No Sale

by | Mar 21, 2017 | Al's Observations | 6 comments

Contributing to charity is a unique transaction in our society: people give money and receive nothing tangible in return.

I think of this when individuals who have spent their careers in the for-profit world draw comparisons between the business and nonprofit realms. They tend to urge nonprofits to run themselves like a business. In applying lessons from their world to the nonprofit sector, these well-intentioned businesspeople often miss a few critical points.

This is particularly true about fundraising. The veteran businessperson will draw comparisons between fundraising and business sales. “You have to work the list,” he’ll say, with a knowing nod. He’ll go on to explain that you also have to be persistent, build relationships, and develop trust, all of which will lead to a gift/sale. I agree to a certain extent. Building relationships and trust is central to encouraging charitable gifts. Human connection is critical to salespeople and development officers alike. Persistence is good, so long as it doesn’t slip into being obnoxious.

But what some people overlook is that customers in the for-profit world need to buy something from somebody. If a hotel manager needs to replace 100 mattresses, she will be buying those mattresses from one supplier or another. An internet retailer needs to have its packages delivered by someone – whether it turns out to be UPS or FedEx or the US Postal Service. A paving company needs to buy raw materials and heavy equipment; an office park needs to hire landscapers and roofers; a charter fishing boat needs to buy bait and hooks and gasoline and motor oil.

What’s true for all these businesses, and every other, is that they need to buy equipment, supplies, and services in order to keep their doors open. It’s simply a question of whether to buy those items and services from Vendor A, B, or C.

But people and businesses don’t have to give to nonprofits. Charitable giving is purely optional.

Let’s repeat that: charitable giving is optional. In fact, the only charitable giving that’s required by law is the annual distribution from private foundations, and those grants make up only 15% of all giving nationally. Yes, there are tax advantages for individuals to give to charity, at least for the 30% of the population who itemize their deductions. And businesses and individuals can receive a social and sometimes practical benefit of being recognized for their generosity. But what the donors get in return never adds up to the cost of the gift.

Donors give for a variety of reasons: genuine altruism, responding to a disaster, honoring a friend, “paying back” a scholarship, and yes, sometimes trying to further their own reputation. Motivations are complicated. But even those gifts that result in some small part from the desire for self-promotion or from a sense of obligation are also driven by the desire to give. Charity is not a requirement. There is an element of joy involved, because it is, at heart, a voluntary action.

It’s not the nonprofit’s job to understand each donor’s motivation. For that matter, even the donors themselves don’t fully know why they give. Asking donors why they contribute to a particular organization is like asking them why they like their favorite dessert or park or song. They know that they like the organization. Supporting the cause answers an emotional need. Giving provides them with joy.

What the nonprofit very much can do is honor the donor by expressing gratitude. Nonprofits should acknowledge the gift immediately, and then, for new or large donors, a board or staff member (or both) should call or write a personal note of thanks. Charities need to honor the donor’s request for publicity or anonymity. They should let donors know a few months down the line how their gift is being used, or how the larger campaign is faring. If nonprofits have the chance to get to know the donors in person – and they should try! – they should be candid about their organizational challenges and ambitions. And then, when the time is right, nonprofits should give their donors the opportunity to make a gift once again.

And in all their interactions, nonprofits should never forget that this is a voluntary action on the part of the donors. People who contributed last year don’t have to give this year or next year. In fact, nonprofits have no right to expect that they will. It’s not a sale. It’s a gift. Keeping that mindset, and treating people with the resulting degree of appreciation and respect, is exactly what will, in fact, make someone a loyal donor, year after year.

Copyright Alan Cantor 2017. All rights reserved.

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