Nonprofit fundraising isn’t the only sector of the economy that is seeking out a new business model. How about American banks?
The consulting company McKinsey recently released a paper by Toos Daruvata that details the problems U.S. banks face and their need to fundamentally redo how they do business. “By business model, we mean how banks actually operate – how work is done, the degree of automation, the pricing and design of their products, and the underlying compensation systems.”
Aren’t banks still making money? Yes, but not enough. Banks are owned by investors and if an investor’s bank stock investment is worse than other classes of investments, the investor will sell their bank stock. If too many people want to sell their bank stocks, the stock price goes way down.
Today banks are being buffeted in three areas; expanded capital requirements, increased regulations, and consumers and businesses deleveraging. “These forces of change will compel banks to reinvent their core banking business. In five years, branch banking will probably look fundamentally different as branch layouts, formats, and employee capabilities change. The use of Internet and mobile devices will grow exponentially. Overall, the cost of serving each customer in a branch is likely to fall by one-third.”
But what about fundraisers? If fundraisers stay with current failing fundraising business models then donations will begin to decline and the work or ministry of the organization becomes stunted. Soon donors that continue to hang on begin to see the organization declining and they, too, pull back.
There will be many nonprofit organizations that fail because their fundraising failed to adopt new fundraising business models.
When a bank fails, it is a bad thing. Some people lose their jobs and investors lose their investments. When a nonprofit organization fails – that is a tragedy. Critical services or ministries are lost to those who really needed them.
-Mike
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Friday, January 27, 2012
Tuesday, January 24, 2012
BIG’s Blog: Death by a Thousand Cuts
At the end of World War II, the Soviet Union’s armies controlled Eastern Europe. Many of these Eastern European countries had been western-style democracies before the war. To his shame, FDR agreed to the Soviet demand to allow “spheres of influence” in the territories (former independent countries) occupied by the Allied armies.
There was never any question that the U. S., France and Britain would allow the countries they occupied to freely elect post-war governments, including Germany. The Soviets had other plans.
But even the Soviets knew they could not quickly impose their domination on eastern countries like Poland and Yugoslavia while the American and British armies were still in place.
The Soviet tactic was to slowly, very slowly, put like-minded communists in leadership positions, change former constitutions, and rewrite laws in these formerly democratic countries. Their thinking was that the populations wouldn’t rebel because the changes were slow and incremental. But they had the effect of slowly ceding democratic rights to the state; the state that was now dominated by Soviet puppet leaders. It was called “Death by a thousand cuts.”
Last Sunday the U. S. Postal Service raised rates yet again. Slow and insidious price increases by Postal management that do nothing to make the Postal Service a better service or that underpin changes that would turn the Postal Service into a viable 21st century organization and business. Death by a thousand cuts.
-Mike
Welcome to BIG's Blog! Please feel free to forward this post to your friends and coworkers...and don't be afraid to leave a comment!
There was never any question that the U. S., France and Britain would allow the countries they occupied to freely elect post-war governments, including Germany. The Soviets had other plans.
But even the Soviets knew they could not quickly impose their domination on eastern countries like Poland and Yugoslavia while the American and British armies were still in place.
The Soviet tactic was to slowly, very slowly, put like-minded communists in leadership positions, change former constitutions, and rewrite laws in these formerly democratic countries. Their thinking was that the populations wouldn’t rebel because the changes were slow and incremental. But they had the effect of slowly ceding democratic rights to the state; the state that was now dominated by Soviet puppet leaders. It was called “Death by a thousand cuts.”
Last Sunday the U. S. Postal Service raised rates yet again. Slow and insidious price increases by Postal management that do nothing to make the Postal Service a better service or that underpin changes that would turn the Postal Service into a viable 21st century organization and business. Death by a thousand cuts.
-Mike
Welcome to BIG's Blog! Please feel free to forward this post to your friends and coworkers...and don't be afraid to leave a comment!
Sunday, January 22, 2012
BIG’s Blog: The “Words” Struck a Nerve
“So while the old players are lamenting you can’t do it the old way, nimble players are utilizing the new tools to gain advantage.”
We live in our own worlds. So we can be forgiven when we “misinterpret” people we think are talking about our world, when in fact, they are talking about something else entirely.
But even when we figure out they are not talking about our world, and take a step back, we can’t help but notice how similar the “issues” are.
