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.

The Active Donor

One of the times I’ve been angriest in my career as a fundraiser, actually in my life, was when someone  working at a charity said the following.  To my face.

“They’re just the Face to Face donors.  They’re not engaged with what we do, most of them probably don’t event know who they’re giving to.”

After I’d been sedated and had time to think, I realised that this is probably the way in which many people in NGOs think of F2F donors. There are some common, but deadly, misconceptions about the donors that fuel our organisations work. This include

• Most don’t know much about the work the charity does.
• They care very little our the work we do, they don’t share the same values
• Many don’t even know the organisations they donate to.

Although there is an element of truth to some of these claims (see the left hand side of the bell curve of engagement) it does an enormous discredit to vast numbers of people.  Part of this attitude comes from negative views on the methodology of F2F, assumptions that people are bullied into signing, or only join because they fancy the fundraiser.

However, we can’t lay the blame for these attitudes solely on others.  The way in which we treat donors reinforces this idea, when there’s the opportunity to do so much more.

In general terms, our communication do little or nothing to encourage anything other than sit back and not cancel. We send them magazines and newsletters telling them how great we are, and, if we’re better at our job, how great they are. We call them up and ask them for more money or to update their details, but none of this invites them to do anything more.  The thing is that we can and we should.

Do not underestimate what kind of a commitment making a monthly gift is.  Admittedly some donors won’t notice the gift going out each month, but declines tell us that a good percentage of our donors don’t have enough money in the account or on their card to complete the donation.  They are committing their last cents to our cause.   If they are doing all they can financially so why limit them to just a financial contribution. Imagine if we tapped into the enthusiasm and asked them to take a small action. Something easy and immediate other than donating that helps attain your organisational  goals: sign a petition, send a postcard to send off, tell a friend about the charity.

Not everyone will take the action of course, as with any call to action there are going to be a majority of people who say no, or who cant be bothered or who forget.  But imagine if just 5% of your donor base wrote to their MP about an issue you’re campaigning on, or encouraged one of their friends to sign up as well. For many charities this would be a sea change in what they can achieve.

On top of that as well imagine the possibilities for retention.  When donors do something other than give you money, the more they are engaged.  The more they engage, the longer they stay, the more likely they are to increase their gift, the more they are likely to remember you in their will. When donors move on being active they become much more than RG donors, they start to become an integral part of your fundraising strategy and even your organisation.

However, all of this requires a change of thinking however and possibly one outside of just the fundraising department.  There needs to be shift in viewing the donor as sitting in an armchair not remembering that they’re giving to you, to someone standing on the front line of your protest, telling their friends that they give to you. And the paradigm shift is only the beginning, when you’re looking at your donor base in this way, the entire way in which you communicate with them changes. It becomes more interactive, more frequent, more inspiring and yes, more work.  But the rewards more than make up for it.

The Bell Curve of Giving A Toss

The most important metrics in regular giving are retention percentages.  They determine ROI, income, donor numbers and pretty therefore pretty much what your organisation is going to be able to achieve in the next few years.   The biggest single influence on attrition rates is recruitment source.  Sadly, a lot of internal NGO conversation seems to stop there.  However F2F teams and agencies the world over, have spent enormous amounts of time and resourcing trying to work out why this is.  The main answer that they seem to come up with is that source reflects and/or influences donors engagement with the organisaion.  

Ability and Desire… again

You may have read in a previous post that a bit too much attention is paid towards demographics of the donors being recruited. Income, age and location do carry some weight. But the reality of the situation is the number of people who cancelling because they really cannot afford to give any donation to you is very small.  What’s much more important is how much they care about the work you do. 

Giving a Toss

It’s the amount of love, not the amount of money that a donor is giving that determines their how long they’re likely to give for.  If they really care about what you do then when they decide to start saving for a home, they’ll make room for the $25 a month in their budget.  If they loose their job then they’ll reduce or put their donation on hold while they look around for a new position if they value their donation to your organisation highly enough.

