‘transactional’ form of fundraising might be more effective and relevant in fundraising from individuals, with relationship fundraising tenets being applied to donors who have a much higher level of involvement with the charity, such as corporate and high net worth individuals.

Not that the majority of individual donors need be downgraded in any way. It is just that ‘good old fashioned’ excellent customer care might be a more effective approach for mass marketing fundraising.

As I argued above, this seems to confuse level three relationship fundraising (based on relationship marketing) with level one relationship fundraising as defined by Burnett.

I believe classifying fundraising as ‘transactional’ is a dangerous view to propose. It strips fundraising of its emotional soul. It is transactional, mass marketing fundraising techniques that led to 2015 being such a tough year for fundraising in the UK. We need to move away from transactional fundraising in mature markets as it is responsible for the current threat of regulation in the UK and it is why charities lose more donors than they recruit in the US.

We need to encourage emerging markets to learn the lessons from the UK and USA and not go down the low cost, transactional route which appears, on current trends, to be unsustainable (though more research needs to be conducted to prove this point).

“Classifying fundraising as ‘transactional’ is a dangerous view to propose. It strips fundraising of its emotional soul”

Proposing that transactional fundraising could be an effective way to fundraise sends the wrong message to the sector. If a distinction is to be made between major donor fundraising and mass marketing fundraising, then perhaps wider adaptation of Stephen Pidgeon’s term ‘minor donor’ would be useful. Pidgeon defines this as: “raising smaller gifts from lots of people, often through a regular monthly donation paid through their bank.”

‘Minor donor’ fundraising has none of the negative implications of a transactional approach and makes the distinction I believe the authors are trying to make.

Finally, what is the purpose of “‘good old fashioned’ excellent customer care”? To build trust, commitment and satisfaction? If it is, then I’d argue it is hard to have trust, commitment and satisfaction with something or someone if no relationship exists.

Even for donors who give only once (for example, to an emergency appeal) we should, as fundraisers, still try to give a satisfying experience that builds trust in donating. The donor may not want to commit to future support now, but it would seem intuitive that a good experience would increase the likelihood of further donations. This could be in the event of a future emergency the donor cared about or the next time the donor feels an emotional connection to a cause and is asked to give.

 

4 Is ‘relationship fundraising’ even the correct phrase?

Of course, it might be that the term ‘relationship fundraising’ has become too tainted and confusing. It is possible that my proposals above wouldn’t resolve the conflicts that exist around the subject.

So perhaps we should abandon the term ‘relationship fundraising’ all together?

In the introduction of Friends for Life Burnett writes:

Relationship fundraising is at best an attitude of mind. Whether you call it donor care, or supporter loyalty, or donor development, or just common sense it all comes down to the same thing – a donor-based approach to the business of raising money.

Would using a different term for British ‘school’ relationship fundraising be useful for fundraisers?

My personal view is we can repair the damage and provide clarity on the subject. However, discussing the definitions and agreeing what we mean when we say ‘relationship fundraising’ is crucial for the future development of the concept.

 

5 A proposed model of relationship fundraising

Last year I proposed a model of what relationship fundraising looks like at an operational level.

DFL Craig's chart.

 

I believe relationship fundraising is centred on the emotional reason for why a person would want to give to your cause. From that point you can build your fundraising structure around telling this story, building relationships, making relevant asks, offering outstanding donor care and using data intelligently to strengthen relationships.

Sitting above this operational model is the leadership, strategy and culture you need to embed relationship fundraising in your organisation.

I offer this model in support of point four. If we can’t agree what we mean by relationship fundraising and how we can apply it in our organisations then we will continue to tie ourselves in knots. We spend too much time arguing over the word ‘relationship’ and need to get on with the urgent requirement to do better fundraising. Hopefully the two models in this article would provide clarity so we can all be certain what we are talking about when we discuss relationship fundraising.

 

Conclusions

The review has the subheading ‘Where Do We Go from Here?’ I believe there are four things that warrant further investigation. We need:

  • To propose, and agree, a clear definition of what we mean by relationship fundraising that can be used by the entire sector.
  • To broaden the literature review to look at what fundraising can learn from all contemporary marketing theories.
  • To evaluate, both quantitatively and qualitatively, whether relationship fundraising (as per our agreed definition) works and raises more money in the long term than transactional techniques.
  • To decide how we share our findings and encourage chief executives and boards to nurture a culture that rewards long term success over short term gain.

