According to a mid-year survey of nonprofits, nearly 44 percent expect a decline in year-end fundraising revenue due to a recent slowdown in giving. Anxiety and hard times can lead to questionable tactics. We’ve seen it before: Short-term wins can erode donor trust, spark animosity among “competing” organizations, and increase donor fatigue.
No matter how tempting they may seem, here are three tactics to avoid as we seek gifts in the final quarter of the year.
Do Not Engage in Competitive Advertising on Search Engines
Search-engine advertising on platforms like Bing and Google can be one of the most effective and efficient ways to boost online revenue. When a potential donor enters a search term for a specific cause, the top results usually are paid advertisements. These ads ensure that donors quickly find a way to donate without scrolling through pages of results. For nonprofits that make smart investments in marketing their brand, these search-engine ads are a primary tactic for turning increased awareness into more donations.
However, every year, we see toxic advertising practices in search advertising. Not familiar with the tactics? Here’s what can happen. When donors search for a specific organization by name, they see ads for a number of different nonprofits. Some unscrupulous agencies even create ads that mislead donors by showing one nonprofit’s name but link to a different organization. For example, the image below depicts a search for Oxfam that leads to results for two other organizations.
Because search-engine advertising uses an auction system to establish pricing, this practice creates potential bidding wars and drives up costs for everyone. The more entities bidding on a keyword, the more valuable the search term becomes, and the more expensive it is to buy ads on those keywords.
When one organization is targeted, it may be inclined to reciprocate. The outcome? Search ad costs increase, but click rates decline. Big tech rakes in more money from nonprofits, and the cost to attract donations online rises.
Plus, think about this. An organization would never cash a check made out to another nonprofit, nor would an ethical fundraiser ignore a donor’s intent and send a gift to the wrong organization. Yet these are the kind of dynamics we see with competitive search advertising: A prospective donor indicates they would like to donate to “Nonprofit A” and instead, they see ads for Nonprofit B, C, or D, sometimes seeing ads that include the name of Nonprofit A.
At Blue State, we recommend that clients never engage in competitive bidding against other organizations’ names. We believe this is not an ethical practice, nor is it particularly effective. Tricking a donor is not a strategy for long-term or sustainable revenue growth.
Instead of competitive bidding, we recommend investing in other forms of brand and digital advertising or, if you want to stay in the search engine space, honing your website content to be optimized for search-engine rankings. This ensures your organization will be near the top of the results, without having to pay for ads.
Do Not Escalate Matching-Gift Levels Beyond Credulity
Everyone loves a match, right? In general, we do!
There is a ton of both practical and academic research about the efficacy of matches. At Blue State, we recommend them to our clients and see smartly deployed matches boost annual results from new and existing donors alike.
However, the trap lies in the details. Recently, we’ve observed an arms race of sorts among nonprofits. To cut through the clutter of mail and inboxes, organizations rely on higher and higher match promotions. While 1:1 and 2:1 gift-match promotions were once the norm, we often now see campaigns that promise to match a gift at 10 times its value.
Escalated matches give us pause for practical and existential reasons.
At a practical level, there is a risk of backlash against overly aggressive fundraising tactics. As we all know, the sector is vulnerable to shifts in public perception and trust; GiveWell and Charity Watch have been outspoken in their criticism of outlandish or “illusory” matches. The Better Business Bureau Wise Giving Alliance issued guidance to avoid overstating outcomes and to ensure truth in advertising in promotions that promise doubling of impact.
Now, the existential problem with matching-gift challenges: At first glance, ever-escalating matches may seem to help a cause stand out in a crowded charitable market. However, these approaches do little to differentiate the vibrant missions and programs that are improving the world. If we truly want our causes to stand out, we need more creative solutions to inspire giving.
Do Not Send Marketing Emails Without Permission
We are seeing an increasing disregard for the need to seek permission to send marketing messages by email or text message. A number of nonprofits, seeking short-term revenue gains, elbow their way into inboxes and mobile phones without permission — despite a negative impact on supporters and the organization’s brand.
What lies behind this trend? It is due to the unfettered selling and sharing of supporters’ personal data.
You may see a short-term boost from this tactic, but research shows worrying signs of long-term disengagement from people who receive emails without their permission.
Fortunately, this trap is easy to avoid. I consistently recommend that organizations focus their email programs on trust-based advertising and fundraising. Instead of buying lists of individuals who haven’t supported your organization, invest in brand-building, petitions, or lead-generation through content marketing, which allow individuals to raise their hands in support of a given issue or organization.
We get it. Holiday fundraising is vital. For many organizations, a big portion of the annual budget is at stake. But don’t let the pressure to hit goals cause you to abandon proven practices and professional ethics.
Avoid tactics that lead only to short-term wins. Focus on long-term value, donor trust, relationship building, transparency, and collaboration (both with donors and other organizations) on New Year’s Eve and every other day of the year.
