Relationship fundraising and marketing: friends or foes?
The dispute about relationship fundraising has been raging for years and seems to go on and on. Surely now it is time to step back and examine the different arguments for and against because surely we all just want to do the best we can to make the world a better place.
- Written by
- Roewen Wishart
- December 04, 2014
When Ken Burnett published his 1992 book Relationship Fundraising, naming and codifying ‘donor-centred’ fundraising, it was a reaction against the perception that direct marketing and advertising methods were being used as ‘blunt instruments’. ‘Blunt’ as in not responding to the variation of donors’ preferences … and in beating donors over the head with an organisation’s wants and requests.
There is some conflict in Australian fundraising practice, and indeed all over the world, between people who take an exclusively relationship fundraising or marketing-driven approach. It underlies some of the conflicts between boards, chief executive officers and fundraising managers, as well as within fundraising teams. It manifests as arguments about ‘being too aggressive in our appeals’ or ‘being too conservative and ignoring the data’. What these opposing voices don’t realise is that they are on the same team.
Beware a simplistic view of relationship fundraising…
The concept of relationship fundraising had fresh exposure in July 2014 when Burnett wrote in his blog that ‘we can’t market our way into the hearts, minds and wills of our donors’. He advocated for an approach ‘based on shared emotions, truth and commitment’, opining that ‘commercial transactions’ should be viewed as the outcome, not the purpose of relationship building.
This gives weight to donor choice, longevity of donor relationships, measuring and seeking lifetime value and to quality over quantity (all other things being equal). But some critics understand it as ‘whatever makes each donor feel friendly to the organisation is right and if we behave warmly to our donors they will give without us needing to ask much’. And this is a caricature.
It is a misuse of the idea of ‘relationship fundraising’ to design a fundraising programme without sufficient attention to strategy, goal setting, measurement and evaluation; to be squeamish about asking for money in major gifts fundraising; or in direct marketing to stick with unproven habits, for example ‘not mailing/emailing our donors too often because we know they don’t like it. And it’s a misuse to think that relationship fundraising means doing what ‘public opinion’ or ‘donors in general’ say donors want. Rather, it’s about acting on what individual donors actually do or choose.
Relationship fundraising does not mean abandoning or neglecting how we ask for money. It does mean that the transaction is the result, not the goal – and being careful with steps that reduce donor choice or favour quick returns over higher long-term returns, even where there is short-term cost.
How does this apply in practice? An example is what I have done in several different organisations – offering new donors a chance to opt out of receiving telephone calls asking for a regular gift (whether or not this was mandatory due to national privacy laws). This had a short-term opportunity cost (reduced volumes, increasing cost-per-call and lead times) and a long-term cost (reduced conversion, since probably some who opted out would have converted if called). My reasoning was that the overall benefits of actively offering donors a choice, including building trust, were greater than the costs.
Another example is creating ways for donors to witness or participate in the organisation’s work. In a major gifts campaign I worked on for Bush Heritage Australia during 2005-2007, which raised $22 million, 10 of the 12 donors made their pledge only after visiting a conservation reserve. So for these donors, a quick solicitation would probably not have worked. What did work was enabling all the donors to make their own evaluation of the people doing the conservation work and to find (or confirm) an aspect of the organisation’s work that they truly valued.
… And avoid an extreme notion of marketing principles
There’s a similarly unflattering understanding of a marketing-driven approach, which is: ‘It doesn’t matter who is offended as long as donors in aggregate keep giving more’. You might recognise this characterisation from reluctant CEOs or board members, or team members objecting to new fundraising practices. But, again, this is a caricature.
Actually, Ken Burnett’s first edition of Relationship Fundraising drew on marketing principles to describe a well-functioning approach to fundraising by advocating more attention to segmentation, formulation of a ‘unique reason for giving’ (the nonprofits’ version of a unique sales proposition) and ‘constant testing of every aspect of direct mail’.
And, if we re-visit some of Burnett’s desirable principles mentioned earlier, it turns out that a marketing-driven approach produces similar results. Donor choice? One benefit of digital capability is that content and choice of channel choice is a given. Lifetime value measurement used in decision-making? It’s been substantially perfected by direct marketing evaluation methods and use of business statistics. Ways for donors to witness or participate in the organisation’s work? High volume participatory events are financially feasible by direct marketing recruitment and fundraising (particularly online), and digital channels offer previously unavailable means of engagement.
Both approaches call for similar skills
In the same blog, Ken Burnett devotes fully five of his ‘nine pillars’ to personal qualities of people in organisations (staff in particular). He states that a relationship-fundraising approach requires organisations:
- To have donor-based, emotionally passionate leadership.
- To build unity around an ambitious dream and robust emotional heart.
- To look, sound and act like people who are really going to change the world.
- To tell stories and communicate the truth powerfully and well.
- And to have inspiration, because fundraisers raise more and donors give more when they’re both motivated.
All these are characteristics shared by people from a marketing background. Indeed, it’s usually a big reason they work in the nonprofit sector. It’s a slur on good marketers to imagine that they are ‘all about the numbers and nothing to do with people’. I believe the best direct marketers do well precisely because they create content that is emotionally genuine and communicates an organisation’s ambitious dream. Donors see right through emotional falseness.
Conversely, it’s a slur on good events, major gifts and bequest fundraisers to imagine that they are ‘all about touchy-feely stuff and nothing to do with strategy or results’.
So I hope I have established in your mind that there’s a false dichotomy between ‘relationship fundraising’ and ‘marketing’. Next time there’s unproductive conflict within your organisation about ‘which approach is right’ turn to this commonality.
This was first published in Fundraising & Philanthropy Australasia Oct/Nov 2014 and is slightly revised.