During World War Two, a tribe in the Pacific Islands saw American supply planes disembark their cargo onto a landing strip. Having a strong belief in the divine, they reasoned that the planes were sent by a God, and that, were they to build a replica airstrip, correct in every detail, the God would send them planes laden with valuable supplies (‘cargo‘). So they set about building wooden huts, a wooden airstrip, painting their chests with ‘U.S.A’, even staffing the huts with people and building fires alongside them to mimic guide lights. But the planes were not sent by a God, they were built and flown by the American army, and none brought the hoped-for cargo to the Islanders’ airstrip.
Cargo cults are a famous example of ‘magical thinking’, where a conclusion is reached that evidence does not support, or even suggest. Fundraising seems to be suffering from a classic case of magical thinking. The patient is serious but stable, although the long-term prospects are dim. Exhibit A: digital fundraising. By looking for the next ice bucket challenge or #nomakeupselfie — in effect praying for free money to fall out of the sky — we may as well build our own plywood airstrips. No doubt a strong digital brand is a prerequisite for many organisations in this day and age. However, in scrambling to co-opt the next trending hashtag, we are diverted from the demanding, but rewarding and necessary work of building enduring donor relationships of long-term value. We are also labeled cynical and opportunistic by the very audience we sought to engage; ultimately, this is not an arms race with a winner, it ends in scorched earth and attrition. Exhibit B: certain types of direct fundraising, including philanthropy and individual giving. In these areas, for different reasons and in different ways, wishing harder seems to be an accepted methodology. At major donor seminars, the almost palpable hope is for a wealthy philanthropist to come to the first event they are invited to, immediately write a huge cheque with no expectation of reporting or stewardship, and do the same the next year. And individual giving keeps a-wishin’ — despite continued 90%+ non–responder rates — for a white knight (looking at you, behavioural economics) to come and save the day, despite no evidence that either response rates nor overall giving will grow, or even remain static, with current methods. The gifts keep not coming or coming more slowly, but we still build our wooden airstrips, light the fires and wait for the cargo to arrive.
- A serious political discussion about the role of philanthropy in public policy.
- Decent research informing policy decisions, paying attention to undesirable side-effects.
- An Impact Philanthropy Lab (IPL): creation and evaluation of new philanthropic / business investment instruments.
- Knowledge about what works in fundraising, and about failures
My addition to the list would be to discuss failure openly and constructively. Learning from failure is fundamental to progress and innovation but often, it seems, we brush it under the carpet or quietly shelve ‘failed’ projects. Organisations such as Glass Pockets and Fail Forward, taking their lead from initiatives like Engineers Without Borders Canada’s ‘Failure Report’, are helping not-for-profits learn that, as NPC said recently, “the public wants to see charities use evidence to become more effective and don’t mind hearing about past failures as part of this process”.
Choosing whether to take these lessons on board may now not be a matter for charities, in the UK at least. The British Government announced this week that, following recent high-profile scandals and tragedies, it would back new laws to limit charity fundraising communications; the first step in this being a review of charity self-regulation by NCVO Chief Executive Sir Stuart Etherington. Charities’ Minister Rob Wilson has left no doubt that charities are losing control of their own destiny in saying recently: “[c]harities need to take more responsibility for their […] fundraising, and ask themselves how they would feel if they were on the receiving end of their organisation’s fundraising practices..[n]o one should try to deny that there is a problem here or that there are indefensible practices taking place..[charities] do not have the luxury of time. There are demands for immediate action not words…I urge you to take that window of opportunity seriously as [it] may not remain open for much longer.”
