Does Less Choice Create More Success?

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Consumers want choices – lots of co choices, right? Maybe not. According to a recent blog by marketing/motivation guru Scott Ginsberg, that may not be true. Other than reassuring me that I’m not the only one who suffers a kind of paralysis when standing in front 50 different cold medicines at the pharmacy, it made me think about how this notion of less choice can be applied to fundraising marketing.

Scott’s blog references a study on choice saturation conducted at the University of Minnesota and offers this quote from one of the researchers. “While mulling over a few options may weigh heavily on your mind, finally choosing one may just plain wear you out.” The study’s conclusion was that the simple act of choosing caused mental fatigue.

There is something that intuitively rings true about these findings. Too many of us have had a moment in the cereal aisle or staring at the fast food menu or ordering coffee or roaming the aisles of our local video store. And what happens when it’s something we’re not committed to buying. Does “choice anxiety” actually get in the way of making a sale? Maybe less is more powerful when it comes to choices.

We offer prospective donors the option of annual funds, endowment funds, capital campaigns, planned giving (with all its options) and various individual projects to support. And while the notion of allowing donors to find the giving opportunity that is most meaningful remains sound, perhaps it's all a little overwhelming. We need to find a way to capitalize on the donor's interest while not driving them away with too many choices. Here’s a couple of ways that you may be able to bridge the gap:

• Create a simple, uncluttered landing page for the ‘Support” section of your website that presents a very compelling (which means very visual) and succinct case for giving and offers the donor only two choices. One is “I would like to support ABC organization. Please contact me.” The second is “click here to discover the many ways you can support ABC Organization.” The second option would take donors to the full “Support” section.

• Create a campaign that has only one available donation amount. Make it an amount that is accessible to a broad range of supporters and make the ask very simple. Yes, you may leave some money on the table but if through its simplicity, the campaign allows you to connect with new donors, it’s a success.

There are lots of other ways of using this approach but in keeping with the subject matter I certainly didn’t want to offer too many choices.

Maybe the “simple” mode is a way of zigging while everyone else zags and cutting through all the clutter that confronts donors.

Puppies and Pandemics

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According to a recent study of fundraising organizations in the U.S., it would seem that in terms of charitable giving, puppies and pandemics are the hot sellers. My question is why.

First, a little background. The Index of National Fundraising Performance tracked direct mail donations to 75 charitable organizations in seven categories. The study is comprehensive, measuring a wide array of factors like new donor acquisition, donor retention, average gift and number of gifts per donor. In total, the study summarizes the activity of 36 million donors, 68 million individual gifts and over $2 billion in revenue - so; its statistical base is sound. And the two categories that fared the best in the past year? Animal Welfare and International Relief.

While all other sectors are clearly showing the effects of the lagging economy, these two sectors are doing just fine. According to the study, “The animal welfare sector has been arguably the highest-performing sector in the index over the past three years. These organizations do not appear to be experiencing the negative effects of the struggling economy.” And, “Relief organizations had positive growth in both donors and revenue in 2008, at a time when almost all other sectors saw declines.”

The study in part attributes the performance of the Animal Welfare to the conviction of football star Michael Vick on dog-fighting charges and offers no explanation for the healthy performance of the International Relief sector.

I have my own explanation. I was taught early in my working career that sales is a transfer of emotion. Every sale – and make no mistake, a charitable gift is a sale – is made primarily on the strength of emotion. These two categories - animal welfare and international relief - are eliciting the greater emotional response. Yes, I know that every charitable gift has an emotional component but there is clearly something about helpless animals and those caught in the wake of natural disaster that is making people respond more generously. These causes are touching the hearts of donors and I think its because donors feel a pressing need. In the end, it’s not about the organizations. Rather its about the people and animals that need help.

How can we learn from this? Fundraising marketing should focus on the impact that an organization is having on the individual. Tell stories. Use testimonials. Make it personal. Even organizations that don’t provide direct service can cast the benefits of support in terms of the effect on the lives of real people. Time and time again, emotion sells. Touch the hearts of your supporters and you will get results.

A Hunch about Fundraising Success

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I have a hunch about why some fundraising organizations are faring better than others during the recession.

We have a client that has unfortunately been just about decimated. This is an organization that depends on fundraising for about 90% of its operating income and has lost 60-75% of that revenue. The result is not difficult to predict. Programs have been curtailed, staff has been laid off and the organization is being forced to accept new standards of success.

On the other hand, we have client organizations that are coping far better. Donations may be down from last year but they are maintaining sufficient revenue streams to be effective and in some cases, to even launch new initiatives.

So, what’s the difference? I'm sure detailed analysis would reveal several factors but here's my hunch. From the organizations that I am familiar with, the more broad based their fundraising was going into the recession, the better they are doing. Organizations that depended on a small number of large donors (like our client above) find themselves with no revenue and nowhere to turn. All they know how to do are large gifts but the lead time to cultivate new five or six figure donors makes it a futile response to the current situation. And where do you find the new prospects to cultivate?

Organizations with strong annual campaigns or some other form of broad based giving have a pool of revenue and more importantly, a pool of donors to cultivate. As those donors who have been harder hit step back, there are others that are in fact increasing their support. But it’s the base of small to mid size gifts that is allowing these organizations to sustain themselves.

A recently released study in the U.S. indicates that 2008 4th quarter fundraising revenue was down about 5% on average and the number of donors was down about 7%. While disappointing, the results are not catastrophic. The organizations whose results form the basis of the survey are for the most part ones with a large donor base and developed annual giving.

When working with fundraising organizations we always advocate for the establishment and/or development of annual giving. While this may seem to be so simple that it's trite, you'd be amazed at how many organizations resist. If my hunch is correct, the recession will provide another argument in favour of broad based giving.

By the way, if you know of any studies that can corroborate (or contradict for that matter) my hunch, I'd love know about them.