The misuse of giving clubs does not negate their value. Here’s why they matter for you.
You’d be forgiven for not closely following the saga, which progressed from an August 2021 Veritus blog post to my Philanthropy Daily response to a Veritus follow-up podcast. The latest salvo came last month with another blog post, “Get Rid of Your Giving Club.”
Without belaboring the point with a play-by-play, my argument can be summarized as abusus non tollit usum (roughly, “misuse does not negate use”). It’s telling that Veritus waffles between the language of categorical condemnation (“get rid of your giving club”) and mere misuse (“membership programs, when used incorrectly…”).
Giving clubs can be used incorrectly, sure; that doesn’t mean they shouldn’t be used at all.
Rather than focusing in on that point precisely, I want to use this ongoing giving club conversation to pose a broader question: How do you engage those organizationally significant donors who don’t want to have a personal relationship with you?
The conventional rule of thumb (regularly cited by Veritus) is that two-thirds of your donors do not desire such a relationship. Therefore, addressing this question is quite important to maintaining and increasing revenue.
My point is that giving clubs are central to effectively engaging precisely this cohort of donors. Let’s examine this by thinking through how both types of donors interact with giving clubs, whether they want that personal relationship or not.
The immediate context here is what Veritus terms the “donor qualification process.” This process entails a series of communications across various media to determine whether a particular donor wants to have a personal relationship with you and your organization. If a donor does not engage with you at any step of the qualification process, he should not be considered part of your donor portfolio.
Your limited time should be spent getting to know donors that do want a relationship with you rather than chasing the donors that do not. As Veritus astutely notes, this lack of engagement does not itself say anything about their affinity for your organization or future giving prospects; some donors just don’t like to engage on this level.
Let’s start with donors who do want to engage with you personally; I’ll call them “relationship donors.” One (valid) concern the Veritus guys have is that giving clubs abet lazy major donor relations. Instead of getting to know what animates specific individual donors, development officers can simply point to the giving club and its various levels and think that they’ve done their job. This, however, is a misuse issue: a bug not a feature of giving clubs.
Even with these donors, however, giving clubs can serve a specific with relationship donors. With these donors, giving clubs are one tool out of many. They can be deployed if useful to level up a donor, to underscore your gratitude for a donor’s support, and to foster community among your charitable supporters. They can supplement—but must not replace—the more foundational task of the development officer, which is to develop close relationships with key donors to partner on meaningful gifts.
Moreover, a good giving club is designed for donors to “out-grow” it. If you are making your case to a donor with six- or seven-figure giving potential and your organization’s giving club is central to it, you’re doing it wrong. The motivation of transforming an organization with a personally meaningful gift is far stronger than of achieving a giving level. But you are not always in a position to make this case.
I led with relationship donors to emphasize the central truth of engaging non-relationship donors: your tools are limited.
With these donors—again, two-thirds of your donor base; not an insignificant number!—giving clubs represent an effective way both to solicit and to acknowledge gifts. This is precisely why good giving clubs are tailored to mid-level and low-major donors: these are organizationally important donors that nevertheless are not at the very center of your donor relations efforts.
On the solicitation side, giving clubs help you upgrade donors with whom you are not currently or as deeply engaged. Even Veritus notes that organizations observe a substantial spike in giving upon the establishment of a giving club! Under their view, the issue comes later, when donors get “stuck” at the giving level.
This, however, can be remedied in two ways. First, with a good giving club design. Levels should progress at realistic increments and show how gifts at that particular level help your organization achieve its mission. To reiterate: Giving clubs are a tool, not the end-game. They succeed insofar as they show donors how their giving fulfills your mission (and theirs!). Second, with good stewardship and cultivation habits. Giving clubs are an entry point for low-dollar donors to upgrade and enter the “donor qualification process.” Those that “qualify” for a more personal relationship can “graduate” out of the club if that’s the most effective way to engage them.
Among donors that are not yet prospects for the qualification process, giving clubs help to identify future “relationship donors.” Among donors who have passed through the qualification process, giving clubs provide an (admittedly imperfect) surrogate for personal communications. Remember: You have no personal relationship with these donors! Being able to speak to “members of the X level in our Y giving society” is more concrete and personal when that deeper relationship is lacking.
Again: the giving club is not an excuse for a deeper relationship, but it is a back-up for donors who aren’t interested in that relationship.
It goes without saying that the more donors you can engage personally, the better. At the same time, we must be realistic that there will always be donors—even some at high giving levels—who don’t, and may never, engage personally. For these donors, a giving club is one tool that approximates the warmth of personal interaction. We neglect it at our peril.