5 Principles to Help Open Loop Organizations Find More Donors

In my previous guest post I explained the difference between open loop and closed loop organizations. Both types of organizations have unique challenges in fundraising. Today I want to drill down into the five principles that help open loop organizations find more donors.

The outstanding benefit of the open loop model is that virtually anyone with the financial means to support you is a donor prospect. While a closed loop organization is limited in large part by the number of people they impact, no such limit exists in the open loop model. There is little chance someone will give to support a church they don’t go to, but just about anyone may sponsor a child. Growth is not limited by the extent of the outreach.

The downside to the open loop model is that donors rarely give to an organization they don’t appreciate or understand. They require some form of engagement or experience with the organization. Some level of understanding is needed before they will commit their financial support. This requires that an “impression” be created, and impressions are expensive.

Here are five principles that can help open loop organizations develop an effective acquisition strategy to find more donors.

1. BE INTENTIONAL ABOUT IMPRESSIONS

The most expensive part of the acquisition process is the cost of the impression. In marketing, an impression is created and counted every time an advertisement is seen. In a nonprofit context, impressions come in the form of ads, a direct mail piece, a presentation to an audience (which would represent multiple impressions), an experience with the charity, or some other point of communication.

While closed loop organizations are able to save the expense of creating acquisition impressions (because prospective donors are reached every time they implement their mission), open loop organizations are required to invest in impressions to reach prospective donors.

The quality of the impression, then, has everything to do with the success of the acquisition campaign. Impressions are needed with people who have the ability to give, are sympathetic to the plight of the beneficiaries being impacted by the organization, and are invited to respond in a way that minimizes friction while still facilitating ongoing communication and cultivation. Text-to-give may be an easy way for new donors to give to a cause (virtually frictionless), but if the organization doesn’t end up with the donor’s name and contact information, the gift is likely to be an episodic, transactional event and not the start of an ongoing donor relationship.

2. INVEST IN IMMERSIVE EXPERIENCES

The more immersive the experience with the organization, the more likely the impression can result in a donor relationship. Ideally, the organization should get out of the way. Being a middle-man doesn’t help; the prospective donor knows the organization is important to the process. The greater need is to create a direct connection, a personal experience between the donor and the beneficiary.

Strong impressions are created by bringing the prospective donor to the work, such as observing relief work firsthand, or volunteering time serving beneficiaries.

When donors are unwilling or unable to go to the beneficiary, the beneficiary needs to be brought to the donor, and that experience needs to be as immersive as possible. I’ve seen organizations use web-based tools to help donors hear directly from the beneficiary. Compassion has a mobile “experience” in the form of a semi-truck they drive around the country and park for weeks at a time. That experience incorporates the sights, sounds, and smells consistent with the children donors sponsor.

Pictures are good. Video is better. Giving the donor the ability to touch, hear, see, and smell something firsthand are best.

This is why stories are so important. While it is important to communicate vision, we need to connect the donor intellectually and emotionally to the needs of the beneficiary. We struggle to wrap our emotions around the struggles of 100,000 people, but we can quickly be moved to tears through the vicarious experience of a single individual.

Because such interactions are brief, impressions hosted by people donors trust and respect are vital. Such peers bring influence which is critical to making a quick decision and taking action. Such engagements should be interesting, perhaps ever entertaining. While the work of most organizations is serious, it doesn’t mean the educational process should be dull or boring. While I would never advocate that we make light or fun of beneficiaries and their needs, Pursuant has had great success in finding unique and interesting ways to educate prospective donors concerning the needs our clients are addressing.

3. IMPROVE MESSAGING WITH DONOR FEEDBACK

Another quality common to effective organizations: they survey their existing donors to discover and confirm the messages they use to best communicate their work in a way that resonates with donor interests.

We recently conducted a study on behalf of a client and discovered that donors resonate more with the domestic work of the organization than their international efforts. This may sound counter-intuitive, but that’s exactly why such surveys are critical. While the client can and should continue talking about their international reach, a majority of the stories they tell should focus on their domestic efforts.

What assumptions are you making about what you think your donors care about most? Are you sure that’s the way they feel? Does it make sense to conduct a quick, digital survey to confirm your assumptions?

4. MAXIMIZE THE ASK

The most effective, immersive experience cannot overcome a poor strategy for asking for and securing commitments and gifts. I’ve seen too many organizations provide outstanding, in-person experiences, only to fall short inviting people into a relationship, asking for their support, and securing gift information immediately. They ask at the beginning of an event before the donor has experienced the organization, or they ask at the end and hope the donor will go home, go online, and fill out a giving form…or they never ask at all, assuming the prospective donor “knows we need her support.” Hogwash.

The ask should come on the heels of seeing what the organization does. You should be clear about the use of funds and the financial goal. Use price handles if possible (“$10 covers a meal for a family of four”). Make it as easy to commit to a recurring gift as a single gift, and help the donor understand what a recurring gift will accomplish.

If the ask is occurring at an actual event, the person making the ask should be recognizable and trustworthy. Provide a testimonial from a peer donor. Have your board present to convey their support. Direct everyone’s attention, with no distractions, and walk the donor through the response process and give them time to fill it out. Capture contact and giving information in the moment and make it as easy as possible. Donors usually know right away whether they intend to give. When you give donors time to “think about their response” they may have every intention of going home and taking action. But best intentions are lost amidst the demands of everyday life. The experience itself is often insufficient impetus to follow through later. Collect responses at the event.

5. LEVERAGE INTELLECTUAL PROPERTY

Donors are most likely to give to an organization or institution when that organization has personal meaning or value to them, and next to people they know (friends, family members), and finally to people they may never meet. One way to illustrate that value is this:

It takes a mature donor to give purely to serve the interests of “mankind.” The demographic segments of “Boomers” and “Matures” were/are more likely to give purely in the service of mankind than the Gen X population. Certainly, a lot of Gen X donors give to make a difference in the world, but our experience is that those gifts are often motivated by a sense of personal mission and/or the sense of personal identify they get from being connected to a cause or organization.

It isn’t surprising, then, that acquiring mature donors willing to give purely to serve mankind is become more and more difficult. Indeed, our surveys increasingly show a desire donors have to meet needs in their own country (Mine) over those that exist internationally (Mankind). So how should open loop organizations respond?

Pursuant’s challenge to open loop clients is to consider how to leverage their intellectual property not only to assist its beneficiaries, but to benefit their donors as well. What have you learned in the service of your beneficiaries that might be valuable to your donors? How might you educate them or apply your unique skills to assist them wherever they are?

For example, if yours is a humanitarian organization addressing hunger, how might you educate your donors about the challenge of hunger—especially hunger in their community, or teach them something about food production, or helping people be self-sufficient? How can you help them teach their kids about hunger? How they might respond to the hunger needs present in their hometown? What have you learned through research? What are the trends connected to your cause? What problems are associated with hunger and malnutrition?

The point is to appreciate the value of what you know, and to use that information to serve your donors directly. If prospective donors see how their gifts help them personally, the universe of potential donors to your organization rises dramatically. In effect, it helps your organization function more like a closed loop fundraising operation.

Open loop organizations have both great challenges and great opportunities. Take into consideration these five principles and you will be well on your way to developing an effective acquisition strategy and finding more donors.