Donor 3.0: connecting with prospects of today, and tomorrow

by the Sametz strategy team for University Business

When it becomes harder to raise funds––and the definition of success is coming up with just 90 percent of last year’s revenues––fundraisers must better understand their donors and the different tools and approaches needed to connect with them if they’re to help advance their organizations. Nonprofits of all sizes now have the opportunity to influence and motivate a new generation of donors and get them in the “habit of giving,” but it’s an uphill climb. The competition for every second of attention and each dollar is frenetic.

We’re far enough into the confluence of changes to begin to make sense of what’s happening. New paradigms are emerging from the disruptions in our economy, our lifestyles, and the ways we communicate—and relate—with one another. Better knowledge of what’s possible, what’s expected, what works and what doesn’t, is helping us to form a working theory of the next archetypal nonprofit supporter, whom we’ll call Donor 3.0.

Who is donor 3.0?

In the Beginning… there was Philanthropy, the domain of the wealthy and well-connected Donor 1.0. There was also Charity, which was what the rest of us supported. Driven by more rigorous acquisition and stewarding practices, and demonstrated need, and fueled by growing personal wealth, philanthropy reached the middle class Donor 2.0. Over the last two decades, we’ve seen engagement between institutions and their constituents become broader: institutions appealing for (and getting) support from more people. For many 2.0s, major giving was still about doing good––giving to a charitable cause—but for some it grew to also represent strategic “investments” in organizations through which they hoped to realize their own personal goals.

Donors in these first two eras certainly had options and self-determination, but for the most part, gifts represented votes of support for institutions’ top-down priorities. Donor 3.0, however, will have a much more direct role in defining those institutional priorities. The days when a donor had to write a six figure check to have a seat at the table are coming to a close. In fact, individuals can now organize and get attention without a seat at the table at all. Often, the feeling within an organization is of a democratization of the mission: when Donor 3.0 is engaged at the $50 or the $5,000,000 levels, campaigns launch with fanfare, not yawns; they advance with the tailwind of popular support. Who is this new partner in shaping and realizing your organization’s vision?

The days when a donor had to write a six figure check to have a seat at the table are coming to a close

Donor 3.0 is the prospect of the next decade. These donors are more informed than ever and less dependent on any institution for information. (They are savvy enough to understand every information source has a bias and an agenda.) They are connected to more people and organizations, expanding their horizons, but also stretched in terms of their finite attention and resources. They understand that their roles in campaigns and movements may be small, but regardless of their means, they expect to have more direct impact.

Donor 3.0’s attention and engagement is at best dynamic and multidimensional, and, at worst, fragmented. Like all of us, 3.0s are expected to accomplish more with the same (or diminished) resources. They are bombarded with commercial, political, philanthropic, and personal messages, and the lines between work and home, local and global, private and social are hard to draw clearly. In this context, they are challenged to sift through many options and to prioritize, inevitably excluding many worthy causes.

These new donors have changing expectations for engagement, whether at the scale of a small news update or a big gala or reunion. And as some organizations have become sophisticated in their messages and outreach methods, impersonal, or poorly aimed communications from other institutions are ruled out quickly, regardless of merit. They simply don’t capture attention or interest. Heightened expectations of quality and professionalism have created sort of a sense of entitlement among donors: you had better know exactly what’s relevant and meaningful with 3.0s, or you won’t make the first cut.

This doesn’t mean mind-reading; it means honing a few clear messages that resonate––and communicating effectively to connect. Inasmuch as many of Donor 3.0’s choices self-consciously reflect (or are designed to build) their “personal brands”—the images we each construct of ourselves for others in our increasingly “social” world—objects of philanthropy are selected, at least in part, for what they telegraph to other people. To connect with Donor 3.0––and her checkbook––your institutional priorities need to intersect with 3.0’s personal brand story: values and visions need to sync up; the strength and meaning of your brand need to enhance 3.0’s sense of self and purpose. This is not your grandfather’s fundraising challenge.

The recent presidential campaign showed that personal identification with a vision and message—even in small units but at a massive scale—is possible and makes a critical difference.

Donor 3.0s choices self-consciously reflect their personal brands; your brand meaning needs to enhance 3.0’s sense of self and purpose

Our new 3.0 donors are immersed in a mixed media, mixed channel sea, where economic, personal, social, and charitable interests are co-mingled. This means donors have more encounters with support appeals in their everyday life––and that they have opportunities to mix their philanthropic business with personal pleasure.

