Inside Philanthropy

A blog on philanthropy and nonprofit news and issues. A publication of Philanthropy Journal.

July 20, 2009

Fundraising, part 1: Scholar calls for improvement

By Todd Cohen

While they generally do a good job involving their boards in fundraising, securing major gifts and planned gifts, and focusing their fundraising on their donors, U.S. charities get only an average grade overall in their fundraising, a leading fundraising scholar says.

“I would probably give it a ‘C’,” says Adrian Sargeant, the Robert F. Hartsook Professor of Fundraising at the Center on Philanthropy at Indiana University. “There is a whole range of thing we’ve done very badly and it’s masked because people in the U.S. are very generous and getting more generous.”

Nonprofits do a terrible job retaining donors, raising money online and securing bequest pledges, Sargeant says.

The fundraising profession also lacks a mechanism for learning from the latest research, which in turn generally has failed to study why people actually give and what would spur more giving, he says.

And nonprofits typically focus their fundraising on the “transactional” strategies and tactics of raising money, Sargeant says, rather than on givers, the causes they care about, and the way fundraisers treat them.

“We’re too hung up on the mechanism,” he says. “Donors are interested in solving problems and making a difference, and whether you call it an annual fund or a capital campaign is irrelevant. We need to organize around what interests donors.”

Marketing perspective

Sargeant, who is believed to hold the only endowed fundraising chair in the world, brings to his research a marketing perspective.

After holding marketing jobs in the business world, he decided he wanted to teach at the university level.

So he enrolled in the master’s program in business administration at Heriot-Watt University in Edinburgh, where he did research for the YMCA of Scotland on its declining supporter base.

“And I’ve been hooked ever since,” says Sargeant, who later received a doctorate in marketing from the University of Exeter.

“Fundraising for me is a form of marketing,” he says.

In comparison, he says, fundraising in the U.S. typically has a public-relations perspective.

Fundraising research

In fact, he says, research on fundraising has tended to focus on the economics of fundraising, such as the impact of tax rates on giving, or who gives and how much they give, and also has drawn on the psychological or sociological perspectives of why people give.

“There needs to be more work in the domain of philanthropic psychology,” he says.

“That’s important because one thing we need more research on is growing the pie,” he says. “We live in a time when a smaller proportion of American society is giving, the giving base is declining,” he says. “There is still a lot more we need to know about donor retention and what we can do practically to improve rates of attrition.”

Research is needed to explore fundraising opportunities that have not been tapped fully, including bequests, online giving and the use of social media, Sargeant says.

“All of these things are potential audiences we can grow,” he says, “and research that helps fundraisers do that is really key.”

Next: Givers’ psychology seen as key

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