Why Labelling Is Important – February 2012

February 27 2012

In previous posts you will have seen how much store we set by effective, regular and meaningful dialogue with supporters and advocates of your organisation.

Here, we present further evidence.

As ever we are grateful to our colleagues in the charity research market, most especially Adrian Sargeant, whose report into donor retention from 2011, is extensively quoted from.

We consider how:

• An Effective Customer Communications Programme Extends The Values Of The Organisation .
• Why it reminds Loyal Supporters WHY they continue to support the cause.
• How Magazines and Newsletters Can Be Used To Generate Additional Revenue.
• How ‘Sweating’ The Magazine, and using it to help find and fund savings in other areas of the business.

In his paper on Donor Retention, Adrian Sargeant argues that retention and acknowledgement can work on many levels, not just transactional…. they have roles far deeper and far more significant than just that.

“Turning to the issue of post gift communications, the issue of labelling has received the most research attention. The idea behind labelling is simple. If people can be induced to believe something new about themselves, then they may start behaving on the basis of that belief. In thanking donors for their gift organizations often append labels to the donor such as kind, generous and/or helpful.

Work by authors such as Swinyard and Ray (1977) has implied that this elicits a greater motivation to help and fosters favorable attitudes on the part of the donor (Moore et al. 1985). The impact of labels will be particularly potent when there are concrete prior behaviors to be labeled and when the label stresses the uniqueness of the donor’s behavior (McGuire and Padawer-Singer 1976).

Consolidating donor self-perceptions via labeling thus furnishes an intrinsic motive to sustain behavior (Kraut 1973). Repetitive labeling has been found to enhance efficacy (Tybout and Yalch 1980) and labels have been found to work only where the donor accepts the label (Allen 1982), emphasizing the need for the label to be credible and be supplied by a credible source.

The fundraising literature is also replete with references to the need for adequate donor recognition (e.g. Warwick and Hitchcock 2001, Irwin Wells 2002, McKinnon 1999). Failure to provide adequate and appropriate recognition, it has been argued, will lead either to a lowering of future support or its complete termination (Boulding 1973). Sargeant et al. (2001) provide the first empirical support for this proposition indicating a link between the perception of adequate recognition and the level of gifts/lifetime value.

Where gifts are offered as part of the recognition process, they will be more effectual where the gift is clearly tied to the organization and its services. Generic gifts, obtainable from other nonprofits (or even for-profits) are significantly less effective in stimulating loyalty (Sargeant and Jay 2004a).