1 Philanthropy and Government Funding

2 Outline Fundraising facts Nonprofit marketing basics The special problem of young people

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 Maslow’s Pyramid

12 Maslow’s Fundraising Pyramid Upper donors Middle donors Godlike Superdonors Low-end donors Upper donors Middle donors Different donors require different messages

13 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

14 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

15 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 Don’t forget that donor fatigue doesn’t exist

17 Two secret weapons Asking Public giving

18 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

19 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

21 Outline Fundraising facts Nonprofit marketing basics The special problem of young people

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

30 Outline Fundraising facts Nonprofit marketing basics The special problem of young people

31 What Everybody Knows Nonprofits face a generational crisis

32 Generations GI Elders (born before 1925) Silent Generation ( ) –Retired –Still working Baby Boomers ( ) Gen-X ( ) Gen-Y (1976- )

33 Why are young people a problem? There aren’t that many of them They are “disloyal” They are less charity-oriented than older people

34 The baby bust

35 This job doesn’t thrill me… …Goodbye

36 Significantly lower average annual giving

37 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 services1.58 Local government schools, colleges, and other educational services0.78 Local government, excluding education and hospitals0.76 Offices of physicians0.76 Full-service restaurants0.70 General medical and surgical hospitals, private0.65 Limited-service eating places0.59 Home healthcare services0.54 Colleges, universities, and professional schools, private0.47 Management, scientific, and technical consulting services0.47 Computer systems design and related services0.45 State government schools, colleges, and other educational services0.44 Community care facilities for the elderly0.32 Child daycare services0.30 Accounting, tax preparation, bookkeeping, and payroll services0.28 Hotel (except casino), motels, and all other traveler accommodation0.24 Offices of dentists0.24 Elementary and secondary schools, private0.22 Religious organizations0.20 Janitorial and other building services, except landscaping & pest control0.19

39 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

42 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

43 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

49 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

50 Be high-touch with donors Create tangible experiences for donors Show people the impact of their gifts