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communication

Why Donors Stop Giving Money to Cultural Organizations (DATA)

Why Donors Stop Giving to Cultural Organizations

Why do some people make a donation (or a few) to a cultural organization and then simply stop giving? The top three reasons stem from the same issue.

Cultural organizations exist to carry out their missions (which often relate to educating and inspiring visitors) – but they cannot achieve these missions if they are unable keep their doors open and their lights on. Simply put, we need our visitors and donors in order to thrive.

It would be wonderful to think of annual donors as fish that we can keep as trophies and mount on our walls. (As in, we catch them and then they are forever ours!) But donors are actually like fish that we catch and then throw back into the sea – hoping that we can use evolving tactics to catch that same fish year after after. This is especially the case if the fish is a $250-$2,500 donor. (That’s a fancy fish!)

While it’s great when we can “catch” and cultivate a $250-$2,500 donor, we all have observed that not every donor renews their gift on an annual basis. So, what gives? Why do some donors fail to renew their contributions?

Take a look at this chart, provided by IMPACTS Research and informed by the 98,000 person sample that comprises the National Attitudes, Awareness, and Usage Study. This chart represents the responses of previous $250-$2,500 annual donors who did not make another gift to the same visitor-serving organization within the past 24 months.

IMPACTS - Why donors stop making contributions

The reason that we segment by the $250-$2,500 range is because we noticed that the repeat giving rate was much, much, much higher for annual donors at the >$2,500 level.  We posit that this because (a) larger donors don’t have the same financial constraints in terms of affordability factors; (b) they are likely very committed to the organization/cause (as evidenced by their higher level of giving); and (c) higher level donors often receive a higher level of attention from an organization. In other words, they are less likely to slip through the development “cracks.” Of course, this still happens all too often…

Notice anything interesting about the top three responses? 

 

1) The top three reasons why donors drop out of giving are due to relationship management issues

Not being thanked for a previous gift, not being asked to donate again, and lack of communication about the impact of one’s donation all represent massive communication fails. Advances in relationship management technologies are supposed to make communication fails increasingly rare – but, the data suggest that many of us remain our own worst enemies when it comes to retaining donors.

CRM stands for “customer relationship management.” CRM is an organization’s approach to managing interactions with current and future customers (or – in the case of cultural organizations – constituents, visitors, and supporters). It’s a bit of a jargon term for “How your organization connects with people and manages relationships.” And it’s important – especially because giving money can feel very personal and, today, audiences want to support something meaningful. If your organization fails to reassure supporters of the impact of their gift – heck, if your organization fails to thank folks for their gift – than there’s definitely an opportunity to re-evaulate your organization’s CRM strategies and tactics.

The fact that not being thanked for previous gift holds the spot as the leading reason why folks stop giving to an organization feels a bit incongruous with the values of the types of organizations that we are supposed to be. We are doing good. And we want people to do good with us. Do we have an excuse for not even acknowledging precious folks who do exactly what we want them to do? I’m not sure that, “I’m too busy to write every $250 donor or member an email” counts in today’s world…

 

2) Expectations of personalization today are unforgiving toward forgetful organizations

This is a good segue to the next point: Personalization trends are affecting everything. We now live in a 24-hour world of constant connection. Most folks expect responses within one hour on social media, and all of our ads and even our newsfeeds are tailored specifically according to our interests. Personalization trends are altering long-held CRM and even programmatic beliefs within cultural organizations. Indeed, change can come slowly for nonprofits, and if there were only a single urgent (and perhaps obvious) need to adapt personalization into cultural organizations, thanking and communicating with donors may just be it.

Also, keep in mind that “not being asked to donate again” isn’t about collateral and messaging so much as it’s about personalized communication. Reaching out to folks to ask them to give again is an opportunity for connection and personalized interactions. If an organization sees “not asked to donate again” in this data and thinks, “Let’s send that form letter out 10 more times,” then that organization is missing the point.

A donor online is a donor off-line  – and lack of a personal touch just doesn’t cut it anymore.

