Relationship Fundraising 2.0 - What can we

learn

from the psychology of human relationships?

Prof Adrian Sargeant

@RogareFTT

Critical Fundraising on Facebook

@RogareFTT

@adriansargeant

adrian.sargeant@plymouth.ac.uk

How do we build relationships?

‘Everything we know about how to build

a good relationship as a parent or friend we can apply to

fundraising.’

Stages of a relationship

Dissolution

AWARENESSStage 1

Stage 2EXPLORATION

Stage 3EXPANSION

Stage 4

COMMITMENT

Relational v transactional

“Not all relationships are important all the time…some

marketing is best handled as transaction marketing.”

Swedish marketing professor Evert Gummesson

Relational or transactional?

Transactional

Fundraising

Relational

Fundraising

Relational v transactional

Single Sales

Immediate ROI

Short-term

Purchase

Emphasis

FOCUS

KEY MEASURES

TIMESCALE

ORIENTATION

CUSTOMER SERVICE

Customer

Retention

Lifetime Value

Long-term

Relationship

Major Emphasis

‘Fundraising pendulum’

Beneficary

NeedsDonor

Needs

Stage 1: Awareness

• What will inspire a donor at this stage

Stage 1: Awareness

Stage 1: Awareness

Stage 1: Awareness

Stage 1: Awareness

• What will inspire a donor at this stage

Stage 1: Awareness

• Invest in immersive experiences

Stage 1: Awareness

• Offer donor choices

– Satisfy them by giving them control

– Don’t ask on a first date

– First prove value of communications

Stage 1: Awareness

• Conduct donor surveys

Stage 1: Awareness

• Conduct donor surveys

Stage 2: Exploration – Deepening the

Relationship

•Satisfaction is driven first by the attracted target but then

by the fulfillment of donors’ needs.

•Shift from “how attractive you are” to “what needs this

relationship can mean for them”.

Stage 2: Deepening the relationship

•Satisfaction is first driven by fulfillment of donors’ lower level needs but then transition to be fulfilled by donors’ higher level needs;

– Connectedness

– Autonomy

– Competence

– Growth

– Purpose in life

– Self Acceptance

But

• The higher the level of perceived needs to be met, the more ambiguous and

more uncertain people feel about judging their fulfilment

• The more uncertain, the more likely they are to rely on others to help them

form the judgement

• The more ambiguous people feel about what a fulfilled life means the more

they would look to others to help them define what a fulfilled life means

Stage 2: Deepening the relationship

Stage 2: Deepening the relationship

Stage 2: Deepening the relationship

Stage 2: Deepening the relationship

25© Tom Ahern 2013

How great the ORGANIZATION is = $4,470 in gifts

26© Tom Ahern 2013

CORPORATE communications

DONOR communications

© Tom Ahern 2013

How great the ORGANIZATION is = $4,470 in gifts

© Tom Ahern 2013

How great the DONOR is = $49,600 in gifts

Stage 3 – Expansion

Self-verification theory

• “People can always feel better if others important to them see them in the same way they see themselves.”

• “Both partners reveal themselves, and seek and express validation of each other’s attributes.”

• (Reis and Shaver 1988, 369).

Self-verification theory

• For the clever

fundraiser, the point of

the research is not the

information, but the

participation

Let donors see similarity

• Donors must believe in what you believe in, but …

• Immerse them in other activities that express those beliefs

– perhaps even invent them so that donors can see the

similarity in beliefs.

Similarity of Identity

• Lets explore …

Public Radio Industry

• Over 800 NPR member stations in the US

• Funding:– 1/3 from individuals

• On-air drives, direct mail, telemarketing

– 1/3 from corporate underwriting

– 1/3 from state and local governments, universities and foundations

• Individual donations – $250 million per year

– Average gifts range from $20 - $250 depending on the length of listening

Social Information

• Seattle’s Lakeside Upper School counts … Bill Gates among its alumni. Rumor has it a fundraiser for the high school put the bite on Gates, who asked: “How much is everyone else giving?” About $75 he was told. “So put me down for $75,” said Gates.

