During the pandemic, there was renewed interest in the work of the charity sector. After almost a decade of declining trust and confidence in charities, indications are that there has been some improvement in public attitudes towards charities over the past few years. There are just over 170,000 charities in the UK and approximately 16,000 of these are in the South West. The largest groups in the region are community charities (3346), culture and heritage charities (1715), religious (1411) or social welfare charities (1060). With current inflationary pressures and the cost of living crisis, charities are competing for funds at a time when the market is being squeezed. Fundraising and leadership teams will need to work harder at securing income. Here Dr Hudson argues that focusing on building long-term donor relationships should be a priority.
Connecting dots and donors
I care passionately about the growth of philanthropy and am particularly interested in charity fundraising. Current research explores the psychological mechanism that encourages donors to give to and develop meaningful relationships with charitable organisations. Whilst philanthropic psychology is a new area, those who use it to inform their fundraising realise that it could significantly increase their income whilst ensuring donors feel good about their gift. A lot more can be done to help charities, especially small, local ones obtain useful and accurate information about how they can engage and communicate with prospective donors to build relationships. Charities who are not well resourced find it challenging to obtain and use accurate and insightful information to build such relationships with their donors. It is, however, vital that they do this.
Potential donors want to feel good about supporting, connecting with and contributing to their chosen charity. I have a meaningful association with a local branch of an animal charity. It started when I got my first rescue pet from them; this created a bond with and sense of goodwill towards the charity. I wanted to support them especially as I care passionately about animals and supporting creatures who do not have a voice themselves. Despite my admiration for the charity’s work with animals, the charity has not yet engaged with me in a way to use my (and I suspect others’) goodwill to their advantage. I would be happy to donate more and would get a buzz out of supporting their work further yet, whilst I am certain they would like to cultivate a deeper relationship, they have not actively done so. This is an example of an issue that is widespread; charities frequently underinvest in donor relationships that are built on a shared identity or commitment. Finding that shared identity is really important; donors can express their concern and commitment through giving, whether that gift is financial or time.
Mistaken identity
We all have various identities: relational, personal and social identities as well as group and organisational identities too. These different identities reflect who we are in different circumstances. Organisational identity explores how someone feels in relation to an organisation they are connected with. Social identity explores the social groups someone engages with. Charities can use these different levels of identity to communicate more effectively with both existing and potential donors. Fundraisers need to understand the needs and identities of their donors. Various identities can come into ‘play’ when donors give; the act of giving can reinforce that identity. ‘Who’ people are when they give is much more powerful than ‘why’ people give.
Fundraisers should consider how donors might identify with their charity at the time of their giving: who/what is their connection to the charity? How does giving make them feel? What autonomy and control do they have over their giving? It is important to explore what a donor’s needs are; do they need their contribution to be acknowledged? If so, it should be done in an authentic, warm and meaningful way. Language should be chosen carefully. Some donors give because ‘it’s the right thing to do’, indicating that their engagement is quite passive. Other donors demonstrate a genuine passion for the organisation that can be increased by building trust, two-way interactions and the development of shared values.
Give on trust
Good communication fosters trust. Communication is about both words and actions: honouring promises, being consistent with stated values, exhibiting good management judgement about activities, resource use and strategic direction. Fundraisers need to communicate clearly the essence of what their organisation does and understand how that resonates with their core donors through their various identities and what potential there is for the relationship to be deepened? The more people feel good about their giving, the more likely they are to give willingly and give more. Donor retention is all about these key relationships. New approaches to retention are being developed all the time, drawing on other disciplines such as relationship marketing. There needs to be a match with donor expectations. Charity staff need to be trained in how to manage and deepen the donor relationship.
Trust is important in any relationship. For charities and their donors, it is paramount. Recent indications are that there has been a decline in trust for charities and fundraising. Clearly there is some work to be done across the sector to tackle this; to date the impact of this has been much more short-term thinking and underinvestment in the sector. More long-term investors are needed but the costs of getting new donors can be high. Those who give need to have a good experience as donors to make them want to stay. Building a long-term relationship with donors can be hugely beneficial for the donor as well as for the charity. Making donations reinforces a donor’s good intentions and can lead to them feeling better about themselves and their contribution to society.
Charity leaders and fundraisers need to get the relationship right. It is no longer sufficient to simply inspire people with what the charity does. Donors want to feel listened to and understood. They want evidence that charities care what they think. Every interaction needs to be thoughtful and considered to build a strong relationship with donors. Donors should be granted a certain amount of autonomy in choosing how to spend their money; giving a donor a voice, a choice and a sense that through their actions they have caused something good to happen is important.
Connection is key
Developing a connection is key to building a relationship over the long term. We know from psychological wellbeing theory how important creating that connection is. Giving creates a scenario that establishes a connection with those we love or care about (such as children or animals). The act of giving can be a means to live up to promises by articulating care and concern for others. It should also be reinforced by competence and belief that it is making a difference. Charities need to demonstrate that they are operating efficiently and evidence the impact of their work. The organisation and its work need to be believable. Much depends on how the charity communicates their work to donors and the wider public. Key donors will want to tailor their engagement with the charity and choose how they are communicated with; they want to know that their donation has brought about change.
To communicate how a donation has made a difference, it is important to get to the heart of who a donor is. Charity fundraising teams need to understand potential donors better: what motivates a donor and what matters to them, why do they want to go on a journey with that charity? It is impossible to have happy and satisfied donors without understanding why and who they are when supporting an organisation. The irony is that when funds are tight, research is put on the backburner. Market research, as well as new product development, are often the first areas to suffer from funding cuts, even when hard evidence tells us that this is the time when it can make the biggest contribution and can guide the deployment of time and resources to best effect.
Fundraising is about inspiring people to believe they can make a difference and building long term, sustainable relationships that deliver value to both the donor and the charity’s cause over many years. Donors need to know what has been achieved as a result of their donations and why it is important for them to keep giving and continuing to make a difference. Without giving, there is no charity.
