What does ‘complexity’ mean and why should you care?
Complexity.
It’s a word we toss around all the time but it has a very specific meaning. And it just might drive the future of fundraising and philanthropy.
Stick with me a minute and I’ll get to the point:
One common construct, developed by leadership guru Edward Snowden, divides our world into four realms: simple, complicated, complex, and chaotic.
A simple phenomenon has clear and repeatable cause and effect. Stick a pin in a balloon and it will pop. Touch a hot stove and it will burn you.
A complicated phenomenon has a clear cause and effect, but it has lots of steps and moving parts. And it may require expert knowledge. Building a house is complicated. Organizing a rally is complicated.
When we get to the complex realm, we’re dealing with phenomena that can neither be controlled nor accurately predicted. This is the realm of systems. Organizational culture is complex. Presidential politics is complex. There are simply too many variables and too many interconnections to be able to predict or control what’s going to happen. But complex phenomena do have patterns that can be understood and can be influenced by our actions.
Finally, in chaos, cause and effect cannot be discerned. Shit just happens. This is the realm of the famous butterfly effect.
I would posit that 20 years ago fundraising was mostly complicated, but today it has become more and more complex.
So What?
Actually the implications of this shift are massive.
Fundraising, and here I am focusing on direct marketing, is built on a system that was created and optimized in the 1970s and 1980s for a generation of donors who were just entering their peak giving years. Pioneers like Roger Craver and Richard Viguerie developed a playbook that largely carries forward to this day: acquisition, mostly via rented lists; renewal; special appeals; upgrades; lapsed donor reactivation.
The early playbook had two channels: postal mail and later phone. When a gift came in there was rarely doubt what triggered it. Attribution was dead simple. Fundraising consulting agencies were made up of a handful of strategists and a large number of white-collar assembly line workers who kept the trains running on time.
The model worked, possibly into the early 2000s.
A Model Optimized for a Bygone Era
But consider what has changed since then. The Greatest Generation is no longer the main giving generation. The baton is now with Baby Boomers and to some extent Gen-Xers. They bring a different mindset and different habits to giving than their parents did. They’re less loyal as donors.
The number of ommunications channels has exploded, and attribution is a nightmare. If someone donates online and got a direct mail package and was served a Facebook ad, what actually drove the gift?
The larger context in which fundraising happens has changed too. The divide between rich and poor has never been greater. Politics is balkanized and vicious. Everyone lives in their own reality bubble. The world has become tribal. We are bombarded with crises, emergencies and moral dramas that pull at our attention every hour.
We have also become more aware of the ways in which fundraising was a white game developed to raise money from white people. This growing awareness is an important and positive development of course, and the philanthropy world has been slow to adapt. And this too adds to the complexity of fundraising today.
There is growing evidence that the days of predictability and clear cause and effect in fundraising may be behind us.Just look at the facts:
The overall number of donors is shrinking. According to Blackbaud, acquisition rates have fallen steadily since 2005. Nearly all the recent growth in fundraising dollars has come from mega-gifts donated by the mega-rich.
New things explode into awareness and then fade away. Think ice bucket challenge.
Email performance is dropping and no one really knows why. Last December year end fundraising was off, and no one really knows why. Retaining talented fundraisers is harder than ever, with the average tenure of a development director measurable in months. I could go on and on.
Bottom line: we are running a playbook for a past era that no longer works in the present.
And Here’s the Worse News
But that’s not the worst news of all. Humans, and that includes most fundraisers, have brains that are optimized for a world of simple and to some extent complicated. But when things get complex, our instincts work against us.
Jennifer Garvey-Berger is a brilliant workplace guru who has been tracking the complexification of our world for some time. Her latest book, entitled Unlocking Leadership Mindtraps: How to Thrive in Complexity lays out some of the ways our brains lead us astray in complex situations.
As we leave the world of complicated and enter the realm of complex, she argues, strategies and approaches need to evolve.
In coming posts, I’ll summarize Garvey-Berger’s mindtraps one post at a time. And I will try to explore how each one might affect fundraising, philanthropy and nonprofit leadership.
None of this is to suggest that planning and precise execution are bad. They are more important than ever. But it’s equally important to maintain an attitude of humility and a spirit of flexibility as complexity storms roll through and mess up expectations.
More soon.