1 philanthropy and government funding. 2 outline fundraising facts nonprofit marketing basics the...
Post on 22-Dec-2015
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• Potential donors: prospects who have not given yet
• New donors: given for the first time.• Transition donors: given three or more
years in a row• Core donors: given three or more years
in a row.• Lapsed donors. After two years: “deeply
lapsed.”• Lapsed but reactivated donors
Not All Donors Are Alike
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The dimensions of a typical list
Percentage of active donors Percentage of revenues
Core30%
Transition18%Lapsed but
reactivated19%
New33%
Core50%
Transition17%
Lapsed but reactivated
14%
New19%
Percentage of active donors Percentage of revenues
Core30%
Transition18%Lapsed but
reactivated19%
New33%
Core50%
Transition17%
Lapsed but reactivated
14%
New19%
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Gift sizes
$128
$81
$60
$51$46
$42 $43
$37
$0
$20
$40
$60
$80
$100
$120
$140
Core Transition Lapsed butreactivated
New
Average annual dollars given
Average gift
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Donor retention
69%
38%
8%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Core Transition Lapsed but reactivated
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Average number of donations
2.8
1.9
1.4 1.4
0
0.5
1
1.5
2
2.5
3
Core Transition Lapsed butreactivated
New
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Long Term Value Index
The LTV of donors can be accurately predicted by the amount of their first gifts.
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Maslow’s Fundraising Pyramid
Upper donors
Middle donors
Godlike Superdonors
Low-end donors
Upper donors
Middle donors
Different donors require different messages
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Why Do Donors Defect?Survey of British Donors who Stopped Giving
• Other NPOs more deserving: 27%• Can’t afford: 22%• Don’t remember supporting: 11%• Didn’t like fundraising: 7%• Not re-asked to give: 3%• Bad service: 2%• Not enough information on uses: 2%• No thank-you: 2%• Felt not needed: 1%
Ref.: Sargeant 2001
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Do Donors Care About Efficiency?
• Reporting low operating and fundraising expenses is a common fundraising tool
• Does it make a difference?– Greater efficiency– Less outreach to new donors
• Model
• Result: no effect in a sample of different NPO types
• True also for individual subsectors?
Ref.: Frumkin & Kim 2001
Ops
OpsTC D
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The Big Myth: Donor Fatigue
• Data show that complainers are rarely donors in the first place
• People who give to you love you• …and people who love you like
hearing from you• People who give once are
waiting to give again
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The Best Donor Pool
• Volunteering and giving are complements, not substitutes
• Volunteering predicts money giving more strongly than income, age, religion, or education
• Don’t forget that donor fatigue doesn’t exist
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Important Lessons
• Enterprises leave money on the table…– …if they don’t track donors– …if they treat all donors as the
same
• Focus on the core…– …but don’t neglect the others—they
are the future core
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How to Fundraise
• Build a donor file• Organize it by type of donor• Design appeals appropriate to
donor type• Focus time and money on the
high-yield donors
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Getting beyond the myths
• Myth #1: Giving makes us poorer• Myth #2: People are naturally
selfish• Myth #3: Giving is a luxury• Myth #4: An entrepreneurial
nation can afford to forgo service• Myth #5: Fundraising is a
necessary evil
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Social Enterprise Marketing
• Marketing: Plan, price, promote, and distribute an NPO’s programs and products
• Marketing tasks– Define target markets
• Who should our clients (or donors) be?
– Link to these clients• How do we reach them?• What “price” attracts them?• How do we communicate with them?
Ref.: Rodos
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Why Is Social Marketing Difficult?
• Nonprofit “culture” (i.e. attitudes about efficiency, bottom line, commercialization, etc.)
• Unrealistic goals• Unreliability of resources (i.e.
volatile donations)• HR issues (staff vs. volunteers)
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Steps in Building aMarketing Strategy
• External analysis– Who are my
constituents?– Who are my
competitors?– What is my industry?
• Internal analysis– What do constituents
think we do?– What do constituents
think we ought to do?
• Firm development– Market growth– Product growth
• Strategy selection and evaluation
• Communication
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Competition
• Competition for what?– Members/clients– Donors/volunteers/
donations– Inventory (e.g. books,
art works, etc.)
