Refresh And Reinvigorate Donor Relationships

January 21, 2016       NPT Staff      

Relationship fundraising can “refashion itself” by creating a sense of identity for donors with charities they support and moving donor relationships from transactional to communal relationships.

Those are among the recommendations to “refashion” fundraising in a new study released by Rogare, the fundraising think tank at Plymouth University’s Centre for Sustainable Philanthropy. The study was conducted by Rogare Director Ian MacQuillin, Professor of Fundraising Adrian Sargeant, and Jen Shang, philanthropic psychologist and director of research.

The study also identified how current theories of relationship building and maintenance from social psychology could be transferred to donor relationships.

Instead of transactional relationships where partners keep track of reciprocated costs and benefits, organizations could move donors to communal relationships, “where partners forget about costs and benefits and instead care about each others’ need sand wants as if they were their own,” according to the study.

What donors want from engaging with a nonprofit will change as the relationship progresses. Relationship fundraising can be seen as a choice the organization makes whether to deliver its donors’ needs as a good or as an end to deliver a good to the beneficiary.

Fundraisers should evaluate each situation to determine which approach is more appropriate, relationship fundraising or the more “transactional” form of fundraising.

Commitment, trust and satisfaction are proven to drive both customer and donor loyalty and through that lifetime value, each better indicators than metrics such as Recency Frequency Value analysis and annual income targets.

Relationship fundraisers did not feel they had the support or engagement of their colleagues or board to deliver relationship fundraising, which included providing the budget needed to move beyond short-term transactional techniques. What they described were failing or failed relationships with their peers and colleagues. Many respondents said the solution would be to create a ‘culture of philanthropy’ at an organization in which relationship fundraising could grow.

Most fundraisers were clear on the need to build relationships with the donors but few suggested the need for a similar focus on building relationships with other stakeholders, such as board or fundraising agencies, that enable donor relationships to happen.

The report suggests that one possible “refashioning” of relationship fundraising could be to adapt the notion of “total relationship marketing,” which focuses on building relationships with all stakeholders, including media, suppliers and regulators, that enable organizations to develop a relationship with their customers.
“Total relationship fundraising” would likewise attempt to foster, build and maintain all necessary relationships, including better relationships with fundraising agencies.

“It’s absolutely essential that relationship fundraising draws on the latest relevant theory to continually refresh and reinvigorate the ways it can deliver the best possible experience for the donor,” said Ian MacQuillin, director at Rogare. “This has been lacking over the past 20 or so years but is imperative to ensure relationship fundraising does not stagnate in the future and become little more than a fundraising ideology,” he said.

“Fundraisers must think beyond the donor and start improving all those relationships that are currently impinging on the donor relationships, particular with CEOs, board and their supplier agencies,” MacQuillin said. “The onus is on fundraisers to build these relationships to foster the culture of philanthropy, as it seems unlikely that the impetus will come from elsewhere,” he said.

“Fundraising will not be effective if we continue to treat our donors simply as computer records within gift categories,” said Jay Love, co-founder and CEO of Indianapolis, Ind.-based Bloomerang. “Those of us involved with this project believe the renewed focus on relationship fundraising will be immediate and long lasting.”

The study was funded by donor management software firm Bloomerang and fundraising agency Pursuant.