 

3) Connectivity is king (and losing donors for CRM failures indicates lack of awareness of this reality)

Essentially, the top three reasons why people discontinue giving are because organizations are forgetting that today, connectivity is king. Content is no longer king for many reasons – but one of them is because many staff members “not my job” the word “content.” Similarly, CRM sounds like marketing jargon (because it is), but other departments – and especially fundraising and membership – “not my job” customer and community management today at their own expense. In fact, community and customer management may be just as – if not even more – important for development and membership teams as it is for marketing teams because big donors lead to big donors and word of mouth from customers drives all other avenues of engagement and revenue – including the gate.

 

The good news about these top three responses is that organizations can change them. These challenges to sustained giving may only be issues because they represent “growing pains” as organizations evolve to meet the needs of our super-connected audiences. But realizing the need to evolve and update our outdated systems is critical for change.

While this data may be a tad embarrassing, it’s something that we can control – and that’s great news! Let’s fix our development and membership communication issues and remove the top three barriers to our $250-$2,500 donors continued giving. After all, our donors want the same thing as we do: To make the world a better place.

Our donors are supporting us. Let’s support them back.

 

Like this post? Please check out my YouTube channel for video fast facts! Here are a few related posts from Know Your Own Bone that you might also enjoy:

 

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Posted on by Colleen Dilenschneider in Community Engagement, Digital Connectivity, Financial Solvency, Fundraising, IMPACTS Data, Myth Busting, Sector Evolution, Trends 4 Comments

We Can’t Keep Our Mouths Shut

The following article was requested and written as a Display Case piece for the American Association of Museums May/June issue of Museum Magazine. You can check it out on page 29 of the hard copy. The magazine is one of the great perks of being an individual member of AMM. You can become one here. (There are all kinds of other perks, too!) Special thanks to Editor and Chief, Susan Breitkopf, for contacting me and also to Susannah O’Donnell  of AAM for her terrific edits. I’m excited to have the opportunity to also share the article here.

 

Generation Y. Millennials. Generation “Me.” The Obama Generation. However you identify these 20-somethings working in your museum, one thing’s for sure: We function differently than older generations in the workplace. Members of Generation Y (born roughly between 1980 and 1992) have a different value set and method of communicating than the generations that came before us. In fact, if you are a Traditionalist (born 1927–1945), a Baby Boomer (born 1946–1964) or even a member of Generation X (born 1965–1979), you may find that the behavior and priorities of members of Generation Y are directly at odds with your own workplace desires—or, at least, in direct odds with business as usual.

If anything, the sheer size of Generation Y makes Millennials hard to ignore. By 2008, there were 77.6 million members of Generation Y, outnumbering the 74.1 million Baby Boomers.

So what do Millennials want from the museums that employ them, and why should institutions care? Studies have found that our generation has some tall orders that are likely to cause a bit of cross-generational clash. But while these starry-eyed, tech-savvy, entrepreneurial, cannot-keep-their-mouths-shut 20-somethings may have a thing or two to learn from older generations in the workplace, we bring with us a new way of thinking that can benefit any organization—and museums in particular—if given the chance.

 

Generation Y employees want to be included in important conversations regardless of their position within the institution … From a young age, members of “Generation Me” have been encouraged by elders to speak up and contribute—and we’ve been rewarded for our input. (On our Little League teams, everyone got a trophy, not just the MVP.) This egalitarian approach may perturb members of older generations who are accustomed to authoritative relationships within the workplace and value the hard work associated with moving up the organizational ladder that they climbed in order to participate in such decision-making discussions.

but they also bring transparency and accessibility to organizations, which will likely have a positive impact on the museum industry. The social media revolution is in full force, and many Millennials would not recognize a world without cell phones and the Internet. With increasing connectedness comes increasing information-share, and in the current market, incredible value is placed on brand transparency. Accessibility has always been an important aspect of museums’ missions, but it is becoming increasingly critical as social technology, online engagement and crowd-curated exhibits take hold of museum audiences. Most Millennials have communication and transparency hard-wired into their nature. And because we use these tools to communicate with friends and family, we often know how to utilize them with the sincerity that is required for building a strong brand.

