Offer your donors their money back -- how many will want it?

Here's an idea that will make your accountants' heads explode. (That's not the reason I'm sharing, by the way.)

Suppose you raise too much designated money for a particular project. If you're on your toes, you have a disclaimer somewhere that says something like: If we raise more funds than needed for any given project, your donation will be used to support similar projects. That covers you ethically to be able to use designated funds in a different way from the way the donor may have intended. And most donors are fine with that.

But why not put a whole new level of power and respect back into your donors' hands?

Here's how: Once you've raised enough money for the project, you write to those donors whose gifts came after a project became fully funded. Tell them funds are no longer needed for the project, and offer them two choices:

1. They can choose to have their gift refunded.
   
2. They can re-designate their to another project. (Maybe give them a few choices.)
   

If they take no action, you will re-designate the gift for them.

While you're at it, make it possible for them to send another gift.

How many gifts do you think you'll have to refund? I'll guess so close to zero as to be statistically insignificant. How many additional gifts will you get? A fair number.

But what you'll get will be donors who feel more empowered, more respected, and more involved. And that will pay off in the long (and short) term.

Have I seen this done? No. I've only seen accountants' heads explode at the thought of this idea. So if you can pull this off, you may be a first. Let me know how it goes.

Technorati Tags: refunds, philanthropy

Comments

[Alanna]

Wow. I love this idea!

[Peter Barney]

We have a number of people that directly support individuals in their activities. When they leave we offer people the opportunity to stop their financial support or continue with the new team member. People appreciate the opportunity and more often than not continue to support the new team member.

[Bill Kennedy, CA]

This happened to me when donating to Medecins Sans Frontiers (Doctors without borders). I wanted to give to the Tsunami fund and was told that they already had enough money for that program. They recommended I give the money to another charity doing Tsunami relief rather than another one of their programs.

So, they didn't get the money and yes, my respect for them grew substantially, but no, my head didn't explode. (I'm an accountant.)

[Conor Byrne]

Great post. I can just imagine a donor getting that kind of letter...wouldn't they be shocked (in a good way). I agree the % of those who ask for the funds back would be slim to none (imagine if you actually sent them a refund cheque...how about that for taking it to the next level?). Even if they dont donate again at that point they will be left with a great feel about your charity that next time you ask them to donate they will certainly want to. It reminds me a little bit about the Global Giving Giving Garauntee I posted baout before on my Donor Care post.

Anyway a Great idea.