We are privileged to serve several large #nonprofits , and they are rightly focused on expanding their missions to help more of the constituents they serve. Times were when boards and leadership could invest more in traditional marketing strategies and be reasonably assured of a predictable path to mission expansion. Those times, altered by a radically changing donor landscape, now look like a distant memory and many nonprofits are learning on the fly as they adopt new approaches.
In many ways, the transformation that nonprofits are experiencing is reminiscent of the #data – and #digital -led transformation that commercial businesses have had to navigate for the last 10 years, and there are some lessons that we have learned in helping our clients succeed in the new world. For nonprofits, we’re calling it the “programs to people” transition.
Changes And Challenges In Donor Marketing
Nonprofits have had a good run with positive economic and macro tailwinds over the last 5 to 10 years which may have masked some looming structural and donor engagement challenges:
Donor Demographics Are Changing
It’s no secret that the average age of donors is going up as the baby boom generation ages. Looming over the horizon however is the “next gen” donor cohort who stands to inherit unprecedented levels of wealth, is more diverse, and is motivated by different drivers. Many nonprofits have not yet grappled with the reality that the next cohort of major donors have different ways of engaging, giving, and managing their relationships—powered by digital
Nonprofit Marketing Is Still Very Direct Mail Dependent
Direct mail fundraising has been a powerhouse for decades but is under increased pressure as donor lists become stale and digital engagement moves to the foreground. Direct mail is still an important contributor to the topline however, and many nonprofits are looking for paths to diversification
Channels, Programs And Teams Are Largely Siloed, Missing Cross-Channel Engagement Opportunities
Just like commercial businesses have done, nonprofits often look at programs in channel siloes—digital performs at “x”, direct mail performs at “y” and so on. What’s lost in this structure is the new reality of how consumers engage across channels. We have seen that omnichannel communications has a positive effect on donor acquisition and retention, yet it’s often difficult to quantify the impact and invest accordingly
Content And Digital Engagement Are Currently Geared To Today’s Generation Of Donors
As one would expect, donation-driving content is focused on the current base, often without adequate attention paid to branching out into “next gen” audiences—younger, more diverse and differently motivated
Audience Targeting Is Left To List Brokers, Program Vendors Or Platforms Vs Being A Core Competency Of The Nonprofit
With direct mail starting to lag in performance and digital showing promise but hitting limits to scale, the inherent challenge of outsourcing targeting is becoming very apparent. Many nonprofits are in essence using the same pool of data as all others, limiting opportunity to define, cultivate and target the audience that’s unique to them
Analytics Is Generally Confined To Descriptive Vs Predictive
Internal teams are burdened every day with reporting on operational metrics—new acquisitions, churn, value of donations, etc. It’s a hard job. As things evolve to being more complex from an audience and channel engagement perspective, advanced uses of data science will be necessary to identify the right donors at the right inflection points in their journey
Driving Growth By Transitioning From “Programs” To “People”
The good news is that there’s a logical, proven path to help nonprofits architect change without disrupting what works. The “people based marketing” framework that many commercial organizations have adopted over the last 10 years offers some elements of the #programstopeople roadmap:
Develop A Growth Plan To Intentionally Drive Multi-Year Progress Against Meaningful Growth Levers
Each organization will have evolved differently, but our experience is that each of the key growth levers—data, analytics, audience development, content and engagement—are interconnected capabilities that if linked together and applied scientifically will drive measurable and sustainable growth. This is critically important as donor bases transition into the “next gen” and younger cohort. A short-term approach that incrementally improves processes is important, but may miss the bigger picture of changing behavior over the long term
Adopt a Segmented Approach Based On Behavior And Insight In Addition To Donor Status
Most nonprofits we see describe their donors as “new”, “lapsed” etc. and often leave it at that vs digging in to demographics, behavioral data and the like. This focus on people and who they are vs donor status only will open up massive opportunities in customer experiences, content, and the like as your organization thinks about its audience in a different way
Own Vs Rent Your Target Audience And Develop A Data Strategy For Your Organization
Commercial businesses have learned over the last 10 years that building an audience capability isn’t just a “nice to have”, it’s a “have to have”. As rules around data and its governance change, cookies deprecate and digital advertising becomes a series of walled gardens owned by the Amazons, Metas and the like, all nonprofits need to develop a robust set of targeting capabilities fueled by datasets that the nonprofit has under its control—opted in audiences, permissioned third party datasets and the like are all part of a comprehensive set of strategies that will allow for greater insight and ability to weather the storms of the changing data landscape. This is not to say that privacy should take a back seat—many nonprofits are cautious about collecting and holding too much data, which is fair. But there is a path to having more insight while being compliant in both the letter and spirit of the law
Integrate Channels To Deliver Experiences That Transcend Individual Programs
The concept of “journey management” is one that is easy to grasp but hard to execute. The fact is that as donors change, there’s an expectation that they will be known across channels and recognized as such—very much in keeping with the expectations they have developed for commercial businesses. The starting point is of course marketing to donors across channels, using appropriate data and targeting. The harder part is coordinating experiences across online and offline points of interaction—journey management, if you will. Consumers of all kinds who receive coordinated treatment and a recognition of who they are respond and perform at a much higher level that the inverse
Adopt And Integrate Advanced Analytics
It has been great to see the growth of analytics teams in nonprofits, and the general emphasis on performance data to drive decisions. As donor engagement becomes more complex, data science will need to play a more prominent role in determining most productive cohorts, next best actions in cross channel experiences, highest performing potential appeals and the like. Our experience has been that analytics in general and advanced predictions are typically still done in siloes and by program vendors, and we’d urge nonprofits to invest in this game-changing capability. All in the service of marketing to individual donors—people—more effectively.
Invest In People Internally And Externally
Perhaps the biggest opportunity we see is that of changing mindset. Nonprofits are incredibly mission focused as they should be, and expanding their mission to embrace the new reality of marketing to “people” vs managing “programs” is both a shift in operational processes and capabilities, but also of the focus of nonprofit staff. In our view, taking the time to explicitly align the organization to new capabilities and approaches will ultimately accelerate the transformation necessary to drive success in the new world
