Thursday, September 27, 2012

BIG’s Blog: The Secrets That Everybody Already Knows

It all started five years ago…circa late 2007. Fundraising numbers were down. It was a terrible recession. But then came 2008, 2009, 2010, 2011, and now 2012. Guess what? The numbers haven’t come back, in fact, in many cases they have gotten worse. We’ve got answers though. The recession is still here, it really never went away. The economy is still in the tank, so that explains why our numbers are still down.

Except that… the economy really has come back. Nobody is boasting that it is robust and growth is anemic, but we’ve technically been out of recession since 2009. Yes… 2009.

Nope…something else is going on here.

The Direct Marketing Association tells us that direct mail response rates have fallen 25% over the last nine years. That started before the last recession (Source: 2012 Response Rate Report).

No…something else is going on here.

I just returned from the National Catholic Development Conference’s annual meeting where I spoke to about 40 different organizations. Guess how many grew last year over the year before? Exactly four. But if you took out bequests, they, too, were down. And projections for this year? They are working hard to hold even with last year.

So what’s going on?

The answer lies in your donor file. A simple age overlay would show that between 65% and 85% of your current donors are over 67 years old. They fall into the Depression and WWII generational cohorts. Yet this group only represents 12% of the population and, frankly, many are getting to the point they cannot give.  

The big question is, “Where are the Boomers?” The Baby Boomer generation represents about 24% of the population, and they range in age from 48 to 66. And according to Pew Research, they have been and continue to be donating their money to all kinds of charitable institutions.

But here is the deal. When my 86 year old mother makes a donation to a charity, she is giving a gift. When my 56 year old wife makes a donation to a charity, she is making an investment.

Gift versus Investment…very different approach, very different expectations.

A gift says: “I trust the institution and only expect a thank you.” An investment says: “I want to know how and where my money is spent and I want to be kept apprised of the results.”

Very different.

To attract younger donors, beginning with the Baby Boomers, fundraising organizations must change the relationship between the donor and the organization. They must become supporter-centered, not organization-centered. What is organization-centered? It’s about the organization…this is what WE do, this is who WE are…it’s about THEM. While organization-centered works for my 86 year old mother whose generation “trusts” institutions, it does not work for my 56 year old wife’s generation where “institutional trust is gone.”

This isn’t something new. Commercial businesses have had to change their relationship approach over the last twenty years. Successful companies today know that they must be customer-centered. If they do not treat the customer as king or queen, the customer will vote with their wallet and leave.

Fortunately charities that are supporter or donor-centered understand that they don’t have to treat their donors as kings or queens, but rather as co-equal partners in the mission.

What does co-equal mean? It means open communication and transparency, as well as responsiveness.  

If your organization has anywhere near 65% to 75% of your supporters in the Depression and WWII generations, you are frankly headed towards a collapse in donations. Not a fall-off…a collapse. Will my 86 year old mother be around in ten years? I certainly hope so, but we are planning accordingly. Yet it seems many charitable fundraising organizations are betting their organizations that my mother WILL be here ten years hence.

You MUST develop a plan to attract younger supporters, and very quickly.

For fundraising organizations that want to find an end to the donation slump…develop a new plan that moves your organization toward being supporter-centered rather than organization-centered. This will be a key first step in transforming your fundraising organization for the future and will go a long way in laying the foundation for solid financial support long into the future.


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