Lucy is an innovation expert who works with charities to improve their ability to innovate and raise funds. She tweets at @LucyInnovation.
Lucy makes the point that innovations are unlikely to give returns within financial year; so the pipeline of new innovations needs to a) be well populated and b) have a multi-year strategy/budget. The challenge isn’t to not ‘fail’, it is to make your innovation process robust enough to withstand ‘failure’, for senior leadership to make failure something people are happy to discuss and mull over, and to spread the attitude that discussing failure is not a bad thing. It is the case though that we become invested in our ideas, and sometimes lose our willingness to accept that something isn’t working.
Every charity wants to innovate. However, leadership and culture are critical. A culture of innovative practice doesn’t come about without examples from the top, especially as it can be difficult for more junior staff to say “that project I worked on absolutely tanked” if they are worried that it will be perceived badly by their superiors. The whole organisation must be behind a change to innovative practices or it is likely to fail. We discussed the example of shoe company Zappos, who pay staff to leave if they are not happy. As founder Tony Hsieh says in a fascinating article about his sale of the business to Amazon, “I believe that getting the culture right is the most important thing a company can do”.
For prospect research and insight, its interesting to consider the role of “translators”. These are the people in organisations who draw out the narratives from information and present the story. For researchers, this is a key skill, and is really important in modern, information-rich/time-poor organisations. And Lucy is clear that “you can’t do innovation without insight”. Building and using a base of evidence for new products and projects, and evaluating existing work, is absolutely essential in the innovation process. While “creativity means not copying“, creativity and innovation rely on learning from experience and incorporating this learning into future work.
Ken has won many accolades, including the Institute of Fundraising’s ‘Lifetime Contribution’ award, and being named, in 2011, the most influential person in British fundraising. He has also acted as a Trustee of ActionAid and the Disasters Emergency Committee (DEC), as well as writing many books and articles on fundraising, including the classic ‘Relationship Fundraising’. He tweets at @kenburnett1, and his website, featuring ‘Relationship Fundraising’ and new book ‘Storytelling Can Change the World’, is here.
Ken’s passion is using communications to build strong relationships with supporters. For more on this, see Ken’s recent blog posts, and series on ‘The Future of Fundraising’, available here, which describe some of the barriers facing charities in building enduring relationships with their donors. Some of those covered in the interview, are:
Underinvestment: Ken highlights the long-term lack of investment in fundraising products and appeals, as well as the relative neglect of customer care compared to the commercial world. This may have been understandable in the past, but with the revolution in customer service lead by firms like Amazon and Zappo’s, poor or average customer service is just not acceptable, and is indeed not being accepted by the majority of charity supporters, who move their support between charities while staying within the same sector with great regularity
On this, he says that “almost all of the [big questions] are examples of underinvestment…because of the nature of our business we think money will come to us…if we’re losing donors at the rate we’re losing them…that’s a recipe for disaster”
High staff turnover: from Trustees to admin staff, most not-for-profits have average turnover rates of up to 20%, making it difficult to build lasting relationships with supporters and reducing the institutional memory of many not-for-profit organisations
Short-termism, which is, in Ken’s opinion, “the major thing that holds our sector back”, with a lack of long-term thinking allied to the fact that “we do not have R&D budgets”, a “blinkered approach [that] holds us back”
Ken calls his “greatest heresy” the assertion that the CRM revolution which swept through fundraising in the 1980’s and 1990’s was a mis-step. He says: “we’ve become very professional…but donors want to be inspired by people who are every bit as passionate as they are”, adding that many charities struggle to build lasting relationships with supporters as, while “our organisations were founded in anger”, many have become slick and professionalised, sometimes losing, in their communications, the sense of outrage which moved their founders to create them, and which drives donors to support them.
Charlie is CEO of DonorVoice UK, who work with not-for-profits to reduce rates of donor attrition and in building supporter relationships. He tweets at @charlieartful.
The interview is about retaining donors. Retention has the coming idea in fundraising for…a long time. Ken Burnett published the fundraising classic ‘Relationship Fundraising’ in 1992, with Professor Adrian Sargeant’s ‘Building Donor Loyalty’ published in 2004, both books are well-known and acknowledged references on how charities can build strong and enduring relationships with supporters. Charlie is a real evangelist for the cause, and opened my eyes to the danger that many charities are — often without knowing it — committing suicide through inertia. We know that two things — the ‘functional’ and ‘personal’ connections to brands — are critical in determining the level and durability of charitable support, yet many not-for-profits routinely follow the mantra of ‘just ask more and it will be fine’.
But we still find ourselves hemorrhaging support. Around one third of first time supporters of charities in the UK do not give a second gift, and in the US around 70% of donors have not continued giving a year later. Acquisition budgets increase, but retention budgets do not exist. We furiously slop water into the leaking bucket, even while holes continue to appear.
In the UK this is especially important, as the generation who the CAF call the ‘Civic Core’ (the 9% of the population who contribute 66% of the time and money donated to charity) are now well into their 60’s and 70’s. This group have doubled their charitable giving in the last 30 years, as younger people’s engagement with charity has fallen off a cliff. To even sustain out current donated income, UK charities urgently need to reach new audiences, as well as building stronger relationships with existing supporters — no mean feat.
Charlie talks in the interview about the fundamentals of retention. He also speaks about recent work done to test how commitment works, the psychology of commitment to brands and organisations, and what people want from organisations they support. Hope you enjoy it.