How Nonprofits Can Raise More Money
Giving USA 2019: The Annual Report on Philanthropy for 2018 was released on June 18. The bottom line is total charitable giving rose just 0.7% measured in current dollars over the revised total of $424.74 billion contributed in 2017. Adjusted for inflation, total giving declined -1.7%. This anemic performance was driven by declines in individual giving (which represents the majority of giving) of -1.1% (a decrease of -3.4%, adjusted for inflation).
I believe this portends a long term trend of little to no growth in giving due to macro economic trends like wealth concentration and an (eventually) slowing economy. This translates into an increasingly competitive environment for donor dollars and I thought it a good time to share what I’ve learned about raising a lot of money.
I spent many years in the advertising agency business working with some of the world’s greatest brands.
There is a lot that nonprofits can learn from the strategic approach to communications that these brands use to convince consumers to buy their products.
It’s really about defining your nonprofit brand with the intent to capture emotional engagement from a specific audience. I have discovered that most nonprofit development directors and CMO’s don’t think strategically about how their brands can drive fundraising.
Here are the five steps to doing just that.
1) The first thing you need to do is define your target audience. Once you do that, ideas will start to flow. It’s not okay to say that everyone is a potential donor or that everyone in my region with money is a potential donor. It’s not true and that’s no way to connect emotionally with that large a group. What you want to avoid is the idea of mass because mass is dull and boring. You need focus.
This requires some digging to understand the hopes and dreams of your donor, potential donor, their family and their friends. What is their mindset? What is their worldview?
There is much written on this topic and you may find this diagram helpful. It’s called the Law of Diffusions of Innovation and shows a bell curve with Innovators and Early Adopters on the left and Laggards on the far right. Your focus should be on the Innovators and Early Adopters because, in a word, they are aspirational. And what’s aspirational attracts others because of status. You hit a tipping point as the pig starts to move through the python.
2) Think deeply about your organization’s vision, mission and values. Find an expression of them that is simple and grounded in hope and connects with the target audience that you’ve identified. What is the high order change you’re trying to make? This will serve as your organizations strategic positioning.
If you’re a hospital, of course you are trying to make patients well. That’s what you do. Challenge yourself to level up to why you do it. It may be to eradicate disease so that people can start businesses and prosper. Or maybe it’s about healing a community. Or a way to confer status. As Simon Sinek puts it so well, the most successful organizations don’t start with what they do, they start with why they do it. It’s never too late to get this right.
Seth Godin gives a great example of this in his recent book “This Is Marketing.”
“Harvard marketing professor Theodore Levitt famously said, “People don’t want to buy a quarter inch drill bit. They want a quarter inch hole.” The lesson is that the drill bit is merely a feature, a means to an end, but what people truly want is the hole it makes.
But that doesn’t go nearly far enough. No one wants a hole. What people want is the shelf that will go on the wall once they drill the hole.
Actually, what they want is how they’ll feel once they see how uncluttered everything is, when they put their stuff on the shelf that went on the wall. Now that there is a quarter inch hole. But wait…
They also want the satisfaction of knowing they did it themselves. Or perhaps the increase in status they’ll get when their spouse adores the work. Or the peace of mind that comes from knowing that the bedroom isn’t a mess, and that it feels safe and clean.
People don’t want to buy a quarter inch drill bit. They want to feel safe and respected.”
This is your strategic positioning. It’s hard work and a really good idea to engage a large cross section of your organization in this process because that will accomplish a couple of things for you. First, you’ll get good ideas and thinking from a range of different disciplines. Second, you’ll get broad ownership and buy-in which will come in very handy later in the process.
3) Find an expression of your positioning that resonates with both your internal and external target audience. Getting this right is likely to involve qualitative or quantitative research; or both. Don’t fall into the trap of accepting a golf clap as an endorsement of your idea. You need an enthusiastic and visceral response from your audiences.
Words and feelings matter a lot here. That’s the reason more and more nonprofits are turning to pros to help them articulate a strategic positioning in a compelling way. It is, after all, the copy that serves as a summation of all that you do and a call to action for a donation.
4) Expose and educate your internal constituents. Every person in your organization should be living and breathing your brand. This accomplishes a few things. It gets everyone on the same page as to what your organization is really about. People start speaking a common language. And it spreads.
It also serves to energize people and their conversations about your brand. As a result, you’ll find new ideas emerging with higher degree of enthusiasm. Marketing buzzwords for this sort of thing are “organizational alignment” and “operationalizing the brand” and so forth. But it’s really just getting everyone on the same page enthusiastically.
5) Go to market. All of your communications whether direct mail, email, newsletters, posts, web updates, events, cases for support — all of it should be on strategy. In other words it should deliver against and reinforce what the brand stands for and represents.
When you define your brand in this way, you’ve created a central idea that will serve as connective tissue as you start to tell stories across all different media. Your communications have focus. And your entire organization is living it. That’s a big win that will lead to increased giving for years to come.