Easy Money Is Not the Best Money

Otis Fulton and Katrina VanHuss

Otis Fulton and Katrina VanHuss

Guest Bloggers - Turnkey

If you run a peer-to-peer event, you’ve heard or thought this: “If we just charge $35 to every person who shows up at our event, we’d make a lot of money.” The problem with this thinking is that it’s a price tag, and after people pay the price, they’re a lot less likely to fundraise. That’s not just what we think; it’s what the data tells us. It happens that way because you’ve framed your event in market terms—people have paid the price of admission, so to speak, and that makes them less likely to consider doing more.

P2P acquisition is often thought of as the “front door” of the organization. It is the high-volume lead producer that can feed opportunities to the rest of your income streams. A problem with a registration fee is that it comes at the beginning of a P2P relationship. Think of your relationship with a P2P volunteer fundraiser as going on a first date. You may have snuck secretive glances and shared witty repartee with them before, but this is the big move. You are asking them out. Who knows what could come of that date? You have to decide if you’ll make them pay to date you. And yes, when you look at it that way, it already seems like a messed-up relationship.

Once the relationship has been framed in market terms, recovering the social relationship is difficult. If you specify out of the gate that you are in a market relationship with your fundraiser, you not only are headed for low retention and low fundraising, you’ll also face low transition to other ways to engage, such as major gifts. See yourself staring into the doe-like eyes of your date, the P2P participant who paid a registration fee, wondering, “Why is there no spark?” It’s because you doused it.

Take, for example, the Omaha Tour for Hope, a cycling fundraiser to benefit the American Foundation for Suicide Prevention. I was honored that they brought Turnkey in to help several months before the event. Their dilemma is typical of what staff and volunteer leaders face each and every day as they try to support their missions. The volunteer board pressured event management to have a $50 registration fee and no required fundraising minimums. First, that $50 is a price. Second, that’s a high price for a charity bike ride in Omaha. The board members, in the absence of better information and with the best of intentions, thought, “If we just charge a registration fee at least we get that money.” What they didn’t know is that they changed the entire nature of the relationship with the potential fundraisers.

With a registration fee, a couple things happen:

  1. Riders expect more and expect differently. A set price seems to promise delivery of something tangible and significant in terms of the experience.
  2. Riders don’t anticipate that they need to do more, like fundraise. They bought their experience; then they are done.

The $50 registration fee also had some unintended consequences. The event just wasn’t highfalutin enough for people to buy it in large numbers. While many mission-minded folks did ride, 67 percent of riders had not been touched by suicide loss. Those people were there for the $50 bike ride. Per-cyclist funds raised dropped precipitously when the organization went to the $50 fee. Management scrambled and tried to motivate cyclists and volunteers to fundraise by offering high-end, custom Tour for Hope athletic shirts for the $200 fundraising level, and a custom bicycle jersey for the $500 fundraising level.

They asked me, “How can we influence their fundraising behavior more, just months before event day?” I told them, “You’ve got to have an experience that will almost force them fundraise, like a high minimum amount. You can charge that if your experience is ‘worth the price.’” But, knowing the event was already underway, and with no budget to make the experience grander, I suggested they lean more on recognition. The recognition items they proposed were good ones to help transcend the market relationship inspired by the registration fee. Perhaps we could layer in recognition with experiences, such as being lead rider, or having a ceremony at which fundraisers are honored, or inviting them to a board meeting to be appreciated.

As for motivating them to register at this late date? They had wisely published an email newsletter listing the top 15 fundraisers and awarding them honorary bib numbers from prior Tours. It went to 7,500 people, with about a 9 percent open rate.

I applauded the social-relationship-inspiring idea and encouraged them to ask for help from anyone connected, including the board. “Ask other people to recruit. Ask current registrants to recruit. Ask your friends to help you recruit,” I told them. “Peer influence is the best possible push to get them to register. Make the goal getting all riders back. And have personal outreach either by you, someone who has benefited from the organization’s work, someone on the board, or another rider as the push.”

I also warned against discounting registration fees to inspire registration. Discounts are for shoe shoppers, not supporters of nonprofits. And for the next year, here were my recommendations for the event:

  • Restructure and ditch the registration fee unless you decide to put on an event that has great retail appeal. If you go that way, it is a different beast. Frankly, without a great, big old budget to create a fantastic event, it will be tough to create a retail-attractive offering. Lean on mission connection instead of sales price and discounts to raise money and get registrations. Use recognition to drive fundraising and participation.
  • Create a recognition structure that expands on the good start you have this year. And recognize relentlessly. For fundraising. For last year’s fundraising. For recruiting others. For getting sponsors. For being a sponsor. For leadership volunteerism. For being a survivor. For being a surviving family. For being born on Tuesday. Whatever you can find.
  • Recruit a volunteer leadership committee for the ride, with the full blessing of your board. Ask people to help in meaningful ways. People on the volunteer leadership committee are likely to fundraise, recruit, and participate if you put them in charge of something. Giving a volunteer a responsibility does several things. It lightens your load by turning you into a manager rather than a doer, it makes them more connected and likely to recruit and fundraise, and, most important, expands your connections into the community for recruitment purposes.
  • Scrap expensive mass media advertising if you go the social relationship route, with a focus on mission connection. Mass advertising is for when you are selling something anyone will buy. If you go with a mission-connected/social relationship-type event, you are not selling something people will buy. With this kind of event, go to the connections you already have—including the newly recruited committee’s connections—and do peer-to-peer recruitment. It is just as powerful as peer-to-peer fundraising.

And what happened to the Omaha Tour for Hope that year? They raised over $15,000, double the board’s goal.

Thanks to Otis Fulton and Katrina VanHuss of Turnkey for the advice and the success story from AFSP, a client we share. Learn more about DonorDrive's opinion on registration fees and the impact on fundraising in "12 Ways to Engage Your Zero Dollar Fundraisers".

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