It turned out that the above quote came from the head of an Internet company who was opining that the SOPA and PIPA bills currently in front of Congress dealing with protecting intellectual property and stopping online piracy actually could have the effect of infringing on freedom of speech and could hurt future Web development. The bills enjoy particularly strong support in Hollywood and the music industry.
I could have sworn it came from a nonprofit fundraising blogger describing the all too prevalent attitude among way too may senior direct mail fundraising executives.
-Mike
Welcome to BIG's Blog! Please feel free to forward this post to your friends and coworkers...and don't be afraid to leave a comment!
We live in our own worlds. So we can be forgiven when we “misinterpret” people we think are talking about our world, when in fact, they are talking about something else entirely.
But even when we figure out they are not talking about our world, and take a step back, we can’t help but notice how similar the “issues” are.
It turned out that the above quote came from the head of an Internet company who was opining that the SOPA and PIPA bills currently in front of Congress dealing with protecting intellectual property and stopping online piracy actually could have the effect of infringing on freedom of speech and could hurt future Web development. The bills enjoy particularly strong support in Hollywood and the music industry.
I could have sworn it came from a nonprofit fundraising blogger describing the all too prevalent attitude among way too may senior direct mail fundraising executives.
-Mike
Welcome to BIG's Blog! Please feel free to forward this post to your friends and coworkers...and don't be afraid to leave a comment!
Thursday, January 19, 2012
BIG’s Blog: Can You Change the World with Donor Service?
“Life is service,” said hotel magnate E. M. Statler, “and the one who progresses is the one who gives his fellow human beings a little more, a little better service.”
Service is about the entire experience. For businesses, it’s about making it easier for customers to spend money with you. Customers will be happier, you will be happier.
Service is about the entire experience. For not-for-profits, it’s about making it easier for donors to donate money to your organization. Donors will be happier, you will be happier.
Every single not-for-profit organization serves somebody. Service is ultimately the core cause of virtually every not-for-profit. Therefore, every not-for-profit should understand the word service.
Why, then, are there still not-for-profit organizations that make it either difficult or impossible to give online?
Spend waaaay more time making your online donation process easier than you do nitpicking your campaign copy!
Your organization’s concern about your donor service says waaaay more to current and potential donors than your copy.
Can you change the world with donor service? Only with happy donors.
-Mike
Welcome to BIG's Blog! Please feel free to forward this post to your friends and coworkers...and don't be afraid to leave a comment!
Service is about the entire experience. For businesses, it’s about making it easier for customers to spend money with you. Customers will be happier, you will be happier.
Service is about the entire experience. For not-for-profits, it’s about making it easier for donors to donate money to your organization. Donors will be happier, you will be happier.
Every single not-for-profit organization serves somebody. Service is ultimately the core cause of virtually every not-for-profit. Therefore, every not-for-profit should understand the word service.
Why, then, are there still not-for-profit organizations that make it either difficult or impossible to give online?
Spend waaaay more time making your online donation process easier than you do nitpicking your campaign copy!
Your organization’s concern about your donor service says waaaay more to current and potential donors than your copy.
Can you change the world with donor service? Only with happy donors.
-Mike
Welcome to BIG's Blog! Please feel free to forward this post to your friends and coworkers...and don't be afraid to leave a comment!
Tuesday, January 17, 2012
BIG’s Blog: Mobile Buying Trends Portend Mobile Giving Trends
You sense that a trend is a hot topic when there is a lot of research around it.
Some time back, I wrote about the prediction that smartphones in 2012 would soon account for over 50% of all mobile phones. Tablet (think iPad and Kindle Fire) growth is also double digit. Both smartphones and tablets are considered ‘mobile’ devices by research companies that are gauging the growing mobile use of online commerce.
Both research from Wakefield Research and IBM showed that the proportion of mobile online retail sales doubled to 11% in December of 2011 from 5.5% a year earlier. And of online consumers that had a mobile device, 38% used their mobile device to purchase a gift.
Not surprisingly, 18-34 year-olds were most likely to make a mobile purchase, and again, not surprisingly, the iPhone and the iPad drove the most retail online traffic.
John Donahoe, the CEO of eBay, recently said that gross merchandise volume from mobile devices in 2011 hit $5 billion for eBay and he expects it to hit $8 billion in 2012. That’s a 60% increase in one year!