When it comes to actual giving, Donor 3.0 is seeing unprecedented options and informational resources. From low-threshold, low- but sustained-intensity opportunities like Facebook Causes, SMS fundraising, and blog/badge challenges, to pools of “venture philanthropy” in online giving markets, through to the high-touch, tailored services of independent philanthropic advisory firms, Donor 3.0 has more than enough ways to discover and act upon philanthropic impulses. These instruments for connection and influence (including those from your organization) allow donors to customize and fine tune philanthropic activity. More to the point, Donor 3.0 defines her own philanthropic strategies, and doesn’t have to subordinate her priorities to someone else’s.

Scarcity of time and money, the need for personal brand connection, and the increasingly wider range of ways of taking action add up to Donor 3.0’s greater expectations for results

Last year’s crash in value and wealth, coupled with a global uptick of costs for nearly everything, made it hard for people to identify with the ambitions of institutions asking for help––a disconnect that ultimately totaled hundreds of millions, and even billions, of dollars. It’s hard for anyone, especially individuals with a depressed portfolio and financial worries, to find a meaningful place in a $1b campaign; what will your $15,000 nugget accomplish? Or $50? Five bucks might still buy you a coffee today, so why throw it into an $850 million, seven- year well? Donors have always wanted to feel that their gifts make a difference, and Donor 3.0 expects to see a concrete plan—and to be kept up to date on progress and results. These donors must be convinced of their stake in the mission (remember, they’re only there because the mission is personally relevant)—and that sometimes means having a voice in the institutional story (at least by proxy) for a lot less money than it used to take.

These conditions—the scarcity of time and money, the need for personal brand connection to development goals, and the increasingly wider range of ways of taking action on a considerable scale, of exercising influence—add up to Donor 3.0’s greater expectations for results…results that are real and personally meaningful.

What are the tools and methods for communicating with donor 3.0?

These days, colleges and universities, cultural institutions, hospitals, and social causes of all stripes are looking for increasingly relevant ways to reach donors of all age brackets. Often this means reaching—even creating—constituents very different from those of the past. Fundraising must evolve to merge tried and true methods with innovative—even experimental—efforts to meet the challenge of engaging Donor 3.0.

Much virtual ink is being spilled about digital and social media in the search for sturdy practices and benchmarks. Increasingly synonymous, these terms tend to denote the media themselves—Facebook, Twitter, mobile Web, etc.—but this is changing. As we all become more familiar with their various strengths and weaknesses, we understand better how to put them to good use. One thing is certain: they are establishing channels between people that are more direct, more transparent, more immediate, and more available…to the point of being intuitive and ubiquitous. But for all their novelty and potential, these new channels also serve to underscore the importance—and the need to optimize—time-tested, fundamental practices: good relationship-building and careful stewardship.

The rise of digital and social media underscores the importance of optimizing time-tested, fundamental fundraising practices

Just as it’s shaking up communication practices at nonprofits across the land, social media is helping to mold the contemporary donor. Donor 3.0 often discovers philanthropic opportunities through personal connections, and those interactions give prospective objects of philanthropy a key ingredient: credibility—pre-qualification for the next step of engagement.

And by tactfully infusing rigorous fundraising practices into digital communication channels like social networks, nonprofits can effectively reach bigger communities and ensure self-selecting donors are just a few clicks away, through trusted conduits.

More personal connections also mean that social media can facilitate personal interactions among prospects and organizations—in many cases making real world meetings more attractive and rewarding. For example, in addition to homecoming or reunion events at yearly or ten-year intervals, schools and alumni organizations are crafting more small scale events—promoted electronically—that leverage personal networks and combine niche interests and a local presence––e.g., an event around a particular shared interest, in a casual space—perhaps even a locale that development folk skipped right by in the past. These focused events—pub nights, coffee with a speaker, team reunions—build shared interest communities on short notice and with low organizational overhead. The results are feelings of community belonging…just maybe not to one single large community. Such “outposts” (from the perspective of a central fundraiser) in the virtual and real spaces extend and enrich the greater community, making connections possible and practical for those who feel they’re too far from the campus / museum / research organization home base.

