When you should NOT conduct face-to-face fundraising

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Greg Warner is CEO and Founder of MarketSmart, a revolutionary marketing software and services firm that helps nonprofits raise more for less. In 2012 Greg coined the phrase “Engagement Fundraising” to encapsulate his breakthrough fundraising formula for achieving extraordinary results. Using their own innovative strategies and technologies, MarketSmart helps fundraisers around the world zero in on the donors most ready to support their organizations and institutions with major and legacy gifts.

Essentially, there are two types of face-to-face fundraising.

  1. When fundraising staff, leaders, and board members (or other supporters) meet with highly qualified, major and or legacy gift donors and/or prospects;
  2. When part-time staff (usually young adults) stand on street corners interrupting passersby asking them to give (I call this ‘street spam’).

One delivers a return-on-investment of between 33:1 – 56:1 on average (and sometimes it even garners 1,000:1 ROI) and the other yields 2:1 – 3:1 ROI.

Can you guess which ROI applies to which kind of face-to-face fundraising? If you guessed that the interrupters deliver low ROI, you were right!

 

You probably won’t be surprised to learn that I have issues with the interruptive face-to-face model including: 

  1. The ROI is low (2.5 : 1). According to this study by CharityScience which notes that “This method is considered less effective than asking existing donors to give more.”
  2. Prospective donors find it annoying. You never get a second chance to make a first impression. Aggressively asking for money on the street is sort of like asking someone to get married right after meeting them for the first time. It’s off-putting and that’s why I believe it can damage your brand. [Note: Proponents are likely to say that it won’t harm your brand. Yet I have not seen any data that supports their claims. So, I simply disagree.]
  3. Shame! Think of it from their perspective. First they are likely to feel that you interrupted them. Then, they’ll feel somewhat pressured (when you asked them for money). And finally, after they say, “No”… as they walk away, they might feel bad about themselves for having rejected you. Yuck! Shame! Come on!… let’s not shame people we don’t know.
  4. The value it provides to most of the people you engage is very low. Don’t forget that the secret to fundraising success is the delivery of value to donors in line with their needs and interests, and at the right time. Sure, a small percentage of folks out in the street might appreciate the fact that you found them and gave them an opportunity to make an impact through giving. But most of the others won’t feel the same way. That larger group will feel they got no value at all. In fact, for them, you’re likely to deliver negative value. Try this: As they walk away, listen carefully and I bet you’ll hear some folks mutter, “Grrrr!!! I’ll never give to that charity.”

 

What ever happened to the golden rule?

Consider how you like to be treated. Do you enjoy interruptions by strangers with clipboards or tablet devices on the street? If not, why would you send youngsters out to treat people (just like you) in that way? It isn’t nice and it makes your targets feel bad. So, think of it this way: If you wouldn’t want be interrupted and asked for money on the street, perhaps you might want to reconsider the approach.

And if you are an authority figure at your organization and you’re telling these young adults to go out there and ask away, keep in mind how authority can drive people to do awful things. Check out the famous Milgram Experiment to understand how ‘authority’ drives well-meaning people to do terrible things. Then, restrain yourself!

 

Can you tell that I don’t like the second form of face-to-face fundraising?

Don’t get me wrong, I know you need new donors. But I’d rather see you prioritize spending your donors’ funds on efforts that result in new major and legacy gift donors; not new low-dollar donors. Do that first! Remember, the giving pyramid is dead! [Something I proclaimed in 2013, before many others began to agree.] That’s why I believe the money you budget for the interruptive face-to-face method should be redirected toward generating new, big donors. These days you CAN inspire people to give at higher levels right off the bat. I won’t get into how to do that here because I spoke about it in the second half of this webinar  and wrote about in my book and on my podcast. But if you don’t want to review any of that, just reach out to me and we’ll chat. HINT: Referrals are the key to low-cost, new major donor acquisition!

Furthermore, I think you should also consider spending more of your budget on stewarding your current major and legacy gift donors first. By doing so you’ll generate more money, more loyalty, and more referrals leading to more major donors. In other words, once you’ve shored-up your base and generated new, high-dollar donors, then you might think about spending money to find new low-dollar donors. But I doubt you will because you’ll be breaking records generating tons of revenue for your cause.

Just remember, new low-dollar donors have a lifetime value of just $42 while larger donors deliver almost $74,000 LTV.

NOTE: You can see our benchmarks here or upload your data to see how you compare here.

 

BOTTOM LINE: Before running out into the street to interrupt people, first align your budgets so you conduct more face-to-face fundraising with the best, most loyal, wealthiest donors and donor prospects

2 responses to “When you should NOT conduct face-to-face fundraising”

  1. Sheila Hard says:

    First, just FYI there’s a typo: Can tell that I don’t like the second form of face-to-face fundraising? should be “Can you tell…”.

    Second, my first reaction was: “You’ve got to be kidding me! Nobody does this.” Then I remembered when I lived in Berkeley about 25 years ago. One of the local charities that fed the hungry/homeless did have a program of “official panhandling”. Clients who wished to participate would be given a locked box that was identified with the charity’s insignia, and the client would go to an assigned street corner. At the end of the day, the box would be opened and I believe the client received a designated share of the proceeds (though perhaps they were paid hourly). There were rules of conduct; as I recall they could smile, shake the box, announce the name of the charity, and must say a thank you for donations, but they were not allowed to aggressively panhandle. And they had to be sober and reasonably clean at the time of solicitation.

    I hate “interrupters”, too, but as I recall there were panhandlers on every corner and many in-between. By giving to “official” panhandlers, you had some confidence that you weren’t going to run into the panhandler a few minutes later coming out of the liquor store. I actually considered this something of a public service because it enabled me to put something in someone’s hat/box instead of 100% ignoring the human misery on the streets.

    I never looked at it as a form of fundraising.

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