Philanthropy and Government Funding

1
Philanthropy and Government Funding
2
Outline

• Fundraising facts
• Nonprofit marketing basics
• The special problem of young people

3
Not All Donors Are Alike

• 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

4
Strategies for different donors

• WIN
• KEEP
• LIFT

5
Donor Ecosystem
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The dimensions of a typical list
7
Gift sizes
8
Donor retention
9
Average number of donations
10
Long Term Value Index
The LTV of donors can be accurately predicted by
the amount of their first gifts.
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Maslows Pyramid
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Maslows Fundraising Pyramid
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
• Cant afford 22
• Dont remember supporting 11
• Didnt 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
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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

16
The Best Donor Pool

• Volunteering and giving are complements, not
  substitutes
• Volunteering predicts money giving more strongly
  than income, age, religion, or education
• Dont forget that donor fatigue doesnt exist

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Two secret weapons

• Asking
• Public giving

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Important Lessons

• Enterprises leave money on the table
• if they dont track donors
• if they treat all donors as the same
• Focus on the core
• but dont neglect the othersthey 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

20
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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Outline

• Fundraising facts
• Nonprofit marketing basics
• The special problem of young people

22
Social Enterprise Marketing

• Marketing Plan, price, promote, and distribute
  an NPOs 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
Nonprofit example University
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
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Messages Types
Found to be most effective
Ref. Clary
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Outline

• Fundraising facts
• Nonprofit marketing basics
• The special problem of young people

31
What Everybody Knows

• Nonprofits face a generational crisis

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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 arent that many of them
• They are disloyal
• They are less charity-oriented than older people

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The baby bust
35
This job doesnt thrill meGoodbye
36
Significantly lower average annual giving
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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

38
New generations face a changing workplace

• Industry Job Growth (millions)
• Employment services 1.58
• Local government schools, colleges, and other
  educational services 0.78
• Local government, excluding education and
  hospitals 0.76
• Offices of physicians 0.76
• Full-service restaurants 0.70
• General medical and surgical hospitals,
  private 0.65
• Limited-service eating places 0.59
• Home healthcare services 0.54
• Colleges, universities, and professional schools,
  private 0.47
• Management, scientific, and technical consulting
  services 0.47
• Computer systems design and related
  services 0.45
• State government schools, colleges, and other
  educational services 0.44
• Community care facilities for the elderly 0.32
• Child daycare services 0.30
• Accounting, tax preparation, bookkeeping, and
  payroll services 0.28
• Hotel (except casino), motels, and all other
  traveler accommodation 0.24
• Offices of dentists 0.24
• Elementary and secondary schools, private 0.22

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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

40
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

41
Voluntary professional associations make young
people more competitive
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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

44
Membership only by way of a fee very low-touch
Percentage that belong to a fee-based organization
45
Traditional money giving low-touch
Percentage that give money each year
46
Giving time higher touch
Percentage that volunteer each year
47
Giving blood hyper-touch
Percentage that give blood each year
48
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

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Be high-touch with donors

• Create tangible experiences for donors
• Show people the impact of their gifts