, ,

Donor RetentionThis is definitely worth the read. Tough questions need to asked. Is technology the failure or is it a failure of a ill defined strategy coupled with bad processes that can’t be executed by staff and volunteers?

It is my position it is not about the technology. The technology will do what you want it to do. The question is do you know what you want it to do?

What if your donors have decided not to give anymore? What if you don’t know that and keep spending money hand over fist to renew their gift? Two very bad things come from that. First, you’ve wasted a ton of money. Second, you have irritated a former donor even more than they were before. If you do this enough, you will be swimming in a sea of red ink with lots of detractors in the market place.

The good news is that it doesn’t have to be this way. Start with a great strategy. Invest in your people to execute it. Create stunning business processes that wows you constituents. At the end of the day, it may not matter much about the technology if it can support these other 3 items.

Unfortunately, the Constituent Relationship Management promise has not been nearly as effective as promised. According to some estimates 50% to 70% of CRM initiatives fail to achieve their goals. Correspondingly, fundraising – which relies so heavily on a CRM and historical donor data – is stubbornly stalled. One could argue the weaknesses cited with CRM – namely very little “R” and not a lot of “C” either – apply equally to much of the fundraising done today.

Consider these other parallels:

CRM Fundraising is very good at receiving, but not very good at giving. Look no further than dreadful retention rates as proof. After all, if donors were getting what they came for when they walked in the front door, why do they leave so quickly out the back?

CRM Fundraising asks donors to provide access and information without adequately telling them what they will get in return. How often is gift impact and donor benefit talked about, but clearly (based on industry trends) not consistently or widely delivered?

CRM Fundraising pigeonhole donors based on past actions without informing them how to build a more advantageous profile. CRM and fundraising prompt donors to become more valuable to the charity without promising greater value from the organization.

CRM Fundraising is fairly effective at measuring its successes but provide little information about its failures. We faithfully record when donors respond positively to automated prompting and prodding but have no insight when donors do not respond in the predicted way.

CRM Fundraising is therefore, unable to determine whether failures are the result of faulty assumptions, incorrect information or poor execution.

CRM Fundraising is unable to tell how these “failed” interactions affect the donor relationship. It treats all failures as the same and all failures as neutral, when in fact the equity in the relationship may have been weakened or undermined by a poorly executed communications, “engagement” or service encounter.

The worst case scenario is the last interaction results in the donor’s decision, unbeknownst to the charity, to stop giving. This critical failure – that the charity is oblivious too – will be met with 2 to 3 years of organizational spend against this donor (and all others like them) and a sea of red-ink on the balance sheet.

via Why CRM Fundraising is broken and how to fix it. | Kevin Schulman | LinkedIn.