Fundraising is not just about getting money in the door this financial year. Research by Professor Adrian Sargeant shows that if fundraisers spend effort providing an excellent experience for the donor, it can encourage loyalty. He found that an increase in donor loyalty of 10% today can enhance the lifetime value of the fundraising database by up to 200%.
For many charities volunteering is also critical for fundraising (and service delivery) success, for example the Royal British Legion Poppy Appeal brings in £46 million raised by over 300,000 volunteers and on Christmas Day 2016 11,000 Crisis at Christmas volunteers provided over 4,000 meals for the homeless.
As supporter demographics change, the needs of supporters also change. For example millennials have higher expectations of response times and are less likely to respond to a fundraising ask in the post (which is the bread and butter for many charities) than older people. Meanwhile, GDPR has had an impact on who charities are able to contact in the first place and the negative narrative rumbling in the press crushing public trust in charities is not helping charities fundraising efforts either.
Given the situation, it’s no wonder that so many charities are trying to innovate: seeking out and testing different ways to engage and delight supporters that have potential in the future to deliver better returns than current methods.
Yet, many charities have a culture of ‘how we do things here’ making innovation or testing anything new difficult. Something new can feel more risky. However it might, in the mid to long-term be more risky not to test new ways of fundraising since there are no guarantees that the current ways of fundraising will continue to raise the income needed.
Perception of risk has been written about for many years. Notably by Daniel Kahneman (I recommend reading Thinking Fast and Slow) for his work on the psychology of judgment and decision-making, as well as ‘inventing’ behavioural economics, for which he was awarded the 2002 Nobel Memorial Prize in Economic Sciences.
Kahneman says that actual and perceived risk are not necessarily the same and we under-react to changes that occur over time which explains why we’d rather stick with the declining ‘what we know’ than risk the possibilities of the unknown. We just keep buggering on.
Innovation doesn’t happen in a vacuum. Innovation happens when people talk. The best innovation happens when people with different perspectives and skills meet to work on a problem.
Some years ago Southwest Airlines ran a programme that included people from in-flight, ground, maintenance, and dispatch operations. For six months they met for 10 hours a week, brainstorming ideas to address the broad issue: ‘What are the highest-impact changes we can make to our aircraft operations?’
At the end of the six months the group presented 109 ideas to senior management, three of which involved sweeping operational changes. Chief Information Officer Tom Nealon said that the diversity of the people on the team was crucial to this process, mentioning one director from the airline’s schedule planning division in particular. “He had almost a naive perspective, his questions were so fundamental they challenged the guys who had worked on for the last 30 years.”
That’s why I believe teams and individuals that are not directly responsible for or even know anything about fundraising hold the secrets to the next fundraising innovation.
Those not immersed in fundraising, just like the team at SouthWest Airlines can ask the questions that the fundraisers wouldn’t think to ask.
If you’re a fundraiser get connected to people outside of or with little experience of fundraising. Find the people who don’t know fundraising, help make it OK for them to ask questions and challenge the assumptions that you hold about your supporters and your fundraising – that’s when innovation happens. Here’s 4 tips how:
If you’d like some help extending your networks and opportunities for innovation, you might benefit from joining the Lucidity Network. It’s a pick and mix of online and offline learning and connection to a dynamic network of people who can help you. We’re open to new members a few times a year. Join the Lucidity Community Facebook group to get in the Lucidity groove for clearer thinking and better results and be the first to hear when the Lucidity Network is open for members.
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