We don’t run around trying to sound like prophets all the time. But in the case of utilizing more and better research and fundraising, we accept this role with enthusiasm, commitment and a sense of duty.

Why?

Because widespread research in fundraising is an innovation whose time has come.

We’ve been talking about donor-centred fundraising for years now. In large part, the research we’ve been talking about means listening to your donors. Really, really listening.

And we know from our own research that donors and prospects want to be listened to.

Donors are getting grumpier by the day. They’re tired of being treated like one of the crowd. They’ve got things to say, like what’s important to them and what’s unimportant. This includes their values and beliefs, which are at the root of their giving; like how they want the transactional relationship to work (number of appeals, type of appeals, where the money goes, how much stewardship and your availability should they have questions or problems); whether they’re prepared to upgrade their support, and if so, under what conditions.

Donors know full well how competitive today’s charitable marketplace is. They know they’re now in the driver’s seat. In fact, they’re already grabbing the wheel.

If you show them you’re listening hard, they’ll reward you. If you don’t, you’re gonna be off the list. It’s that simple. We know, because we’ve asked them. Thus, our responsibility to take on the role of research prophets.

Donors will just about always tell you exactly what you want to know if you simply ask them in an honest and forthright way.

After all our years of doing fundraising-related research, we’re still happily surprised that the information donors give us exceeds our expectations.

For example, consider a group of older donors who support a health charity. They’ve agreed to come to a focus group. Ten of them meet for the first time, in a corporate-looking board room with a stranger who says she’s going to moderate the discussion.

As the discussion comes to order, the moderator tells the group that the conversation is being videotaped and audiotaped. They’re also informed that there are more invisible strangers from the charity behind a mirror. The charity strangers will be able to see and hear them, but they won’t be able to see or hear those strangers.

Sounds kind of intimidating, doesn’t it?

Within half an hour, they’re opening up their hearts and souls. They’re complaining loudly about things the charity is doing that pisses them off. They’re talking about what their lives have meant and what their legacies to the world will be. They’re freely telling the moderator what they like and don’t like about a new proposed brochure. They’re usually saying they love the charity in question, but that the relationship has to get better in specific ways, or it is in jeopardy. 

A lot of marriages we know don’t have this kind of quality of discussion and true communication. It truly is something special to behold.

We’ll bet dollars to doughnuts that you’d love to do some research, or improve the research you’re doing already. The desire to undertake it is not what’s holding the sector back.

The issue is return on investment. And articulating this return is what we don’t do well as fundraisers. If you can’t articulate that return, you shouldn’t be surprised if your executive director or board fundraising committee turns your request for research funds down flat.

Let’s take the imaginary charity “Save the Pussycats”, an established charity with 30,000 active donors. The issue with STP is that its donor renewal rate has dropped from 75% to 59% in the last three years. Here are two scenarios of the director of development’s making her pitch for some research funding:

Scenario 1: I’d like to request $25,000 over two years to do some research on donor attrition. Our donors are leaving us and we don’t know why. We need to get to the bottom of this or we’re going to be in even bigger trouble.

Scenario 2: In the last three years, our donor renewal rate has dropped by 27%. On an annualized basis, this drop costs STP $31,200. Our average donor stays active on the file for 5.5 years, so the long term cost of this attrition is $156,000. I propose the following investment to recapture this attrition and improve our renewal rate back to the 75% level we had three years ago:

a) $10,000 in year one to do focus groups. These groups will identify the strengths of our brand, what made our donors give in the first place, and what is causing them to lapse. This research will also probe how our donors’ values and beliefs line up with STP’s mission and purpose;

b) $15,000 in year two to test specific messaging and arguments with a representative cross-section of our donors. This testing will find the ideas, concepts, phrases and words that will maximize donor commitment, satisfaction and loyalty.

The return on this investment over 5.5 years will be 624%. 

Research has shown consistently that it costs five times as much to attract a new donor as it does to keep an existing one. Improving donor renewal must be STP’s number one fundraising priority in the short term – and this research is our best bet in getting our program back on track.

It would be irresponsible of us not to do this work.

It’s a no-brainer that the second argument stands a much better chance of success.

We’ve said it before and we’ll say it again. The future of successful fundraising is research. This is an innovation whose time has come. Your donors are ready for it – in fact they’re demanding that you listen to them.

In 1962, Everett Rogers wrote a book called Diffusion of Innovations. This book launched what is now commonly referred to as “S-Curve Theory”. Rogers split the population into segments with respect to the quickness with which they adopt and use new innovations and technology. When plotted on a graph, these segments form a typical bell curve.

The innovators (2.5% of the population) come first. They’re the risk-takers – the bold explorers. Then come the early adopters (13.5%). These are the social leaders, and their role is to make the innovation credible and acceptable. Following the lead of the early adopters, the early majority (34%) bring the innovation in question into widespread use. Next, the late majority (34%) join in because everyone else is doing it , and the perceived risk of adopting (the now-not-so-new) innovation is minimal. Lastly, the laggards (16%) get into the innovation game. These are the people who were buying VHS videotape players when pretty much everyone else had progressed to DVDs.

Viral marketing gurus like Seth Godin (Unleashing the Idea Virus) and Malcolm Gladwell (The Tipping Point) still refer to these segments often in their writings.

The Innovators are already out there – researching their little hearts out. For the next couple of years, the Early Adopters will pick up the research innovation and benefit big time. It’s the Early Adopters in a profit-making venture who make the most money. Two years from now, the Early Majority will get into the research game in a serious way. They’ll profit too – but not to the same degree.

If you wait until they’re all in, you’ll be playing defensive catchup. In other words, research will already be the sector norm and you’ll be running to catch the bus. By then, you’ll be trying not to lose more money rather than trying to increase your bottom line.

Throughout this series of articles, we’ve done our level best to make the case for fundraising research.

We’d like to leave you with a few simple thoughts that we hope will tip you into action.

• Research in fundraising is an innovation whose time has come. The wave has begun. Once it starts, it won’t turn back. 
• Getting started doesn’t require a doctorate in rocket science, or half a million dollars. It does require some serious thought and practical considerations for putting the research rubber to the road when the day is done. 
• Donors want you to listen. They expect you to listen. Increasingly, they’re demanding that you listen. Research is the best way we know how to give them what they want. 
• Relationships almost always live or die over the issue of communication. Effective listening is more than half the communication game. Today, we’ll bet you’re not listening enough.

So, get online. Go to the library. Buy a book on one of the types of research we’ve outlined. Take an evening course. Go talk to some colleagues; better yet, go talk to some donors.

Any course of self-improvement involves taking a first concrete step. Decide on that step and take it. A year from now, you’ll be glad you did.