Let's Raise Some Money
Insights from Karen Climer about fundraising and nonprofit organizations

Donations Are Not Investments, So Quit Calling Them That!

August 4th, 2014 by Karen Climer

There is a growing trend for development officers to refer to donors as investors because these are people who invest in the organization and expect to see a return on their investment.  I hate this trend.  As far as I’m concerned, it can’t die quick enough.  Why am I so cynical about it?  Because, in my own giving, I don’t consider my donations an investment, I consider them a gift.  The investment language turns me off.

People give for a myriad of reasons.  Some people give to repay society because they were helped at one time.  Some people give because it is a family tradition.  Some people give because they enjoy the social aspects or love seeing their name in the spotlight.  Some people give because their religion encourages or even requires it.  And yes, some people give because they think of it as an investment that will benefit them in the future.

It’s estimated that only 15% of donors are investor donors, but judging from the communication I receive, you would think it was 100%.  Don’t assume that because your donor is a business person she wants to hear about your ROI.  Why do so many say they return $7 for every $1 invested?  I have never received a dividend check from a nonprofit.  (Although I should mention that I received a nickel in a direct mail piece recently.)

I’m not trying to say that you should never you the word investment.  I’m saying it depends on the donor.  Don’t make assumptions about why donors give.  Ask them.  In fact, if you can only ask the donor one thing, ask them why they give.  If they say it’s an investment, then by all means, talk about ROI and dividends.  If they say it because they love the cause or to give back or anything else, leave investment out of it.

Posted in Communication

2 Responses

  1. Ward

    I don’t like referring to donors as ‘investors’ either. I guess you could say that a donor is ‘investing’ in your organization’s cause, but calling a donor an investor sounds very impersonal to me. While I was at the SPLC, we called our donors either ‘donors’ or ‘members’. Anyone who makes a monetary gift of any size to the SPLC is a member. The SPLC wants its donors to feel like they are a close part of the organization, which they are indeed.

    At Nova Southeastern University, where I serve as the legacy giving director, we call our donors either ‘donors’, or if they attended school here, we of course refer to them as ‘alumni’.

  2. Karen Climer

    I hadn’t thought about “investor” sounding impersonal, but you’re right. I have heard organizations use “member”. I like that term because it sounds like you are an integral part of the organization.

    Thank you for reading and commenting so often. You always have insightful thoughts to share. Thanks.

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