Thursday, May 31, 2012

BIG’s Blog: How Big is the Internet?

Most fundraising organizations that do direct mail fundraising consider one million pieces a large mailing. In fact, many groups don’t even mail one million pieces in a year. Nonetheless, we all understand that one million pieces of mail is a lot of mail.

Do we even get how large the Internet is?

Quick story:

A year ago my wife decided to get rid of a swing set we had built for our kids almost 20 years ago. We live in Lincoln, Nebraska, population 250,000. When you leave Lincoln you drive into the country, which just illustrates that Lincoln is an island of a relatively small population.

My wife decided she was just going to give away the swing set so she posted it on Craig’s List.

Within 20 minutes three people had responded. Within an hour and a half one of the people called a buddy, got a truck, came to our house and disassembled the swing set and took it away.

Swing set gone in 90 minutes from its post on Craig’s List.

Lincoln doesn’t have a large population like Washington DC, New York, Chicago, or LA. But there were at least three people looking at Craig’s List that presumably wanted a swing set at approximately the same time my wife posted the note.

I know that you understand the dynamics of direct mail; you mail… you get donations. You’re probably less clear about the dynamics of the Web to get donations.

But consider this… there are millions and millions and millions of people on the Web every second of the day. My swing set story is an example.

How many are looking for you but don’t know you are there?


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Tuesday, May 29, 2012

BIG’s Blog: The Billion-Dollar Gift to Fundraisers

A couple of weeks ago, the Internet company Facebook went public. “Going Public” is the term used to describe the process a privately-owned company goes through which allows their shareholders to sell their shares on a public stock exchange. Likewise, it allows the general public to acquire shares (ownership) in the company.

As a private company, there are not a lot of rules and regulations as ownership is somewhat limited. But when a company goes public, there are a lot of disclosures of information that the management of the company must release. Facebook was no exception.

Although there has been a lot of press about Facebook selling initial shares at $38 per share, and the price of the shares subsequently falling (as of the writing of this blog the share price was approximately $33 per share), the hubbub over the stock price misses the bigger point… at least for fundraisers.

The CEOs of companies that are going public always walk a fine line. They clearly believe in the growth prospects of their companies, but they also are aware of potential pitfalls. Mark Zuckerberg, the CEO of Facebook, is no exception. Or, is he?

In financial disclosure documents, where potential investors are interested in the prospects of growth and profits, those topics are typically what CEOs eloquently expound upon.

But Mr. Zuckerberg is decidedly different. Zuckerberg writes in the disclosures that “Facebook was not originally created to be a company. It was built to accomplish a social mission – to make the world more open and connected.”


Did you just read what I read?

The CEO of Facebook is essentially saying, “Look folks, this organization wasn’t conceived to make money but to connect people all over the world. We think we have figured out how to generate profits for investors, but you need to understand up front, profits were not the driving force behind creating Facebook.”

Okay, as a potential investor, you might want to sit back and watch the financial performance of Facebook before investing in it. But as a fundraiser… Hello??

Zuckerberg and Company have just built you a billion dollar platform to connect with people all over the world.

And it costs you how much to use Facebook?


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Monday, May 28, 2012

BIG’s Blog: The "Social" Epiphany

Today’s blog marks an “intentional” shift in focus on my part for my blogs. Of course my blogs will continue to cover nonprofit fundraising, but today marks the introduction of “the” major theme of my blogs going forward. And that major theme is the Web evolution to the “Social Web.”

Let me make this as clear as I can; the Social Web will be the salvation and the future of nonprofit fundraising.

To grasp the significance of the social web you must also understand a previous evolution in the Web. Tim O’Reilly of O’Reilly Media is commonly referred to as coining the term “Web 2.0.” And though others may have equal or more claim to originating the term, it was O’Reilly Media and MediaLive’s hosting of the first Web 2.0 conference in late 2003 that has connected the term to Tim O’Reilly. It was at that conference that John Battelle and Tim O’Reilly outlined their definition of a major evolution in use of the “Web as Platform.” Software applications were now being built on the Web as opposed to the desktop.

Essentially, Web 2.0 is a migration of Web use that breaks the old model of centralized web sites and moves the power of the Web/Internet to your computer or web accessible device.

