1 Philanthropy and Government Funding

2 Outline Fundraising facts The beneficiaries of giving Social enterprise marketing basics

3 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

4 Strategies for different donors WIN KEEP LIFT

5 Donor Ecosystem

6 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. 10

11 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

12 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

13 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

14 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

15 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

16 Outline Fundraising facts The beneficiaries of giving Social enterprise marketing basics

17 Does Charity Lead to Higher Incomes? Statistical objectives –Look only at the part of the income-giving relationship that goes from charity to income changes –Control for other factors like education, age, and race Two people, identical in every way, except that one gives $100 and the other doesn’t First person enjoys—as a result of the gift—$375 dollars in higher income

18 Philanthropy and Economic Growth 1% increase in giving this year ($1.9b total) results in a GDP increase of $37b Philanthropy is an excellent investment

19 Givers are much happier than nongivers Why? –Our brains are wired to serve –Approval of our peers –Improved control –Better health –Better citizenship

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

21 Outline Fundraising facts The beneficiaries of giving Social enterprise marketing basics

22 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

23 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)

24 Steps in Building a Marketing 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

25 Competition Competition for what? –Members/clients –Donors/volunteers/d onations –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)

26 Firm Development Nonprofit example: University Ref.: Rodos

27 Communication Tools Explicit communications –Annual reports –Newsletters –Press releases –Brochures –Direct mail –Media advertising –Telemarketing –Special events Implicit communications –Pricing –Products –Distribution

28 Targeting Messages to Demographic Groups Ref.: Van Slyke 2002

29 Messages Types *Found to be most effective Ref.: Clary