Why I stopped hating the opt out Upgrade (and why I probably won’t be doing it again)

A few years ago a fellow fundraiser told me a horror story.  He had heard that another charity had just increased all their donors’ regular gifts without asking them. I was appalled as I liked this charity, but I made a mental note never to support them.  Flash forward a few years and it turns out , that like all good horror stories, although there was some basis in fact most of what my friend told me was not really true.  What the charity had done was an opt out upgrade, sometimes called an auto-upgrade.  They had informed a number of their donors that their monthly donation would increase, unless they asked them not to, then increased the donation of all the non-responders.

Although this may have been the first opt out upgrade conducted by a charity in Australia, its certainly not the last. But even with a number of organisations conducting these programs over the years, it remains one of the most controversial tactics  of Regular Giving programs. When discussed among fundraisers a good proportion of them believe opt out upgrades to be the work of the devil whilst a similar number believe it to be literally a life saving retaining value against inflation.  Personally I started out being extremely against the idea, but over the last year or so I have changed my mind.   Although I didn’t initiate the first one, the program I look after has run several opt out upgrades.  I’ve run a couple of these programs now  I’ve seen the outcomes first hand.

Before I give you the reasons why I’ve come around to the idea of opt out upgrades  I’d like you to ask yourself a couple of questions.

1. If you were to die unexpectedly and your heart to be used to save someone else’s life, would you agree to the transplant?
2. Are you registered as an organ donor?

The difference in the number of people who respond positively to these questions tells you why opt out upgrades have a place in fundraising.  I consider myself to be an engaged, organised and responsible person, but I am also one hell of a procrastinator.  Anyone who’s seen the half finished planter boxes in my back yard can attest to this.  Most people won’t make these decisions unless they either really, REALLY  care about the outcome or they are put on the spot. To continue with the organ donor analogy above, Germany has an opt in system of organ donation, and around 12% of their population have agreed to save someone’s life after they die. Austria on the other hand has and opt out consent to organ donation, meaning that  that 99.98% have agreed to give their organs after death.  I’ve known enough Austrians and Germans to realise that they are not exactly the same, but there aren’t 87 degrees of altruism between them either.  By contacting donors and telling them that their donations will increase if they do not contact you, then you are asking them to say if they really care enough NOT to upgrade.  If they do then they will tell you. If you phrase it correctly, they are unlikely to be angry with you.  An opt out upgrade is not an increase in the gift whether the donor likes it or not, but it is making sure the question is heard and asking if they really don’t want to increase their gift.

The ethical arguments against an opt out upgrade are usually around idea that it’s removing the donor’s choice. But asking them to opt out, still gives them a choice which we are not usually granted in other areas of our lives.  My electricity company doesn’t give me the opportunity to opt out of their price increases. The government doesn’t ask me to contact them if I choose not to increase my taxes.  Cooper’s brewery are yet to give me a heads up about the increase in beer prices and give me the chance not to pay extra if I don’t want to. The option of opting out keeps the choice  in the donors hands, which in turn reflects the optional nature of a donation.

One flaw in this theory is that there will always be a number of people who you haven’t see your communication and therefore are unaware that they had the option not to increase the donation.  They only see that it has increased when they look at their statement. There are two basic situations where this could have arisen.  It could either be because they received, but chose not to read the email or letter or you have their details wrong and they didn’t receive it.

A number of these people will be upset at the increase and a number will tell your incoming call team in no uncertain terms how upset they are. The percentage of these people is comparatively small, but they more than make up for it in their volume. The important thing, as with any complaint, is to listen to them and explain what has happened. Be ready to offer refunds at the drop of a hat. Tell them that you’re sorry that they feel that way, that they have missed the communication or that you didn’t have their correct details. You shouldn’t be sorry for the program of opt out increases.

All of the stats evaluations that I’ve seen on opt out increases show that the increased income far out-weighs the slight increase in attrition. This can be improved by making intelligent who is upgraded based on tenure, gift, age etc…  So  there can be no question that it is very effective and ethical, but I am unlikely to run an opt out upgrade again.