To a fundraising industry tied to print and ink direct mail, this research is just another indication that to reach younger demographics...your next generation of donors...you must be moving online.
-Mike
Welcome to BIG's Blog! Please feel free to forward this post to your friends and coworkers...and don't be afraid to leave a comment!
Some time back, I wrote about the prediction that smartphones in 2012 would soon account for over 50% of all mobile phones. Tablet (think iPad and Kindle Fire) growth is also double digit. Both smartphones and tablets are considered ‘mobile’ devices by research companies that are gauging the growing mobile use of online commerce.
Both research from Wakefield Research and IBM showed that the proportion of mobile online retail sales doubled to 11% in December of 2011 from 5.5% a year earlier. And of online consumers that had a mobile device, 38% used their mobile device to purchase a gift.
Not surprisingly, 18-34 year-olds were most likely to make a mobile purchase, and again, not surprisingly, the iPhone and the iPad drove the most retail online traffic.
John Donahoe, the CEO of eBay, recently said that gross merchandise volume from mobile devices in 2011 hit $5 billion for eBay and he expects it to hit $8 billion in 2012. That’s a 60% increase in one year!
To a fundraising industry tied to print and ink direct mail, this research is just another indication that to reach younger demographics...your next generation of donors...you must be moving online.
-Mike
Welcome to BIG's Blog! Please feel free to forward this post to your friends and coworkers...and don't be afraid to leave a comment!
Sunday, January 15, 2012
BIG’s Blog: The Power of Habits
Which comes first, the chicken or the egg?
It’s an age-old imponderable, but also a metaphor for what perceptive fundraisers are asking today.
Most fundraisers that depend on direct mail today understand that direct mail’s effectiveness is dropping year after year. But why; and what do we do about it?
The focus turns to “new” digital media and digital communications like email.
But what if the “big story” isn’t the new media or the digital communications we think are important today? What if it’s about the devices?
We all understand today that tablets (think iPad) and mobile smartphones are increasingly where people are accessing their email, search, varied applications like Facebook, and even online news sites.
Aren’t the devices what are changing our habits? Don’t we have to pay as much or more attention to the new habits of access as we do to what we access? After all, my changing habits are what are having me cancel my print edition to the Wall Street Journal, but keep my digital access. The only time I read the print paper is the weekend edition . . . maybe.
But for the last two years I had both the print and the digital subscription. What changed? I got a new smartphone with the ability to access the WSJ app and I got the iPad that gave me the ability to access through the WSJ app or the WSJ website through the Internet. Now my habits dictate that the print edition is constantly old news and so I cancel it. The devices are moving me and everyone else to focus on digital access. The devices are changing our habits.
Changing habits drives real change.
-Mike
Welcome to BIG's Blog! Please feel free to forward this post to your friends and coworkers...and don't be afraid to leave a comment!
It’s an age-old imponderable, but also a metaphor for what perceptive fundraisers are asking today.
Most fundraisers that depend on direct mail today understand that direct mail’s effectiveness is dropping year after year. But why; and what do we do about it?
The focus turns to “new” digital media and digital communications like email.
But what if the “big story” isn’t the new media or the digital communications we think are important today? What if it’s about the devices?
We all understand today that tablets (think iPad) and mobile smartphones are increasingly where people are accessing their email, search, varied applications like Facebook, and even online news sites.
Aren’t the devices what are changing our habits? Don’t we have to pay as much or more attention to the new habits of access as we do to what we access? After all, my changing habits are what are having me cancel my print edition to the Wall Street Journal, but keep my digital access. The only time I read the print paper is the weekend edition . . . maybe.
But for the last two years I had both the print and the digital subscription. What changed? I got a new smartphone with the ability to access the WSJ app and I got the iPad that gave me the ability to access through the WSJ app or the WSJ website through the Internet. Now my habits dictate that the print edition is constantly old news and so I cancel it. The devices are moving me and everyone else to focus on digital access. The devices are changing our habits.
Changing habits drives real change.
-Mike
Welcome to BIG's Blog! Please feel free to forward this post to your friends and coworkers...and don't be afraid to leave a comment!
Thursday, January 12, 2012
BIG’s Blog: When Does It Get Serious?
Fundraising results are trickling in and we are hearing it’s a mixed bag of results for last fall and Christmas season giving. Not surprisingly, our clients are mostly reporting gains. Of course, many of our clients have been some of the most successful fundraisers over the last ten years.
