By Larry Johnston Ph.D.
In seminars I do at conferences, I’ll frequently ask the question, “What is the primary purpose of development?”
Answers always vary, but they tend to cluster in several areas like raising funds, building relationships, advancing the organization’s mission, and teaching stewardship.
There’s truth in all of these, but I’m doubtful about “teaching” stewardship. That’s a role of some excellent ministries, and certainly the role of churches although most of the latter fail miserably on this front for a host of reasons.
If development has a role in stewardship, I think it has to do with providing attractive kingdom investment opportunities and then helping investors to feel, in the immortal words of Mae West, that “Too much of a good thing is marvelous!” That is, when it comes to giving and generosity, moderation is a vastly overrated virtue!
After hearing from the seminar audience, I’ll tell them what the primary purpose of development is from my vantage point:
To create and keep the right kinds of donors.
Creating donors entails a host of activities, including branding, marketing and communications. And central in these activities is developing and articulating a distinctive value proposition, something that should be the cornerstone of your organization’s strategy. A value proposition recognizes that increasingly, development departments must be about the business of mutual value creation: proactively creating value for donors and other stakeholders as they go about creating value (gift income, a healthy donor base, visibility, brand equity, etc.) for their organizations.
But keeping donors increasingly entails knowing what value is for your donors, and more specifically, what are the key value drivers for your donors.
Our research has confirmed that there are a couple dozen drivers of donor satisfaction, engagement, loyalty, and thus donor lifetime value. We know that these drivers vary by organization and that while some of these clearly overlap, each donor base has a distinctive “personality.” What’s more, our research confirms that key drivers not only vary between organizations, they can vary within organizations by donor segment.
That is, key drivers for major donors can be different than those for medium and mass donors giving to the same organization. (Major, medium, and mass donors are typically fairly broad vertical segments of a donor “pyramid” reflecting amounts of financial support.)
Now here’s the head-scratcher: It can be forcefully argued that nothing (other than, perhaps, divine favor) is more important to the success of fundraising than consistently delivering on these key drivers, and yet not one in 100 development departments can provide empirically (i.e., research) based answers to the critical question of what drives their donors’ loyalty.
Abraham Lincoln wisely noted that if he had six hours to chop down a tree, he’d spend four hours sharpening the ax. For those in development, sharpening the ax includes knowing, not merely guessing, what drives donor loyalty and lifetime value.
The truth be told, the key value drivers for your donors are in turn huge drivers of the success and even the sustainability of your organization.
Do you know what’s driving your donors?
Larry Johnston is the president of McConkey-Johnston International, where he has spent 40 years working with leading Christian organizations, consulting internationally in fundraising, strategic management, organization development and leading and managing change.
Be sure to register for the Academic Experience if you plan to attend the 2014 CLA National Conference. You don’t miss out on the Intensive Training Institute and this session lead by Larry Johnston. Follow the links to find out more about his ITI session.
April 14, 2014: Permanent Whitewater: Leading Organizational Change