Sunday, June 12, 2011

BIG’s Blog: Is Your Fund Raising Wobbly?

Your fund raising model is wobbly if you’re using a lot of direct mail.

A fund raising model is similar to a business model in the commercial world. A business model is defined as: management's operating assumptions of what a customer wants, how they want it, how the organization can organize to best meet those needs and get paid for it.

An example: In the late 1990s and early 2000s, newspaper business models took the twin hits of first, alternative news services online and second, losing advertising. The newspaper business model’s value proposition is that they delivered news that readers (people) wanted to read. By bringing readers to the newspaper’s pages, they could also bring advertisers to the pages. The advertisers paid the newspapers to be in front of their readers. As the readers and subscribers declined, the newspaper business model became wobbly as advertisers either left the pages or demanded lower rates for their advertising.

Today’s newspapers have moved online even while keeping their print editions. And though the definition of a newspaper may change as some newspapers completely drop print editions, they are doing what it takes to remain in business by remaining relevant to their readers even as their operations and business models evolve.

Direct mail fund raisers, though feeling the squeeze of postal increases, production increases and declining response rates, are still generating excess revenue. It’s not broken yet; it’s just wobbly.

But, just like the newspapers, this is absolutely the right time to be looking at alternative fund raising models. It is important to look at alternatives while you still have excess revenue from your direct mail program. Don’t wait until your direct mail program is irretrievably broken; take heed that it is wobbly and start looking at alternative fund raising models now!


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