Our fundraising model is broken and digital can fix it

4-nonprofit-fundraising-tips-digital-benchmark-reportA guest blog by Branislava Milosevic

Digital is delivering for almost every industry – music, retail, media – and across government. Yet according to some fundraisers, not for charity fundraising. Why not? Probably because, unlike other sectors, charities have been resisting the change that the rise in our digital lifestyles has brought about.

Successful commerce has always had a culture of customer focus: with the rise of the Internet, businesses have transformed to avoid losing their customers to competitors and taking a massive hit to the bottom line.

The music and media industries learnt this lesson the hard way. For years they tried to fight the disruption caused by changes in their customers’ behaviour triggered by the arrival of the Internet as a major content distribution channel. They tried to stop applications like Napster, free distribution of content, mixing and matching and borrowing of music. All this was seen as an attack on the industry as it challenged their established business model.

It’s only in the past few years that the industry accepted that it needed to change and work within the ‘rules’ of the digital ecosystem where their customers and fans have been for years. Napster, with its free music, may have gone from the mainstream but we have new models for music buying, listening and sharing like iTunes, Spotify and now Apple radio.

In the case of the music industry, Napster was a disruptor. And there’s been one for each industry – easyJet and Ryanair for the airlines; TripAdvisor for travel; Airbnb for hotels; Uber for taxis; Facebook and Google for advertising and content; and Buzzfeed, Vice and Upworthy for news and media industries.

Who are the disruptors for charities? 38 degrees, Avaaz and Change.org shook up charity campaigning. The trendy brand marketing of charity:water and the Kiva platform with its direct link between donors and beneficiaries both had the potential to disrupt charity fundraising but didn’t. User generated viral initiatives like #icebucketchallenge made us stand up and pay attention. But these are one-offs, as is to be expected with virals, and do not give the basis for the development of a sustainable model.

What are the basic principles of the mass-market disruptors?

  1. They provide flexibility and convenience for the end-user – we can buy, sell, work, read, support friends and innovative projects on our own terms in our own time (at home, at work, on the bus);
  1. They provide a good user experience thanks to testing and experimentation – platforms are mobile, easy to use and easy to understand as they are written and explained clearly;
  1. They provide vetting of community members and the services members provide, and they enforce the community rules which builds trust in the platform;
  1. Around these platforms there is a community of people linked together by the same need and/or passion, who police and evaluate products and services which in turn creates trust in the overarching brand.

Non-profits have a community of supporters who are passionate about our causes yet many charities are still scared of trusting them. We provide patchy user and brand experience – there aren’t that many charity websites or online donation forms out there which are easy to use. As much as we talk about supporter experience and journeys we develop websites which fulfil internal priorities and the wishes of those colleagues who shout the loudest. Most of us don’t really start with our supporters when we plan.

By learning from how the ‘disruptors’ engage the public we need to create a range of fundraising products that truly live in the digital ecosystem where the majority of our supporters are and will increasingly be in. Such a model will help us create a new generation of donors before the current charity fundraising model collapses. Because, make no mistake, collapse it will.

This blog was first published in full at Digital Leaders. Head over there if you’d like to share comments or thoughts on other aspects of what makes these “disruptors” work and what that means for charities.

Brani is a digital strategy consultant working in the charity sector for over 15 years.

7 Comments on “Our fundraising model is broken and digital can fix it

  1. Yes, charities do provide patchy user experience and build websites to meet internal priorities. It’s the same problem across all the channels we use.

    What’s broken in fundraising is the way we treat donors. A constant measuring of ROI & income without the same focus on the donor experience. And by donor experience I don’t just mean flexibility, convenience and ease of use(although important). I mean treating each donor like a human being who cares about other human beings – a unique individual who has chosen to make us part of how they build community & connect with the world.

    The channels we use are merely tools and how we use those tools is what’s broken. Digital is no more the answer than is telephone or text or glitzy customised mail packs. When we use our tools to forge human connections & build relationships focused on the donors not just their money… we will make real progress in fixing fundraising.

    The idea that one channel or the other is the fix is what got us into this mess. We use analytics to “maximise” a channel thinking only about what we can get out of it and our donors end up feeling used and abused.

    Digital has the potential to be just as alienating as any other channel.

    We have to use every tool we have to build real human connection. Each channel we choose can be misused.

    There’s a very real struggle going on between trying to humanise & trying to scale. Scale is one of the gods of the digital world but scale can be the worst enemy of actual human interaction. The bigger we get the more we tend to treat our donors like numbers and digital can exacerbate this. Digital “personalisation” is really just hyper segmentation and has very little to do with actual human relationships.

