Peer-to-peer campaigns spend a lot of money on recognizing their fundraising volunteers —in some cases, as much as 4.5 percent of the funds raised.
But for many organizations, that money isn’t being spent wisely, according to a new study by the peer-to-peer fundraising strategy company Turnkey.
All too often, peer-to-peer programs attempt to recognize their fundraisers with gifts that actually work against their efforts to build long-term relationships with those fundraisers.
So what kind of recognition actually works?
We recently chatted with Turnkey CEO Katrina VanHuss to learn more about effective recognition.
P2P Forum: Why did you decide to study the topic of recognition in peer-to-peer fundraising?
VanHuss: As I’ve been working with nonprofits for the past 27 years, one thing I’ve seen time and again is that most product promotional purchases are without merit. There’s no way nonprofits should be buying these products because it’s hard to get them in the right hands, at the right time, in the right manner. Nonprofits are spending exorbitant amounts of money on products and they are using them poorly with zero ability to measure their impact.
They’re doing so, because they’re often gathering the wrong data. Many nonprofits rely on surveying their constituents in terms of what they want in terms of recognition. That’s the path to disaster because human beings do not survey very well in terms of their future behavior.
This was our attempt to provide some real data that can help nonprofits make better decisions and invest more effectively.
P2P Forum: What questions did you set out to answer?
VanHuss: We had a hypothesis — if we use gifts that look or taste or smell like money, it will have a negative effect on fundraising, behavior and expense. The second part of the hypothesis is that if we use items that don’t look or feel like pay, we will get a more positive reaction.
P2P Forum: What is the difference between those two types of gifts?
VanHuss: You can make something a transactional relationship in a lot of different ways. One of those ways is the reward you get for a particular behavior.
Let’s say I ask you to bring me a coffee from Starbucks. You bring one and I come over and hug you and say ‘thank you’. In that case, you and I are in a social relationship and your reward was a hug. But if you go to Starbucks and I gave you $5, we’re in more of a market relationship because I paid you for the action.
We know that the people who are paid to bring Starbucks to a friend are less open to doing it again than the people who simply got thanks for having done it.
The analogy in the nonprofit world is this. If I give you a blender for fundraising, versus something that is recognition, whether it’s a product or an experience, you will be demotivated to fundraise in the future. Your preference for participating again will be markedly enhanced by not getting that blender.
P2P Forum: Did your hypothesis play out?
VanHuss: It did — and we knew that it would because there is so much social science research done on this front. It was just a matter of setting it up in the context of the data we had. There are buckets of studies on this on the difference between how people act when they are in social and market relationships.
We have seen this happen in some really large clients with large data sets. The study brought all of that together and provides it in a way that nonprofits can use for budgeting and planning.
P2P Forum: What are some top-level takeaways for P2P fundraisers?
VanHuss: One thing is I hope their reaction to low fundraising will be different. We see programs that are coming in under goal and suddenly we see people panic and they start doing things like offering discounted registration. That’s one way to get into a market relationship with your volunteers.
I also wanted to elevate the level of conversation about the human mind and human decision making. Everyone is working off their gut instincts, and our guts are often wrong. There’s enough science out there that helps us understand human behavior.
P2P Forum: What should P2P programs do differently as a result of this?
VanHuss: The first thing they should change is charging a registration fee. If you’re not obligated to do it, it’s worth thinking hard about dropping. Charging a registration fee is like showing up for a first date with a $20 bill in your hand. It’s awkward. Really awkward.
P2P Forum: What kind of recognition is more effective?
VanHuss: The best recognition is what psychologists refer to as providing “insufficient justification” for the action that you are asking for. For example, if I give you a set of tickets to a football game for fundraising $250, that is not insufficient justification. Those football tickets (which were donated to the nonprofit likely) have a financial value that undermines my relationship with the nonprofit. On the other hand, a tee shirt for $250 in fundraising can’t possibly be construed as payment. My relationship remains social; I remain highly committed. Nobody works 20 hours for a $10 tee shirt.
Organizations default to gifts because they are the most easily managed form of recognition. But they are not the most powerful form. The most powerful form of recognition is personal interaction, personal call out or personal advocacy.
If I stand up in front of the group and say “I’m a cancer fighting evangelist,” that’s way more powerful than a jacket will ever be. But it’s way more difficult to get that action and to measure its impact.
Free download:
Turnkey’s Peer-to-Peer Recognition Benchmark Report