A Game Of Fundraising “Would You Rather”

Have you ever played that game “Would you rather”? Maybe on a road trip or at a bus stop or a house party? Somebody throws out some random question starting with “Would you rather…” and finishes it with two scenarios, neither one more inherently right than the other, and you have to choose? It’s a great conversation starter and time waster but it can also be a very useful method of getting at people’s underlying beliefs and values. In my consulting work, I actually ask clients some “Would you rather” questions in the discovery phase like “would you rather raise $100,000 or gain 100,000 followers” (not that we can guarantee either by the way) to get a better read on their mindset and motivations.

With the topic of how we as a society and industry approach fundraising, getting a lot of coverage lately, largely thanks to Dan Pallotta’s TED Talk (if you haven’t seen it do that right now) and other blogs like The Agitator carrying on the discussion I thought it would be fun to play a little “Would you rather” fundraising style. Ready? Here we go.

1. Would you rather… a) spend $10,000 to raise $50,000 or b) spend $100,000 to raise $200,000?
2. Would you rather… a) spend $5,000 to raise $50,000 from current donors or b) $25,000 to raise $50,000 from new donors?
3. Would you rather… a) spend $10,000 to boost your donor retention rate by 10% or b) spend $10,000 to boost your donor acquisition rate by 10%?
4. Would you rather… a) spend $25,000 on a new idea that could raise $100,000 or b) spend $25,000 that you know will raise $50,000?
5. Would you rather… a) spend $150,000 on a potentially excellent fundraiser or b) spend $75,000 on a potentially good fundraiser?

How did you answer those questions? Were some harder than others to choose? Some easier than others? I’d love to know your thoughts so please comment below or send me a Tweet. No matter which option you chose, you probably made your decision or had an emotional reaction to some options solely based on your risk tolerance. In some cases you maybe did some calculations and quickly figured out the net and logically made that choice. Now if that were your organization and actual decision with donors and boards involved, would you answer the same way?

The constraints in the sector and the crippling pressure from boards, donors, media and watch dog groups are very real, don’t get me wrong. But it is the single biggest factor, in my opinion, why the sector is in the state it is in. Little willingness to take risks. Fundraising guru Ken Burnett (and he’s earned the “guru” title) wrote about risk tolerance and some other reasons why these odd and damaging mindsets exist in the industry, particularly amongst board members and donors but also a surprising amount of nonprofit leaders as well, and what some of the repercussions are. Here are a few of his key points:

1. The question is wrong.
2. The arbitrary fixed ratio model isn’t found anywhere else.
3. It discourages risk and innovation.
4. It’s staggeringly unsophisticated.
5. The public believes spending on admin is wrong.

Whether you are a board member, donor or nonprofit staff the blog post is a good read and I strongly recommend checking it out. As you read, I encourage you to think about your mindset and risk tolerance as a donor, as a board member and as staff at a nonprofit. How open are you to taking risks? For your organization to take risks? For the organizations you give to to take risks?

And for what it’s worth, here’s how I would answer the “Would you rather” questions and why:

1. B. This one was the easiest for me. Raise $100,000 or raise $40,000? $100,000!
2. B. A tough one but I think acquiring donors, especially in today’s world, is so difficult I’d take the lower net raised in the short term and expect it to pay off over the long term.
3. A. This was my “potentially out of character” one as I chose retention. The payback over the long term is what’s at play here and while acquisition is harder we’re seeing that retention isn’t exactly easy either.
4. A. $75,000 upside compared to $25,000 upside.
5. A. Probably the hardest one to answer but people are any organizations greatest assets so if you want to start investing in the future it starts by investing in your people.