An Interview with Adrian Sargeant: Fundraising and Donor Loyalty

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Professor Adrian Sargeant is Director of the Center for Sustainable Philanthropy at the University of Plymouth. He is also an Adjunct Professor of Philanthropy at the Lilly Family School of Philanthropy at Indiana University, and Adjunct Professor of Fundraising at the Australian Centre for Philanthropy and Nonprofit Studies, Queensland University of Technology, Brisbane, Australia. He is one of the world’s most prominent authorities in the fields of fundraising and non-profit marketing. This interview was conducted in Beijing by CDB’s Gabriel Corsetti on the 28th of July, in the context of China’s second annual Fundraising Conference, to which Professor Sargeant was invited as a speaker.


Gabriel Corsetti:  You are the founder and director of the Center for Sustainable Philanthropy of the University of Plymouth. So could you tell us about your motivations in founding the Center and what you do?

Professor Adrian Sargeant: There are around the world many centers that study philanthropy; the biggest of them is Indiana University where they had a center for philanthropy, now a school. Our interest isn’t really in studying philanthropy per se, it’s in growing it. So all of the research that we do is around how we can grow the philanthropy of nations, and in a very particular way, growing it by enhancing the quality of the donor experience. And that’s where we get this notion of sustainable philanthropy from, because I figure that if we give people a better experience of philanthropy and make it more meaningful, then its more likely that that giving will be sustained. So we are looking for ways of achieving that kind of win-win, where people give more, but they give more because they’ve had a better and more meaningful experience.

GC: So it’s very much focused on improving the donors’ experience in order for philanthropy to grow.

Adrian: Yes. We are the home of a new field called philanthropic psychology, so my colleague Jen Shang is a professor of philanthropy psychology, and she is interested in taking ideas from the psychological space about where people get meaning in their life, and thinking about ways in which we can engineer that value when they are engaging in philanthropy.

GC: I see. And where is she a professor?

Adrian: She is a professor with me at the Center for Sustainable Philanthropy, and she was the first PHD in philanthropic studies to graduate from Indiana University. I think she started her studies at Warton and then she moved her PHD to IU because of the fact that there was this first opportunity to be a philanthropic studies PHD.

GC: So she is actually teaching philanthropic psychology. Is it a subject that you can major in?

Adrian: You can study it, and it’s a component of the educational program that we have developed for fundraising associations around the world. So if you want to take the AFP diploma in fundraising or the institute of fundraising diploma in fundraising then you will be getting a dose of donor behavior in that and within that this notion of philanthropic psychology. Because we are beginning to understand a lot more now about where people get value from their philanthropy and what it says about them when they engage in it.

GC: That’s all very interesting. And coming to that, you are most well-known for your work on donor retention and donor loyalty, basically. So could you tell us what you think the recent trends are? Do you think things are improving? Because I have the feeling you think they aren’t.

Adrian: No, around the world, in other countries, like European countries, in the USA, in Canada, or even in Australia, the pattern of retention is not good, and it’s getting worse. We are losing more donors each year, and the duration of a lifetime is decreasing each year. Moreover it is becoming tougher to replace them because of all the acquisition activity taking place right now, and it’s hard to make that pay. So for all kinds of reasons I think we have to as organizations get more focused on retaining donors. Here in China, I think fundraising is so new in a sense, that people aren’t overwhelmed by it yet. So levels of loyalty here in China I suspect would be higher, simply because it’s new and people are exploring it for the first time, and they are not necessarily bombarded with fundraising messages in the way you might be in the UK or the US.

GC: Okay, that’s an interesting point. So you think one of the main problems in the West is in fact that people are overexposed.

Adrian: I think we adopted what I call a transactional perspective. So organizations were very much about “let’s try and recruit every last donor that we can, let’s try and raise as much money as we can”, instead of thinking about how we were making people feel when we communicated. So I gave in my talk the example of Olive Cooke, bless her, who was a long-time supporter of many charities, but in the end felt bombarded by all the charities trying to squeeze more money out of her. Something is wrong when the system gets to the point where elderly people are just bombarded with hundreds of communications asking for money every month. That’s not healthy. It would be better for her to be giving to the few things that genuinely interest her and for those organizations to be building their relationships.

GC: Yes, I know very well what you are talking about, because actually I have an elderly grandmother who lives in London, and until recently she was living alone, and she was getting bombarded by charities. She got to a point where her mind wasn’t fully with it anymore, she was just giving to everyone without much discernment, and her children got worried about it.

