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Evolving a Transaction into a Relationship

[fa icon="calendar"] Jul 30, 2018 9:00:00 AM / by Erika Cole

When people think about fundraising most often what comes to mind is the latest dinner or event they attended, or the latest auction or raffle ticket they bought, or a challenge they participated in. What would be defined as “traditional forms of fundraising”. The charitable sector has created many methods to get potential donors interested in their cause, get them in the door, and to get them to donate. Methods that have allowed them to collect funds from multiple donors at one time. Methods that incentivize and encourage them to give. However, a lot of the time, these methods serve this one purpose and fail to create a journey where donors feel inclined to donate again. So while they may have purchased that $100 plate of food, or “donated” $30 in exchange for a t-shirt, unless there’s journey or path for them to follow, the odds of the organization ever converting these types of donors are low. They probably aren’t interested in another shirt or pricey meal, and they probably feel like they’ve already done their part by donating the last time around.

That’s not to say that transactional donors hold absolutely no value. The issue lies with organizations who put too much emphasis on this form of immediate ROI without the strategy, resources, and processes in place to convert and retain these types of donors long term. There’s so much pressure for gift officers to make a number and increase revenue that their margins are usually overlooked.

Ask just about any charity and the answer would probably be universal: they would rather a $100 straight donation versus a $100 in raffle tickets purchased.

In the minds of these types of donors, the value-exchange was completed the moment their money was passed over and something was given to them in return - their initial interest was driven by what they would receive. Institutions on the other hand, sometimes mistake these transactions as an indicator of someone who intends on becoming a long-term donor, and get confused and discouraged later when there’s nothing but radio silence. In fact, the average donor retention rate in 2017 was only 45.5%.

This is not to say that transactional donors don’t care about the cause of a nonprofit, they just aren't framing it the same way the organization is. Take the example of the infamous Ice Bucket Challenge. They undoubtedly care about a cure for ALS being found, but are they committed to the cause? Are they following success stories? Are they asking questions? Reaching out? Are they frequently looking for new ways to get involved? Or do they feel like they’ve done all they needed to do, and that’s as far as this relationship with the organization goes?

Alternatively, when a donor is actually committed to an organization, the dynamic shifts drastically. For any charitable cause, the ultimate goal is to have them and their donors achieve a shared vision. When this occurs, donors trust the institution, they know where their donations are going, they’re more forgiving if mistakes are made, they recommend them to their peers.

They donate, and they don’t stop.

They become monthly donors, annual donors, they become so attached they (sometimes) end up leaving huge portions of their estate to a cause. But how can they be identified? Where are they found? Can a transactional donor be developed into something more?

It begins with charities taking another look at the very bottom of their pipeline and having the resources in place that can really elevate them to the next level. If they are able to properly identify and nurture these “one-time donors”, they can become something much more.

In order to efficiently and effectively form and maintain these relationships, it’s crucial that an institution have access to some form of software or service that can make sense of all the information and data coming in from these raffles or events. In this day and age, data truly reigns supreme. As more businesses (and nonprofits) go digital, the more crucial it becomes to leverage and use data to get ahead. It’s easy for fundraisers to get overwhelmed when they have thousands and thousands of constituents in their database and nothing available to help them make sense of it.

However, with the proper tools in place, there are some (really) simple things gift officers can do to aid in this development:

Say Thank You

It’s interesting how many charities so willing take a donation without so much as a thank you note. Now while on a lot of donation portals, the thank you message may appear as soon as a donor presses “Donate Now” or “Submit”, and during a event or dinner, whoever is emceeing the event is sure to thank all the attendees, but that’s not the same. Send another thank you via email, make it personal, and send it immediately. A personalized thank you letter after the fact says “We’re still thinking of you taking the time to support us, it didn’t go unnoticed”. This doesn’t just apply to the first time they’ve donated, either, a personalized thank you note should go out every single time.

Communicate their Personal Impact and Follow Up with Other Ways to get Involved in the Future

This is completely separate from the thank you. Organizations need to follow up in a timely matter (i.e. wait no more than a couple weeks - ideally, keep it within a months time) highlighting the impact their last donation made. Make it front and center, tell them exactly where their money went, and how much it helped the cause. Give them a heads up of other events in the future, get them thinking about the organization and additional ways to get involved while their last donation is still on their mind. They’ll feel good about making such a difference and be more inclined to want to participate again.

Use Emails to Target

The next follow up should be less about galas or “transactional” donations. Shift the focus and context of the email explaining what a (slightly larger) donation will do for the organization and reiterate how grateful everyone still is for the previous gift they gave. To make it even more impactful, give them an inside look at the things to come in the organization. What big projects are on the go? How is the institution looking to expand in the future? To serve a better purpose (which will be explained in the next step) give at least two distinct stories. Link these stories or projects to different landing pages/donation portals and (with the use of some kind of software) keep track of who goes where.

Segment Donors to Develop Relationships

Through tracking the data on who clicked what on the previous email, an organization will now have a better understanding of what engaged a particular donor to get involved with them to begin with. What does this mean moving forward? It means an organization can segment these donors and begin sending them messages that are much more tailored to what they actually care about. By learning what resonates with these people, an institution can drive home the bases of a relationship and have their constituents feel that they’re making a real difference about the specific thing they really care about. The conversation becomes less about asking for gifts, and more about cooperation and working toward a shared goal - and that’s how a true relationship is born.

Fundmetric uses machine learning technology to instantly study the data institutions are collecting on their constituents, making it the ultimate relationship building tool. Donor lists are always being refined and updated based on where donors go on an organization's website, or what they’re clicking on in emails or newsletters. This enables nonprofits to truly understand what resonates with who so they can segment accordingly. With Fundmetric, every conversation is tailored to the individual, creating the real kind of one-on-one relationship charities need to continue to grow.

Topics: machine learning, charitable data, charity, data capture, data analysis, predictive modeling, data science, charities, non-profits, als, ice bucket challenge, major gift, transactions

Erika Cole

Written by Erika Cole

Erika Cole is a recent marketing graduate from Dalhousie University in Halifax, Nova Scotia. She is currently the Community Manager of Fundmetric, and passionately supports animal rights and child welfare initiatives.