The last six weeks of the calendar year are make or break time for nonprofits.
In fact, nearly 30% of nonprofits raise 26-50% of their annual fundraising in November and December – when folks are feeling their most grateful and generous. So you really want to be firing on all cylinders as the end of the calendar year approaches!
And the best way to assure success is to get inside your donors’ heads. Center your annual fundraising appeal strategy on what works best for your donor, not what works best for you.
Donor-centered fundraising is about as foolproof as you can get. Because whenever a donor prospect opens up your appeal, the first thing they’ll involuntarily ask themselves is WIIFM (What’s In It For Me)?
To be a donor-centered fundraising expert, you must:
(1) Know what donors love and desire, and
(2) Offer these lovable, desirable things to them.
Got it? It’s that simple; yet very few organizations do this successfully.
Instead, they ask donors to do things they don’t want to do. They make them guess at how much they should give. They offer limited giving options. And they make folks wonder where their gift will really be applied.
Wrong, wrong, wrong.
Today we’re going to talk specifically about three things donors love so you can plan ahead to do your darnedest to give them these things:
- A big win
If you want gifts you must give them!
Think of these three things as ways to sweeten the giving pot and give folks just that little extra nudge – an added benefit – that inclines them to say “yes” or even “heck, yes!”
First, let’s look at some research that backs up the notion donors love these three things. Big time. So big, in fact, that if you heed this research you can dramatically ramp up your fundraising this year
What Type of Appeal Has Supercharging Power?
Behavioral economist, Uri Gneezy, led a study in which 40,000 donors were randomly sent one of four different appeals:
- A simple ask for end of year donations.
- An appeal to build on seed funding of $10,000.
- An appeal saying donations would be matched dollar-for-dollar up to $10,000.
- A no-overhead appeal saying the donor’s gift would go entirely to programming; an existing $10,000 in funds would be used to cover overhead.
One simple ask. Three with potentially appealing, donor-centered benefits.
Which appeals do you think worked best?
I’ll give you a hint: The bottom performer was the simple appeal.
That means if the appeal you’re planning for your year-end fundraising has none of these donor-beneficial bells and whistles, you may want to rethink.
Plain vanilla (the control) is just that. Some people love it; more people are okay with it, but not as a passionate choice.
Let’s look at what you can do to offer donors flavors they adore – so much so they’ll be willing to even pay a premium to get what they love!
3 Things Donors Love When Making Donations
1. To leverage their money.
Leverage. People can’t resist it. Folks love to S.T.R.E.T.C.H their dollars.
Which is why the ‘Matching Grant’ outperformed the simple ask.
There are three dynamite ways to employ the leverage strategy:
(1) CHALLENGE GRANT
A pitch to “double your money” has a lot of appeal.
Interestingly, there’s research showing that tripling or even quadrupling your offer won’t result in any more increased giving. The thing that triggers the giving is the fact of the available leverage, not the amount.
You still may have time to secure a matching (also known as a challenge) grant. Here are some ways to do this:
- Ask your board if they’d like to contribute jointly to create a match.
- Ask a current major donor if you can use their gift as a challenge.
- Approach a business who may like the publicity you can offer by associating them with the challenge (if it’s too late to do this for this year, put this on your calendar to ask in Q4 of this year or Q1 of next year – a time when many businesses do their budgeting and planning).
- See if a foundation donor might consider increasing the size of their grant to help you leverage their support and build your individual donor base (this is a good strategy for funders who want you to demonstrate you can become self-sufficient moving forward, and don’t want you to rely on them indefinitely).
This works for any nonprofit that can buy goods and services more efficiently than an individual could. For example, a food bank can buy a lot more food with the donor’s dollar than the donor can, because much of their food is donated. “Your $1 = three meals.”
(3) RIPPLE EFFECT
The key here is to demonstrate that helping one person also helps multiple people. Perhaps an entire family. Or an entire village. “Build a well to serve a village of 300+.”
2. To be part of a winning strategy.
Winning. It feels good. Again, it’s hard to resist.
Which is why the ‘Seed Funding’ outperformed both the simple ask and the match.
No one wants to jump on board a sinking ship. Or try to pee into the ocean to raise its level. It’s just not a ‘feel good’ thing to be doing. It seems small, meaningless and token. In other words, a losing strategy. On the other hand, if you appear to be well on your way to success, that’s an opportunity to be part of a winning strategy.