By doing this we will be able to definitively prove if relationship fundraising works and in what context.

  • Craig Linton is global fundraising advisor at Amnesty International, a member of Rogare’s advisory panel, and sat on the advisory group for Rogare’s review of relationship fundraising.

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13 comments for “OPINION: Relationship fundraising – so where should we go next?

  1. February 15, 2016 at 4:15 pm

    Hi Craig

    A very good and thoughtful piece here. The way I’ve heard Adrian Sargeant talk about relationship fundraising in terms of what we measure is, I think quite helpful.

    To paraphrase Bananarama and Funboy 3 – ‘it ain’t what you think you do, it’s the way you actually do it.’

    As Adrian puts it – if you claim to be a relationship fundraiser, but all your metrics are transactional – i.e. gross income/net income, response rates, average gifts, etc. – then you are in fact probably doing transactional fundraising.

    Whereas if you were truly doing relationship fundraising, your metrics may well still include the above, but would be expanded to measure donors’ ongoing feelings of trust in, commitment to, and loyalty towards, your charity, because these are actually relationship measures.

    One of the things that has shocked many fundraisers over the last year is – I think – the disparity between what they think they have been doing and what the wider public thinks they have been doing. Perhaps because of this exact disparity between fundraisers’ conceptualisation of their work and actual practice? And donors’ experience of the latter?

    Perhaps the next step is for everyone to be brutally honest with themselves about whether they are actually practicing relationship fundraising at all….

    • February 18, 2016 at 11:48 am

      Hi Adrian, agree how we define and measure things is so important. I believe very few charities truly practice relationship fundraising (as defined by Ken). Perhaps, only Salvation Army, Anthony Nolan, MSF and Friends of the Earth of large (thinking £10m+ fundraising income) doing so on a consistent basis. Not surprisingly, their fundraising results in recent years reflect the benefit of this approach…

  2. Ian MacQuillin
    February 15, 2016 at 4:40 pm

    We had a number of purposes in conducting this review and Craig has addressed some of these here. One of his main points is the definition of relationship fundraising and, indeed, whether it should be called ‘relationship fundraising’ at all.

    I am not a fundraiser. But I have worked in fundraising since 2001. And soon after becoming editor of what was then Professional Fundraising, I found myself quite surprised by how fast and loose some fundraisers were playing not just with the definition of ‘relationship fundraising’, but also with the definitions of its component parts ‘fundraising’ and ‘relationship’.

    Definitions are important when they, well, define something. If they don’t delineate and demarcate a meaning, then there is little point in having them.

    So it is true that in the RF review we said that all fundraising is about building relationships. But that is not the same thing as saying that all fundraising is therefore something called ‘relationship fundraising’, unless that’s how you define relationship fundraising, and we were careful not to do that.

    In fact, if all fundraising is relationship fundraising – because by definition, all fundraising involves creating a relationship, irrespective of how long it lasts or how valued it is – then the word ‘relationship’ is irrelevant: it’s just ‘fundraising’.

    It’s like calling it ‘connective fundraising’ because all fundraising involves making a connection with someone, or ‘cognitive fundraising’ because all fundraising involves some kind of cognitive process by the donor.

    Without demarcating or delineating what the word ‘relationship’ in ‘relationship fundraising’ means, it’s actually rather meaningless: it just means ‘fundraising’.

    Ken didn’t draw on marketing theory, much less theories from social psychology. But we have, in attempt to imbue the adjective ‘relationship’ with some meaning over and above the rather trivial sense in which it’s currently used. We always said that we wanted to review and ‘refashion’ relationship fundraising – take it in new directions; we weren’t simply aiming to bolster the status quo.

    What we have said is that there are different types of relationships that can be built – you still have a ‘relationship’ with donors from whom you only ever upgrade their regular donation, a ‘relationship’ that they can trust or distrust or be satisfied or dissatisfied with.