This shift to Web 2.0 was the prelude to the Social Web. And it is the Social Web that will allow fundraisers to develop relationships… the core of all fundraising… and by extension, donations, from the millions that use the Web.

Next time, I’ll tell you about the Billion-dollar gift to fundraisers.


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Thursday, May 24, 2012

BIG’s Blog: Texting Codes

We all either have kids, grandkids, nieces, or nephews who are in their teens, twenties, and thirty-something age groups. Texting is a major form of communication with these groups.

Young texters have developed their own shorthand or acronyms for common phrases that they all use and know. So rather than type out the whole phrase, they just text the shorthand version.

Examples include:

ATM – At the moment
BTW – By the way
WAM – Wait a minute

For more involved phrases, the shorthand gets longer such as;

YGTBK – You’ve got to be kidding

Or one that I get a lot:

YYSSW – Yeah yeah, sure sure, whatever.

But did you know that our senior citizens are also getting heavy into texting, and sure enough, they too are developing their own shorthand or acronyms for common phrases in their life? And just like the youngsters, they are unique to their age group.

Examples include:

ATD – At the doctor
BTW – Bring the wheelchair
BYOT – Bring your own teeth
FWIW – Forgot where I was
GGPBL – Gotta go, pacemaker battery low
LMDO – Laughing my dentures out

And my all-time favorite: ROFLACGU – Rolling on the floor laughing and can’t get up.

Have a great Memorial Day weekend!


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Tuesday, May 22, 2012

BIG’s Blog: Perspective

At some point you are going to decide… or make a determination… that you need a new fundraising plan.

There is a large group of people… maybe you are one of them… that thinks “anyone” can do fundraising or “anyone” can do marketing. Is that you?

Setting aside fundraising for a second; do you really think that anyone can effectively market your organization? If you are right - and I am not saying that you are - then why do all those large commercial companies – for example McDonald’s, Boeing, AT&T and Disney – hire outside advertising and marketing companies? After all, they have way more in-house marketing staff than your fundraising group. Aren’t the people on their staff professional marketers? Absolutely. Then why do they hire outside expertise?

The answer is that in most cases they want an outside perspective. Any group… repeat… any group can become myopic or shortsighted. Every organization populated by humans needs an outside or a bigger perspective from time to time. That is why the largest and most successful organizations bring in agencies and consultants from time to time to give them a different perspective.

For nonprofit fundraisers – this is one of those times.

The changes in how we are all communicating, driven by technology, are reshaping how we all receive and deal with information. And the pace of this change is moving faster and faster.

This means that the offline media your organization uses to communicate is quickly losing out to alternative forms of online communication. We all know someone over sixty, or even seventy, who started using a computer or iPad and now spends more and more time communicating with others on that device. This is happening in large-scale and at an increasingly rapid pace.

Are you going to wake up tomorrow and find nobody is reading your direct mail fundraising appeals? Of course not. But if you think your direct mail appeals will be generating donations at the level they are today five years from now… you are NOT facing the reality of the situation.

For nonprofit fundraisers who are overly dependent on direct mail for a significant portion of their donation income… this is becoming critical.

What is your “Plan B”?

Many nonprofit organizations have engaged firms like Browne Innovation Group. You do have options. What you don’t have is a free pass. This is not the time to freeze up and do nothing.

You need the perspective that comes from thinking outside your organization.

I use the example that we are like ants crawling across the famous painting of the Mona Lisa. We are all so close to the work that we have no perspective.


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Sunday, May 20, 2012

BIG’s Blog: The Era of the Passive Consumer (Donor) Is Over

Anna Bager works for the Interactive Advertising Bureau, a nonprofit association, and writes periodic articles for ClickZ on technology and consumer trends. The focus of a recent article was about changing consumer behavior driven by behavioral changes in how we (all of us!) use technology.

“Whether it is shopping in a store, commuting to work, or sitting on the sofa watching TV, the consumer is not passive anymore. We have changed our media consumption behavior along the same lines as we have changed our way of working – finding ourselves not only working at the office, but on the road, at home, or any location for that matter. As individuals we are getting more and more used to having access to content wherever we are and whenever we want it.”