    So this brings us back to what’s really broken, relationship with our donors. Hmmmm… I think I remember someone writing a book about this. But no one reads books anymore.

    • Thanks Denisa – yes – that book…. Reminds me of a very good experience I had with AirBnB recently – it was the combination of on and offline, real people and automation, speed and efficiency that gave me a great experience. I’ll pen a blog about it soon!

  2. Hello Denisa, Brani here. Thank you for your thoughtful insight.

    I totally agree – the way we treat the donors is what’s broken about the fundraising model.

    The reason why I think Digital is the solution, is because Digital is not just a channel. It’s a ecosystem of different technology, behaviours and cultures. This is why it’s transforming industries, every single part of organisations and businesses.

    Many charities have the “Same shit, different channel” approach to Digital which is why it isn’t working for fundraising.

    One of the things that all the new models of online engagement I’ve mentioned offer is flexibility and choice for the user. We definitely don’t offer flexibility in how people can engage when our main focus is to get everyone onto Direct Debit. Whatever the way one engages with a charity in a year, they will be repeatedly asked for a regular gift regardless of how many times they said No or have given a one-off donation.

    And personalisation *can* be one of the solutions.

    But, In order for it to work, there needs to be a range of different types of cross-organisational engagement offers which require more or less effort from a supporter. That way people can engage on the level that is appropriate for them. New digital technologies can make personalisation so much more sophisticated than what any of the charities are doing at the moment.

    The problem for the sector are old databases which were developed pre online shopping and social media. They just aren’t capable of running real-time (two-way) communications based on supporter behaviour and preferences which has become the norm. In order to upgrade their supporter database and bring themselves into 21st century organisations will have to make a huge investment and not just in technology.

    The process of CRM implementation usually reveals everything that is not working in the organisation and in order to fix it, organisations will have to change the way they do things. Starting with how they engage donors. This is why Digital has been transformational for organisations and businesses.

    And, there is no time to wait.

    With the new EU-wide Data protection regulation to kick in next year, we know that all industries will need to offer people more choice in how they engage with brands (retail and some charities are already making changes). So charities will have to change how they do CRM and, therefore, their databases. If they continue to resist change it will be at their peril as in 5-10 years those who don’t transform won’t exist.

    I’ve written a bit more about this here if you are interested :
    http://digitalleaders.org.uk/treat-your-supporters-right-go-digital/

  3. I don’t disagree that we all have to adapt & embrace new technology. The challenge for charities is to really understand how their donors want to engage and focus resources delivering a wonderful donor experience on the most important channels. We are always constrained by budget & staffing so we can’t do everything. But I’m very concerned by a lot of truly terrible advice being given to charities that they need to redirect their limited resources to all things digital at the expense of off line channels their donors use as much as they use digital channels. It really is about who your donors are and how they prefer to engage.

    A real world scenario to ponder. Google just used a newspaper insert to get people to engage with their new technology. Digital channels just weren’t getting the same traction http://www.wired.com/2015/11/google-cardboards-new-york-times-experiment-just-hooked-a-generation-on-vr/

    So the most advanced digital company in the world used one of the oldest offline channels in order to get humans to interact with their tech. My point is, the marketing and communications ecosystem is far broader & more complex than just digital.

    Less than 10% of giving in the U.S. happens online and half of that (5%) is driven by direct mail. Digital will continue to grow but not separate from the broader fundraising & communications ecosystem.

    I agree with much of what you are saying about how we need to invest & keep up. But the title of this article is ridiculous & myopic. Drop the “digital is the messiah” nonsense & lets talk about how we can use all available channels be more human & show our donors more love.

    • Hello again!

      I can see why the title of my article can irritate – it’s simplistic.
      I chose it on purpose to provoke the discussion. Because, over the years, we’ve all been saying digital -yes, but it’s all about the channel mix etc etc. While true it never moved us ahead in making a leap into working with the digital culture which is all around us and where our supporters will ultimately be.

      To me it is about making the mind-shift of thinking about Digital as an ecosystem of different influences, behaviours, content and culture, rather than just as another channel.

      Your Google example is the perfect testimony of exactly that. They made the shift we never did – they stopped trying to make people get excited about their product and decided to create a different take on it that’s more appropriate for the audience.

      On the point re the US online fundraising figure – it is my understanding (I might be wrong though, you will know this better) that Philanthropic giving (major donors) is huge in the US so that can skew the figures in terms of %.