Our clients’ “transformation” initiatives for which they engaged us haven’t fully kicked in, or in some cases are still in the building phase. We tell all our clients to think of the initiative as a “Decade of Transformation.”
Do we wish they would move faster? Of course; but the pace of transformation needs to be driven by the organization.
There is one womens religious community that can’t move fast enough. They understand that their opening to the world is through the Internet. And they understand that transforming their fundraising approach to "Real-Time" and "Always-on" will not only expand donations, but will also affect every other part of their community from vocations to expanding missions.
-Mike
Welcome to BIG's Blog! Please feel free to forward this post to your friends and coworkers...and don't be afraid to leave a comment!
Our clients’ “transformation” initiatives for which they engaged us haven’t fully kicked in, or in some cases are still in the building phase. We tell all our clients to think of the initiative as a “Decade of Transformation.”
Do we wish they would move faster? Of course; but the pace of transformation needs to be driven by the organization.
There is one womens religious community that can’t move fast enough. They understand that their opening to the world is through the Internet. And they understand that transforming their fundraising approach to "Real-Time" and "Always-on" will not only expand donations, but will also affect every other part of their community from vocations to expanding missions.
-Mike
Welcome to BIG's Blog! Please feel free to forward this post to your friends and coworkers...and don't be afraid to leave a comment!
Introducing BIG TV! (Retry!)
Dear Friends,
I apologize for the hard-to-read text on our first email!
I want to introduce you to Browne Innovation Group’s latest tool for communicating with you. We call it BIG TV.
Please forward this email to your associates, nonprofit fundraising peers, and friends.
Thanks for watching,
-Mike
Tuesday, January 10, 2012
BIG’s Blog: Figuring It Out – Or Not
An article in the WSJ had a call-out box that got my attention: Digital technology continues to roil all manner of once-dominant companies.
The article was about Barnes & Noble, the once-dominant book retailer that left smaller bookstores quaking in fear to a struggling giant, grasping for a plan to ensure its long-term relevance in the publishing industry.
I’m betting Barnes & Noble will figure it out. Why? Because the article goes on to tell us that they are not trying to figure it out all by themselves. In addition to engaging outside consultants, they are talking to groups and individuals far and wide. They even instituted a strategic-review process.
How does that differ from Borders Books that went out of business last year? I’ve heard that “the geniuses” that ran Borders stated over and over: they didn’t need outside help and could figure it out themselves.
Proverbs 20:18 Plans are established by counsel; by wise guidance . . .
-Mike
The article was about Barnes & Noble, the once-dominant book retailer that left smaller bookstores quaking in fear to a struggling giant, grasping for a plan to ensure its long-term relevance in the publishing industry.
I’m betting Barnes & Noble will figure it out. Why? Because the article goes on to tell us that they are not trying to figure it out all by themselves. In addition to engaging outside consultants, they are talking to groups and individuals far and wide. They even instituted a strategic-review process.
How does that differ from Borders Books that went out of business last year? I’ve heard that “the geniuses” that ran Borders stated over and over: they didn’t need outside help and could figure it out themselves.
Proverbs 20:18 Plans are established by counsel; by wise guidance . . .
-Mike
Welcome to BIG's Blog! Please feel free to forward this post to your friends and coworkers...and don't be afraid to leave a comment!
Sunday, January 8, 2012
BIG’s Blog: Disruption
This year . . . 2012 . . . is going to be a critical “decision year” for a lot of fundraising organizations and their leadership.
What’s the scariest word for people managing businesses and organizations today? No, it’s not recession, depression, unemployment or the skyrocketing cost of healthcare. Those are big problems and worries, but nothing compared to Disruption.
Disruption is an existential threat. Disruption is a term economists use to define the effect of organizations failing to reinvent themselves for the digital future.
Sector after sector of the economy has faced the “changing force” of digital disruption.
The music industry was one of the first to face it when a couple of engineers created Napster. Napster allowed people to share their music back and forth without having to buy their own album. The reaction of the music establishment was to get Napster shut down. In this battle they succeeded, but they ultimately lost the war. Today, the old model of distributing music is, if not dead, certainly dying. Remember when Best Buy had a huge area of CDs? Today, the shelves of CDs are gone and Best Buy only sells music online. And now there is Spotify.com and other music sites that are practically like the old Napster.