And while rumors of its death abound, print communication is going through a transformation, too. Expensive, glossy, comprehensive case books are becoming rare, replaced by digitally printed, topic specific “mini cases” produced in smaller quantities. These pieces are more targeted, much as Donor 3.0 is more targeted: they don’t have six chapters the donor isn’t interested in. And they’re written and produced knowing they will be updated as priorities evolve and dollars come in. They’re often used in concert with even lower-production-value materials, like desktop-published funding opportunities sheets, or templated sheets that each tell one specific “proof” story. Bundled thoughtfully, these print materials show Donor 3.0 that you’ve done your homework; that you’re giving her what’s relevant and meaningful; that you’re aware of her limited time, that you’ve personalized your interaction.

Configuring a modular print architecture allows you to assemble targeted packets that advance a dialogue, economically

Coincidentally, more people (your prospective 3.0 donors included) now have the power to explore, share, and even create rich media (video, animation, music, podcasts) at their fingertips. This capacity ups the ante for the professional communicator: hence the rise in appeals delivered in short movies with music; leaders’ addresses that are filmed and broadcast; and photo galleries that include more than black tie party pics and new construction groundbreakings. Rising expectations around just what effective––and welcomed––communication look like need to inform your communications planning.

Microsites and even micro brands—once considered anathema to a strong nonprofit brand strategy—are increasingly effective in providing personally meaningful touchpoints for prospects. They can help break down enormous goals and initiatives into smaller ones, with a more human scale and focused messaging. Until recently such initiatives threatened to fragment brands, and scatter scarce communication resources. Without a clear strategy and thoughtful management, this can still happen. But many tools and practices for keeping decentralized communications coordinated (shared high level messages, values, topics, and a common visual vocabulary) are making these strategies more attractive.

Many of the strongest charities and nonprofits are, of course, associated with popular movements of various sorts, such as AIDS, breast cancer, or autism. Nonprofits can’t often align themselves with popular movements, but they can frame their initiatives similarly by articulating a clear and positive vision for change, and promoting the relevance and urgency of an institutional priority.

Nonprofits need to articulate a clear and positive vision and promote the relevance and urgency of institutional priorities

While we’re living through a period of exciting experimentation (or troubling uncertainty, depending on your point of view) these evolving communication means and methods will underscore the importance of time-tested principles: listening, responding, personalizing communications, helping people to feel they have a stake in the mission. You and your colleagues can articulate reasons why prospects should give, and can make excellent intellectual and emotional cases for giving. But what actually prompts the gift is the donor’s desire to give—and the convenient opportunity to act.

Nonprofits now have many tools with which to connect their priorities to their donors’ passions. So as with any change in practice, a guiding principle should be to make each donor feel important… not just major donors.

Adding it up: model changes

These new tools and methods for connecting to Donor 3.0––and the expectations and interests of these donors––suggest the need for new relationship models: updated definitions of one another’s roles, and the means of interaction.

Most important is the need to shift from communicating to donors to communicating with them. This means at least better listening (if full responsiveness is not practical or desirable) and the mass-customization of dialogues: designing communications that anticipate and encourage personal interactions within a strategic context. It’s been said of social media, “you can’t expect people to come to your party if you don’t go to theirs.” Use social media to at least monitor conversations and communities outside your walls. Even better, make contributions to those conversations—but represent your organization honestly and check your fundraising agenda at the door. Communities are built on trust, and trust is earned through authentic given and take.

Another departure from familiar communications paradigms is the need to shift from cyclical strategic planning, and the execution of two- to five-year campaigns, to constant iteration and refinement within a strategic framework. This is easier to achieve when you tie up fewer dollars in boxes of printed brochures, but it still requires new levels of tolerance for uncertainty, the ability to evolve quickly, and a different staffing strategy. (Can you believe you might pay someone to spend his day on Facebook?) Listen for ideas from unexpected quarters, be prepared to launch initiatives quickly—and to shut them down quickly when they’ve run their course.

New tools to reach and engage people present new pipeline sources. Personally relevant shared interest groups and microcommunity membership may succeed where generic annual appeal messages and headline events have failed. Active supporters promote their involvement with you, and bring their friends into the fold through their own networks. Topical or cause-related communications can further engage traditionally nonaffiliated prospects (i.e., those who have no direct personal experience with your organization) by demonstrating you have solutions to important problems, and that you have something to offer to the whole world—not just to those who are already close to you. Be present in digital places where your constituents operate, and offer ideas and updates that are personally relevant. (Do not, repeat, do not, treat these tools as new channels for press-release material. Press releases are about you, not about your constituents’ lives and interests. External focus is critical.)

