Financial Support

November 4, 2014

 

We hardly ever hear the term “transactional relationship” when it comes to fundraising anymore — and that’s a good thing.  Now, it’s all about building a relationship with your various constituents.  Long-term relationships, that is.

 

This change in emphasis reflects the fact that fewer donations are made on a “once only” basis.  While it may seem that there isn’t much difference between a donation made transactionally and one made as a result of a relationship, there are important differences.

 

Transactional fundraisers don’t leave potential donors much choice.  Segmentation is very limited and the communications that are received tend to be very standard.  The emphasis of the content is usually on the immediacy and urgency of the appeal.  In a few months these fundraisers will approach their donors with another pressing need.

 

What then happens is that the donor receives a series of communications which are very similar in approach as they simply want to achieve the greatest possible ROI. It’s not about getting to know the donor individually.  It’s all about presenting the need.  Sooner or later that well gets tapped out of its potential to give.

 

The reverse of that is Relationship Fundraising which recognizes that it isn’t essential to break even on every communication with a donor because there is something more  which is being built.  This strategy recognizes that if a donor is treated with respect, he will want to give again (and not have to be coerced to doing so).  Fundraisers are content with somewhat lower rates of return in the early stages of the relationship because they know what is coming in the future if they do a good job building a solid relationship with the donor.

 

They are content because they have the confidence to understand that they will achieve more ROI over the length of the relationship.  This is what is known as “lifetime value.”  Transactional fundraisers don’t concern themselves with this concept.

 

Once fundraisers understand how much a given donor might be worth over time, they can tailor their appeals to that particular donor based on his needs/requirements, while ensuring a good lifetime ROI.

 

Are you having success building relationships with donors?  We’d like to hear about it.

 

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