How educating your donors can put you in a financial death-spiral

The purpose of fundraising is to raise funds. I only bring it up because it’s not as obvious as it sounds. Many organizations believe they should use their fundraising program to educate donors. To tell them things they don’t know, but we’ve decided they ought to know.

Most fundraisers have a handful of offers that work well. If they’re on top of things, they’re always testing to find new offers to expand their portfolio. But they consistently use the winners, those offers their donors respond to best.

Educate-the-donors fundraisers have a different approach: They use fundraising offers whether they work or not, because the goal is to give donors a “rounded” picture of the work.

That means they trot out calls to action that most donors don’t understand and don’t respond to. Donor-educators believe it’s worth the price. Some claim it will pay off over the long term as non-responding donors have aha moments. Others just seem to want to be understood, despite the cost.

So let’s look at the cost.

Let’s say you have 100 current donors. You send them 12 fundraising appeals a year.


  • 10 of those have strong offers, with an average response of 8%
  • 2 are not as good, with an average response of 5%

Over the course of a year, that’s 90 responses. At an average gift of $40, you get $3,600. Since many donors give more than once, that nets out to 45 donors giving in the course of a year.

The other 55 lapse. You will never again hear from most of them. The following year, the 45 who didn’t lapse will give $1,600.

Let’s try that again, but apply educate-the-donor metrics:


  • 2 strong appeals, averaging 8%
  • 5 mediocre appeals, averaging 5%
  • 5 weak appeals, averaging 3%

That set of donors got a broad education of the organization’s activities. But at what cost?


  • Total giving: $2,240
  • 56 gifts
  • 28 donors giving

That’s a 37% drop in revenue and number of gifts. Which hurts. But here’s the big hurt: Instead of 55% of the donors lapsing, 72% of them lapse. The remaining 28 will give just $1,000 in the following year.

Unless they’re pulling off miracles in new donor acquisition, that organization is in a financial death-spiral.

An educate-the-donor fundraising program has extremely high costs. Short term, and even more so for the long term.

And here’s the really sad part: Poor response is mostly a product of low involvement. Those weak appeals you send out to teach — nobody even reads them! They fail at teaching just as miserably as they fail at raising funds. There’s no education, no aha moments, no deeper understanding. And you lose your job in the bargain.

If you don’t want that, use your fundraising program to raise funds. Donors are in charge of their own education. They don’t want — and seldom accept — your help.


Comments

8 responses to “How educating your donors can put you in a financial death-spiral”

  1. I’ve read this warning several times but can you show us examples of asks that do too much educating and not even fundraising? I agree with what you’re saying, I just want to see all of this in action – the good and the bad.

  2. I’ve read this warning several times but can you show us examples of asks that do too much educating and not even fundraising? I agree with what you’re saying, I just want to see all of this in action – the good and the bad.

  3. An over-educating offer is not so much a particular kind of offer as an offer that was used not because it works but because someone thought the donors needed to see it. In theory, an offer put forward with that motivation could work just fine. In practice, it almost never does, because when you don’t START with the donor, you won’t reach the donor.
    An example would be an organization that fights poverty. They have a number of effective offers related to feeding the hungry and other simple, direct-service programs. They also give civil society seminars, which are very effective. An offer based on the seminars is not at all likely to work, yet people at the org may say “We do it, and it’s important, so we need to put it in front of donors.”
    That’s not to say you shouldn’t try new offers. Donors can surprise us, and brilliant thinking can sometimes package up a difficult offer into a thing of fundraising beauty. But throwing offers out there with the goal of teaching donors what you do — that’s the costly mistake.

  4. An over-educating offer is not so much a particular kind of offer as an offer that was used not because it works but because someone thought the donors needed to see it. In theory, an offer put forward with that motivation could work just fine. In practice, it almost never does, because when you don’t START with the donor, you won’t reach the donor.
    An example would be an organization that fights poverty. They have a number of effective offers related to feeding the hungry and other simple, direct-service programs. They also give civil society seminars, which are very effective. An offer based on the seminars is not at all likely to work, yet people at the org may say “We do it, and it’s important, so we need to put it in front of donors.”
    That’s not to say you shouldn’t try new offers. Donors can surprise us, and brilliant thinking can sometimes package up a difficult offer into a thing of fundraising beauty. But throwing offers out there with the goal of teaching donors what you do — that’s the costly mistake.

  5. Glynis Avatar

    What about stewarding donors – where you aren’t actually asking for money – you aren’t putting an offer in front of them, but you are communicating. My thought is that even if there is no offer, you should always show the donors how their money is being used, but we recently sent out a piece that thanked donors, but told them nothing about how their money was being used. One of our programs is eye health (we are one of the largest eye clinics in our area – so we treat cataracts, glaucoma, etc.). So we sent out a piece with 5 facts on glaucoma. I’m still not sure how that stewards our donors, but that was the decision made. I’d love to hear your opinion on it.

  6. Glynis Avatar

    What about stewarding donors – where you aren’t actually asking for money – you aren’t putting an offer in front of them, but you are communicating. My thought is that even if there is no offer, you should always show the donors how their money is being used, but we recently sent out a piece that thanked donors, but told them nothing about how their money was being used. One of our programs is eye health (we are one of the largest eye clinics in our area – so we treat cataracts, glaucoma, etc.). So we sent out a piece with 5 facts on glaucoma. I’m still not sure how that stewards our donors, but that was the decision made. I’d love to hear your opinion on it.

  7. Glynis: “5 facts on glaucoma” might be a great thing to send donors — if it’s a service to them, giving them useful information. Stewarding donors should mostly be about telling them how their giving makes a difference, but giving them helpful information is a worthwhile thing to do also.

  8. Glynis: “5 facts on glaucoma” might be a great thing to send donors — if it’s a service to them, giving them useful information. Stewarding donors should mostly be about telling them how their giving makes a difference, but giving them helpful information is a worthwhile thing to do also.

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The future of fundraising is not about social media, online video, or SEM. It’s not about any technology, medium, or technique. It’s about donors. If you need to raise funds from donors, you need to study them, respect them, and build everything you do around them. And the future? It’s already here. More.

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Jeff BrooksJeff Brooks has been serving the nonprofit community for more than 35 years and blogging about it since 2005. He considers fundraising the most noble of pursuits and hopes you’ll join him in that opinion. You can reach him at jeff [at] jeff-brooks [dot] com. More.


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The future of fundraising is not about social media, online video, or SEM. It’s not about any technology, medium, or technique. It’s about donors. If you need to raise funds from donors, you need to study them, respect them, and build everything you do around them. And the future? It’s already here. More.

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Jeff Brooks has been serving the nonprofit community for more than 30 years and blogging about it since 2005. He considers fundraising the most noble of pursuits and hopes you’ll join him in that opinion. You can reach him at jeff [at] jeff-brooks [dot] com.

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