If you work in or are interested in philanthropy and the non-profit sector in any way, then chances are you might have come across this video already. But if not, I strongly encourage you to watch it. It is a powerful call to reshape how we think about charity, donations and social change. As someone who has worked most of my career in the not-for-profit sector it is refreshing for someone to come out publicly with such a well articulated vision for what needs to change to actually improve the state of our society and environment – what all charities are really working towards in the end. It’s especially refreshing to hear him taking down that old fundraising ratio tautology that dominates so much evaluation of and donations towards charities!
The video speaks for itself, so here it is:
The Atlas of Giving publishes monthly reports on charitable giving in the US – including giving by sector and forecasts for the coming year. These insights can be helpful for charities for a number of different reasons:
- Compare fundraising performance against sector average and overall trends
- Inform planning and strategy through forecasts
- Adjust budgets accordingly
- Schedule fundraising activities
The latest forecasts show that, as of the end of April 2013, giving is up 7% from the year before. This is great news for charities, but it is expected to tapper off slightly in the remaining of 2013 – with giving in the calendar year 2013 forecast to by 5% up from 2012.
The giving trends for the past year so consistent growth from the year before:
Whereas the forecast for giving over the next several months is expected to hover around the same amount last year, and even decrease slightly:
The forecast breakdown by sector remains more or less the same, with religion still accounting for over 1/3rd of total giving:
In terms of how particular sectors are expected for perform, nature/environment is forecast to grow the most at 9.1%, with a few other sectors – human/disaster services, education, arts, and society benefits – also expected to show fairly strong growth at over 6%.
Finally, in terms of the types of donors, foundations are forecast to show the most growth at 7.1%. Individual donors, corporate and bequests are also expected to grow between 4% and 5%.
Horrific as they were, the Boston Marathon bombings had a way of bringing people together. Millions across the globe wanted to help or do something, and donating to the victims was often the most accessible way of expressing solidarity and support. We have seen these ‘crisitunities’ many times before – especially in the wake of natural disasters. The age of crowdfunding means that nonprofits have more resources at their fingertips than ever before.
This week’s guest post from Holly Aker looks at what crowdfunding lessons nonprofits can lean from the One Fund Boston.
Giving back to those in need is an inherent human reaction, especially when an event like the Boston Marathon bombings occurs. To give people an outlet to provide support, Massachusetts Governor Deval Patrick and Boston Mayor Tom Menino formed The One Fund Boston immediately following the bombings.
“One particular strategy—crowdfunding—helped The One Fund Boston raise over $20 million in less than a week and attract considerable attention. The nonprofit has received an outpouring of donations from organizations including shoemaker New Balance, Major League Baseball and Simon Property Groups, among many others,” Stephanie Kapera, a contributor at Software Advice, explained.
Other organizations and groups also began popping up soon after the bombings, and by taking advantage of websites like Teespring, Pinterest and other social media channels, these organizations raised a significant amount of funds for the Boston Marathon victims.
So once your nonprofit organization launches its crowdfunding campaign, how can you get the word out to those who want to give back? We’ve compiled a few tips to help set you on the right path to exceed your fundraising goal.
- Act quickly – Get your campaign up and running within the first few days after a disaster. People feel less passionate about a cause as more and more time passes (see graph below).
- Leverage online influencers – Target people on social media who have large followings and have an interest in your cause. Then send them a message or tweet, asking them to share your campaign with their audience.
- Use a multi-channel approach – Spread your campaign across as many social media outlets as possible to reach the highest number of people.
- Use hashtags – Hashtags help raise awareness by acting as bookmarks for topics.
- Get visual - Studies show the majority of human learning occurs visually and that an image with text and a visual aspect are four times as likely to be shared.
With the right tools and strategies, social media can be that extra kick to make your crowdfunding campaign go above and beyond.
To read a longer version of Kapera’s article, click here.