Adrian: Yeah, and just this last year the sector has published a code for dealing with vulnerable people, so now it has become an issue, but only after a couple of well publicized cases where people had obviously been abused. And one of the newspapers in the UK had somebody undercover in a telephone agency and it turned out that the agency were calling people who they knew were confused and they recognized were confused, but they were still pressuring them into making a gift. It’s utterly outrageous behavior. But you can understand where it comes from, if you‘ve got fundraisers who are remunerated for every last penny they raise, they communicate that sense of urgency to the agency who then cut a few corners, encourage staff to put a little bit more pressure so they can meet the target this month, and that’s where you find that people are treated inappropriately. Immediately, when you discover on the phone that somebody is confused or uncertain, that should be the end of the conversation.

GC: Right, I totally agree. Okay, and do you see much hope for more charities to adopt what you would call a relationship philanthropy approach in the future?

Adrian: I think the movement in the UK now is fundamentally going to have to be towards relationships. We are going to be very limited in terms of the communications we can do now in the UK because of the whole new swathe of regulation. The US is a bit different. I think there are a few more organizations that are starting to think about genuinely building relationships, others though are still engaged in some of the terrible kinds of fundraising I showed earlier, where very little thought goes into it, and its still about the dollars that are raised.

GC: You have been in this field quite a long time, so you must have seen how the emergence of the Internet and online fundraising has changed the picture. So how do you think that affects donor loyalty?

Adrian: Well, I think it could have a very positive impact on loyalty because one of the things that drives retention is having little meaningful interactions with supporters over time. And in the digital space it’s quite easy to have these little interactions with people, asking them to do little things for you, sign up for a newsletter, share their views, rate themselves, participate in a survey, and every time you get a little interaction like that, you get a little bit more loyalty. So encouraging people to engage with you in ways that are not necessarily just about money is easier in the digital space. And we also know that if you can encourage people to communicate with you offline and online, you get much more loyalty. So the fact that somebody is a multi-channel donor means that they are going to give more and they are going to be a high-value donor. So there are different ways in which you can add value. I think the challenge for non-profits is in thinking about the digital strategy, to think about meaningful ways in which people can engage with the organization. A lot of non-profits have social media presences, but they haven’t really thought through what the relationship is between that social media presence, the relationship they have with their supporters and fundraising. I mean they get likes, but likes don’t get you anything. I think it was UNICEF that ran a campaign on that.

GC: Liking isn’t going to solve anything

Adrian: Yes, liking us isn’t going to feed a child, so there’s a strategy that builds likes, but what will that do? They’ve got to forge better links and get smarter about the way they are using the digital technology. And actually one of the good things here in China is that they have bypassed a lot of the early fundraising, and they’ve gone straight into using technology in a smart way through social medial channels.

GC: Yeah, I was going to say that in China most public fundraising, in fact I would say practically all of it is done through social media, online. I don’t think people usually get requests in the post to support charities, yet.

Adrian: It’ll come.

GC: Possibly, but I am not sure. I don’t think it would work here, I don’t think many people would be responsive and there’s no culture of setting up a direct debit with a charity or things like that. People just donate on a one-off basis, when they see something which catches their attention online.

Adrian: That’s what they said in the States. They said “monthly giving? Won’t happen here. People just send checks”. Because I was preaching for years that monthly giving was going to take off in the US, and I was being told “no, won’t work here, people just write checks, and there’s no culture of it”. But cultures change.

GC: So did it take off?

Adrian: It’s taken off now, big time, yeah. It’s done differently because it’s done through the credit card, in the same way it would be done here, or so I was told yesterday. But it’s surprising what begins to take hold when channels change.

GC: That’s an interesting point, because I assumed that would never work in China.

Adrian: Never say never. Who knows whether it would work or not. Direct mail works very well in Hong Kong for example. Most fundraising in Hong Kong is done through direct mail, so one imagines that cultures may merge. It’s an interesting area. If I had a crystal ball we’d know.

GC: Exactly. But Hong Kong might be more influenced by British culture.

Adrian: I’m sure it was. But it would be interesting to see how things shape up.

GC: It will be, yes. Since you’ve also worked for many years in the US, I wanted to ask you what the main differences are between the UK and the US, in terms of the policy framework for fundraising.

Adrian: Well in the UK policy is much more hands-on. So central government has taken an active dislike to the sector over the last 4-5 years. There’s a lot of politics kicking around, because the non-profit sector as a whole has been quite critical of government and over the last few years I think we’ve seen some pushback from government, so they’ve constrained what we could do now in terms of advocacy, and they’ve taken an active interest in fundraising, and I think as a consequence of the measures they’ve just implemented, we’re going to probably see a 20% fall in voluntary income over the next five years.