 

Generation Y employees value mission and mentorship over money, challenging traditional workplace motivators … That may not sound like a culture clash, but it certainly makes the priorities of Millennials a bit tricky to understand, particularly for goal-oriented Baby Boomers who are accustomed to utilizing monetary reward as a motivating force. Tracing the annual Universum IDEAL Employer Rankings reveals a startling trend in Generation Y’s ideal employers prefrences. While the 1999 version of the survey found that Generation X wanted to work for large, private companies like Microsoft or Cisco, Generation Y prefers working for public service organizations. They don’t call us the “Obama Generation” for nothing: Working for an organization we believe in is often every bit as important to Millennials as the price tag on a starting salary. Because of our generation’s desire to achieve and be recognized, mentorship is also an important aspect of the ideal Millennial work environment. Mentorship takes time, though, and time translates to money for older generations. Making time for the mentorship of Millennials is not always a high priority for busy professionals.

but these values also represent a natural alignment with your museum’s public service goals. While adjusting to these “softer” workplace desires may require some effort within the museum, having energetic employees motivated by public service is sure to work in the organization’s favor. Don’t get me wrong: Millennials have more debt and student loans than any generation that came before them, so warm fuzzies aren’t going to cut it if we cannot pay our bills. Those emotional rewards, however, motivate us and provide what studies have shown is often very high on our workplace wish list: personal fulfillment by making a positive social impact.

 

Generation Y has a reputation for “overshare” and treating employees equally, even the CEO … Generation Y is often regarded as an “oversharing” generation, seemingly tweeting about every dinnertime meal and putting countless photos on Facebook for the world to see. Another habit contributing to our overshare reputation is the perhaps too casual way in which Millennials offer up input to leaders in the workplace.  In fact, Andrew McAfee, a principal research scientist at MIT’s Sloan School of Management, cited overshare and addressing all employees casually as two “not-so-smart” mistakes that Millennials commonly make in the workplace in a recent Harvard Business Review blog post. Being social means sharing information with your friends- and online, Generation Y has a lot of them. Millennials are a social bunch and, not surprisingly, surveys have shown that members of this generation prefer to work in groups and share information. Similarly, Generation Y has been found to value teamwork and organic workplace structures. Members of Generation X and Baby Boomers may find this particularly odd, as they’ve been found to generally prefer working independently and have championed workplace autonomy.

… but overshare keeps upper-level management aware of industry trends, and collaboration increases opportunities for competitive advantages. According to writings by Brian Huffman, a professor of management at the University of Wisconsin, River Falls, CEOs and upper-level management are nearly always the last to see big societal changes coming; the front-end folks see it first. Considering this, it may help that the front line has a big mouth. With social technology bringing about almost constant changes in branding, marketing and community engagement, Millennials can be a key resource for institutions wrestling with the misconception that museums are organizations frozen in time. You might still cringe when a millennial offers unsolicited input to the department director, but it can help to share different points of view. Studies have found that organizational collaboration helps dodge management groupthink and, in general, makes organizations stronger.

 

So, what’s the value in taking note of the workplace desires of Generation Y? A simple response may be, “Because they are the future leaders of your museum, whether you like it or not.” But that’s not a particularly compelling answer. A better reason is that competitive organizations are becoming more transparent, public-service oriented and horizontal in structure, with value placed on increased communication. The evolution of these business practices reflects the values of Generation Y.

Can members of Generation Y be a nuisance in the workplace? Maybe. Despite our reputation for over-confidence, we certainly have a lot to learn. But Millennials can also be invaluable members of your organization who help weave the fabric for a strong and strategically sound museum. Each of our respective generations marches to the beat of its own drummer. Though the Generation Y workplace beat is a bit more casual and dissonant than others, we still have the interests of the museum at heart and an aim to make a lasting difference in the communities we serve. And that’s pretty cool, right?

Posted on by Colleen Dilenschneider in Millennials, Nonprofit Marketing 2 Comments

OnlyUp: The Key to Change is in the Word “Social”

This morning, OnlyUp launched. It is an action-oriented, bimonthly journal about young adults in the nonprofit sector. The online journal seeks to engage the nonprofit sector in conversations related to social change leadership. The first issue features articles from bloggers and thought-leaders such as Allison Jones (one of four creators), Robert Egger, and Akhila Kolisetty and covers pressing topics in the sector. This post presents my first contribution to OnlyUp. You can view the article here.

