Do the Word

Right smack in the middle of our week on measurement comes a post from The Agitator (commenting on a post from DM News)…

…on measurement.

You’d almost think we planned it.

Both articles posit three groups of donors/consumers [Editor’s note: the fact that donors and consumers are interchangeable–does this trouble you at all?]:

1. Those whose lifetime donation/purchase total is the highest among your constituents.
2. Those whose “share of wallet” (percentage of money spent/donated to you of all they spend/donate in your category) is the highest among your constituents.
3. Those whose referral rate (the number of folks in their sphere of influence that they tell about you) is the highest among your constituents.

Both articles ask the same question in an effort to provoke: If you could figure out which of your constituents fell in each of these categories (which you can’t, because you’re only tracking transactional data), which category of donor-sumers would you invest in the most?

To me, such a question is not provocative but roundly disappointing.

I recommend two genuinely provocative questions instead:

1. Why would you build a fundraising program where you were investing in people based on your calculations of their ‘investment value’ rather than building a development program where you were investing in people based on their demonstrated willingness to be mentored by you comprehensively in relation to the cause?
2. What if the reason we kept measurements on individuals wasn’t so we could determine their ‘value’ but rather to share those measurements with them for their benefit–to help them see things about their growth in the cause and impact on the cause which would help them grow to greater fullness in Christ?

What we’re building up to this week is the concept of ‘shared measurements’: measurements done collaboratively with our champions, according to their eager and explicit consent, for their sake (i.e., to enable them to grow in the cause).

Before we move on to what shape that might take in TG, I can’t help myself but to ask:

Don’t you marvel at the opportunity churches miss to do exactly this when they send their giving summary updates listing your donations for the quarter/year?

These church giving statements–they’re like the register tape in a grocery store, with a thankful/hopeful/concerned/call-the-office-if-you-see-an-error-here letter from the pastor or finance chair thrown in for good measure.

GIFT *** DATE *** WHAT YOU PLEDGED *** WHAT YOU GAVE ***

I just got my ‘statement’ last week. (On the same day, I got my ‘statement’ from the water company, too.) What the church measures–is it for tax purposes? Church budget purposes? For the purpose of coaching their champions into the fullness of Christ?

Check your statement and let me know what you think.

Measurement sounds like an inherently complicated subject, but it’s not. Most of the time we can learn an immense amount about a situation without even looking at specific measurements. All we need to look at is what’s being measured.

Take traditional transactional fundraising. (Please.)

In traditional transactional fundraising (ttf), what do we measure?

• Gross income raised
• Net income raised
• Cost of fundraising
• Recency of gift
• Frequency of giving
• Size of gift
• Wealth information related to the donor or prospect.

Sum it up and say that what we measure in ttf are quantifications of the relationship between the donor and our organization.

When we report back to donors (and foundations and our board), and when we evaluate our organization internally, what we typically report on are measurements between our organization and the cause our organization is seeking to impact.

So there are umpteen measurements between the individual and our organization, and between our organization and the cause.

But are there any measurements between the individual and the cause in ttf?

In a word? No.

Why?

Because ttf does not believe it is the individual’s job to impact the cause. That’s the organization’s job. The individual’s job is to determine which organization to give money to in order to impact the cause, and to give as much as possible as frequently as possible.

Similarly, ttf does not measure the relationship between the individual and his or her church. Why would we? After all, that’s the donor’s business, right?

According to Barna Group research, church members are shifting their giving away from churches and to nonprofits at an astonishing rate. Three years ago the average Christian was giving 84 cents of every donation dollar to the church. Today, that’s plummeted to 76 cents of every donation dollar, and the trend is accelerating.

The fact that we don’t measure how an individual’s giving to our nonprofit affects his or her giving to church is a sign that our attitude toward the Barna statistic is, ‘It’s not my problem. Tough luck, church. It’s a charity-eat-charity world out there. You better suck it up and figure out how to compete better. Eat my complimentary address labels.’

Another thing ttf doesn’t measure is the relationship between the individual and his or her sphere of influence in relation to spreading the cause.

Grassfire.org was one of the first organizations to build its development philosophy around what founder Steve Elliot called ‘The Grassfire Effect‘–the idea that individuals could be something more than the source of ‘endless referrals’ for an organization; instead, they were the most effective means by which a cause can spread in their sphere of influence.

The fact that ttf doesn’t measure the degree to which an individual’s sphere of influence is saturated with the cause indicates that nonprofits don’t believe individuals are the main means by which the cause spreads. Nonprofits believe nonprofits are the primary spreaders of the cause.

Finally, ttf doesn’t measure the individual giver in relation to himself or herself. Is the gift a healthy step for this individual’s giving portfolio? What does it represent about his or her giving overall–not just as a percentage but as a step of maturity in understanding what the Bible calls him or her to do? Does it reflect maturation in relation to the cause?

The fact that ttf doesn’t measure these things indicates that, in the end, it’s not really the relation between the individual and the organization that is being measured. It’s the amount of money that’s transacted (or in the case of prospects, the amount of money that potentially may be transacted) that’s key.

And that, dear reader, is pretty sad.