They are creating a fundraising preference service, so in both the US and the UK there are mail preference services and telephone preference services where you can opt-out from receiving those forms of communications. Well, we are going to be the only sector that has its own preference service, so you can sign up to the fundraising preference service that prevents any charity from contacting you, at least by name, and you can at a stroke reset all your charitable givings, so the moment you sign up, even charities you’ve been supporting for 20 years will no longer be able to contact you. They are also making fundraising opt-in rather than opt-out, so you actively have to opt-in even before we can thank you in the UK, which is going to be terrible I think. There also constraining the use of data to the point where it will shortly be illegal to open a file on somebody and keep a record of their wealth, their company directorships, the causes they like to support, all the stuff you normally do to manage their fundraising. Can’t do that, because you would need their permission to start keeping those records.

GC: Wow

Adrian: Yeah, there’s a big push to constrain fundraising. In the US I think people are much more robust, people don’t mind being asked, there’s a sense that non-profits need to do that, and you just say no if you’re not interested. The UK seems to want to try and protect people, which is well and fine, except they are forgetting that fundraising doesn’t exist in a vacuum, it exists because somebody over there needs help, and in a civilized society, if you need help, you should have the right to put your hand up and ask for it, or for somebody to do that on your behalf, and that’s going to be increasingly difficult in the UK over the next few years.

GC: So in a sense they’re caring too much about the rights of the donors, and not enough about the rights of the beneficiaries?

Adrian: Yeah. It will be harder, in the UK, to save a life than to sell someone insurance, and that’s wrong, it’s the wrong way around, it should be easier to ask someone to save a life than to sell them car insurance.

GC: Yeah I would agree.

Adrian: But I think the learning from it is that if you don’t do fundraising properly, if you start to bombard people and put them under pressure, then ultimately government takes notice. And governments like to be seen to be taking action against something which the public doesn’t like. So there’s a cautionary tale irrespective of what country you’re in. Wherever you are, if your sustained fundraising’s inappropriate, in the end someone will take action.

GC: Ok, maybe Chinese charities had better remember that.

Adrian: Yeah I think it’s worth getting it right from the get-go, and then there’s no reason for legislators to intervene, because everybody’s happy with what’s going on.

GC: Well here in China at least they don’t go knocking on people’s doors. I think that’s what really bothers people.

Adrian: Well every culture has the things that it hates, and in Britain knocking on people’s doors is not liked either. The one thing I’ve learned in fundraising though is that there is an inverse relationship between whether people like it and whether it’s effective. The only form of fundraising people really like is radio advertising, and good luck raising money through that. But knocking on people’s doors, stopping people in the high street, writing to them, phoning them, all of these things are what actually raises the cash. It’s an odd paradox really.

GC: I think you’ve already answered this as far as you can, but since it’s the second time you come to China, I was going to ask you what you think the situation is in China concerning donor loyalty and fundraising.

Adrian: The honest answer is we don’t know, because there isn’t the same degree of sharing information here yet, so there hasn’t been a coordinated study in which people have pooled their data to track donor behaviour here in China. My hypothesis though is that because it is still relatively new, that newness still makes giving attractive, and people are intrigued when they are contacted, because it’s a whole new thing. When it gets more ingrained, I think that’s when you will start having organizations work harder at retaining their donors, because there will be lots of opportunities to give to lots of other organizations, and it’ll be even more important to get the quality of that fundraising right.

GC: I see. So it’s to do with saturation?

Adrian: I think so, yeah. I would be surprised if organizations had a big issue with retention here and there, if they were soliciting monthly giving. If they’re running events, then retention is not necessarily an issue, because they’re just looking for one-off participation. But regular giving programs, monthly giving programs, those things can be a problem in terms of donor retention. But everybody I’ve met so far seems to have pretty reasonable retention rates right now.

GC: So you’ve met with some Chinese charities?

Adrian: I did a day’s training yesterday, and I was talking to them, not a large sample obviously, but just a handful of organizations that were trying monthly giving programs, and they’re reporting retention rates year-on-year of 90%, child sponsorship. They say that it’s because the child sponsorship is very personal, it is a child, and you have contact with the child through the agency, so you can imagine how powerful it would be, and people are just phenomenally loyal as a consequence.

In Brief

Professor Adrian Sargeant, world renown authority on fundraising and donor psychology, talks with CDB about how fundraising can be made more responsive to the needs of the donors, and about some of the issues facing the charity sector in China and worldwide.
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