Why isn’t the music establishment trying to shut down Spotify.com? Because even they are seeing the explosion of new artists as the public demands the ability to get their songs online. And the big hook is free music. A new business model for the music industry is emerging and digital plus the Internet is at the heart of it.
And now disruption is coming to fundraising.
Years ago a wise person told me, “Hope is not a plan.”
Guess what? Having a website, doing email marketing or . . . the latest buzz word . . . “integrated marketing” won’t in and of themselves somehow miraculously transition your fundraising into a successful digital model.
You think that bolting on digital tools to your current fundraising organization is going to carry you to the new fundraising Promised Land?
I cannot install a brand new state-of-the-art Bose sound system in my old 1986 Ford F-150 pickup truck. The electrical system can’t handle it.
Where’s the plan?
Every month we get email and mail requests for proposals to provide comprehensive reviews and evaluations of direct mail programs. Beginning January 1st of this year, we will no longer provide that service. Perhaps a better way of saying it is; “We will no longer waste your organization’s TIME or MONEY providing what is essentially a useless service.”
The gist of these requests comes down to the following: “Our direct mail program has been declining in effectiveness for some years; we need recommendations to make it profitable again.”
Our firm arguably has more experience in direct mail marketing (read direct mail fundraising) than many consulting groups. I personally have practiced direct mail marketing for over 35 years. We could make recommendations that would tinker around the edges and improve performance. But in helping you momentarily improve your declining direct mail fundraising performance, you only postpone dealing with the real issue which is fundamentally transforming the way you think about fundraising and practice fundraising in the new digital world.
The real issue is that the digital future has arrived for fundraisers.
2012 is going to be a "critical decision" year for fundraisers.
-Mike
What’s the scariest word for people managing businesses and organizations today? No, it’s not recession, depression, unemployment or the skyrocketing cost of healthcare. Those are big problems and worries, but nothing compared to Disruption.
Disruption is an existential threat. Disruption is a term economists use to define the effect of organizations failing to reinvent themselves for the digital future.
Sector after sector of the economy has faced the “changing force” of digital disruption.
The music industry was one of the first to face it when a couple of engineers created Napster. Napster allowed people to share their music back and forth without having to buy their own album. The reaction of the music establishment was to get Napster shut down. In this battle they succeeded, but they ultimately lost the war. Today, the old model of distributing music is, if not dead, certainly dying. Remember when Best Buy had a huge area of CDs? Today, the shelves of CDs are gone and Best Buy only sells music online. And now there is Spotify.com and other music sites that are practically like the old Napster.
Why isn’t the music establishment trying to shut down Spotify.com? Because even they are seeing the explosion of new artists as the public demands the ability to get their songs online. And the big hook is free music. A new business model for the music industry is emerging and digital plus the Internet is at the heart of it.
And now disruption is coming to fundraising.
Years ago a wise person told me, “Hope is not a plan.”
Guess what? Having a website, doing email marketing or . . . the latest buzz word . . . “integrated marketing” won’t in and of themselves somehow miraculously transition your fundraising into a successful digital model.
You think that bolting on digital tools to your current fundraising organization is going to carry you to the new fundraising Promised Land?
I cannot install a brand new state-of-the-art Bose sound system in my old 1986 Ford F-150 pickup truck. The electrical system can’t handle it.
Where’s the plan?
Every month we get email and mail requests for proposals to provide comprehensive reviews and evaluations of direct mail programs. Beginning January 1st of this year, we will no longer provide that service. Perhaps a better way of saying it is; “We will no longer waste your organization’s TIME or MONEY providing what is essentially a useless service.”
The gist of these requests comes down to the following: “Our direct mail program has been declining in effectiveness for some years; we need recommendations to make it profitable again.”
Our firm arguably has more experience in direct mail marketing (read direct mail fundraising) than many consulting groups. I personally have practiced direct mail marketing for over 35 years. We could make recommendations that would tinker around the edges and improve performance. But in helping you momentarily improve your declining direct mail fundraising performance, you only postpone dealing with the real issue which is fundamentally transforming the way you think about fundraising and practice fundraising in the new digital world.
The real issue is that the digital future has arrived for fundraisers.
2012 is going to be a "critical decision" year for fundraisers.
-Mike
Welcome to BIG's Blog! Please feel free to forward this post to your friends and coworkers...and don't be afraid to leave a comment!
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