I have written before about this growing attitude: “As individuals we are getting more and more used to having access to content wherever and whenever we want it.” But this “attitude” also is changing our behaviors in how we make decisions. And this decision making also applies to who we support.

Technology and our increasingly busy lives means our decision behavior is changing: Quick Access, Quick Message (what your organization is doing, who you are helping, and the outcomes), and Quick Decisions.

Competition has long since arrived in the nonprofit sector. There are more and more nonprofit organizations chasing the same dollars. Established organizations should have the advantage by virtue of their longevity, but only if they are online and sharing the results of their work.

Having choices – as in media consumption for example – forces us to make decisions. And decisions mean we “quickly” scrutinize options and “quickly” decide. This applies to what nonprofits are putting online about themselves.

Your parents and grandparents may have been institutional givers. That is, they gave to institutions on the basis of who they are. But starting with the Baby Boomers, this institutional giving default mode begins to fade away.

Scrutinizing the work and outcomes of the organization by potential donors is becoming more and more the norm. They want to know what their dollars are doing. Today’s donor sees their support as an investment in your organization’s work, not as a gift to the organization.

But there is a huge “blind spot” in many nonprofits – especially faith-based organizations – in regard to understanding this. So much of what they put online is “about them” and only secondarily is “the work that they do.” And even more important, there is little, if any, information about “the results of their work (outcomes).”  

I have no doubt that your organization is doing great work. But the criteria for donor decisions are quickly changing. It’s not about “who you are” – there are a lot of great organizations out there today. It’s about “what you are doing” (your mission/ministry) and “the results of that work.”

You must be online and optimized for mobile devices, you must be able to quickly and compellingly communicate the work you are doing, and you must quickly show the difference your organization is making.


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Thursday, May 17, 2012

BIG’s Blog: Circling the Drain

We’ve all seen a bathtub drain; the little tornado in the water that forms right at the end as the final water is about to run out.

That’s a good metaphor for what’s happening in a lot of areas today, but hopefully not in fundraising.

Jeremy Lockhorn writes a column in ClickZ, an online publication about technology and media. Last week he wrote about the “mood” and comments of network executives amid the most recent report of declining TV ratings. “Amid rating drops as high as 20 percent, some comments from network executives might even be described as bordering on “panic.”

Although there is a wide variety of reasons for the sudden drop, clearly the underlying reason, according to Mr. Lockhorn, is an underlying theme that has been building for years: the way people watch TV is changing dramatically.

Lockhorn says, “People are sending a message to Hollywood (and the networks including cable)… They’ve been empowered with choice and control by digital technologies like the DVR and increasingly impressive libraries of on-demand content that often have zero advertising… They just want what they want, when they want it, and on the device of their choosing.”

So what does this have to do with fundraising?

The “they” Jeremy Lockhorn writes about isn’t someone else; it’s us. Pay attention to: “They just want what they want, when they want it, and on the device of their choosing.”

Is your fundraising organization set up to allow people to connect with you whenever they choose and on whatever device they choose? Or, are you still dictating the channels and limiting the hours?

We are quickly becoming an interconnected networked society with a 21st century consumer ethos. And if your organization is just set up to produce direct mail, process checks, take donations on your website and answer donor service questions from 8:00 am to 5:00 pm, are you really open to the “what they want, when they want it” ethos of today’s consumer/donor?

You work during the day – right? If you have a problem with your cell phone, chances are you’re going to call after work – right? You call at night because it is convenient for you – right? You expect customer service to be there when you call at 7:30 – right?

What if I am one of your donors with a question but I also work during the day. When am I going to call your office? Is there someone to answer my question at 7:30 in the evening?

If you said “yes,” congratulations.
We live in a consumer society. Our changing behaviors of watching TV or what we expect from commercial vendors colors our expectations of even what we expect from nonprofits we donate to.

You are your donor. Your expectations are your donor’s expectations. The key question then is: “Would you be happy with your donor service?”


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Tuesday, May 15, 2012

BIG’s Blog: One Size Does Not Fit All

I saw a presentation the other day that illustrated three distinct groups of workers in today’s marketplace. But they also represent three distinct groups that you need to be marketing to.

The first was a man in suit and tie about age 60. In the picture with him were the business tools that he was used to using, which were a computer and cell phone, as well as Microsoft Office software.