    You have a choice whether you take these relational theories from social psychology and apply them to your fundraising. You don’t have to – you could adopt a different marketing paradigm (we’ve called one of these ‘good old fashioned customer care’).

    But if you want to call what you do ‘relationship fundraising’ just because at some level, you inevitably have a relationship with someone simply because you have built a connection, then that is also a ‘choice’ you can make, but I’m not sure where it actually gets any of us.

    So I don’t think there needs to be an agreed definition of ‘relationship’ fundraising, but rather an acknowledgement that there are many different way to use ideas and theories of relationship building and maintenance in fundraising.

    I think we would all be better off if we could move beyond ‘relationship fundraising’ to that.

  3. Ian MacQuillin
    February 15, 2016 at 5:54 pm

    The other point of Craig’s that I think is really important to address is the case of the much-maligned ‘transactional’ fundraising.

    Craig says that referring to fundraising as ‘transactional’ is dangerous because it “strips fundraising of its emotional soul”. Now, this is a fabulous soundbite, and I used it when I Tweeted a link to this blog.

    But it does rather raise the question: what is fundraising’s ‘emotional soul’?

    Seriously, what is it? I presume that Craig means – and I’m sure he’ll correct me if I’m wrong – that the emotional soul must mean something about how you make donors feel.

    We say in the review that this could be an objective of relationship fundraising – in other words, the point of relationship fundraising could be to make donors feel good about themselves, rather than how donors feel being a means to the end of raising more money.

    But we say that this is a choice and it doesn’t mean that it is better than any of the alternatives. Craig seems to be saying, as does Ken Burnett in his recent blog, that it is the only correct choice (to the effect that the others aren’t really viable choices at all).

    The argument that transactional fundraising is not really a viable choice because it has caused the woes we witnessed last summer in the UK rests on two assumptions.

    The first is that so-called transactional fundraising did cause these problems. Now, the type of fishing feet fundraising (as Joe Saxton calls it) whereby the only way fundraisers can reach their ever-increasing short-term targets is to issue more and more and more solicitation requests, irrespective of the long-term consequences, may have been a factor in a diminished donor experience.

    However…

    Was the donor experience diminished because fundraisers chose to adopt transactional fundraising methods instead of relationship fundraising methods, which they could have freely chosen as an alternative?

    Or were they forced to adopt transactional fundraising methods because that was the only way they could possibly meet their targets?

    This isn’t a rhetorical point – it’s a questions I’d really like to know the answer to.

    In the first case, transactional fundraising is a choice among options; in the second, it isn’t – other forms of fundraising would result in services going unfunded. So while in a sense, transactional fundraising is responsible for a diminished donor experience, what seems much a much more relevant factor in the second scenario is what prevented fundraisers from using relationship fundraising techniques

    What were the market conditions or factors (lack of support from board, lack of budget released by FD, supply/demand situation with agencies) that could have led to such a preponderance of transactional fundraising (and as Adrian Salmon mentions in his comment, transactional metrics)?

    The second assumption hidden in here is that ‘transactional fundraising’ is bad by definition and that it couldn’t possibly be practised any better than it currently is.

    Low cost, high attrition mass fundraising of the type practised in the UK doesn’t seem sustainable, for reasons I think would be found mainly in market conditions rather than anything inherent in the way you ask someone for an upgrade on the phone, say.

    Telephone fundraising doesn’t become an unsustainable practice just because you define it as ‘transactional’ and you further define all transactional fundraising as ‘bad’.

    How much better might telephone upgrading be if charity finance directors were prepared to triple the fee paid per call to agencies and fundraisers weren’t required to stick to a defined script? Those changes would not necessarily mean that the call was suddenly no longer transactional and had become relationship FR (unless you define it that way – but as in my comment on the definition of relationship fundraising, that approach gets us nowhere).

    So the argument about what to call different types of fundraising is an important one, but it takes us beyond the scope of our review. It may be that we ought not call a certain type of fundraising ‘transactional’, because of certain connotations it has, as Craig suggests. That’s a fair point.

