Transactional Philanthropy

A transaction is not a philanthropic action.  Social sector causes mistake membership renewals, silent auction bids, purchasing tables at a gala, or sponsorships of programs as philanthropic.  If goods and services are exchanged in consideration for a ‘donation’ then define the interaction as transactional.  However, if somebody wants to support your vision by providing fuel (money, resources, talent, networks) for your journey in exchange for the stories you share and the dent you plan to make in the community, then that interaction is philanthropic.  Twisting arms, offering benefits, hyping features are transactions.  Nothing wrong with this tactic but defining them as acts of philanthropy is inconsistent.  Most corporations no longer practice philanthropy, their transactions with social sector enterprises are approved by the marketing department who is thinking of the corporation’s positioning as well as the the nonprofit’s success.   Transactions can be a powerful tool but the motivation of the contributors are different from the true philanthropist.  Consider the following question, who takes your calls when you offer only the stories that come from the pursuit of our organization’s vision?  Those are your philanthropist.

What is the lesson?

World renown street artist Banksy sold spray-paint artwork on canvass outside of Central Park this weekend.  He had a video to capture the activity around his stall.  The catch, the works were signed in an space that was not immediately visible and he employed a random New Yorker to handle all sales.

Are the buyers art connoisseurs who have an eye for remarkable talent?  Were these viewed as trinkets from a random New York street vendor?  If the artwork had been marketed as signed by Banksy would it have been sold in mere minutes for hundreds (or more) of dollars?  Would buyers of the authenticated signed artwork been purchasing for the art or the prestige?  If the artwork itself does not change but the perceived value changes when we learn the name of the artist, are we investing in the art or the artists?  How many artists are showing world class work daily and cannot make a sale because their reputation is unknown?  Does the reputation make it safe to transact?  It make me wonder if people are investing in me as a person or my work?  Does my reputation carry more weight than my performance?  And who is investing on the edges in the unknown and the undiscovered?

Billboard Tribes

Do you need a membership card to define your tribe?

Billboards are great place to connect with your customers if you are ready to sell limited-time features and offer a short-term opportunities.  Loyalty programs are designed to build a tribe based on transactions.  If United Airlines were to terminate its MileagePlus program I would start my airline reservation search by lowest fare instead of by airline preference.  Why? I am passionate about my mileage balance and frequent flyer status which bring certain rewards.  It is not because I am not loyal to United, they have trained me to care about transactions, not the tribe.

When we try to develop loyalty through transactions we are building a house of cards.  True loyalty is demonstrated by those who would miss you and your super power if you were not around to share it (to paraphrase Seth Godin).  Convenience loyalty is cultivated by possessing something of temporary value that keeps people in the general vicinity.

Who would miss you if you were to stop performing?  That is your tribe, everyone else is less deeply connected.  They may be ready to join or are just hoping to get something in exchange for their proximity.  Make sure you treasure those who notice your arrival and departure.    



Membership is not a card you purchase.  It is not a discount you receive at a bookstore or gift shop.  Enrolling in a cause does not include filling out a form or getting early access to tickets.  Membership is not a priority line or badge. It is not about being listed in an annual report or having your name etched on a wall.  Membership is about what you can do to enhance a cause.  It is an action not a status.

Do not confuse frequent patronage with inclusion in a tribe.  If you joined because of features and benefits then the relationship is transactional.  If you joined because you recognized an opportunity to have an impact and have something to contribute then enrollment occurs when you join those who are ready to lead.