• Competition with whom?– Other social
enterprises– For-profits– Governments
• Identifying competition– Similarity of prizes
(management perspective)
– Similarity of services (client/donor perspective)
– Common competitor: inaction (e.g. no medical care)
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Firm Development
Existing markets
New markets
Existing products
Market penetration
Market expansion
New products
Product development
Diversification
Nonprofit example:University
Existing markets
New markets
Existing products
Recruit college-bound seniors
Recruit career-changers
New products
Create a new program for
undergraduates
Create an executive
education program
Ref.: Rodos
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Communication Tools
• Explicit communications– Annual reports– Newsletters– Press releases– Brochures– Direct mail– Media advertising– Telemarketing– Special events
• Implicit communications– Pricing– Products– Distribution
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Targeting Messages to Demographic Groups
Ref.: Van Slyke 2002
DEMOGRAPHICS TO TARGET
FUNDRAISING FOCUS
SENSE OF COM-MUNITY
CHARITIES ARE MORE EFFECTIVE THAN GOV’T
SENSE OF DUTY
HELPED YOU IN TIMES OF NEED
TAX BENEFITS
RELIGIOUS REASONS
LOW INCOME
X X
YOUNGER
X
PRACTICING FAITH
X X
MARRIED
X
SINGLE
NONWHITE
X X
WOMEN
X X X X
CONSERVATIVES
X
VOLUNTEER
X X X X X
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Messages Types
Promote Refute
Abstract “Giving is vital for society”
“Y our gift might be small, but you’re doing your part”*
Concrete
“Giving makes you feel good”*
“Y our gift can achieve X, even if it’s as small as Y ”
*Found to be most effective
Ref.: Clary
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Generations
• GI Elders (born before 1925)• Silent Generation (1925-1945)
– Retired– Still working
• Baby Boomers (1946-1964)• Gen-X (1965-1975)• Gen-Y (1976- )
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Why are young people a problem?
• There aren’t that many of them• They are “disloyal”• They are less charity-oriented
than older people
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This job doesn’t thrill me……Goodbye
13%
21%
34%
45%
54%
73%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Pre-Gen-X Gen-X only Gen-Y or later
All
Not satisfied with job
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Significantly lower average annual giving
$680
$312
$1,418
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
Gen-x Gen-y Pre-Gen-X
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But are we looking at the right things?
• Immigration has helped to backfill younger cohorts
• “Workforce loyalty” is an old concept
• Younger generations may not have matured into philanthropy yet
• New generations may give in new ways
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New generations face a changing workplace
Industry Job Growth (millions)Employment services 1.58Local government schools, colleges, and other educational services 0.78Local government, excluding education and hospitals 0.76Offices of physicians 0.76Full-service restaurants 0.70General medical and surgical hospitals, private 0.65Limited-service eating places 0.59Home healthcare services 0.54Colleges, universities, and professional schools, private 0.47Management, scientific, and technical consulting services 0.47Computer systems design and related services 0.45State government schools, colleges, and other educational services 0.44Community care facilities for the elderly 0.32Child daycare services 0.30Accounting, tax preparation, bookkeeping, and payroll services 0.28Hotel (except casino), motels, and all other traveler accommodation 0.24Offices of dentists 0.24Elementary and secondary schools, private 0.22Religious organizations 0.20Janitorial and other building services, except landscaping & pest control 0.19
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High-end idea professions are ascendant…
• Higher education• Financial & legal
services• IT
• Consulting• Design• Medicine
Prized characteristics in idea professions
• Entrepreneurship• Creativity
• Individuality
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Mobile young professionals
• May appear disloyal by job-hopping……but are really just responding to
the job market
• What do they need?– Social and professional networks– Community– Ideas and education
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Voluntary professional associations make young people more competitive
26%
33%
24%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Pre-Gen-X Gen-X Gen-y
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High-tech vs. high-touch
• High tech: the cutting edge. Innovative newness
• High-touch: filled with human meaning
• Young people are comfortable with high-tech, but still require high-touch experiences
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Why do people give?
• To discharge personal duty• To have an impact
“A younger donor wants to know and feel that her giving makes a difference.”
Merkle-Domain
• Impact is most evident in high-touch giving
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Membership only by way of a fee: very low-touch
Per
cent
age
that
bel
ong
to a
fee
-bas
ed o
rgan
izat
ion
48%
24%
0%
10%
20%
30%
40%
50%
Pre-Gen-X Gen-X or later
45
Traditional money giving: low-touch
83%
70%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Pre-Gen-X Gen-X or later
Per
cent
age
that
giv
e m
oney
eac
h ye
ar
46
Giving time: higher touch
44% 46%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Pre-Gen-X Gen-X or later
Per
cent
age
that
vol
unte
er e
ach
year
47
Giving blood: hyper-touchP
erce
ntag
e th
at g
ive
bloo
d ea
ch y
ear
19%
14%
0%
5%
10%
15%
20%
25%
Gen-X or later Pre-Gen-X
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Find ways to provide and demonstrate these benefits
• Social and career networks• Ideas and education• Community• Opportunities to serve, with
tangible impact
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Use this message: Giving is good for you and your career
• Money giving pushes up money earning
• Volunteering has a huge impact on happiness and health