The second person was about 45 years old and was wearing an oxford button down shirt without a tie. In his picture was a laptop and smartphone. Around him were logos for software like Power Point and database tools.

The third person was about 35 years old and was wearing a polo shirt and khakis. Around her was a tablet like an iPad and an iPhone and a myriad of logos for both online platforms like Facebook and Twitter, but also other online programs and apps of all kinds.

These three people represent three distinct age groups within our working population today. But they also bring to their jobs different attitudes, expectations, and levels of competence and comfort with online tools and software applications, which are a part of who they are as distinct generations. But to nonprofit fundraisers they also represent the challenge of communicating their message across different technologies and in different styles.  

Most nonprofit fundraising groups are comfortable targeting and communicating with the 60 year old person in the suit and tie. He represents the audience that most closely looks like the leadership in fundraising today and also is behaviorally attuned to the way most fundraisers communicate today. Fundraisers have moved online with a website and the use of email to communicate with their supporters, along with direct mail. Most of this age group is still institutionally oriented so they give because they are familiar with the organization. This is especially true for faith-based groups.

The 45 year old person represents a challenge to today’s fundraisers. This person represents a group that may still receive mail but is not prone to respond to it; especially acquisition mailings. And since direct mail tends to be the major new-donor-solicitation vehicle, it shouldn’t be a surprise that fundraisers have so few of this age cohort as donors.

The 35 year old is representative of the generations that do virtually all their financial activities online – including donations – as well as many of their other life activities including significant communications. Even what I would consider some of the best faith-based and secular fundraising organizations are not coming close to connecting with this cohort the way some commercial organizations are. This group is not institutionally oriented in the least but will still give to causes. And more important… they are connected online and in social networks.

25 years ago, fundraisers could communicate to all generational cohorts in pretty much the same medias with pretty much the same message. Not anymore.

Okay, so that is the bad news. The good news is that the cost of communication has gone way down. But you have to be intentional in communicating with different generational cohorts today in their media and in their style if you want to connect with them.

One size does not fit all.

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Sunday, May 13, 2012

BIG’s Blog: Not Knowing

A recent story in Philanthropy Today, Disabled Veterans Group Loses Money on Direct Mail, illustrates what I find in too many fundraising groups. It isn’t that the finance people are not accounting for the revenue and expenses, but rather, there is very little cost analysis going on.

Do you really know how much money . . . if any . . . your direct mail programs are making?

If direct mail responses are falling and the costs to produce your direct mail are going up, this indicates that margins are collapsing and hence profitability is declining.

This isn’t your direct mail vendor’s fault. Frankly speaking, it also isn’t your direct mail marketing team’s fault either. Direct mail is in a long term decline.

In years gone by, with good direct mail response rates and lower costs to mail, direct mail program financial analysis was not such a pressing issue, although good financial analysis is always important. But the situation today is clearly different.

As the Disabled Veterans Group is finding, if you don’t have good financial analysis, you can be losing money and not even know it.

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Thursday, May 10, 2012

BIG’s Blog: Three Part Series on the Future of Fundraising – Part Three

The First Thing Fundraisers Must Do To Make The Shift To The Internet

To make the shift to the Internet effectively, you have to have access and you have to be using social networks.

You can’t understand the new Internet-based world I write about in my blogs if you are not a part of it. Although most of you use computers to access social networks such as Facebook, fewer may be using smartphones. A smartphone is a handheld cell phone with Internet connection. The two main operating systems are Android, which is available from a variety of manufacturers, and Apple’s iPhone. Also, it is mandatory that you can download apps to your smartphone; especially social networking apps.

Unless you are actually using social networks via a mobile device – which means you are using apps – you just don’t understand what the social networks mean to your organization.

From Beth Kanter and Allison Fine’s book The Networked Nonprofit, they tell the story of Ellen Miller, the co-founder of the Sunlight Foundation, who, as a forty-year veteran of the nonprofit world, had her own epiphany about social networks and what it would mean to her organization.

To succeed in this new role, Ellen had to change her thinking about the way that she worked and the role of her organization. She described her shift this way: “It was the classic lightbulb going on. I realized that this new medium was a way to engage people at far less cost and more effectively. But it meant that I had to give up the control that I had used in running the organizations in the past. I had to be willing to be open and recognize that the old ways of working [were] not as effective as I would have liked them to be” . . .