Research from the University of Pennsylvania found that people hold stereotypes about for-profit and non-profit organizations (i.e. companies and charities) that influence their consumer behaviour. Charities are often perceived as warm or feel-good, but less competent than businesses. Conversely businesses are perceived as more competent but not as caring.
One of the impacts of this stereotype is that consumers are less likely to purchase a product or service from a nonprofit than a similar product or service from a for-profit. But they’re more likely to feel that a nonprofit is better than a for-profit at benefiting society and treating its employees well, for example. Perhaps this could be one of the reasons that social enterprises have not been able to scale up on a significant scale, and therefore one of the consumer attitude/behaviour barriers that will need to be overcome?
So how are nonprofits supposed to overcome this stereotype about incompetence? There are two tactics the researchers test and suggest might work:
Changing perception of nonprofits through endorsements
The researchers conducted an experiment in which people were presented with scenario of purchasing eco friendly bags from World of Good. They were given two different World of Good organizations – one a dot com and one a dot org. Participants were more likely to associate the dot com with a for-profit and the dot org as nonprofit…including all the stereotypes about warmth and competence that go along with those associations.
However, when the nonprofit World of Good received an endorsement from a trustworthy third party media outlet, perception of competence increased and people were much more likely to want to purchase a product from the charity:
consumers want to buy from for-profits more than non-profits due to greater perceived competence of the firm. However, with a strong endorsement, non-profits (vs. for-profits) benefit because consumers show a greater willingness to buy from them due to their combination of perceived warmth and competence.
Changing perception of nonprofits through priming
Another experiment tested the role of priming with money on competence of nonprofits. Plenty of studies show that thinking of money has a positive correlation with competence. So, the researchers divided participants into two groups: one group was primed through articles about money that they were told was part of an unrelated study, and the other group received no prime. They found that “exposure to the money prime (vs. no prime) made gDitty.org [the nonprofit in this study] appear more competent.”
This research is important for a number of reasons: brand perceptions, barriers to accessing funding through products/services, marketing strategies, leveraging positive associations with warmth, etc. This research also offers (for me at least) a fresh insight into the appeal of cause related marketing for companies. If the nonprofit association can bring that warmth to the perceived competence of their product, then it sets it apart from competitors.
The researchers didn’t go into it in this paper, but what implications does this have for donations? Are nonprofits missing out on funding opportunities because they are viewed as not very competent at management and business? Would changing attitudes of fiscal responsibility increase donations? My guess is that the old fundraising ratio is a symptom of ingrained stereotypes.
The nonprofit industry standard online annual benchmark study for 2013 is here at last. If you’re not familiar with it, M+R Strategic Services and the Nonprofit Technology Network (NTEN) put together an annual survey of how charities are making use of technology and what results they’re seeing – from online fundraising to social media to mobile marketing.
You can read the entire e-benchmark study for free here. And if – like me – you haven’t had time to dive into it yet, here’s a handy inforgraphic with some of the main findings. Looks like a mixed bag – with many groups seeing online fundraising revenue and supporters continue to grow, but engagement is an issue (e.g. declining open and response rates). Environmental charities are definitely capitalizing on online revenue – up over 30% from last year!
How does your nonprofit compre to these averages?
Most charities are using some sort of digital fundraising technology now – online giving, text messaging, email campaigns, etc. In fact, according to this research from the UK, Understanding donor behaviour in a digital age, 89% of charities are investing in this form of fundraising. So, how is it going? Do the findings corroborate all of the buzz about online giving? Kinda.
Here are some of the main findings:
How charities are using digital fundraising
- 81% spent less than £10,000 ($15,000) in the past year on this income stream
- 83% used their charity website for online giving, and 55% used Facebook
- Half of all survey participants used peer-to-peer giving sites (e.g. for fundraising events and challenges)
- 48% used email marketing
- About 45% are using other online giving technology – such as eBay and text donations
How successful is online giving?
