Wednesday, April 1, 2015

Nonprofit Fundraising Needs Competition Analysis

Nonprofit Fundraising Needs Competition Analysis

Rachael Swetnam

In the nonprofit fundraising field, it's common knowledge that some donors have a specific subject matter in their life that is meaningful to them, such as if a close family member struggled with a certain ailment or illness, or a certain animal they care for, and they only want to donate to that cause. But other times a person who is willing to donate is flexible on which causes they will donate to -  it is simply a matter of being asked to give. Therefore, the competitive concept of "other players offering similar products to yours" (1) absolutely applies to this field. If an organization can entice donors who are flexible, then they have a better chance at soliciting those funds for themselves.

In my experience with several different types of nonprofits, I have never once seen an organization go for the competition, perhaps in an attempt to avoid crossing that "non-profit/for-profit" line. However, it's not a mystery that donors don't want to give money to a nonprofit that's not performing well financially, and would prefer if nonprofits were run more like businesses (half the time, nonprofit management job descriptions suggest having an MBA!). So, why not act like it?

In my Heinz Professional Fundraising course, I was surprised to learn that there is incredibly high turnover in the professional fundraising field due to low salary pay, relative to a demanding position. Later, in my Heinz Cultural Advocacy course, I learned of the increase of positions for data analysts and statisticians in major nonprofits and foundations nationwide as the public sector embraces the data movement to quantify their impact on society. Large funders no longer want to throw money at nonprofits who can't prove they are having an impact. Here we have two totally unrelated departments, but by working together they could really create something interesting.

A perfect marriage of data analytics and nonprofit management is to create positions for competitor analysts within nonprofits fundraising teams. If fundraisers had hard data at their disposal, their jobs could be easier and more effective all at once, allowing them to target new donors, or target current donors better. Additionally, data could be distributed to marketing, PR, and executive staff for analysis. If hiring someone in-house is an issue for smaller organizations, there seems to be plenty of room in the market right now for an organization to offer this service at various level of pricing to nonprofits, as we are reminded by the IT article published by McKinsey Quarterly (2), to offer anything as a service. This is a common occurrence for other types of fundraising functions in the nonprofit field.

While it's generally recognized that nonprofits will likely be among the last to adopt many of the exciting new technology recommendations (2) due to a general lack of budget, there must still be a cultural shift to stop fearing technology and data, even in smaller organizations. Especially if it's the way to keep the organization afloat for another year.

(1) Competitor Analysis: Understanding Your Opponents
(2) Ten IT-enabled business trends for the decade ahead, McKinsey Quarterly, Jacques Bughin, Michael Chui, James Manyika

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