Non-Profits are Membership Sites and Local Businesses

People in the non-profit sector have a tendency to freak out when you tell them they’re running a business. It’s like you’re swearing at them.

To become a not-for-profit business, first you have to incorporate. Then you apply for non-profit status. And if you want to be a charity, you have even more rules and guidelines to follow. Plus they all have to file income tax returns – just like any business.

So why do they get so freaked out when you tell Boards of Directors and Executive Directors that they have to behave like a business?

According to Convio, Edge Research and Sea Change Strategies, charitable giving is a $118.2 Billion dollar market for 2010 in the United States. That’s the marketplace in just one country. (Have a look at their paper on giving.)

Here’s my point: A Not-For-Profit Business is a business that must provide a high value experience while delivering an intangible product.

When I invest $100 to purchase a footprint on the Bruce Trail, or $55 to puchase one square foot in a Habitat for Humanity House, I’m investing in Conservation and Community. There’s no UPS package rate for either.

The paper from Convio has a lot of good information in it. It’s called “The Next Generation of American Giving” and it looks at the giving habits and inclinations of 4 generations (Gen Y, Gen X, Baby Boomers and Matures).

Here are two quotes that jumped out at me from the paper:

For most charities, the answer has been to continue to apply a traditional direct mail centric acquisition model to target Baby Boomers and other younger donors who make it onto available rental lists.

Direct mail is by far the primary channel for both soliciting and collecting small gifts. New donors come from rented lists, the members of which receive “prospect packages.” And, while typically only one in 100 letters yields a gift, eventually the process pays for itself as those donors give again.

The words to watch are “rental lists” and “rented lists.”

Why on earth are charities “cold-calling” to get new donors? Every charity has a body of passionate followers who support the cause. It’s this body of followers who is the key to gaining new followers.

You’ll see that idea put forward as you read through the paper. It’s just a shame that the non-profit community is just starting to pick up on something that other business owners have know for years.

Now, there are a couple of things in this paper that I disagree with strongly.

One is an assertion that “calculating ROI is going to be much harder going forward and is going to require a new, and not yet defined calculus.”

Okay. They’ve really missed the boat on this one.

Businesses have been using e-commerce and attracting new customers online for more than a decade. Do the folks at Convio really expect you to believe that getting and tracking new donors online is somehow radically different from getting and tracking other online traffic? Please.

Hook up Webalizer, Awstats and Google Analytics to your site. You’ll know when somebody so much as blinks at one of your pages, where they came from, how long they stayed, and where they went next. And in case you’re wondering – they’re all free programs. Webalizer and Awstats come with a hosting account, and Google Analytics is just free.

The other thing I disagree with is this: Traditional donor database systems based on the old model of financial transactions do not provide the relationship insight the next generation donor needs and expects. The ROI conversation cannot even begin until this need is effectively addressed by a new generation of integrated marketing database products.

Now, I’m all for positioning yourself as an authority in your field but this is just pure crap.

Agora Publishing, Early To Rise and Strategic Profits are just 3 examples of companies that have been doing multi-channel marketing for years. You can bet your boots they have integrated marketing databases.

They connect their e-mail to direct mail to websites to maintenance streams to referrals to reactivation sequences. And you can be sure they’re using a mutli-directional approach as well as multi-channel. That is, you can start anywhere in their product funnel and move in any direction you choose. There’s no linear progression or status quo.

I’ve worked with MaryEllen Tribby (Early To Rise, Working Moms Only) and Rich Schefren (Strategic Profits) often enough to know how they work.

Here’s the bottom line: Community Involvement and Fundraising are changing.

Imagine that…the marketplace is changing. (Okay. Hugely sarcastic, but it’s amazing how people deliberately choose to ignore this. Just look at the record companies and how long they spent in denial.)

When you read through Convio’s paper, keep in mind that some of the behaviours exhibited by the younger generations stem from being young. It’s easy to go after older donors because they can give more today. Yet a younger donor will be with you for a lot more years, and give you a longer lifetime value.

Rather than looking at with generation to target, consider how to target each generation uniquely. See them as niche markets. Maybe that’s too much of a cliche for Convio because the phrase never appears in the paper.

There’s lots of good information in Convio’s paper. Just be careful about leaning too heavily on advice provided as a means to marketing their products and services.

Now it’s your turn to comment. How do you use online channels to get new donors or customers? What do you think of the conclusions in Convio’s paper?

For most charities, the answer has been to continue to apply a traditional direct mail centric acquisition model to target Baby
Boomers and other younger donors who make it onto available rental lists.

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