This is a summary of the main conclusions for possible ‘refashionings’ of relationship fundraising.
For the full findings, download the report: Relationship Fundraising: Where Do We Go From Here?
1. A choice between relationship fundraising and ‘good old fashioned’ customer care
There is little evidence to show that relationship marketing – a long-term focus on customer needs, which are viewed as pre-eminent, through a flow of two-way information – works in a mass consumer environment, or even whether consumers want such relationships with the companies they buy stuff from.
There is therefore a question of how useful the relationship analogy is in the arena of individuals fundraising, where in some cases, a more ‘transactional’ form of fundraising may be appropriate, leaving relationship fundraising to be applied where donors have a much higher level of involvement with the charity, such as corporate and high net worth individuals.
However, all donors deserve excellent standards of customer service, which may be what fundraisers need to apply in their mass market fundraising to enhance the donor experience.
Rather than blindly seek to apply relationship fundraising to every individual donor, fundraisers should critically evaluate each fundraising situation to determine whether a relationship is the best approach.
2. When to focus on the donor; when to focus on the beneficiary
What the donor wants from engaging with a nonprofit organisation changes as the relationship progresses. At the acquisition stage, donors need to be ‘aroused’ to feel something for the cause because they are attracted by what the charity does and how it helps its beneficiaries. By the time the relationship is into the retention stage, social psychology theory predicts that donors will be far more focused on what the relationship does for them, so fundraisers need to meet those needs.
In a sense, relationship fundraising can also be seen as a choice the nonprofit makes whether to meet its donors’ needs as a good in its own right rather than merely as an end to deliver a good to the beneficiary. This review passes no opinion on whether one approach is better than the other.
3. Use academic theory from social psychology to meet donor needs
There is a wealth of theory from the field of social psychology that can be deployed to enable nonprofits to meet donors’ needs and in so doing foster their commitment to, trust in and satisfaction with their relationships with the organisations they support.
We think that two of the most important of these for the future of relationship fundraising are creating a sense of identity for the donor with the charities they support (Identity Theory); and moving donor relationships from ‘exchange’ (where partners keep track of reciprocated costs and benefits) to ‘communal’ relationships (were partners forget about costs and benefits and instead care about each others’ needs and wants as if they were their own).
4. Focus on commitment, trust and satisfaction
Commitment, trust and satisfaction are proven to drive both customer and donor loyalty and through that lifetime value. They are much better indicators than monetary metrics such as Recency Frequency Value analysis and annual income targets. This is true whether fundraisers choose a relational or transactional approach to their fundraising (or a mixture of both).
The review therefore strongly recommends that fundraisers develop bespoke metrics with which to measure relationship fundraising that focus on these three factors, but particularly satisfaction; and that charities should remunerate their fundraisers according to how satisfied they make their donors feel.
5. ‘Total relationship fundraising’ and building a ‘culture of philanthropy’
It was very clear from the survey of relationship fundraisers that they 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 organisation in which relationship fundraising could grow.
Most fundraisers were very clear on the need to build relationships with the donors. Yet few suggested the need for a similar focus on building relationships with any of the other stakeholders – such as board or fundraising agencies – that enable donor relationship to happen.
The Rogare review therefore 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 (such as media, suppliers and regulators) that enable organisations 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.