A New Way to Understand Your Donors: Empathetic Giving Part I

Randy McCabe April 28, 2016 Nonprofits

“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”

Attributed to Mark Twain at the beginning of the movie The Big Short, this quote is a good description of the false assumption that mortgage-backed securities are as safe and secure an investment as you can get.

And while I’d hate to tarnish the noble reputation of most fundraisers by comparing them with the investment banks that perpetrated the sub-prime mortgage crisis in 2008, the fact is nonprofits have been following the same old fundraising strategies for many years under the false assumption that it is the only way to strategically communicate with donors and raise funds for important charitable causes.

Using Data Strategies to Maximize Donations

Let me provide a bit of background: In the 1970’s and early 80’s, when there was little strategy behind nonprofit’s donor communications, some smart people started applying innovative strategies to help nonprofits communicate with donors and raise funds. They used data strategies they learned from their mainstream marketing experience – specifically the RFM Model of Recency, Frequency, and Monetary – to understand donors and apply appropriate messages to appropriate donors. By looking at how recent the last gift came in from a particular donor, how often that donor has been giving, and how much a particular donor gave (both in terms of cumulative giving and per gift) these fundraisers were able to help nonprofits communicate more effectively with donors and raise more money to help their worthy causes.

Unfortunately, while these strategies may have been adjusted slightly through the years, they haven’t evolved enough or been displaced by newer innovations that can propel an industry forward in a more significant way. So, while technology has dramatically changed our world over the last 30+ years (or even the last 10+ years) fundraising strategy has struggled to remain relevant and meaningful while laboring to produce the same level of results it always has. That’s the bad news, but here’s the good news.

A New Fundraising Model Enters the Scene

There’s a new way of understanding the donor that is gaining momentum fast because it marries the old RFM model with a new and cutting-edged theory that is as actually as old as Mark Twain’s common sense… Empathetic Giving. The idea of caring about and seeking to understand who your donors are, what they believe in, and what they care about. Especially learning if they believe in and care about what your organization does to make a significant difference in peoples lives.

Empathetic Giving horizontal

Because if we as fundraisers understand what moves a donor, we will be able to connect them with the appropriate cause at a level far beyond what any strategic RFM segmentation could ever do on its own.

Historically we used RFM and basic demographic data (gender, geography, age, etc.) because it was the only data we had. But from one-on-one work with major donors, we know that two people giving $1 million dollars each can have widely divergent reasons for doing so. And the same is true for two people giving $100 each. Empathetic Giving means aligning your donors not just by giving level, but by affinity.

Empathetic Giving makes sense, but how does it work? Stay tuned for Part II of our series on Empathetic Giving.