-- Forbes, Jan 22, 1996, p. 16

On-Air Drives

• Listeners call to make pledges

• Share social information during the phone

conversation

– Control: say nothing

– Social Comparison: $75, $180, $300

Implementation

Phone Conversation “Hello! Station-Name member line.”

“Are you a new member or renewing member of Station_Name?”

Test Groups Say nothing (control group)

“We had another member who contributed $XXXX.”

○ $75 $180 $300

Dependent Measure “How much would you like to contribute?”

Ethical Concerns No deception

Anonymity protected all donors

Social Information Increased Giving

for New Members(Number of Callers = 317)

$86.58$87.44

$96.98

$111.91

$80.00

$85.00

$90.00

$95.00

$100.00

$105.00

$110.00

$115.00

Control $75 $180 $300

Condition

Mean

Ple

dge A

mou

nt

($)

Social Information Increased

Giving for Renewing Members(Number of Callers = 113)

$0.71

$3.64

$19.07

$26.47

$0

$5

$10

$15

$20

$25

$30

Control $75 $180 $300

Conditions

Ch

an

ge in

Con

trib

uti

on

($

)

Long-Term Financial Impact(One Year Later)

• 31%-45% Higher Revenue

$10.62

$22.21

$30.28 $29.95

0

5

10

15

20

25

30

35

Control $75 $180 $300

Condition

Ex

pe

cte

d R

eve

nu

e (

$)

Financial Impact(with very low cost)

• 250 Million Donor Income– 10% Increase

– 25 million.

• Investment?– CPB paid about $250,000

• Return on Investment?– How can we make the results more generalizable, more

precise, and more effective?

Other Fundraising Media: Direct Mail

• Social Information Increase

Contributions in test stations

– We had another member Mary, who has

contributed $300 last year, We invite you

to join this member and make your pledge

today!

– Telemarketing

Boundaries?

How to strengthen the effect?

• Mass Fundraising (Not Major Gifts)

– Segment donors into groups.

Similarity Matters (Mary &vs.Tom, She vs. He)

131.57

160.2

120

125

130

135

140

145

150

155

160

165

Mismatch Match

Condition

Mea

n C

on

trib

uti

on

($

)

Gender Identity Esteem Matters

0

0.5

1

1.5

2

2.5

3

Mismatch (N=21) Match (N=22)

Gender Congruency Condition

Mean

Co

ntr

ibu

tio

n (

$)

)Low Esteem (-1 std )High Esteem (+1 std

Self-Other Focus Matters

30

40

50

60

70

80

90

100

110

120

Mismatch (N=99) Match (N=83)

Identity Congruency Condition

Mean

Hyp

oth

eti

cal

Co

ntr

ibu

tio

n

($

)

Self Focus Other Focus

Social Identity and Giving

• Gender Identity

– Gender Identity Esteem

– Self-Other Focus

• Symbolic Social Identity

– Social Networks

• Moral Identity

Survey

• 1237 active members

• Questions– Why do donors contribute to public radio stations?

– What are the psychological characteristics that donors have?

– What is their listening habit?

– What is their listening social network?

– What are their demographics?

Social Network Matters

Amount Donated Based on Number of

Acquaintances who Listen to StationX

101.83

119.19

113.74

122.02

132.31

$100.00

$110.00

$120.00

$130.00

$140.00

1 to 3 4 to 6 7 to 9 10 to 12 13 to 15

Number of people

Ave

rag

e

Am

ou

nt

Do

nat

ed (

$)

Only Friend Listeners Matter

TABLE: DV: Total Giving in the Past Thirty Years on Family Friends Network

Model 1 Model2 Model3

IV of Interests

Family Friends Network 10.601*** 6.916** 6.353**

(2.464) (2.253) (2.255)

Usage Information

YearsListening 376.421*** 299.627***

(25.355) (30.165)

HoursListening in the past year 117.072*** 112.743***

(25.314) (26.490)

Number of Other Stations -24.509 -12.178

(24.922) (26.290)

Social Norms

Estimate of Others Listening 119.913***

(26.005)

Demographic Variables

Gender (Dummy) 11.323

(54.184)

Age 112.245

Education-College 16.709

Education-GraducateCredits 211.359*

Education-Advanced Degree 254.732***

White or Not 235.347*

Married or Not 228.760***

N 1164 1075 972

R-Squared 0.016 0.215 0.283

Note: Dependent variable represents the total contribution of the past 30 years.