    But it doesn’t necessarily mean that type of fundraising we’re referring to is poor fundraising, just because you define it as ‘transactional’. And ‘minor donor fundraising’ would probably be done equally incredibly poorly if it were chronically under-resourced and its targets were very high.

    It becomes even more important to correctly phrase the nature of this terminology question if your end goal is to name it in such as way that it serves a nebulous and ill-defined concept such as ‘saving fundraising’s emotional soul’.

    Otherwise we all risk going round in ever decreasing circles until we disappear up Ken Burnett’s ISBN number.

    • February 18, 2016 at 12:03 pm

      Hi Ian, thanks for the considered response. I believe we are in broad agreement on most points.

      I’ve said before, and will say again, transactional fundraising was a good strategy for many charities when the cost of acquisition was low and further investigation of the point you make above would be really interesting.

      I’d say that even the best transactional fundraising has an ’emotional’ element to it. I’d argue it is very hard to fundraise, build loyalty etc without emotion. Take something like a lottery/raffle – a very transactional type of fundraising. Which charity has grown this income line most in recent years? Macmillan. How have they done this? Spent lots of money, of course, but they also make sure all their branding and messaging has a strong connection to the cause and makes an emotional case to support.

      Charities that you don’y have an emotional connection/relationship with are likely to be the ones you stop giving too when times are hard and when you get a better offer. Sometimes personal connection, i.e. my dad had cancer, therefore I want to give to a cancer charity, trumps bad service etc and people give despite fundraisers and our approach. In my experience donors are very forgiving of the charities they care about.

      Whether this is relationship fundraising or we should use another term won’t probably get us anywhere. What we should be researching and trying to prove is the best way to fundraise that will maximise income, not just for individual causes, but for the sector as a whole. I firmly believe that donor focussed will trump transactional – I think Joe explains it brilliantly below with his comparison of supporter-led and product-led fundraising. This may be a much easier way to explain things!

  4. February 15, 2016 at 11:32 pm

    I also think that having a debate about the use of the word “transactional” isn’t the most important aspect here. “Transactional” certainly has connotations connected with banking and consumer purchases which aren’t uplifting.

    Perhaps we can use a less “loaded” term – “casual commitment” fundraising? I agree that it’s always worth delivering a donor experience which is valued, and encourages the next steps in “relationship formation” (to borrow from the social psychology reviewed in the report). But while the NFP’s aspiration might be “the next step”, that isn’t the reality for plenty of donors. Consider, for example, the classic example of the third party/challenge event donor, whose primary relationship is almost always with the fundraising volunteer. (So much so, that plenty of Australian professionals argue that these people shouldn’t really be categorised as “donors”, except in the basic legal/tax sense).

    The relevance of all this, I think, is that trying to apply “relationship fundraising” as a blanket model may end up mis-allocating fundraising resources. (Note – I am not implying here that Craig Linton’s critique advocates or assumes this “blanket application”).

    • February 18, 2016 at 12:06 pm

      Hi Roewen – I think Joe probably answers your comment and his suggeston of thinking of supporter and product led fundraising (third party challenge being a strong example of product led) really help clarify the discussion.

  5. Joe Jenkins
    February 16, 2016 at 9:19 am

    This is one of those discussions that flirts dangerously with protracted pedantry – but so far I think it’s just about on the right side and it is instructive to delve into the definitions of “relationship fundraising” to hopefully ensure we’re talking about the same things.

    In my own thinking, I’ve found distinguishing between “relationship” and “transaction” less helpful, given the majority of fundraising involves both at some point in some way. Instead, I prefer to distinguish between “supporter-led” and “product-led” fundraising. (Note: I really don’t like the term ‘donor’!).

    As with other definitions, I’m not suggesting one is inherently better than the other. But product-led fundraising prioritises the offer in each communication, focussing on cost, margins, profitability per product. It particularly prizes RoI by product/channel, optimising net income by product, has lots of financial metrics that relate to profitability, and favours shorter term performance (necessary to justify the investment in the product). The supporter is not ignored, but is subservient to the product.

    With supporter-led fundraising, the focus is on the long term value of the supporter. Focus is on satisfaction, loyalty, engagement, trust, experience – with metrics related to the relationship with the supporter. The longer term is favoured as return is understood by the lifetime value of supporters, rather than the profitability of offers/products. The product is not ignored, but is subservient to the supporter.

