Transactional Donors Are Not Really Donors – Yet

15 May Transactional Donors Are Not Really Donors – Yet

by David Allen, Development for Conservation

“Jorge” gives $250 to play in your golf “outing.”

“Aliyah” gives $50 to become a member and immediately saves $80 on the cost of putting her two kids in the two-week nature camp you offer.

“George” and his wife give $150 for two tickets to the Gala and then successfully bid $600 on one of the auction items.

What do these “donors” have in common?

They are each “transactional donors.” They have purchased something and have gotten equal or greater value in return. If this is their first “gift,” great! But the chances of getting a second gift are significantly diminished unless the same “exchange” is offered again at the same “price.”

There is nothing wrong with transactional donors. We love transactional donors!

But there are at least three things wrong with the way most of us think about transactional donors.

First, most transactional donor fundraising is small-ball fundraising. It comes from the same place as bake sales, car washes, and discounted food – like marching band chocolate, girl scout cookies, and boy scout popcorn. (Ask me sometime about trying to sell 1,000 boxes of Krispy Kreme donuts in a WalMart parking lot during a 100-year rain event!)

The interest in transactional donor fundraising is born because we can’t imagine why someone would give money without a material incentive – or don’t have time to make that case. And it works pretty well up to about $75 per person for dinner and $250 per person for golf. $1,000 per plate dinners are not unheard of, but there usually needs to be a high-priced celebrity or a political candidate involved.

Second, we confuse transactional donors with mission donors all the time. We even call them “members.” We send them the same types of information in the same quantities as if they were mission donors. We include them in donor reports. And we try to “renew” them a year later.

Transactional donors aren’t even donors, yet!

So why are we surprised and disappointed that they do not renew? Transactional donors that do not renew make their decision based on a value calculation. They may not need another T-shirt or mug. They didn’t end up shopping at those places where they would get a discount after all. They’re not going to be in town on the golfing weekend. Sorry, not sorry.

Third, we fail to recognize that the exchange – for them – is complete. Value received for value given. Asking them to give again or give without getting value in return doesn’t work very well. Asking them to increase their gift amounts to a “price increase.”

Why would I buy a $500 table when I got a $250 table last year? My discount is only $40, and the membership costs $50. That’s not a good “deal.”

Transactional donations are easy to spot when the exchange involves material goods or experiences. But the same dynamic exists in less obvious circumstances.

“Maria” donates $500 toward the purchase of a nature preserve within walking distance of her home, in part because of fond childhood memories there.

“Terrell” gives $200 to sponsor a rider on a long-distance bike ride to support your organization.

“Emily” and her husband donate an easement on their property and then donate $5,000 in cash toward its perpetual monitoring.

Each of these donors contributed to something that got “done.” Something that they wanted to see done. They didn’t necessarily contribute to the organization doing it as much as they contributed to the “thing” being done. And in that context, it doesn’t make sense to them that they would be asked to “renew.” After all, it’s over.

And sometimes, their reaction borders on the hostile. “I just gave you a conservation easement and $5,000 to go with it. Why are you asking for more now?”

So what can we do about Transactional Donors? I have four suggestions:

• First, stop treating them like their gifts are renewable. Even calling them “members” is problematic in my view.
• Tailor their communications to the reasons they gave in the first place. Give them information about what the money raised at the event accomplished. Or the next project that will need funds.
• Ask them for money again right away. If they are not mission donors already, ask them to support the mission – or become a member – within three months of their transactional donation. If they are a golfer, table buyer, or event sponsor, ask them to “renew” their sponsorship for next year’s event within a month or so of the completion of this year’s event – ie BEFORE we know whether next year’s event will get rained on or whether there will be a more attractive offer for that particular evening.
• And last, be completely transparent with them. If the price of golf includes a membership, then say so and use the opportunity to tell them why that’s important. If the money they give to endow the perpetual monitoring of their easement includes a renewable membership in the $1,000 club, then say so overtly and more than one time. And don’t forget that memberships thus bestowed do not need to be 12-month memberships. They could be 6-month or even 4-month memberships.

Do you have a success formula for converting transactional donors into loyal mission donors? Color me interested.

Cheers, and have a great week.

-da

Related Posts:

The Trouble with Transactional Giving

Photo by Pawel Kadysz courtesy of Stocksnap.io.