Moving Beyond Donor Recency-Frequency-Monetary to Capability

Isn’t there something even a little bit sad about the little old lady in your donor file who has been giving to your nonprofit every month for thirty years…but who is no more skilled at impacting the cause now than she was when she first started giving?

Some might say no. After all, said little old lady scores well on the R/F/M (Recency-Frequency-Monetary) scale traditionally used to segment donors:

  • Recency: She gave this month.
  • Frequency: She gives every month.
  • Monetary: She’s not giving a lot. But there’s always the hope of scoring big in her will.

But there’s something deeper at issue here than whether such a classification scheme is sad (and, uh, morally reprehensible). There’s a question of whether such a classification will be sufficient or even relevant in the near future.

In a lengthy post that’s well worth the read, John Seely Brown and Richard Adler discuss Minds on Fire: Open Education, the Long Tail, and Learning 2.0. (Thanks to Weblogg-ed for the tip.)

Fundraising was probably the furthest thing from Seely Brown and Adler’s minds when they wrote the piece. Properly speaking, it’s about social learning and the future of education in the broadest possible terms. As you read, though, you’ll see how it’s virtually impossible to conceive of the future of fundraising without taking into serious account what the authors have to say.

First, the authors detail the seismic shift in thinking about how people learn. A cornerstone of the system that is passing away is the idea that teachers and learners differ by kind, not degree. That is, we’ve always assumed that in any given setting, one person teaches, the others learn, and crossover in roles is, at most, serendipitous.

This “Cartesian” (Descartes-inspired) way of thinking has a clear carryover to the way we think about fundraising. We think of some folks are “supporters” and some as “supported”–some as doers of the work, so to speak, and some as givers to the work. Or in Facebook terms, you’re either a Cause or a Fan but not both.

But that way of thinking is passing away, if not already dead:

In a traditional Cartesian educational system, students may spend years learning about a subject; only after amassing sufficient (explicit) knowledge are they expected to start acquiring the (tacit) knowledge or practice of how to be an active practitioner/professional in a field. But viewing learning as the process of joining a community of practice reverses this pattern and allows new students to engage in “learning to be” even as they are mastering the content of a field. This encourages the practice of what John Dewey called “productive inquiry”—that is, the process of seeking the knowledge when it is needed in order to carry out a particular situated task.

Did you catch that phrase “learning to be”? It contrasts with “learning about”, as in “Are you newsletters helping your donors learn to be the cause, or do they only help your donors learn about it?”

Mastering a field of knowledge involves not only “learning about” the subject matter but also “learning to be” a full participant in the field. This involves acquiring the practices and the norms of established practitioners in that field or acculturating into a community of practice. Historically, apprenticeship programs and supervised graduate research have provided students with opportunities to observe and then to emulate how experts function. Apprentices traditionally begin learning by taking on simple tasks, under the watchful eye of a master, through a process that has been described as “legitimate peripheral participation”; they then progress to more demanding tasks as their skills improve.

Instead of supporter/supported, in other words, the future bodes best for nonprofits who think in terms of apprentice/master, where the nonprofit is a community of practice where donors engage in what is called “limited peripheral participation”–in other words, they learn to be the cause by getting to do real, actual work that impacts the cause, though initially at a much simpler level than you do it. But the point of “donor cultivation” in this model is to help the donor grow to be the cause at the same level of skill that you are currently at:

Open source communities have developed a well-established path by which newcomers can “learn the ropes” and become trusted members of the community through a process of legitimate peripheral participation. New members typically begin participating in an open source community by working on relatively simple, noncritical development projects such as building or improving software drivers (e.g., print drivers). As they demonstrate their ability to make useful contributions and to work in the distinctive style and sensibilities/taste of that community, they are invited to take on more central projects. Those who become the most proficient may be asked to join the inner circle of people working on the critical kernel code of the system. Today, there are about one million people engaged in developing and refining open source products, and nearly all are improving their skills by participating in and contributing to these networked communities of practice

Writing computer software is one example. For purposes of nonprofit work, the more applicable example given by the authors may be the way people participate in Wikipedia:

Since the open source movement is based on the development of computer software, participation is effectively limited to people with programming skills. But its principles have been adopted by communities dedicated to the creation of other, more widely accessible types of resources. Perhaps the best known example is Wikipedia, the online “open source” encyclopedia that has challenged the supremacy of commercial encyclopedias. Becoming a trusted contributor to Wikipedia involves a process of legitimate peripheral participation that is similar to the process in open source software communities. Any reader can modify the text of an entry or contribute new entries. But only more experienced and more trusted individuals are invited to become “administrators” who have access to higher-level editing tools.

