Should We be Recognizing Cumulative Giving and Longevity?

17 Jul Should We be Recognizing Cumulative Giving and Longevity?

by David Allen, Development for Conservation

The new website is here!

The new website is here!

After weeks of promising, the new version of Development for Conservation’s website is complete. Take a look around. I hope you like it.

The new site is still subject to Spam, but the Comments system should work better now.
(So leave me one, please.)

The first time you comment, it will need to be approved, but thereafter, your comments should post right away.

Hopefully, all the bugs are fixed, but if you find one, please let me know that as well.

Onward!

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from my In-box this week:

We are considering a new program that recognizes a member’s donation history. Their level of giving (Platinum, Gold, Diamond, Silver….. $100K, $50K, $25K, etc.) would be based on what they have given over time, instead of the membership level they joined at this year. Our idea is to set the membership at $25 and gain more members, who then may decide to donate more money to get to the next “level.” Are we on track here or too utopian?

It feels like you’re asking two different questions here. There’s one about recognizing how much a members has given over time (their cumulative giving), and another about setting a fixed “cost” per person for membership.

Recognizing cumulative giving is an interesting idea, as long as a) you have and are able to keep very accurate giving records, and b) you think through how longevity will actually be determined.

Record keeping is always a bugaboo for small organizations.

“We have records going back 35 years – right over there in that shoebox. Well, actually most of them are there. When Mike was Secretary, he went three years without filing them at all, but we’ve recreated most of them from memory. We converted the spreadsheet to Quickbooks in 1984, and Quickbooks to Little Green Light in 2015…..”

you get the picture.

My recommendation is that you don’t want to create a system that isn’t supported by records you can trust.

I instituted just such a program for TNC some years ago. We ran it for about five years, and then abandoned it with several other sweeping procedural changes which TNC was undergoing at the time.

Here’s what I remember from the experience:

• It was difficult to arrive at a one-size-fits-all program that included cumulative giving. We had levels essentially at orders of magnitude: $100, $1,000, $10,000, $25,000, and $100,000. And once someone passed a milestone, there were recognized at that level for the remainder of their lives regardless of their giving after that point. Aside from the problem of it taking 100 years for a $100 donor to reach $10,000 and 25 years for a $1,000 donor to reach $25,000, I also had a strenuous conversation one afternoon with a woman who was miffed that her parents, whose ONLY gift to the Conservancy was a piece of land worth a little over $100,000 (and for whom the resulting preserve was named) wasn’t included on each one of the five cumulative giving lists.
• The program DID work as intended in the sense that it incentivized some people making larger gifts, but it was not particularly effective in encouraging people to stay up at that higher level. In other words, I was able to periodically succeed in asking someone to give $300 instead of $100 to bring their cumulative giving to the $1,000 level (from $700), but I was not successful in securing another $300 gift the following year. In fact, many just went back to their previous levels of giving. In comparison, TNC’s donor club provided an incentive for members to increase their giving to $1,000 and stay up at that level every year thereafter.

There is a related recognition system based on how long someone has been a member. Again, the problems will relate to record-keeping.

And the question of what counts. Say someone makes a first gift in 1998 and makes a gift earlier this year. How many years in between would they have to have given to be considered a 20-year donor?

• What if those were the only two gifts?
• What if they gave every year from 1998 through 2014, and then mysteriously stopped until several months ago?
• What if they gave every year except for the five years from 1999 to 2004?

Based on my TNC experience, together with other direct and indirect experiences along the same lines, I have come to believe that incentivizing and recognizing longevity is worthwhile assuming you can keep the program simple and the record-keeping accurate. But the real benefit of such programs is probably limited to Planned Giving. There is a dramatic difference in planned giving likelihood between 10-year members and 12-year members, with the latter group being three times more likely to leave the organization in their estate plans. (This assumes that you have some kind of visible PG program.) Recognizing longevity is an easy way to put a little extra pressure on members to not let their membership drop. (So will including “Member Since_____” on their renewal notice.)

I don’t believe incentivizing and recognizing longevity is particularly effective for an organization in other ways: renewal rate changes, upgrading, major gift development, and so on – and certainly not preferentially over other techniques and more direct donor engagement – telephone calls, for example.

And I don’t believe connecting it to cumulative giving is worth the distraction from these other activities. It’s too much about looking back and not enough about looking forward – feeling good about what someone has been giving instead of feeling inspired to do more.

If you get through those gauntlets, I recommend the following:

• Recognize longevity without attaching dollar amounts – I would NOT create a system to recognize cumulative giving.
• Create public recognition for them – perhaps at the annual meeting – for every five years of membership (pins are cheap and effective);
• Create these alternative recognition systems IN ADDITION TO recognizing people based on their most recent gift – not instead of your current system.

The second question is easier: I would not recommend it. The underlying philosophy needs to be that membership is a “gift.” The size of that gift is determined by the donor. If you assign a dollar value to membership, you make it into a transaction. $25 per person in a household becomes unnecessarily limiting.

There are many variations on this transactional donor theme, and I’ve written about transactional donors before: See especially The Trouble with Transactional Giving, and Transactional Donors Are Not Really Donors – Yet.

Many organizations still offer “Lifetime Membership” for the princely sum of $1,000. I’ve seen several organizations offer membership “discounts” for those willing to “buy” several years at once. For those in retail sales, it makes a certain level of sense. For those in nonprofit fundraising, it does not.

Donors will give $100, 250, 500, 1,000 and even more as their membership if they feel their gift is being well received and responsibly used – and if they are asked to do so. Setting a cost/person, in all of its various forms, is antithetical to this underlying philosophy that membership is a “gift.”

I would be very interested in your take on these recognition strategies – and happy to share your results with others on this blog.

Cheers, and have a great week.

-da

Photo by Markus Spiske courtesy of Stocksnap.io.