 

If you’re a nonprofit professional, then you probably come across the word “social” at least five times today. Nonprofit blogs and literature are running wild with terms like “social change” and “social justice.” We’re giving the word the leading position in mash-ups with other buzzwords like “media,” “entrepreneurship,” and “capital.” Not to mention, we’re well aware of its match with “security” and “worker.” It even has connections to topics we cover in school like social studies and social psychology. But are all of these terms linked because they include the word “social”? Does social media, for instance, have anything to do with with social workers? I think it does.

It seems as though the words that we use with “social” are increasingly giving us not-so-subtle clues about key ways to bring about large-scale change in the upcoming decade. It’s as though we are providing our own cheat-sheet to bring about public good and possible solutions are coded within our own daily language.

The State of Now: an Era of Social. Our first clue that change-makers should pay attention to this word is apparent in the definition of the word “social” itself. “Social” means related to society or human relationships. It makes sense, then, that the word would come up frequently during this era of collaborative learning in which we are seeing an increase organic, horizontal workplace structures. Moreover, members of Generation Y (born roughly between 1975 and 2000) are thought to be one of the most social and collaborative generations of all time. These individuals are now making their way up the ladder and securing positions as nonprofit leaders. The generation is said to be team-oriented, and with the rise of instant communication technologies, they are easily and constantly connected to one another.

Barack Obama made a call to service in 2009 and, though often called the “Obama Generation,” Millennials weren’t the only ones who listened. Despite economic hardship, overall corporate giving increased in 2009. In recent years, we’ve seen an increase in corporate social responsibility and PricewaterCoopers claimed, after completing a recent report, that a social conscious is a core business value in today’s market. With things like the Pepsi Refresh Project, it’s clear that giving and supporting people is an increasingly important societal value. Science Daily even recently reported that we are evolving into a species built upon the notion of “survival of the kindest.”

What’s in a word? We are in an era in which people, collaboration, and caring for others really counts- and counts even more from one day to the next. Because “social” means related to people and society, it makes sense to look at the things we call “social” with an eye toward how they can help pursue social change. For instance, four seemingly unrelated “social” terms can inform nonprofit leaders of key ingredients for making a difference:

  • Social entrepreneurship: Change will take leaders. A social entrepreneur is a person who recognizes a social problem and summons their ambition and business acumen to create, organize, and sustain a social venture to solve that problem. It’s no question that large-scale change will require several hundred social entrepreneurs (if not thousands). It takes a critical, forward thinking leader to be a social entrepreneur. This is a type of mindset that the sector will likely need to cultivate and empower in order to bring about change.
  • Social media: Change will take collaboration. Social media is providing a basis for information-share and crowd sourcing that can help bring people together to solve complicated issues. This new way of communicating makes it easier to get in touch with people who share similar interests in promoting a cause.
  • Social capital: Change will take people, connections, and compassion. Social capital is the network, spirit, attitude, and personal connections created through social interaction. We “build” social capital by interacting with and relating to people. There’s a connection here to empathy because we are more moved by a cause when it affects someone that we care about. In order for change to happen, we all have to care. And in order for us all to care, we need to be connected.
  • Social psychology: Change will take an understanding of the people we serve, and the people we’re trying to motivate to contribute. Social Psychology aids us in understanding one another. If the goal of large-scale change is to help people, then we must understand these people’s needs and emotions in order to be effective. Moreover, we must understand those who similarly give and choose not to give to our cause. In the private sector, companies are always aware of their external economic climate. Nonprofit leaders must keep a finger on the pulse of the social climate as well.

Leaders navigating the nonprofit landscape looking for the buried treasure of social change need not feel discouraged. Our own language is providing us with possible keys to this treasure as society opens up to embrace a turn toward the social. As best practices grow even more powerful and efficient, nonprofit leaders will be armed with the connections, compassion, community, and communication tools to spread the word and support one another in achieving social change.

Posted on by Colleen Dilenschneider in Community Engagement, Nonprofit Marketing, Trends 1 Comment