Despite Survey Report, Recognition Clubs Make Sense!

Despite a report from The Stelter Company that seems to suggest otherwise, donor recognition clubs can still be a valuable part of a sound development program.

Last month, I reported on insights and flaws contained in What Makes Them Give: 2012 Stelter Donor Insight Report. Now, I want to more thoroughly explore the controversy the report has spawned regarding the subject of whether or not donors want to be part of a donor recognition club.

The survey asked planned gift donors and “best prospects”:

Are you currently a member of a donor recognition club for any charity — this would be an organization for major donors and/or people who have made a planned gift to that charity?”

The survey found, “Just 14 percent of planned givers and best prospects are currently members of a recognition club.” That breaks out as 17 percent of planned givers and 13 percent of best prospects saying they are members of a recognition club, according to Bev Hutney, Director of Research and Innovation at Stelter. Of those who are not members of a recognition club, only three percent of both groups say they would like to be “invited” to join one, when asked:

Would you like to be invited to be a member of this kind of organization for a charity you support, or would you prefer not?”

On the surface, the responses seem to suggest that donor recognition clubs are of little or no interest to donors and, therefore, of little or no value. However, Hutney acknowledges that interest might be low because the term “recognition club” might not be understood by those not part of such a group. Or, they might have been put-off by the idea of being “invited” to be part of such a group. Also, the use of the term “organization” might have been confusing for some.

The other issue with the survey result is that Selzer & Company, the research company that conducted the study, failed to take into account Social Desirability Bias. Russell N. James, III, JD, PhD, CFP, an economist and Director of Graduate Studies in Charitable Planning at Texas Tech University explains the issue with SDB this way:

One study found between 10 percent and 75 percent of the variance in participants’ responses can be explained by SDB (Nederhof, A. 1985. ‘Methods of coping with social desirability bias: a review.’ European Journal of Social Psychology, 15(3):263-280.)  Also, we know specifically that SDB is most likely to occur in responses to socially sensitive questions (King, M. and Bruner, G. 2000. ‘Social desirability bias: a neglected aspect of validity testing.’ Psychology and Marketing, 17(2):79–103.) like the issues we are dealing with here. For example, if you ask someone, ‘Are tax benefits motivational to you in making a charitable gift?,’ the answer is going to be ‘No,’ because ‘Yes’ is a socially inappropriate answer.

“Nevertheless, econometrically, we can see that deduction rates do strongly influence actual giving. Similarly, if you ask someone, ‘Would you like more public recognition of your donations?,’ the socially acceptable answer is ‘No.’”

In other words, if the survey respondents understood what a recognition club is and how it benefits the charity, and if the researcher had taken into account SDB, the results of the survey might have been drastically different.

Even Hutney acknowledges, “We’re not knocking Legacy Societies by any stretch but, in our practicable experience, we see that a fraction of donors get really fired up about them. There appears to be an opportunity to refresh our approach. How can we update the nomenclature we commonly use to recognize donors, engage a wider circle of passionate supporters and develop stewardship techniques that resonate with the next generation of prospects?”

Rather than suggesting that donor recognition clubs are of little value, the Stelter report might simply suggest that the nonprofit sector needs to do a better job of positioning and leveraging such groups.

James offers the following ideas:

I would suggest turning donor recognition ‘on its head.’ The stated purpose of donor recognition should be not to benefit the donor, but to motivate others. Taking this approach moves donor recognition out of the realm of the socially unacceptable to the role of taking an influential leadership role. The benefit of joining the legacy society is then not, a dinner, plaque, certificate, etc., it is the ability to influence others to follow in taking the positive step to support this cause and become a leader, too.

“I think the survey confirms what does not work about ‘selling’ a legacy society. Asking, ‘Do you want to get more public recognition for your decision?’ will absolutely flop. But, if instead, we say: ‘This charity depends upon people being willing to leave legacy gifts, and the best way to make that happen is to find leaders willing to be public about their commitment in order to influence others. I know you are uncomfortable with this sort of thing, but if you would be willing to stand up and be counted, it could have a tremendous effect in influencing others.’ That is motivational. That is based upon socially desirable motivating factors. And, yes, we still have donor benefits, but we don’t SELL those. Those are for other people who care about such things.

“The survey is helpful if we interpret the results correctly, as in defining an approach to presenting a recognition group that won’t work.”

The Stelter study itself seems to support the notion that the problem is not with donor recognition clubs but, instead, with how they are positioned. For example, the study found that 40 percent of respondents believe that “giving to a charity is a good way to become part of a community of like-minded people;” that’s one of the functions of a recognition club.

Donor recognition clubs can help donors feel good about their involvement, enhance the relationship between the donor and the charity, and inspire others to give. The key for nonprofit organizations is to be donor centered when designing a recognition club and explaining its purpose to donors and prospects. A well-designed, donor-centered recognition club can be something that can benefit the charity while being appreciated by donors. A poorly conceived recognition club, on the other hand, will almost certainly be of little interest to donors and little value to the nonprofit organization.

That’s what Michael Rosen says… What do you say?

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4 Comments to “Despite Survey Report, Recognition Clubs Make Sense!”

  1. Excellent discussion about a growing issue. Same can be said about polling outside the voting booth and why pollsters seem to always not to be as accurate as one would hope. On socially sensitive issues often voters tend to publicly say one thing and may vote otherwise. Well thought out article Mr. Rosen. Your premise makes a lot of sense.

    • Frank, thank you for commenting and the kind feedback. By the way, while I wrote about the problem involving Social Desirability Bias, that’s not the only issue I have with the survey. Surveys that ask people to predict their future actions or future desires can be quite unreliable. For example, does someone who is 45-years-old really know today whether or not s/he will want to be included in a donor recognition club when s/he makes a charitable gift annuity contribution in 30 years?

  2. Nice post! Agree that asking folks what’s important to them (like the famous experiments asking folks what magazines they read) will likely yield unreliable results. SDB exists. I like your suggestion that we make our giving societies donor-centered and, in so doing, also rethink the value proposition for donors. In my practice I’ve often suggested to folks that their “leadership by example” is a second mitzvah (good deed) that adds to the value of their monetary gift. Most folks find this compelling.

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