NEW IDEAS: The donor is always right, part 1 – is being a donor the same thing as being a consumer?

Fundraising regulation is often predicated on the assumption that donors require the same degree of ‘protection’ as consumers. In the first of a two-part blog, Ian MacQuillin argues that it’s beneficiaries, not donors, who are a charity’s true consumers

Addressing a gala dinner at the Institute of Fundraising national convention in July, Lord Grade, chair of the Fundraising Regulator, told guests that the public were unhappy about fundraising because there had been a “serious escalation” in advertising activity. (The context to this was his defence of an interview he’d given to the Times in which he said that he regularly misleads fundraisers – the people who are supposed to trust him to regulate their actions – by pretending he’s a lawyer, then, after directing abusive language at them, threatens them with ‘legal’ action.)

Even though, as Third Sector reported, Lord Grade conceded that charity advertising represented only a small proportion of the total, he nonetheless stated that fundraisers have to be “sensitive” to the overall volume of marketing people receive, not just the volume that is due to fundraisers.

As reported in both Civil Society and Third Sector, Lord Grade said: “Donors are also consumers.”

There are (at least) two ways to read this comment, and each interpretation takes us in slightly different directions:

1. Being a donor is also being a consumer (‘consumer’ and ‘donor’ are essentially same thing, or similar parts of a larger whole).
2. Those people who are donors are also consumers (i.e. ‘donor’ and ‘consumer’ are discrete concepts, as in, ‘donors are also citizens’).

As soon as I heard Lord Grade’s comment, I leapt to the first interpretation, perhaps because it had such relevance to my current research: because donors are simply not consumers; they are not the same thing at all.

Why donors are not ‘consumers’, but beneficiaries are

A good place to start in matters like this is by consulting a dictionary. The Cambridge online dictionary defines consumer as:

“A person who buys goods and services for their own use.”

‘Donor’ however in the same dictionary is defined as:

“A person who gives money or goods to an organisation.”

These definitions are approaching mutual exclusivity: the donor doesn’t buy anything for his own use; rather he enables an organisation to provide goods and services to for someone else entirely.

Having started by consulting a dictionary, the next place to look is in the academic literature, to see if this can nuance what the dictionary tells us. Here’s one definition of the process of ‘consumption’ from the academic literature (you can therefore infer that a consumer is someone who engages in the process of consumption):

“The process by which people acquire, use and dispose of commodified goods including ideas, services, products, brands and experiences.”

It doesn’t simplistically refer only to ‘buying’ products for own use, as the dictionary definition does, but also refers to acquiring and ‘disposing’ of products, which have been commodified.

As such, it describes pretty well the process that beneficiaries follow when using the goods and services provided for them by charities. SolarAid’s beneficiaries acquire, use and dispose of the lamps (a commodified good) that SolarAid provides for them. Blind and visually-impaired people acquire and use the dogs provided for them by Guide Dogs for the Blind Association. Beneficiaries, it would seem, are charities’ consumers.

But are they the only ones? Can this conception of ‘consumption’ also encompass a concept of ‘donation’?

To apply this concept of ‘consumption’ to donating to charity, you would need to show that donors acquire, use and dispose of some kind of commodified good. Sometimes that would appear to be the case: for example if a donor is also a beneficiary of the charity she gives to, or is buying something from a Christmas catalogue. But in those cases, their relationships as consumer-beneficiaries and consumer-customers are separate to their relationships as consumer-donors (if indeed they are ‘consumers’). It’s the second interpretation of Lord Grade’s statement.

Generally however, when a person drops a few coins into a collection box, or makes an annual gift or a regular monthly donation, are they really acquiring, using or disposing of any commodified idea, service, product, brand or experience? This question requires some serious thought, but I think the answer is going to be: no, they do not.

I’ve heard the argument that donors really are ‘consumers’ (and it usually comes with scare quotes), because they ‘buy’ (more scare quotes) a warm glow, or some other intangible return, from the charity. A warm glow however is not a commodified good (you can’t ask for 10 units of warm glow, please), and even if it were, it’s not subject to any kind of contract. If you give £100 to a charity expecting to feel good about doing so, but no warm glow materialises, you can’t ask for you money back for that reason.

Have we ‘productised’ the giving experience?