Here are two ways to make donors winners:
(1) SEED MONEY to Complete the Project
When you can tell folks you’ve already got seed funding, and you need their support to put you over the top, this is an appealing investment proposition.
When all you do is wring your hands and talk about the dire need, you paint a depressing picture. Who wants to throw their hard-earned money down a black hole? Not enough people!
The seed money appeal taps into one of Robert Cialdini’s principles of influence and persuasion known as “social proof.” Because your donor feels someone else has made the decision to invest with you, this short-cuts their own decision-making. This is the principle at play when you look to Yelp to decide which hotel to book or which auto mechanic to hire.
The seed money appeal also tells your donor their gift won’t just be a drop in the bucket. They know they’ve a very good chance of seeing the desired impact of their philanthropy (which is why they’re giving) come to fruition. They know they’re not in this alone.
(2) THERMOMETER to Complete the Project
Fundraising thermometers are a visual way of demonstrating to donors what their gift will mean. They can see how their gift will get you close to your goal, or even put you over the top!
In addition, people can see they’re part of a larger community of like-minded folks. We’re wired towards community; the drive to join is deeply ingrained.
3. To be in control of how their money is used.
Control. This is perhaps one of human being’s deepest needs. It’s rooted in our basic survival instinct: if we can control our environment, we’ve a better chance of success.
Which is why the ‘No Overhead’ outperformed every other type of ask in the study.
There are two ways to make an appeal that offers a donor control:
(1) NO OVERHEAD appeal
First, a confession. It pains me, deeply, to tell you how much this strategy seems to work. I don’t want it to work. I wish everyone understood overhead. You can’t operate without staff. And facilities. And toilet paper. And marketing. And fundraising. Which is why I’ve been on a soapbox for years warning about the “overhead myth” and how it leads to a nonprofit starvation cycle. I hate how nonprofits collude in perpetuating this myth, by touting how low their overhead is and ignoring the fact this may be actually stunting their growth and effectiveness.
Nonetheless, this “insider” perspective ignores the fact that “outsiders” (donors) don’t really want to give money to pay for the CEO’s salary. It’s not necessarily that they don’t understand the need for overhead (although sometimes this is true – and nonprofits should be truthful about their need for, and their costs for, overhead).
The no-overhead letters worked in every regard. Not only did they raise triple the amount of the simple ask letter, they also brought in significantly more donors.
Interestingly, a related experiment found donors were unwilling to contribute to a charity when they were simply told it had high overhead. However, if they were told the overhead had been “covered” by another donor, the existence of this overhead no longer served as a deterrent. In other words, overhead is perceived as okay – “just not in my neighborhood!”
Of course some of your major donors, including board members, may well understand the necessity of overhead. Feel free to ask these folks for unrestricted gifts so you can apply them to overhead and make room for those who prefer to more specifically designate their giving.
Which brings us to…
(2) SPECIFIC PROJECT appeal
Even if you don’t go the overhead/no-overhead route, I strongly advise enabling designated (aka restricted) giving.
In my practice over three decades, I found approximately 50% of donors preferred to give this way. My evidence is anecdotal, but often these donors made larger gifts.
If you can tap into your donor’s specific passions, they’ll give more passionately. It’s just common sense. Here are some ways to do this:
- Ask for a specific program or project.
- Segment your mailing list and tailor your appeal to specific donor interests.
- Include different options for gift designations on your remit piece and donation landing page.
It’s not that difficult to divide your operating budget into a range of funding opportunities that, essentially, combine to be the functional equivalent of unrestricted operating expenses. You’re just taking the whole and putting it into different packages. When your donor sees a package that attracts them, they’re more likely to open it than if you didn’t take the time to wrap up their gift.
Yes, offering donors investment opportunities is a gift.
What can you do to incorporate something donors demonstrably love into your appeal this year?
1. Can you offer leverage via:
- Challenge grant
- Bargain offer
- Ripple effect offer
2. Can you make your donor a winner via:
- Seed money appeal
- Fundraising thermometer (Download a free template)
3. Can you give your donor control over how their gift is used via:
- No overhead appeal
- Options for earmarking gift
Pick one or more donor benefits to wrap up your appeal with a bow your donor is likely to find enticing. [See “Annual Appeal Checklist” for more annual appeal tips]