The problem with an opt out upgrade is that some people, even if they understand it, will not necessarily like it.  They won’t cancel their donation, certainly not immediately.  They won’t call you and tell you that they’re upset, but there will be a feeling of negativity there. Fundraising works on a very base level; it’s all about emotions and our lizard brain. If there is a feeling of negativity then there it makes getting people to agree to things later on, much harder.  They may say no rather than yes when you next ask them to upgrade. They may be more likely to cancel when that big bill comes in or that holiday comes up.  We’re not talking about big swings in emotion here, but they may only be 3% more likely to say “no”.  But a successful RG or indeed any wide scale fundraising program is about getting as many of the small percentages work in your favor.

The problem is now you’re aware that there’s one way of making an RG database retain it’s value at low cost, there must be another way which doesn’t colour you negatively.

I’ll save those ideas until the next post.

Analysing Cancelation Reasons

A couple of posts ago I looked at donor’s pathway to cancelling. The next stage to look at the reasons they give us for cancelling and what that tells us about our program.   One issue with this is that people don’t always tell you the real reason why they cancel.  We know this because we never get told that they’re cancelling because I’ve never seen the cancellation reason “Thinking about it for a while because I doesn’t really feel that inspired, then got out of bed on the wrong side and opened an electricity bill.” People tell us what they feel ok with telling us. Its not often that they feel ok with telling us that they don’t really care anymore.

But although they may feel bad about telling us the whole truth, we should never judge them for the reasons they stop giving.  People do not cancel because they have suddenly turned evil. There are influences that have lead to this cancellation which are within your control (change these), and there influences that are outside of your control (don’t sweat about these). Never get upset with ex donors. Its not their fault

Anyway, here’s an interpretation of cancellation reasons and what they might be saying about your program.

“My financial circumstances have changed” – 90% of the time their financial circumstances have not changed, the donor is just trying to let you down gently.  It’s the RG version of “its not you, its me”, in that it’s very definitely you, they just don’t want to break your heart by telling you you’re boring or your breath smells.  What that generally equates to in charity terms is that they don’t think you’re worth the money their giving you.  If your getting a large number of people cancelling early for this reasons tends to mean that they didn’t really want to give to you in the first place and you should look at your recruitment channels. Maybe F2F fundraisers are not engaging people enough or worse, signing up people who don’t really want to give. If people are still dropping off in big numbers after the first few months it means that you’re not communicating with them well enough.  You need to tell them how great they are, how much of a difference they are making and do it more frequently.  Incidentally this accounts for a large percentage of most cancellations files across most charities I’ve seen.  It’s terrifying to know that we are loosing people because of reasons which are relatively easily fixed.

“I’m a Student/Pensioner” – A more specific reason, and likely to be true, but not necessarily telling you what you need to know. It’s easy to make the leap to thinking that they shouldn’t have been recruited, but that’s not quite the case.  It means that they were being recruited in a way which didn’t make them feel the program was right for them.  It could be that they were recruited at a donation level that was too high, or they felt that their donation was too small to make a difference.  It could be that, as with the “financial circumstances” they weren’t engaged enough. Again this could be a reason with the recruitment channel, but it might not be as simple as bringing on the wrong people, they might be bringing them on in the wrong way.

“I’ve just become unemployed/I’m going traveling for a year” – This is completely out of your control sadly, but it if it’s any consolation getting this means that your doing your job.  By telling you that it’s a limited period of time that they wont be able to give for, they  are keeping the door open for giving to you in the future. Invite them to stay on email lists and certainly flag them for reactivation programs.

“I don’t like this thing your organisation did” – Going back to the Buckaroo theory of cancellation, this must have been the last of several straws.   Komen for the Cure’s withdrawal of support for Programs with Planned Parenthood programs  is a recent and well known example of this. When decisions are made  that move away from an organisations’ normal operations or values, they are usually made at high level and with the understanding that this will upset some of your supporter base.  This hopefully gives you time to plan a clear and concise explanation of the charities actions that can be communicated to supporters.   The other side of the coin is if people are coming into your organisation with false expectations about what you are or what you does. One of the reasons why clarity of message is so important in the recruitment process.