* Significantly different from zero at the 10% level.

** Significantly different from zero at the 5% level.

*** Significantly different from zero at 1% level.

TABLE: DV: Total Giving in the Past Thirty Years on Co_Worker Network

Model 1 Model 3 Model 5

IV of Interests

Co-Worker Network 15.29 -6.332 -17.224

Satisfaction about making Donations

Happiness & 111.502*** 108.250***

Satisfaction

Reasons For Giving

Station_Factor -13.991 -53.930

Norm_Factor -72.668* -23.341

Funding_Factor 78.808** 61.931

Scoial_Factor 119.414** 64.971*

Listening_Factor 68.264** 63.084*

Usage Information

YearsListening 301.561***

HoursListening in the past year 69.619**

Number of Other Stations -46.922

Social Norms

Estimate of Others Listening 64.415**

Demographic Variables

Gender (Dummy) -46.098

Age 99.053**

Education-College 112.240

Education-GraducateCredits 288.597**

Education-Advanced Degree 288.948***

White or Not 257.397*

Married or Not 184.595***

N 822 803 698

R-Squared 0.000 .052 .271

Note: Dependent variable represents the total contribution of the past 30 years.

* Significantly different from zero at the 10% level.

** Significantly different from zero at the 5% level.

*** Significantly different from zero at 1% level.

How can we use this information?

• Listeners call to make pledges

• Ask the type of family and friends social

network they have:

– Listener network

– Resident network

Implementation

• Phone Conversation

– “Hello! Thank you for calling XXXXX”

• Test Groups

– Say nothing (control group)

– “Before I take your pledge

• may we ask how many of your friends and family members also listen to XXX Public Radio?

• may we ask how many of friends and family members also live in the XXX area?

• Dependent Measure

– “How much would you like to contribute?”

• Ethical Concerns

– No deception

– Anonymity protected all donors

Only listeners matter!

Listening Network Predicts Giving

0

20

40

60

80

100

120

140

160

180

200

1 20 40 60 80 100

Number of People

Me

an

Am

ou

nt

Ple

dg

ed

($

)Live

Listener NetworkCondition

Control Condition

Can we do better than that?

Yes

• Listeners call to make pledges

• Ask people about their social network:

– Thanks for calling XXX Public Radio

– Thanks for calling XXX Public Radio. Before I take you pledge, may we ask if you have more or less than 2 friends and family members who also listen to XXX public radio?

– Thanks for calling XXX Public Radio. Before I take you pledge, may we ask if you have more or less than 45 friends and family members who also listen to XXX public radio?

– Thanks for calling XXX Public Radio. Before I take you pledge, may we ask if you have more or less than 150 friends and family members who also listen to XXX public radio?

Well….

139

265.83

100

120

140

160

180

200

220

240

260

280

Less More

Comparative Network

Mean

Ple

dge A

mou

nt

($

)

How can you use the idea?

• Programming

– Create talking points

• Development

– Create communication network between listeners

– Prime such networks right before people make a contribution

Does Fundraising Stop here?

• How can we help donors give?

• What does giving make our donors?

Morality MeasuresBelow is a list of traits that people possess. Please indicate how much you believe you actually

possess such traits, and how much you ideally would like to possess such traits.

Actual: Your own beliefs concerning the moral traits you think you actually possess now.

Ideal: How much you would like to possess this trait: the type of person you wish, desire or hope to be.