Personally relevant shared interest groups and microcommunity membership might succeed where generic annual appeal messages and headline events have failed

Nonprofits everywhere grapple with the challenge of cultivating a culture of philanthropy, but the fact is most of an organization’s constituents never feel it. But if, for example, students are eased into the idea of philanthropy by their alma mater, or single ticket buyers to concerts are treated as if they have an important connection to that particular orchestra, or parents who bring their kids to a museum are treated as an integral part of that organization’s ecosystem, then you will, over time, build a community of people primed to give when the time is right. Raise the visibility of giving efforts (both underway and successful, to show results), while lowering the barriers to give. SMS campaigns are a perfect example: immediate, focused messages with a reasonable call to action. Again, it’s high frequency, low volume that promotes ongoing engagement.

The proliferation of tools and touchpoints makes it even more important that organizations coordinate communications from various brand stewards to create an integrated brand experience

The really good news around the widening set of tools that nonprofits have to work with is that they increase the ability for fundraisers to create an integrated brand experience across a range of touchpoints. Magazines, virtual and physical get-togethers, letters, videos, shared snippets tweeted or passed on by friends, alignment with lifestyle and workstyle behaviors… each increase the opportunity to fit into Donor 3.0s’ lives and personal brands. But coupled with this opportunity is the requirement that nonprofits truly and deeply appreciate that brand management and communications are not solely the domain of the development and communications staff. Rather, this new environment of multi-directional, multi-stakeholder engagement heightens the pressure to coordinate communications from various brand stewards (for example, at a school: admissions, alumni relations, development, public and community relations, and executive leadership) so that communication do not look like they’re coming from different institutions. Dollars will go further and your organization will appear to have its act together.

Getting started

So how to form an action plan to engage Donor 3.0? It’s too early to prescribe a tried and true methodology; there’s still much change and experimentation happening, and each organization will have to tailor its strategy to the peculiarities of its community. But you can lay a strategic groundwork that will help cut through the hype and enable you to weigh your options, and recognize (even create) opportunities that may not be obvious.

Coordinate brand strategy with major stakeholders

Marketing, communications, and development might provide the strategic leadership and carry out the most regular and high profile communications, but in a complex nonprofit environment many other brand stewards—both staff and volunteers—have to participate in shaping a coordinated brand story. Why start with your brand? When donors make a gift to you, it’s either thanks to your brand…or in spite of it. Your brand plays a role in your donors’ behavior and those who self-consciously identify with it are stronger allies. But no single department in your organization owns your brand.

Refine your intelligence on your constituents

Develop clear profiles on who they are, what they care about, where they are (digitally and physically). Understand their relative “distances” from you: what’s keeping them close and interested, and what’s keeping them away and disinterested. Keep quantitative and qualitative research up to date. Most importantly, watch and listen. How do donors and prospects want to receive (and give) information? Whom do they trust?

Articulate long term strategic goals and short term tactical ones

Do so once you’ve worked out descriptions of your constituents, and better understand their interests and patterns of behavior. Keep in mind that the path from moderately curious prospect to engaged donor is rarely short or straight. Donor 3.0 will be cultivated through many interactions of various intensities, from becoming a fan of a relevant Facebook page, to get-togethers, to cups of tea with your senior leadership, to big hoe-downs. Deploy communications accordingly.

Establish—and, crucially, join—communities of like-minded people

Facilitate discussions, seed them, but don’t focus on broadcasting messages. If you are launching new communications, be sure their design provides ways for people to participate, give input, and feel they have a stake without it being disruptive to their habits and lives… and without setting un-meetable expectations. Keep it simple, fun, relevant, and human in scale.

Change your expectations for your relationship with Donor 3.0

Prepare to tolerate greater risk, exposure, and uncertainty. You might feel like you’re ceding your message and losing control of the dialogue. But if you’ve done your homework, and are prepared to change with your constituents, then you’ll actually be more in touch with your message than ever before because you will have first-hand knowledge of how it’s received, interpreted, and translated into change.