On Donor Clubs – Take 1 (of 3)

24 Jul On Donor Clubs – Take 1 (of 3)

Among mistakes common to most small to medium-sized organizations, including land trusts, the most limiting is the failure to ask. Take a close look at your fundraising letters. Do they actually ask for money? Do they mention a specific dollar amount? Do they refer to what the donor gave last year? If they don’t, you can improve both the number of returns and the average return just by adding this simple language. For example:

Last year you gave $50 for membership. Thank you! As you consider your renewal, please consider giving $100 this year.

Doing so, of course, means you have to merge and mail several different versions of your letters, but the return on that investment can be impressive. At Texas Land Conservancy in Austin, Texas, 24 percent of their donors increased giving in 2010 (versus 2009) and the average increase was 157 percent. Other land trusts are achieving similar results just by systematically asking members to give more each year.

Some land trusts are enjoying even greater returns. At Mississippi Valley Conservancy in western Wisconsin, 21 percent of their members increased giving in 2010 by an average of 300 percent. How? By launching a donor club called the Bluffland Guardian Society. They’re not just asking for specific dollar amounts. They’re asking some members to renew at $1,000.

Donor clubs offer the social equity that comes with being listed publicly alongside people you know and respect socially. According to David Landsdowne in his book, The Relentlessly Practical Guide to Raising Serious Money, “psychology has always played an incalculable role in fundraising”, and the reason donor clubs work is purely psychological. “They fulfill a host of human desires and needs, not the least of which are our need to feel connected and our desire to be treated special.”

For many of us, $1,000 is a large gift, so it seems like they should be restricted to a specific project or program. Donor clubs are useful because they encourage members to give relatively large sums of money as unrestricted gifts and because they carry the expectation of annual renewal.

You should keep the number of separately branded clubs limited to a very few. Once established though, take care to strongly brand each one, with separate communications, events, and maybe even letterhead.

I also suggest the following set of basic organizing “rules.”

Qualifying gifts:

• are individual membership gifts (not business or foundation) and are completely unrestricted – no exceptions;
• are made as a single giving decision, even if multiple pledge payments are involved;
• are made by a single donor ($500 gifts matched by a corporate program do not count); and
• must be cash or liquidated immediately to cash (in-kind gifts do not count, unless the gifted item, such as stock or a car, is immediately sold).

Qualifying members enjoy special “member only” perks. A special dinner is common; a special memento (pin or necklace), recognition in each issue of the newsletter, and so on could be considered. Be creative. Make it fun.

Board directors should lead the way with donor clubs, but all directors are encouraged to attend club events even if they themselves are unable or unwilling to join the club. Directors are leaders of the land trust and need to be seen at all organizational events.

Other Notes: Club memberships are personally solicited by the individual board directors and the executive director. Starting a membership club is generally not recommended unless there are already 8-10 members giving at the threshold level. Rollout often includes “inducting” those members and soliciting “charter memberships” to selected others. A current list is carefully maintained, visible on the website and newsletter, and regularly shared with members of the club. Anonymous donors are accepted, but anonymity is not offered proactively.

You can raise more money from your members just by systematically asking for more money. Donor clubs can help, and a significant side benefit is that the annual solicitations provide a useful way for board members to get more involved in fundraising.

Got a donor club story? Your comments, questions – and stories – are always welcome here.

Cheers,

-da