You have to use the tools if you are going to commit to shifting to the Internet. You cannot delegate this.


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Tuesday, May 8, 2012

BIG’s Blog: Three Part Series on the Future of Fundraising – Part Two

What Is The Alternative For Fundraisers To Direct Mail?

In the second installment of this series, the worm turns. Up to this point there has been the negative overhang of talking about declining direct mail.

This is where we can all turn positive!

I firmly believe that nonprofit fundraisers are at the cusp of a new Golden Age in fundraising. Will it “look” and “feel” like the fundraising world you all grew up in? The answer is no.

But… and this is a big BUT… it will be so much more productive in generating donations and connecting and engaging all of the constituents of your organization; from volunteers, to those you help and serve, to employees, as well as donors.

The Internet is changing our world. And the Internet changes everything. The Internet is a powerful platform that connects people. You may know this intellectually because you use email, Facebook, or the myriad other Internet-based services, but are you really grasping the reality of being wired to everyone on the planet?

Do you think I am being “over the top?” Well, there are about 7 billion people in the world. Facebook will shortly have 1 billion users and it’s only 9 years old as a company. How old is your organization? One billion down and six billion to go; and that’s just Facebook.

If you can reach everybody on the planet… and they can reach you… in real-time…what does that mean?

This is not science fiction. This isn’t coming sometime in the future. THIS IS NOW!

Right now, maybe your head is spinning. Maybe you’re worried you don’t how to do this… what it looks like…what it means for YOU.

If that is what you are worried about… congratulations… you’ve just made the leap from the old analog print-and-ink audience-based world to the Real-time, Always-on Internet world.

Now all you have to do is start learning what you don’t know . . . yet.

Remember when you got your first computer? Remember when you first tried to figure out Microsoft Outlook or some other computer program? Back then, you didn’t know what you didn’t know. And today you DO know those programs and many more besides. So tomorrow, you will know what you don’t know today.

In our final installment, I will address The First Thing Fundraisers Must Do To Make the Shift To The Internet


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Sunday, May 6, 2012

BIG’s Blog: Three Part Series on the Future of Fundraising – Part One

Why Postal Mail Is Failing

It is my job to talk to nonprofit fundraising organizations that use direct mail as a significant part of their fundraising mix. Over the last year, I have probably talked to close to 100 organizations, and they run the spectrum of small, medium and large.

According to my records, this is how it breaks out:  About 40% are down again in topline revenue over their previous year. And their previous year was down from the year before. Their last good year was 2005.

Another 40% are even on their topline revenue, but because their margins are tighter, they are netting less revenue. And interestingly, their last good year was 2005.

20% are still growing their topline. But, like the other two groups, their margins are collapsing and their net revenue has been shrinking. And you guessed it, they look back on 2005 as their last good year.

No doubt your organization falls into one of those three groups. And if you somehow believe your organization is different, you need to have a serious conversation with your accountant, controller, or CPA. Drill into the numbers for the last four years.

But here is the most important thing you need to hear: “It’s not your fault.”

Way too many direct mail fundraisers think it is somehow their fault that the numbers are declining. You and your team are probably excellent direct marketing professionals. The problem is that the world has shifted away from analog media of which paper-and-ink direct mail is a part. For a lot of reasons we will share later, direct mail is in a cyclical terminal decline. Ask yourself, “What could reverse this trend?” Unfortunately, there is nothing that will.

Your direct mail fundraising group has no control over whether the U.S. Postal Service stays in business or goes out of business or changes the way they do business or raises rates. I personally believe that the Post Office will continue in business for the next ten years. But just because the Post Office stays in business doesn’t mean that your direct mail programs will generate net dollars to your organization.

The print and ink world of direct mail is scalable. This means that the more mail you produce, the lower the cost per unit. This is called the economies of scale. But as scale (volume) shrinks, the economies of scale begin to work against you. If today your organization is profitably mailing one million pieces of mail and next year you can only mail 700,000 pieces profitably, the cost per piece goes up. The postal service sees their volume declining and as a monopoly they raise rates. This is a cycle that keeps going the wrong direction until you cannot mail any program profitably.