Bellcurve

Everyone is an individual and so everyone who responds to recruitment ask will therefore respond in a different way.  This means that every recruitment methodology is likely to recruit a cohort of donors whose engagement with your organisation looks a little like a bell.  There will be a small amount who care a lot, a small amount who hardly care at all (I have no idea why these people sign up, but they always seem to) and a big chunk of people in the middle.  The exact contours of your bell curve will vary depending on source, but they will probably all take a similar shape.

Prove It

I can’t.  And this is the most difficult thing basing a concept on something as unmeasureable as emotion.  Like a black whole, you can see the effects of it (on retention rather than gravitational pull), but you can’t actually see the thing itself. If demonstrating it to yourself is impossible, then imagine how hard it’s going to be to the board.

So why bother with it at all.

Because even if you can’t base budgets around it, it gives you a framework for strategies to retain people.   If you know source a (green) has better retention than source b (blue) you can start to work out where along the bell curve you want to focus your attention.  Do you want to focus your communications streams on the less engaged donors, the very engaged donors or somewhere in the middle (hint, its the latter answer, the question is where in the middle).  We’ll look at the bell curve again in the near future as were only scrapping the surface of what it can tell you.

How To Ask For A Little Bit More

The other night my girlfriend received a call that I could instantly tell was asking her to increase her donation to a charity.   Even though I couldn’t hear the words being said I knew exactly what was happening and both of us thought it was excellent.  (NB my lovely, wonderful girlfriend is definitely a civilian and although she knows bits and pieces about fundraising from when I talk about work, she’s not that interested)

I knew it was an upgrade call as every step was textbook, each part perfectly executed by all involved: The international development organisation she gives to; the telephone fundraising supplier they use; the caller on the other end of the line all did their bit to make it a fantastic experience for all stakeholders. Here’s how it worked.

Timing

This is perhaps the most important part of any program which asks for more from a regular gift.   My girlfriend signed up around 9 months ago via F2F.  As a significant tranche of your F2F donors either drop off or miss payments in the first six months, it’s a fair assumption that those who haven’t are pretty good donors and worth contacting again.  They’ve settled into the donation pattern, received your amazing updates and should be feeling much closer to your organisation.

In addition to this the tax year has just passed here in Australia and so if your donor agrees to increase their gift now, it will have the most positive effect on that artificial yet important deadline next year. Also there isn’t much else for phone suppliers to be doing at this time.

The only minor criticism I have of the timing is that the call came before her tax receipt had arrived.

Structure

This is really crucial and it has to be said that the caller did it with aplomb.

Thankyou:  After introducing himself the first thing the caller  did was thank my girlfriend for her contribution over the last year.  I could tell this because after a couple of seconds her face lit up.  She felt that genuine glow that one gets when you’re reminded that your doing something wonderful.

Success: Then he told her about some of the success that her donation had helped the organisation achieve. Although I couldn’t here what he was saying, I could tell from his upbeat tone of voice and her happy nods of agreement.  This is a stage that’s hugely important when talking to donors who already give, but can be counter productive when asking someone to start a donation.

Reason for Increase: Then the atmosphere dropped. My girlfriend’s expression turned to one of concern. The caller’s voice was lower, more serious.  He was obviously talking about things that were not right in the world, and he was communicating them exceptional clarity.

Ask: With the case for support effectively given, this became a logical step.  The caller initially asked for an increase that was more than my girlfriend could afford (afterwards I found out that this would have brought it up to 150% of the initial donation). She told him that that was beyond what she was prepared to give.  He suggested a smaller increase of about 20% of her monthly gift  and she agreed.

When she came off the phone she was chuffed, smiling about what her extra donation was going to do.  Her connection with the organisation was reinvigorated.

There are a couple of takeaways I got from watching all this unfold. Firstly that people like hearing from the charity they give to.  My better half didn’t know it was a call to ask for more until the ask actually came, but she was flattered and reengaged with the charity.  Even if she hadn’t decided to give more, the call was likely to extend her commitment. Second she wasn’t offended to be asked again because of the way in which the case was put forward; a logical and emotional reason justified it. Thirdly, this isn’t rocket science, these are all  101 Fundraising  concepts (by this I mean really basic, not related to the excellent and insightful crowdblog). Also it reminded me that although I’m keen to eventually get a rolling increase program started, this is a great time of year to be running this type of campaign.