The Intersection: Jun 2011

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Is Your Nonprofit Organization Meeting Its Fundraising Potential?

Cloe Axelson co-authored this article.

What you say matters – and how your use online tools to communicate your key messages will increase your bottom line.

In this sluggish economy where the competition for philanthropic dollars is challenging, leading nonprofit organizations are carefully evaluating their fundraising strategies.Many organizations (large and small) had become very reliant on major gifts to underwrite their programming costs, but when the economy dipped significantly in 2007 and struggled to recover, it was clear that the old fundraising model would not suffice.

Nonprofit organizations must now broaden their financial support bases and identify more communications channels to reach potential donors.  Based on our experience, the difference between leading nonprofit organizations and the rest has been their willingness to revolutionize their fundraising approach to take advantage of leading research methods and new online communications tools. The old way of doing business just does not cut it anymore.

Today, successful well-established organizations such as the American Cancer Society, AARP, Museum of Fine Arts (Boston) and Partners In Health are using a blend of traditional and cutting-edge communications strategies to reach their supporters. How have these organizations gotten up to speed? The lessons from political campaigns have provided valuable guidance.

Use research. In a closely contested political campaign, candidates work with pollsters to identify the issues important to voters as well as the most effective messages candidates can use to influence voters’ opinions. Based on our analysis, leading nonprofit organizations are following a similar model by conducting quantitative (surveys) and qualitative (focus groups and in-depth interviews) research efforts to understand the issues important to supporters, and to identify the most convincing messages that will encourage donations. The findings from these research projects subsequently inform the strategic planning and execution of donor outreach efforts. This approach is not ground-breaking; however, our analysis suggests that many organizations are not taking advantage of the resources at their disposal.

Leverage online tools. Nonprofit organizations are also leveraging online communications tools to support their fundraising campaigns. Political campaigns have been leading this charge since Howard Dean pioneered – and then-Senator Barak Obama perfected – the art of organizing, educating and mobilizing supporters to get involved in campaigns and make donations online.

Nonprofit organizations following the lead of political campaigns in the online arena makes sense. According to an Arbitron and Edison study, when asked to choose among television, radio, newspapers and the Internet as the “most essential to your life,” the Internet is the leader by a significant margin. Digital technology surrounds us, thanks to mobile devices, tablets and widespread broadband access.

Integrate communications tools across platforms. Leading nonprofit organizations have effectively utilized online tools to complement existing outreach efforts like direct mailings, events and canvasses. The results have been impressive. Online giving grew by 35% in 2010, according to a February 2011 report from Blackbaud, a leading provider of fundraising software. Large organizations experienced a 55% increase in revenue through online giving, while medium-sized organizations saw a 15.9% uptick and small organizations experienced a 22% increase.  These numbers were buoyed by disaster relief efforts in Haiti and a recovering economy, but they also signal a growing opportunity for nonprofit organizations to find more philanthropic dollars online.

It’s an exciting time in the nonprofit fundraising arena. The competition for philanthropic dollars may be fierce, but nonprofit organizations now have sophisticated new resources that enable them to evolve their fundraising approaches.