And beyond sad, it’s likely not even ’cause smart’ in the long run. It may perhaps be smart in relation to institutional survival, though even that’s debatable. But do we really want to say that Kingdom causes are best impacted by Christian nonprofits funded by reverse consumers known as ‘donors’ who are cultivated the same way for-profit marketers cultivate people to buy a certain brand of dishwashing detergent?

Or would we rather gamble that Kingdom causes are works prepared from before the foundation of the world by God for His people to walk in on the way to full maturity in Christ, assisted by leaders whom God sends for exactly that purpose, all to reveal the glory of His Son (cf. Ephesians 2:10 and Ephesians 4:12)?

Sounds like something well worth measuring.

Prior to becoming President of the Los Angeles Mission a job transition or two ago, I was serving as Vice President at the Russ Reid Company, overseeing the agency’s work with rescue missons, including the Los Angeles Mission.

At that time, the mission was going through a “If one direct mail appeal letter a month is good, two appeal letters a month can only be better” phase.

No exaggeration. And most months there was also a newsletter thrown in for good measure.

And the weird thing was, it was working–at least according to all of the metrics that are typically employed to measure fundraising. The mission was generating not only more gross income, but more net income, and its overall cost of fundraising was remaining well within the bounds of acceptability.

I wanted to protest that donor fatigue would derail the mission’s approach sooner or later, but the mission’s lapsed and inactive donor reactivation program steadily, predictably, and efficiently gathered the donors up who fell out of the clown car and stuffed them back in again, all while the car veered wildly down the Hollywood Freeway.

It was amazing. Disgusting, alarming, and yucky. But amazing. It was one of the few times in history that a direct mail agency was alarmed that its client was mailing too much.

Even back in those pre-Transformational Giving days, there were some mission fundraising folks (including Seattle Union Gospel Mission’s Jenny Printz and Los Angeles Mission’s Matt Bates, now not coincidentally both Regional Giving and Training Officers with Mission Increase Foundation) who knew that there must be more to fundraising measurement than gross income, net income, net yield per donor, and cost of fundraising. Out of that vague sense of discontent, we each began on our own to try some different things that would eventually crystallize into the movement known as Transformational Giving (TG).

Transformational Giving has become quite the detailed system of development in the last ten years. In one area, however, Transformational Giving remains quite undefined:

Measurement.

Now, that doesn’t mean that there is any dearth of proof or statistical evidence that Transformational Giving ‘works’, or that it works ‘better’ than traditional/transactional fundraising (ttf). Mission Increase Foundation maintains one heckuva impressive statistical database that tracks just that. And there are no shortage of organizations successfully exemplifying TG principles; we regularly chronicle ’em in these pages here.

When I say that measurement is the great undefined frontier for Transformational Giving, what I mean is that Transformational Giving is different from traditional/transactional fundraising not just in degree, but in kind. As a result, it ought to be doing more than just showing it can hold its own in measurements like income growth and cost of fundraising.

It needs to determine what from a TG standpoint is worth measuring in the first place.

Principle 8 of the Transformational Giving Ten says, ‘Giving is not the process but rather one vital result of the process of a champion being comprehensively coached to share the cause effectively within his or her sphere of influence’. That certainly suggests, and rightly so, that the results of TG are seen first and always most prominently in the champion himself or herself, and secondarily in the bank account of the nonprofit. If so, TG ought to be determining, promoting, and popularizing measurements that relate to that.

It ought to be doing that. But so far it’s not.

Sadly, I suspect that’s because we TG folks are too busy trying to sell TG to nonprofits and missionaries who were raised on traditional/transactional fundraising. Proving that TG beats ttf  requires that we use ttf’s metrics: income and cost of fundraising. That’s not all bad, but, on the other hand, it’s not all good. For example, if a ministry can generate more income at a better cost of fundraising through traditional/transactional fundraising (ttf), should they simply continue to do so? If not, why not?

I think there are plenty of reasons why not, and they’re not simply abstract theological reasons (though the abstract theological reasons in and of themselves ought to be enough to keep any self-respecting Christian up at least half the night). But until we development TG measurements and subject ttf to them, we’ll simply be accused of being idealistic and not understanding that ‘my organization is going down the drain, and we need MONEY! Please tell me how the LA Mission managed to make so much money doing two appeal letters and a newsletter every month. We definitely need to do that. And please give us a grant while we’re waiting.’

So this week we turn our attention to questions of measurement and Transformational Giving. Our goal: the development of metrics that reveal TG’s true potency, especially when compared to traditional/transactional fundraising. Some will say it’s not the sexiest topic we’ve ever covered, yet I’m not so sure it’s not quite literally the most important. The future of TG likely depends on our being able to make a case to nonprofit executive A or missionary B that they should care about anything other than gross income, net income, and cost of fundraising.

Our text for the week will be Douglas W. Hubbard’s How To Measure Anything: Finding The Value Of Intangibles In Business. Not a light tome by any measure, but it’s the good pleasure of this blog to make it interesting and applicable to you.

So grab your champions and a ruler and get set for this week’s Adventures In Measurement!