    So far this century, the product approach has dominated UK fundraising. We’ve often talked about supporters and relationships, but the majority of fundraising programmes have been focussed on optimising product profitability. In my view, the product approach has proven successful in the past – we’ve seen some fast and significant growth at a large number of charities – but it’s effectiveness has peaked and I believe we are entering the era of the supporter. My hope is that the supporter-led approach might ultimately prove far more successful in not just delivering success for individual charities – but just maybe finally growing the overall level of philanthropy in the UK, that holy grail that sees us stopping taking chunks out of each other and increasing our share of people’s total time and wallet. But as the majority of our programmes are geared up to deliver a product-led approach it will take us time to pivot.

    (Of course, we’re referring here primarily to “one-to-many” types of fundraising – major value programmes have adopted supporter-led approaches for some time. But in the UK at least, the Individual Giving programmes have been the key engine for net income growth and come to characterise fundraising overall. In the era of supporter-led fundraising, this may be less the case.)

    So there will always be products, and we’ll want them to be effective and efficient – but moving forward I expect they’ll increasingly serve the supporter rather than the other way round. Incidentally, I think the other 2 great forces, alongside Supporter and Product, that shape our fundraising programmes are Message and Channel – which have been subservient to Product in the past and will need to serve Supporter in the future. I’m tempted to write a parable but that’s probably the point I should stop writing…

    Similar then to Craig’s point about “donor-led” being more relevant than “Relationship fundraising” I think the differentiator that each charity must consider is whether they want supporters to be the primary force that all other elements should serve, or whether product is king. I know what I think!

    • February 18, 2016 at 12:11 pm

      Hi Joe – thanks for the comment. I think this is a brilliant way to describe types of fundraising (has far more clarity than relationship v transactional fundraising) and would have saved me 2,000 words if you’d written it earlier! 😉

      I’ll definitely be using it.

      One quick comment, products typically have a life-cycle and constantly need refining and a new gimmick adding. Belief/value led fundraising has greater potential, although is harder to execute. One of my favourite marketing quotes is from Hugh McLeod. He says ‘ the market for something to believe in is infinite’ – a good way of thinking of donor led fundraising! http://gapingvoid.com/blog/2004/06/27/the-hughtrain/

  6. March 13, 2016 at 8:39 am

    Finally, what is the purpose of “‘good old fashioned’ excellent customer care”? To build trust, commitment and satisfaction? If it is, then I’d argue it is hard to have trust, commitment and satisfaction with something or someone if no relationship exists.

  7. March 28, 2016 at 10:25 pm

    Full disclosure before I go on… I created the phrase “engagement fundraising” a while back. So I am, of course, very fond of the expression.

    Ok. Now that I’ve gotten that out of the way….
    Thank you for this terrific post. I never quite understood why we would want to call it “relationship fundraising.” Consider this, in the U.S., most bequest donors never tell the organizations about their intentions before they die.

    Also, in one study by Melissa Mencotti, 56% of the “matured” bequests (realized dollars) came from people who not only failed to notify the NPO of their plans but were also NOT assigned to a fundraiser at any time. In other words, these people were not even on the organizations’ radars.

    In the same study it seemed that “assigning staff” to prospective donors actually harmed the potential for bequests. And, also, she found that 20% of bequest donors were first time donors… seemingly having no relationship with the charity whatsoever.

    In the book Belief and Confidence by Ronald Schiller quotes many philanthropists saying that in many cases they don’t want a relationship (but I believe they really mean that they only want a relationship with the organization’s mission and brand— not a real person).

    Now, having said all that, I believe that engagement is the key. What do I mean?

    The only way someone will donate is if they’ve been touched in some way— engaged.

    That engagement must be positive. It must provide value to the donor in some way.

    If it does, the result will be terrific for the donor, the facilitator (the organization), and the beneficiaries of the gift.

    More on “engagement fundraising” and how it works can be found here: http://imarketsmart.com/introducing-engagement-fundraising-future-marketing-nonprofits/

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