Where To Find All That Money Your Nonprofit Is Losing

4 min read · 7 years ago



You’re grocery shopping on a tight budget. You’ve got everything you need and a few things you want. You approach checkout knowing the $40 in your pocket will just about cover everything. But when you come to pay you find you’ve lost $20.

Do you:

  • Look for the missing $20 (you know you had it a moment ago)?
  • Decide to do without half of what you intended to get?

Option one, right? So why when faced with falling, or at best flat net income do so many fundraisers simply lower target instead of searching for the huge volume of money we’re losing year on year? If we wouldn’t go without ourselves, why do we willfully make that choice on behalf of those whose lives we’re supposed to be saving? We owe it to them to look for all the money lost on our watch. But where to start looking?

Well, so often the thing we’re looking for is right in front of us, and this is no different.

Take your current ‘supporter journey’. What was the thinking behind it? Chances are you sat in a series of meetings with an agency guru. You studied colourful charts of giving behaviour. You minutely analyzed at what point people dropped off your file. You did a comprehensive creative audit to identify messages that had been popular. Then out came the white board and together you mapped the perfect journey. Yes, it felt an awful lot like the one you did last year (and the year before, and very similar to the year before that), but this time you were going to have ‘big vision’ and be ‘innovative.’ You were going to use the latest ‘insight’ to re-segment the data. You were going to tell ‘stories’ and be ‘emotional.’ Oh, and you were going to add a few ‘thank you’ messages along the way to ‘surprise and delight.’

How’s it working so far? I’d be surprised if you were delighted!

Or how about that new creative test that promised so much but didn’t deliver? Are we really surprised that it didn’t? After all how often do you ever beat the control? Why do you think the latest thing you’re being sold is ‘dare to fail’? The people selling it know that’s exactly what it’ll do; this is the only angle left to pitch it!

And of course there’s that loyalty program you were told would massively reduce attrition. How’s that working out? So many big name charities that have sunk hundreds of thousands of pounds into agency led loyalty schemes only to see attrition get worse! It’s absurd to think that throwing in a random, insincere ‘thank you’ letter, or clumsy rambling phone call is suddenly going to solve the problem. Maybe you’ll get a little bump, but a little bump isn’t going to save the world.

What do these expensive, wasteful, time consuming exercises have in common (apart from not working)? They’re all trying to influence behavior by studying behavior. Now it may be fundraising blasphemy to say this, but fundraisers do not and cannot directly impact behavior.

Okay, take a breath and read on…

No matter how they’re selling it to you, studying behavior in isolation only leads to the idiotic premise that your best donors are your best donors because they’re your best donors. Where do you go from there?

It doesn’t matter how complex you get with data analysis. It doesn’t matter how far back you can track. It doesn’t matter how much extra information you overlay. It doesn’t matter how many intriguing patterns you find; “Wow, 52 percent of our donors drop off after three months and 19 percent of them did so on a Wednesday. Now if we overlay this socio-economic modelling we can see that 37 percent of them wear red socks on Wednesdays, 23 percentof them are left handed, two percent of them have a peanut allergy, and I’m distantly related to one of them.” Fascinating. Useless. No wonder nothings having an impact!

‘Big vision’ is great but it doesn’t work if it’s grounded in where you want donors to be without knowing where they actually are. Data analysis is great, but it doesn’t work if you are analysing the effect and not the cause. Innovation is great, but it doesn’t work if it’s only based on your best guess. Storytelling is great, but it doesn’t work if you don’t know which stories to tell.

So what can we do? Focus on the thing that we can directly impact; how a donor thinks and feels about us. It’s intuitively obvious; the human decision making chain is feeling, thought, action. No one disputes this, so why does no one act on it? Because until recently no one knew how to measure and influence donor attitudes. But that’s all changed. The code has been cracked and is freely available. Charities that use it have seen staggering improvements in lifetime value of up to 131 percent and greatly reduced attrition.

Fixing this simple, basic flaw that undermines everything we do is the key to improved lifetime value and retention.

It’s where you’ll find all the money you’ve lost and a load more you didn’t even know you had.

This article was syndicated from Business 2 Community: Where To Find All That Money Your Nonprofit Is Losing

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