But what are the drivers that are keeping you from mailing more pieces of mail besides costs?

There are two major drivers: 1) Competition for direct mail and 2) Shifts in societal communication behavior.

For 200+ years the U.S. Postal Service had a monopoly on the distribution of written personal and business communication. The Internet changed that, or, more specifically, email changed that. And what is the cost of email? It was only a matter of time before the print and ink distribution platform of mail was supplanted by electronic email. And where is innovation going on? That’s right, in the Internet-based world.

The second driver was really a consequence of the first. As the accessibility of electronic (digital) communications grew, people’s behavior changed. And today, virtually all generational cohorts are using less and less postal mail.

What could change theses trends? Nothing.

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Thursday, May 3, 2012

BIG’s Blog: I Got It Wrong

Sometimes when we are researching a piece of information we get the details wrong and just plain blow it. It’s time to fess up!

Such was the case in my April 12th blog post entitled “Where’s The Action?”

In that blog I wanted to make the point to mature nonprofit fundraising charity – primarily faith-based – organizations that have been in existence and serving the needs of people for 70, 80, 90, and 100+ years (and have been doing fundraising for at least that long) that “maybe” they are in need of a radical rethink of their fundraising strategy if they are not keeping up with similar organizations.


Because other charities that are 50+ years old… and here I mentioned Heifer International being 68 years old… are raising significantly more in donations than your organization. In Heifer International’s case I said they were raising $10 million in donations annually.

How old is your organization and how long have you been fundraising? Most of my blog readership consists of older, established charities that have been raising funds for 50+ years and many for much longer. And here is Heifer International - according to me - raising $10 million dollars a year.

How long has your organization been fundraising and how much are you raising?

So my point is, why is your fundraising organization only raising a fraction of the donations of Heifer International when many of your organizations are as old or older than Heifer International?

I mean, $10 million is a lot of donations…right?

Turns out I was wrong about Heifer International raising $10 million dollars a year in donations.

Allison Stephens, the Public Relations Manager for Heifer International sent me a note thanking me for mentioning Heifer International in my blog, but making the point that I got the annual donation amount wrong.

It turns out that Heifer International, founded in 1944, raises over one hundred million dollars ($100 million) in annual donations a year!

Is your fundraising organization setting the bar too low? Or, have you stalled with your current fundraising strategy and are in serious need of rethinking your fundraising strategy?

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Tuesday, May 1, 2012

BIG’s Blog: The Store Is Still There!

I live near Omaha, Nebraska. One of the major intersections is 72nd and Dodge Street. Near that corner is a Borders book superstore.

Funny thing, it’s there but it’s not there.

All the action with Borders happened in 2011. In February, they sought bankruptcy protection to reorganize, but by July it was obvious that even closing most of their stores couldn’t keep them afloat . . . so they changed their bankruptcy to liquidation. By last December, Borders was gone. Only their store fronts remained.

It’s old news and ironic that Borders was put out of business by the innovation of Web-based retailing as practiced by when it was the innovation of book superstores like Borders that put many mom & pop small book stores out of business in the 90’s and 2000’s. Remember You’ve Got Mail that starred Meg Ryan and Tom Hanks? Hanks’ character owned the book superstore that sure looked like Borders.

Who’s next?  How about the big box electronic retailer Best Buy?

Circuit City and CompUSA are already gone. Again, this is moving so fast that I still see their empty store fronts. Retail analysts are saying that unless Best Buy changes its business model to compete with Web-based retailers like, it will follow Circuit City and CompUSA into bankruptcy liquidation.

What’s the common thread? The Web.

I do not want to see empty offices of nonprofit organizations the way I now see Borders, Circuit City et al.

What is your strategy for growing donations using the Web? Notice I didn’t ask, “What Web-based tools or programs are you using?” Just like Form follows Function in architecture, so too, Tactics follow Strategy in fundraising. Without determining the function of a building, how would you know what form it would take? Without determining the strategy of your Web-based fundraising, how would you know what tactics (Web-based or other) to employ?

Borders and Circuit City are history because they didn’t develop a Web-based strategy. Best Buy may yet survive if they develop a strategy that incorporates the Web.

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