The calls for actions should not be a surprise. As previous interviewee on this site Charlie Hulme pointed out in a brilliant polemic this week, their causes have deep roots in our methodologies, particularly the singular failure to understand donor motivation: “[w]hat do we actually know about the people we systematically bombard with requests for more money? We know their transactional history and demographic profile. But knowing who gave, what they gave, when they gave and how they gave tells us nothing, nothing, NOTHING about why they gave or would give again….As a sector growth is stagnant. Retention rates are catastrophic. And fewer and fewer people like, much less trust, us. Our jaded, complacent, timid sector is mired in bad business and bad ethics. Bad business because, despite the rhetoric, we do nothing to change a set up that, by definition, precludes the concept of being ‘donor centric’ from being anything more than a buzzword. Bad ethics because this stops us growing and making the slightest dent in mission.” These are strong words, but to quote economist John Maynard Keynes, to have their full impact “words ought to be a little wild”. Charlie, Kevin Schulman, Roger Craver, Ken Burnett and others have warned for years (and decades) of the risks associated with ‘just ask more’. They are surely being proven right now, and deserve to be listened to.
Charities can persist — as cargo cults do — or they can change and thrive. The causes we represent are the best imaginable, but as Sir Stuart Etherington said this week, “[c]harities can only do the work they do because of the trust, confidence and overwhelming generosity of the British people”. Not regaining this trust and confidence will be the death knell for ambitions to grow, or even maintain, giving. Nobel Prize-winning physicist Richard Feynman famously said that to avoid ‘cargo cult thinking’, “the first principle is that you must not fool yourself–and you are the easiest person to fool”. Rather than fooling ourselves, we should dare to know why our supporters choose the charities and causes they do, and dare to break the ‘ask less’ taboo. Rigorous use of evidence, learning from ‘failure’, being honest with ourselves and donors, and actively seeking out disruptive innovation will all be key parts of our being able to raise, and do, more for those who need us.
The planes will not land unless we have the courage and skill to build them.
(Fund) Raising Voices 
Wow, this is a great post. I think it nicely describes a lot of the things I’ve observed in various sorts of organizations. Lots of small nonprofits fail to adequately build workable fundraising programs because they don’t know enough about the way the process should work, and as they learn, it seems overwhelming at first. And lots of larger nonprofits keep going back to the same donors over and over again and never shift their strategies because they think what they are doing will work forever, even despite the fact that the needs and goals have increased and changed. And then, of course, it doesn’t help that sometimes the large donors of the sort that are wished or hoped for may just appear out of the blue every so often. It only encourages the persistence of the sort of magical thinking you describe.
Sometimes it can be very helpful to plainly put the facts about the prospect pool and the data out there with no agenda and to let people come to their own conclusions as they understand the reality of the situation. But even then, I’ve noticed, if people or organizations have beaten the odds before, many will look at the data and still persist in magical thinking on the basis of past examples which are highly unusual outliers. That’s one reason why I’m focusing lately on communicating the importance of systems instead of goals. If we concentrate on building workable systems, we are likely to encounter much more success than if we simply fixate on goals and wait for magic to happen.
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Thanks Dean, and apologies for the incredibly slow reply. There’s a lot to say about how organisations plan their donor relationships, my point being that, as I say, hoping harder won’t get us there! There are always outliers, but its the hit rate/conversion rate that reallly matters, as well as timeliness of contacts and conversion rate of asks/gifts. But the metrics matter less than accepting that building donor relationships is king.
As you say, many smaller charities struggle to plan longer-term. In the UK, most nonprofits are micro — 75% have income of £100k or less, and the majority employ two or fewer people. In my experience, that leads to a lot of muddling through, and just keeping the doors open is an achievement, let alone being strategic or planning beyond the current financial year. For me, that makes it even more important for the bigger charities to lead the way in building expertise and sharing it across the sector; knowledge-sharing is something nonprofits do really well.
You mention systems vs goals, but risks are often also not taken into account, so, for example, the risk of continuing with business as usual, which could well be considerable, but the assumption sometimes seems to be ‘we’re doing it already, so someone must have factored in the risk’. Which is obviously a risk in itself but seems to be quite prevalent.
Anyway thanks for reading and for the comment!
Ben
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