So it’s Halloween! What would today be without a blog post that somehow appropriates a spooky theme!? If you came here hoping for cute and fluffy, here you go, but after this cutie I’m getting serious.
That said, there’s enough going on in the world right now that truly is scary, so don’t expect to run away gasping from this article. The scary stuff I’m going to talk about is all fixable.
Donor Attrition
The last two years have been really tough on our sector as we watch the numbers falling in terms of individual donors supporting nonprofits. According to data from the AFP-led Fundraising Effectiveness Project, donor retention hovers around 40%, which sounds kind of okay until you realize that means that donor attrition is around 60%. Yikes.
That said, giving continues to increase (see Giving USA). Not as much as inflation, unfortunately, but $557.16 billion is still record giving.
What we see going up is donations to donor advised funds. Yes, we talk about DAFs a lot around here, but that’s because they’re just super important for everyone in nonprofits to understand and just a huge source of funding that is going overlooked.
Okay, so how do we deal with the attrition/retention problem?
First, if there’s a donor you want to keep, find out why they love your organization. Research them, survey them, talk to them. Then do something creative with that information that helps retain them.
Second, if you want to retain mid-level regular donors, consider this: 10% of all giving right now is going into donor advised funds, and that’s a figure that’s growing yearly by leaps and bounds.
Also, and maybe more importantly: The 2024 DAF Research Collaborative National Study on Donor Advised Funds reported that “DAFs are a mid-range philanthropic vehicle, accommodating contributions larger than typical household donations yet smaller than those establishing private foundations.
- 38% of contributions fell within the $10,000 to $49,999 range.
- 15% of contributions were in the $50,000 to $99,999 range.
- 19% of contributions were within the $100,000 to $499,999 range.”
That’s nothing to sneeze at. And as we’re looking to retain and upgrade mid-level donors, that group is worth paying special attention to. But more than that:
DAFs are created specifically to give away money to nonprofits. Don’t make it hard for people to give to your nonprofit with their DAF! There are low-cost apps and widgets you can add to your website and fundraising emails that not only make it easy for donors to give but also provide you with all-important specific donor data so you can personally thank and research them.
Ignoring ASK ME signals from donors
When was the last time you checked donation acceleration?
What does that mean? For example, let’s say someone gives $25 in year one, $50 in year two, $75 in year three, etc. Maybe they’re increasing their giving because you asked them to, or maybe they’re just doing it on their own. Either way, these people are jumping up and down telling you they love your mission and want to support it. A simple data science project can help identify these awesome prospects for volunteer opportunities or increased giving.
And how about volunteers? Are you also asking them to give? There’s an organization that I love and volunteer for that Will. Not. Ask. Me. for a donation. I have no idea why (and I do give even though they don’t ask) but organizations should seriously ask people who love them for financial support in addition to sweat equity. You might get an upgrade…
Under supporting/under-utilizing prospect development
Over the years I’ve had the pleasure of talking with hundreds of fundraising managers who are concerned that their prospect development team is under-performing. One of the things that scares me is when I hear, “Our research department doesn’t give us what we need.” “They’re not proactive.” “It takes forever to get anything back from Research,” or – scariest of all – “the information I get isn’t relevant/helpful.”
Yikes.
When I hear that, I like to dig down a little more.
Tell me, what’s the frontline fundraiser to research staff ratio?
What are the expectations (and budget) for continuing professional education?
What’s the budget for fee-based research and training on using the resources?
How often does Research attend development/major gifts planning/strategy meetings?
How often do you update research report templates?
How often do the researchers hear about the results of their work?
If I learn that there’s one researcher for every three fundraisers, an expectation that the researcher(s) will attend a professional conference at least every other year, and a research budget that includes a variety of fee-based resources, and/or a general disinterest from Research in strategic planning, then we start talking about remedial actions for the research team.
But (and let’s hope that I’m exaggerating here), if we’re talking about one researcher trying to meet the information needs of 7 fundraisers, 2 board volunteers, and the executive director with access only to free webinars and Google as their primary resource, then it’s time for The Talk with that fundraising manager.
Maybe this sounds like your nonprofit (or maybe just parts of it do). If you’re a fundraising leader, don’t be afraid to dig down a little further to find out if under-resourcing your prospect development team is hampering your ability to get the best information possible. Maybe it’s the people, or the systems in place, or the resourcing that needs to be fixed. Don’t be afraid to look into the issues when problems arise so they don’t get harder to deal with.
Fundraising intelligence is a critical system, like your database, your relationships with donors, and the services you provide to end users. If it’s running well, it’s going to be a whirlwind for you to keep up with, and I mean that in a good way.
AI
Okay, I saved the scariest for last. Artificial Intelligence.
I get scared when I read about reference librarians wasting hours trying to locate articles and books for patrons, or (worse?) journal articles for medical students, only to discover from the requestor that they got the recommendation from ChatGPT for a source that doesn’t exist.
Recently on a subreddit for librarians, two contributors had this to say:
We just had a student bring an entire list of books and articles that her professor recommended for her research, and not a single title on the list exists. We reached out to the professor and yep. She got the list from ChatGPT.”
I’m an academic librarian at a medical school and I get sent a fake article to find like once a week. It’s terrible. It’s not just the students either, I also cover the residents at the local hospital since the hospital got rid of their medical library and they are even worse about it.”
(yikes, if that’s not something that scares you, I don’t know what will)
Duke University librarians Hannah Rozear and Sarah Park had something to say about ChatGPT in their excellent article ChatGPT and Fake Citations, including: “Be wary of asking ChatGPT to summarize a particular source…” That’s important advice because summarizing is a big thing we’ve been encouraged to use these tools for.
If a tool you use to help you save time adds in fake information, well, that’s not adding value. It detracts from prospect research’s perceived value, which we as a profession have spent decades trying to build up.
Issues like this, at least at this point, certainly makes me and the HBG team think twice about the reliability of the resources we use, and the trust that frontline fundraisers put in the information that we provide.
Increasingly search engines are providing short-cut information that has been generated, inferred, interpreted, or just plain imagined by large learning models (LLMs). In some cases, we’re being fed data that has less reliability than a chocolate teapot, and it’s harder to spot what’s real and what’s not. I hope that the reliability will be increased, but right now that’s just not the case.
Last November Melissa Bank Stepno wrote a thought-providing article on alternative interpretations of AI in prospect research. As you consider the reliability of your sources and how to navigate using AI in your work, take a look at her advice again as an informed guide.
So those are the things that are scaring me right now in fundraising and prospect research. All fixable, with opportunities for positive change.