Please rate the extent to which you believe you actually possess the traits next to “Actual”; and the extent to which you ideally would like to posses such traits next to “Ideal” on the following one to nine point scale.

Caring Actual: Not at all 1 2 3 4 5 6 7 8 9 Completely

Ideal: Not at all 1 2 3 4 5 6 7 8 9 Completely

Compassionate Fair Friendly GenerousHelpful Hardworking Honest

Kind

Morality: Survey Results

6.5

6.7

6.9

7.1

7.3

7.5

7.7

7.9

8.1

8.3

8.5

Actual Ideal

Types

Mo

ra

l Id

en

tit

y

Male

Female

Morality: Survey Results

1.18

1.2

1.22

1.24

1.26

1.28

1.3

1.32

1.34

1.36

1.38

Male Female

Gender

Mo

ral

Id

enti

ty D

iscre

pa

ncy

Discrepancy

Morality

Control Condition

“Thank you for being/becoming a member.”

Moral Condition

“Thank you for being/becoming a XXXX member.”

○ XXXX= two randomly selected words from the following five

words

Caring

Compassionate

Friendly

Kind

Helpful

Morality Increases Giving in Females

$114.06

$85.16

$103.83

$99.07

Male Female

Control

Morality

How to do it yourself?

Caring Compassionate

Fair Friendly

Generous Helpful

Hardworking Honest

Kind

That’s some serious stuff!

• Social Information

• Social Networks

• Morality

• Religious Identity

• How about having some fun??

I/We Implementation

“Thanks to our community’s [your] continuous annual membership support, XXX Radio has the financial resources needed to be there for you, me, and our neighbors [you] each and every day.”

“We’re [You and XXX Radio are] in this together – more than 18,000 listeners join us in playing [play] a critical role in keeping this station – our [your] station – strong. Our [Your] continuous support is vital.”

“As we approach the [the] November anniversary of your last contribution [approaches], we’re [I’m] writing to ask for a renewal of your membership [a renewed commitment]. Your ongoing support will help guarantee another year of our community’s [your] favorite radio programs – shows like Morning Edition, All things Considered, Car Talk, A Prairie Home Companion, and Wait Wait Don’t Tell Me.”

Positive Emotion Implementation

Smiley faces versus double circles

CONTENT OF

THE LETTER

We or I

RENEWAL FORM

CONTENT OF

THE LETTER

We or I

RENEWAL FORM

We/Smiley and I/Double-Circles

Increase Contribution in Male DonorsAverage Amount Changed from Previous Contributions by Focus, Emotion and Gender

W e Let t er

$5.45

$1.85

$0.29

$13.46

Female Male

Double circles

Smiley faces

I Letter

$4.38

$18.13

$2.08

$4.71

Female Male

Double cricles

Smiley faces

Because… Positive Emotion(Fredrickson, 2001)

• Broadens the scopes of attention, cognition, and action

• And is both an end and a mean to achieve the end.

Self-enhancement theory

• Katz and Beach (2000) tell us that people are most likely to

seek partners who give them both verification and

enhancement, and that in the absence of the latter, they seek

the former.

• So how can fundraisers can stretch their donors’ imagination

about just how good a human being they can be?

Self-enhancement theory

Identity fusion

• The giving of money is not experienced by the donor as a

‘loss’ or an ‘investment’’ any more.

• The action of giving money, as the theory predicts, should

make the individual feel stronger because of the closer

connectivity they experience with others

Identity fusion

• Should not thank for the donor’s generosity per se…

• …but rather, celebrate shared success

Stage 4: Commitment

• Focus on satisfaction

• Past investment

• Availability of alternatives

But

• Past tangible investment (shared debts, pets, jointly

purchased items

• Past intangible investment (disclosures, effort and time)

• Planned tangible investment

• Planned intangible investment

Download the reports

www.pursuant.com/relationshipfundraising

@RogareFTT

@IanMacQuillin

ian.macquillin@plymouth.ac.uk

@adriansargeant

adrian.sargeant@plymouth.ac.uk