Follow this line of thinking to its logical fundraising conclusion and you have a sea change in the kinds of materials we need to be including in our newsletters, posting on our websites and blogs, and featuring in our banquets and volunteer events:

The openness of Wikipedia is instructive in another way: by clicking on tabs that appear on every page, a user can easily review the history of any article as well as contributors’ ongoing discussion of and sometimes fierce debates around its content, which offer useful insights into the practices and standards of the community that is responsible for creating that entry in Wikipedia. (In some cases, Wikipedia articles start with initial contributions by passionate amateurs, followed by contributions from professional scholars/researchers who weigh in on the “final” versions. Here is where the contested part of the material becomes most usefully evident.) In this open environment, both the content and the process by which it is created are equally visible, thereby enabling a new kind of critical reading—almost a new form of literacy—that invites the reader to join in the consideration of what information is reliable and/or important.

Sum it up and say:

If the involvement of the little old lady in your donor file differs from you in kind rather than in degree–if, that is, you categorize her by RFM rather than by Capacity–your nonprofit may not be around to train the next generation of little old ladies in the future.

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Donors Are the Nonprofits of the Future, Part II: Support the Kid Who Buys the Crayons

In our June 30 Donors are the nonprofits of the future post, we wrote about “donor” Pamela Abdallah and one of her charitable “vehicles”, the Salvation Army, and how the Salvation Army is best described as a supporter of  Abdallah rather than Abdallah being a supporter of the Salvation Army.

Today we introduce you to America’s “next great nonprofit”: 8-year old Abby Enck, and her charitable vehicle, Lutheran General Children’s Hospital in Park Ridge, Illinois.

Plenty of elementary school kids run lemonade stands during the summer. Few turn those lemonade stands into charitable franchises that help sick kids.

But 8-year-old Abby Enck found a way to use her refreshing entrepreneurial enterprise to bring some color into the life of her 6-year-old brother, Cameron, and his cohorts at Lutheran General Children’s Hospital in Park Ridge.  Cameron was born with Cerebral Palsy…

Cameron was diagnosed with the disease when he was just one week old. Big sister Abby has accompanied him to almost all of his appointments and noticed that the kids at the hospital liked coloring.

So when Abby made $4.50 from selling delicious lemonade to neighborhood locals, she decided use the money to buy 36 boxes of crayons for Cameron and the other kids at the hospital.

Alright, so far so cute…but read on:

When 2010 rolled around, Abby thought she could best last year’s donation.  So rather than sling lemonade on her own, she created “lemonade kits” that consisted of a bottle of water, a packet of lemonade and a homemade tag that explained her goal.  Abby made 52 kits and recruited family and friends to help sell them for $1 each.

The franchise idea turned out to be crayon boom-town, and Abby has been able to purchase 869 boxes of Crayola Crayons so far this year. She hopes to make it to her goal of 1,000 boxes in the next few weeks.

Now, here’s the payoff:

“What’s special about this donation is that she took it upon herself and made it personal,” said Lutheran General’s communications manager, Nate Llewellyn…

It doesn’t hurt that the kids at Lutheran General love using the gifts.

“Coloring is a great creative outlet for kids,” Llewellyn said.  “It helps them work through any issues they may be going through and take their mind of metal or physical pain. It really creates a sense of home, safety and comfort for them.”

Becki said Abby handled the whole operation herself.  She created a to-do list, compiled a list of family and friends to whom she planned to reach, designed a company logo on the computer and came up with a slogan:  “If life gives you lemons, COLOR!”

The whole experience has been good for Abby and Cameron.

“She used to be very shy, but this is really bringing her out of her shell,” Becki said.  “She wants to share and this is something exciting that she can be recognized for.”

Abby says the best part about making the kits is buying and donating the crayons.  When her mother asked what she had learned from the project, the 8-year-old replied, “Everybody can make a difference.”

So through this process Abby has experienced personal transformation, as have those she helped. Her project is more than salutary; it has made a demonstrable and significant impact. Next year she plans on moving up to giving away DVDs. The article doesn’t say why, but one presumes it is as a result of Abby growing in her personal knowledge of and ablity to impact the cause.

Now, the question every nonprofit should be asking with regard to its “nonprofits of the future”–that is to say, its “donors”:

How is Lutheran General Children’s Hospital supporting Abby? And how can they grow in their support of her in the future?

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Haiti update: $627 million of donations spent, $1 billion of “urgently needed” donations remain in NGO bank accounts

Six months after the quake, how much of the $1.6 billion raised by NGOs for Haiti has been spent?