You could argue that charities have commodified the giving experience and turned the act of asking into a product. Rogare Advisory Panel member Joe Jenkins argued recently on Critical Fundraising that charities have homogenised their fundraising ‘product’, and Liz Waldy, also on Critical Fundraising, makes the case that supporter journeys have also become ‘productised’. Mark Philips’s notion of ‘Trojan Horse fundraising’ also describes a type of fundraising ‘product’.

I think this is where the analogy of donors with consumers is most likely to have some validity, though it’s contingent on the asking/giving experience really having been commodified. Perhaps the most obvious cases of commodified goods acquired and used by donors would be the raft of free pens, address labels and bookmarks some charities habitually distribute in their direct mail.

But does a (potential) donor really “acquire, use and dispose” of the commodified good of the brand and experience of being approached by a street fundraiser from a particular charity? Did those people who took part in the Ice Bucket Challenge and then donated (so excluding those who took part but made no donation) really “acquire, use and dispose” of the commodified experience of doing so? (Again, these are not rhetorical questions – they are genuine questions to which I don’t yet have a full answer.)

I suspect that any reasoning along these lines would attempt to shoehorn donors into a definition of consumer, or to file down the edges of the concept of ‘donation’ until it can fit through the shape of the hole labelled ‘consumption’. But what we really need is concept of ‘donation’ that is analogous to, but separate from, ‘consumption’.

‘Donation’ – a three-way transfer process

If we adapted the academic definition of consumption cited above, we might arrive at something like this for an analogous concept of ‘donation’:

“The process by which people voluntarily provide resources to nonprofit organisations to enable commodified goods (including ideas, services, products, brands and experiences) to be acquired, used and disposed of by the nonprofits’ beneficiaries.”

This is quite different from the definition of consumption, principally because it transfers the focus from ‘own acquisition, use and disposal’ (in consumption) to acquisition, use and disposal ‘by others’ (in donation).

Consumption is therefore a bilateral transactional relationship (an exchange of commodified goods between consumer and the supplier of goods, an exchange that is usually subject to a contract that grants the consumer certain protections).

Donation is a trilateral relationship, but it’s a transfer rather than a simple transaction: resources are transferred from donor to beneficiary via a charity, which turns the resources provided by the donor into commodified goods, a process that is rarely governed by a contract either with donors or beneficiaries.

This process is clearly seen in Solar Aid’s marketing. This video describes the consumption process experienced by users of its solar light; while this donation page allows donors to enable Solar Aid to provide those products to beneficiaries.

Most benefits that do come the way of the donor, for example in the form of a warm glow or enhanced reputation, are either informal (i.e. non-contractual) inducements to make the donation, or a happy by-product of doing it. And even if they may be the primary reasons why some donors give, the charity is not actually providing any ‘commodified goods’ that donors can acquire, use and dispose of – you can’t go to a comparison website to check out which charity is offering the best deals on buying warm glow this week.

Where donors do get specified benefits in return for a donation – such as with corporate sponsorship or major donor naming rights – these usually are subject to a contract. So in cases such as these, the concept of ‘donor’ is much closer to that of ‘consumer’. (This is also slightly ironic because it could suggest that major gift fundraising, usually regarded as the epitome or relationship fundraising, is also quite transactional. However, what I infer from this is that ‘relationship fundraising’ and ‘transactional fundraising’ are not mutually exclusive concepts, as some fundraisers would have us believe.)

But special cases such as these aside, there is a clear distinction between consumption and donation, and so consumers and donors are not identical, nor even particularly similar, concepts. And this has important implications for how the process of asking and of giving donations ought to be regulated, which I’ll explore in part 2.

• Ian MacQuillin is director of Rogare, the fundraising think tank.

• Find out more about Rogare’s review of fundraising ethics.
• Download the new ethics white paper.
• Download Rogare’s evidence to the House of Lord’s Select Committee on Charities enquiry, which employs the distinction bewteen consumption and donation to articulate fundraisers’ accountabilities to donors and beneficaries.

Thanks are due to Advisory Panel member Adrian Salmon for pointing out the second possible interpretation of Lord Grade’s comments, which initially passed me by.

The ideas contained in this blog are from new. I first explored these themes in two blogs on UK Fundraising in 2007, which are available here and here, though they have been considerable developed since then.