- 56% of charities saw an increase in digital donations over the past year versus only 4% who saw a decrease
- 50% of people in the UK shop online versus only 2%who donate online
- The number of online donors increased from 4% to 7% over one year (2008/09 to 2009/10), but then flatlined the following year
- Digital giving and interaction is important for young people: 54% said being able to make digital donations encouraged them to give; 34% said they wouldn’t give if digital donations weren’t available; and 35% use social media to interact with a charity
Trends and predictions
- Most charities (70%) think an economic upturn will not boost giving a lot
- Older donors (55+) are more reluctant to give online – better security may help to overcome this for some
- A digital presence is important for awareness raising and engagement – which will ultimately lead to greater fundraising income among all age groups
Many nonprofits are now experimenting with and investing in digital – online, email, social media, text, etc. Most are also experiencing good results, but ultimately not making a huge impact on overall income. The big takeaway from this research is that charities see a digital presence as just as important for awareness and engagement as it is for donations. In other words, a diversified online presence enables them to cost effectively interact with more people (especially younger people), which will ultimately lead to more donations through various channels.
It’s a pretty well known fact that companies use whatever marketing tactics are available to them to sell their products. Marketing is a massive industry with tons of money and research behind it. Companies are continually pushing to find new, creative ways to increase profits. Psychology has been playing an increasingly prominent role in persuading folks to part with their money. The latest trend is a field called “neuromarketing”.
As outlined in this good overview article of neuromarketing, this concept involves measuring the brain’s response to marketing stimuli – e.g. through brain imaging, like MRI scans. For example, which types of marketing triggers reward centres in the brain (which are also responsible for addictive behaviour)? And why do people still prefer Coke even when they pick Pepsi in taste tests? Neuromarketing is really about trying to uncover the sub-conscious reactions in the brain and exploit them for the purposes of selling people stuff. It’s a pretty ethical grey area that has some people and organizations adamantly against it – even launching lawsuits to halt the practice (see above article).
But what about nonprofits using this tactic to get people to donate to their cause? Surely using these tactics to increase support for charities should be encouraged? After all, diverting money away from purchasing stuff and towards helping people is an example of exploiting our sub-conscious for good. No? As I’ve discussed in previous posts, there is already mounting research to demonstrate which appeals generate more money based on neuromarketing: forcing quick decisions, showing cooperation/links when these are groups and appealing to negative emotions.
Well, that’s something I don’t think is cut and dry and is worth a discussion. Here are some thoughts on this:
- Pro: Nonprofits need to use whatever tactics they can to increase support. Needs always outweigh funding and resources needed to respond to and solve them. So if neuromarketing is a way to increase the funding going to charities then so be it.
- Con: Charities should win donors based on their mission, evidence of outcomes, etc. rather than through ‘tricks’. They need long-term committed supporters who can help carry their messages and programs forward. Psychology tactics will generate less committed supporters (and there for much higher attrition rates) because the base for their support is based on a primordial reward stimulus. That means more money spent on marketing and less on charitable programs.
- Con: Neuromarketing could just create a battle among charities who have the biggest ad budgets at their disposal and have the best psychology tactics. In other words, the best charities are not rewarded with the most support and encouraged to scale their successful approaches.
- Pro: The best charities aren’t rewarded or given funding as it is. Besides, these marketing tactics only really apply to online and direct mail campaigns, so charities can still continue to get other sources of funding (foundations, major gifts, bequests, etc.) based on other motivations.
I’m still of two minds about neuromarketing for charities, so would love to hear what others think.
And here’s an infographic to describe the success of infographics. It’s shocking to see just how much of a difference infographics can make in responses and donations. As you can see in the example with African Wildlife Foundation, using an infographic for an appeal to supporters increased response rates by nearly 900% and increased donations by over 250%!
Fundraisers might want to experiment with using infographics in campaigns and compare to traditional messaging. Based on these numbers I would say it’s worth a shot.