      And while I agree with your point that direct mail will trigger response online (marketing is always needed to take people to where you want them to go) I take these % figures on online income with a pinch of salt. In my experience, % of online income figure is often skewed due to the way charities tag ‘source’. For example, when people chose ‘seen a TV ad’ on the online donation form that’s counted as DRTV income but not as online income.

      I share your concern of charities being given wrong advice and wasting money on tech solutions that then fail and don’t work.

      Resources are tight but I have seen charities investing £25k pa in a PR agency knowing very well that, at best, this will give them presence in ‘letters to the editor” twice in a year. At the same time they absolutely refuse to spend more than 5k on a website which would be a shopwindow to their organisation and can engage more supporters than a column in a newspapers ever can.

      I think that charities share the responsibility for this waste by not investing (time and money) in the development of their digital talent – staff who can help make these decisions, guide the organisation through the process of digital growth and, ultimately, transformation.

      • This statement is exactly the problem with digital marketers who don’t understand where digital fits in the overall Eco system of fundraising.

        …..” I take these % figures on online income with a pinch of salt. In my experience, % of online income figure is often skewed due to the way charities tag ‘source’. For example, when people chose ‘seen a TV ad’ on the online donation form that’s counted as DRTV income but not as online income.”

        You see, “source” is what drives the decision to give. Without the “source” there will be no online gift. In this case, “online” is merely the channel the donor chose to give through. The “source”(DRTV, direct mail, print ads, Google ads) is the driver of giving decisions. Once the “source” has done the heavy lifting its important that the digital channel they go to is well designed to capture and convert.

        As it stands now, nearly 50% of online giving in the U.S. is driven by direct mail. Digital is growing as a convenient channel for donors to give through. But as a “source”, digital marketing drives only a fraction of the actual decision to give. I keep hearing digital marketers talk about how we shouldn’t be using “old metrics” to measure digital. It’s absolutely hysterical! They don’t want their response rates and conversion rates measured against the conversions and ROI of traditional marketing channels because most digital marketing is about “reach” & “impressions” and simply doesn’t deliver bottom line results.

        I think digital can be a viable “source” when you apply the same bottom line, direct marketing standards to it that we apply to other direct marketing channels. And I think it’s most powerful as a part of an integrated multi channel environment. I have yet to see a digital channel return a 2-3% cold response rate with a €70 avg gift. And yet this is fairly normal in my direct mail.

        Digital marketers need to quit asking for “different metrics” and learn real direct marketing skills instead of just defaulting to “awareness” and feeding off the stream of donors traditional channels are feeding through to charity websites.

        Digital is an important and broad category of tools we can use in fundraising but there’s a lot of testing and development that needs to happen to bring it up to the performance level we expect from our other channels of direct marketing.

        • Hello again,

          I agree with a lot of what you say with regards to channel mix and integrated planning.

          My point was % of overall income that comes through online, regardless of source. It is a measurement of user choice for a way to give as you describe, but also of a good online marketing planning. Direct mail/DRTV won’t work as well as a source of a donation without a strong Google Ads & SEO investment for example.

          What you described as “awareness” is not a construct of digital marketeers, it’s a fact for many brands. For many supporters their experiences are not linear as they used to be – receive DM, fill in the coupon, send it in or call the number on the letter. A tweet will work in a linear way only very rarely when a tweet goes viral.

          However, not being on Twitter/Facebook or not being responsive to tweets, FB comments, managing this conversation w supporters clumsily in this public space for all to see – can form an opinion of that organisation and inform people’ decision to give. And we can’t measure this w ROI, that would be like saying – we’ve answered this many queries on Twitter which costs X amount of staff time and we only got tiny income from Twitter therefore it’s not worth us doing it.

          I agree though that measurement of digital activity can not be left to measuring reach and views only. We do need to find a way to understand how a combination of different (traditional and digital) channels and content work for our organisations. This does require changing (or developing additional) ROI measures. As ROI is often measured based on old data processes & systems that date before the days of digital marketing, this is not an easy or a cheap job. But this is where serious investment needs to be made and now.

          The DM stats (gathered over decades) describe what’s working now, but I wonder if it’s going to work as well once the post war/baby boomer generations are totally gone…. It could certainly work but my gut feel based on how markets are changing is that it won’t work as well.

          In 10-15 years time, I think we’ll need a fundraising product that works in a digital world beyond the support role for DM/DRTV etc. So we need to start with the principles of products like Uber and Airbnb, then use the experience of traditional (charity) marketing to fine-tune the model without killing it. That’s the challenge.

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