$627 million, or 39% of the $1.6 billion raised.

As Holden Karnofsky notes, $627 million is roughly equivalent to the amount raised in the first nine days following the quake.

Now, in and of itself there’s nothing fundamentally objectionable about that statistic. Long term recovery projects are, after all, key to Haiti’s recovery.

The potentially objectionable part comes in questions like:

Was this reality reflected in the Haiti disaster relief fundraising? In other words, did NGOs make clear that “a little more than half of your donation may not be used in the first year or go toward emergency relief efforts?

A July 8 press release on The Red Cross website notes, “The American Red Cross is on track to meet its goal of spending more than $200 million to address immediate needs – mostly in the first 12 months after the earthquake. The remainder of the funds raised will go to longer-term recovery over the next three to five years, with spending plans likely to evolve to respond to changing needs.”

So of the $468 million Red Cross raised for Haiti, the plan was–and remains–to spend less than half of that in year 1.

The question I’m raising is not whether that is a good idea but rather:

Was that plan made clear in the disaster relief fundraising efforts?

The answer may be, “Yes, it was.” Or it may be, “It took us a while to put together the plan” or “We never know how much we can expect in donations” or some combination thereof, like “Our plan is generally to spend about XX% in the first year (depending on what we raise), and we don’t have budget numbers or plans available at the time we’re doing the fundraising because, good heavens, the disaster just happened, and it takes us a while to assess the damage and plan the recovery.”

That all makes sense. It really does.

It just doesn’t square, in my view, with two elements of disaster relief fundraising:

First, disaster relief fundraising turns on the urgent need for money now. Is it really too much to ask that an NGO fully integrates its strategic approach into its fundraising, i.e.,  “Our plan is generally to spend about XX% of what you give in the first year (depending on what we raise), and we don’t have budget numbers or plans available at this time because, good heavens, the disaster just happened, and it takes us a while to assess the damage and plan the recovery.

Second, much ado is made at the time of every major disaster about the importance of donors giving through highly-rated disaster relief agencies. Otherwise, the argument goes, you might as well just hand out cash to victims on the street.

That being the case, one part of the Red Cross press release bears particular mention:

Innovative Text (SMS) Cash Transfer Program
In addition, the Red Cross said today that it is launching a major $50 million SMS cash transfer program to give cash grants of approximately $125 to up to 400,000 Haitian families over the next several months. Recently, the American Red Cross tested a technologically innovative program to give cash grants to families using cell phones and text messaging. During this successful pilot, smaller $50 cash grants were given out to help nearly 1,800 families move from at-risk camps to camps in safer areas. This newly expanded program will enable families to buy food and supplies, fund the education of their children, purchase medicine, repair homes, relocate from camps, and invest in their businesses and livelihoods.

“Through these programs, families who once stood in line for relief distributions will now be empowered to buy some of the basic items they need most, which in turn should help stimulate the country’s economy,” McGovern said, noting that even modest amounts of money can make a big difference to Haitian families, as 70 percent of Haitians lived on less than $2 a day prior to the earthquake.

“The same cell phone technology that enabled Americans to text donations for Haiti will now enable earthquake survivors to access money to support their families,” said McGovern.

So after six months we are now on the verge of being able to do the technological equivalent of handing out money to people on the streets.

Again, I actually think this is probably a great program. My question is still the one I asked back on February 3: Who’s hindering the help in Haiti: “Disaster do-gooders” or NGOs?

And my answer–and my recommendation of how we consider giving at least a part of our donations in such circumstances in the future–is still the one I gave on January 25: Give through credible (denominationally-affiliated) ethnic church congregations and–in consultation with or through expats you know and trust–to institutions (like churches) in the country where the disaster occurred. Give, in other words, to credible groups whose connections to disaster victims is personal, not merely humanitarian and whose knowledge of the area is personal, not merely researched.

I wrote then:

Going on a decade ago, my wife and I noticed that when it came to helping North Korea, most people opted for giving through reputable major aid agencies.

Very few people attempted to reach North Korea through North Korean defectors.

And yet when we talked to the aid agencies and the North Koreans, we consistently found that the North Korean defectors had strikingly better insights into how to help and who to help–and how not to help–than the aid agencies did.

After all, North Korean defectors weren’t simply motivated by humanitarian concerns. They were motivated by trying to help family members not die.

So $627 million down, $1 billion left to go. I wonder if this is what everyone had in mind when they texted in their urgently needed life-saving donations six months ago?

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