Passion Trumps The Donor Pyramid
March 24, 2015 Patrick Sullivan
Tom Gaffny was giving Jamie Hyneman and Adam Savage, hosts of the hit television show Mythbusters, a run for their money during the Direct Marketing Association Nonprofit Federation’s 2015 Washington Nonprofit Conference. Gaffny, who owns an eponymous fundraising consultancy in Wellesley, Mass., busted some myths of his own during the session.
First up was the idea that the donor pyramid tells fundraisers everything they need to know. “We now know how to rank donors. But there’s one thing that’s missing: how does she rank you?” said Gaffny. “We have profile data and the pyramid, but we don’t have a passion pyramid.”
One of Gaffny’s clients launched a planned giving campaign. “Rather than rank attributes and giving, let’s select high passion people who did not meet the selection criteria,” Gaffny told the client. The response rate for this segment was three times higher than overall. “If we just based (segments) on our pyramid, we never would have selected these people and would have left money on the table,” he said.
Second, the notion that you have a donor base is flawed. “You don’t have a donor base. You belong to the donor,” said Gaffny. Your organization can control what to send, when to send it and by what channel. The recipient, however, has all the power: over if and when to open your package, when to read it, how to respond, how large or small of a gift to send.
Language reflects nonprofits’ attitude. “We say we ‘acquire’ donors, like they’re indentured servants,” said Gaffny. “We don’t ‘befriend’ them, we don’t ‘engage’ them, we don’t ‘create a relationship.’ If they leave us, we ‘recapture’ them. After we recapture them, we put them through a conversion program.”
Gaffny recounted an organization where fundraisers sent an appeal with the premise of ‘Make one gift and we’ll never ask for another.’ This works, he said, “because it tells the donor that you’re in charge. It’s all about you. The donor’s need for control is that deep.”
One tactic many fundraisers use that really says to the donors that they are valued: multiple stamps. “This works because it’s one of the few things we ever do for the donor,” said Gaffny. “It’s about their convenience, ease and pocketbook. The one tactic that makes it easy for the donor is the one that works so well.”
The third myth, that acquisition is the key to growth, is unique to the nonprofit sector. “We might be the only industry that doesn’t view retention as the key to growth,” said Gaffny.
Gaffny put out a hypothetical example of a charity that had to make a choice four years ago of either to invest heavily in acquisition and keep retention investment flat, or cut acquisition by 25 percent and invest in multi-year retention to gain a 2 percent lift. “I would contend that (investing in multi-year retention) would give you as many or more donors, more multi-year donors and far more revenue,” he said. “In terms of revenue growth, the myth of growing our way out of something by acquiring more $15 donors isn’t the case.”
Gaffny delivered more bad news to the audience, in his fourth myth: You are not doing everything possible to cultivate major donors. “Most major donor mailing programs consist of first class postage, and that’s about it,” he said.
Focusing on major donors makes good business sense. “What’s easier? Convincing one person to do something, or convincing 500? Getting a $10,000 donor to double her gift, or 500 $20 donors to double their gifts? We spend most of our time on the second when it should be the first,” said Gaffny.
“The top of your file is a treasure chest, but in too many cases they’re treated like everyone else,” he continued. The main differences are they get first-class postage and organizations actually mail to major donors less than other donors.
Food for the Poor, based in Coconut Creek, Fla., sent a card when Gaffny’s granddaughter was born. “How are you going to compete with that?,” he asked rhetorically. “I feel like they, through their actions and phone calls, have demonstrated a sincere degree of thanks for our giving. Are they helping themselves? Of course. But while they’re out there getting 16 people to sign a card, what’s your organization doing?”
Finally, direct mail is not going anywhere. While 91 percent of Americans use email daily and it’s a more effective way to acquire donors than social media, direct mail still has a prominent place in fundraising.
The older donors, the ones who respond to direct mail, “are going to be around for a while,” said Gaffny. Life expectancy charts show that a 65-year-old could live to 85, and a 70-year-old to 87. “We need to stop thinking direct mail is dead or dying,” said Gaffny.