Tuesday, October 9, 2012

BIG’s Blog: Kill Your Fundraising Model Before It Kills You

Ron Ashkenas is a business consultant in strategy, but also writes articles for the Harvard Business Review. I modified his title, Kill Your Business Model Before It Kills You, to make the point that the same issues that apply to commercial businesses also apply to nonprofit fundraising.

“No business model lasts forever. The most dangerous trap that a manager can fall into is complacency.”

Ashkenas states that Peter Drucker (another famous professor and strategic consultant) reportedly once said that the biggest curse for any business was twenty years of success. Markets, environments, and technology can change so quickly that no amount of profit today guarantees success tomorrow.

Is there any leader today of a fundraising group who wouldn’t shout a big “Amen” to that statement?

In his article, Ashkenas uses three examples of organizations that were either slow or didn’t change their strategy: AOL, Kodak, and the U.S. Postal Service.

“AOL knew that dial-up subscriptions were fading years before it took action. Kodak realized that film was being replaced by digital media long before it changed its investment strategy.”

But Ashkenas saves his harshest comments for Postmaster Patrick Donahoe and the U.S. Postal Service.

“About a year ago the U.S. Postal Service ran an ad campaign warning about the dangers of email and proposed paper-mail as a safer and more reliable alternative. When I saw this ad, I thought I had accidentally switched to a comedy station. But it wasn’t a joke. This was a serious (and misguided) attempt by the U.S. Postal Service to stay in business.”

Ashkenas ends his article with a sobering warning that applies to fundraising leadership today.

“Nobody wants to be in a position of the U.S. Postal Service, trying to defend a business model that has little runway left.”

Take a hard and critical look at your fundraising business model and your results for the last five years. If it is not what your organization needs, then start looking for alternative strategic fundraising business models.


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