Winning Donors’ Trust with Restricted Giving

Today’s donors have totally changed. And you need to change your approach to them. Watch the trends. You’ll see major shifts in what donors expect, what they want, and what they are responding to.

Today’s post-recession donors are just plain different. Here’s why:

They Don’t Trust Us as Much as They Used To.

Donors are generally less trustful of everything: the government, financial institutions, the news media, big organizations – and your local nonprofit.


You can see a sharp decline in Americans’ confidence in major institutions. It’s tracked by many sources: Freaknomics and the Wall Street Journal, for two. One study even found that even friends trust each other less.

The loss of confidence in institutions is global. People have simply lost faith. They are skeptical.

How Does Your Organization Show Up as Credible and Trustworthy?

If your donors are less trusting across the board, how do you get them to believe in you and your cause?

You can rebuild donors’ trust in you by being very explicit about where the money is going and how you are spending it.

Take a look at the photo: “Your Membership Fees at Work.”

My local YMCA had this taped to the wall above the water fountain. Way to go! I loved it so much that I took a picture of it on my phone.

One of the most important pieces of information you ever give your donors is a chart that says:

“Your Gifts at Work.”

It should be a prominent part of your web site. It should be a stand alone page. Splash has a great page for this here, and charity: water has one as well here.

Today’s Donors Are Mistrustful About Unrestricted Giving.

Here’s what today’s donors are particularly nervous about:

They are really worried about making a gift into the big black hole of “unrestricted gifts.”

Your donor is thinking:

I wonder what their fundraising costs are?

Will they waste my money?

I wonder where the unrestricted money really goes?

How will I be treated?

I don’t want to pay for somebody’s inflated salary.

Here’s the problem: we keep cheerfully and enthusiastically asking our donors for their support.

But What Are You Going To Do With The Money?

We don’t talk a lot about what we are gonna do with the money. Where can a donor find this out? I hope they don’t have to go to your 990 on GuideStar to find it!

Here’s a great example of being totally transparent about the money:

Check out this email thank you charity: water sent to my friend Kivi Miller recently. They always do a terrific job reporting back to donors. The latest example: their 2011 annual report.

Nothing makes donors feel better than knowing exactly how you spent their money. The great Penelope Burk said at a presentation recently:

“Donors will give more if you let them restrict their gifts.”

She said it’s a shame that so many nonprofits are beating the drum for unrestricted gifts. Because most donors don’t want to make unrestricted gifts.

Penelope Burk said we could raise so much more from our donors if we let them target their gifts for specific projects.

And the brilliant Tom Ahern, in his recent INSIDERS Master Class with us, told us:

“You have to be specific about where the money will be used.”

Of course, all my fundraising friends say to me: “but, but, but we need unrestricted funds!”

And I know you do! But we are lazy. There are more interesting ways to talk about and frame unrestricted gifts than we do now.

See if you can’t shape your unrestricted funds into projects.

Here’s an example: My colleague Ann runs a huge facility that houses other nonprofits.

She is wailing to me:  “How do I raise money for the lights and utilities? I don’t have any real ‘programs’ to promote. Help!”

I asked her:  “how many people come through your door a month?” She answered: “around 5,000.” I said: “how much does it cost you to run the facility for a month?” She replied with a figure. I suggested: “then can you create an average number that represents how much it costs per person per day more or less? If so, you can structure your fundraising around that.”

She said: “yes yes!” And she was really pleased to have a new way to frame her fundraising appeals. She was able to move from a generic request to more of a specific request that will appeal to today’s less trustful donor.

Bottom Line:

1. Try being creative about the purpose of your year-end appeal.

2. Construct some “projects” and let donors fund these.

3. Let your donors know where the money is going, and why it costs so much.

4. Be upfront about your finances.

And your donors will pay attention. They will thank you back with renewed investments.

 

Gail Perry, is a non-profit consultant, best-selling author, and speaker. Want Gail to help you make your year-end letter more compelling to your donors? Find out how here.

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