Wednesday, February 6, 2013

BIG’s Blog: Eating Your Future

There are two upstart groups in the world of charitable nonprofit fundraising today that are growing their fundraising and could eat your future. The first group is the newcomer nonprofits and their fundraising organizations that literally are starting from scratch but are tech savvy and hungry. The second group is the older, established organizations who have either had a “wake up call” or an “epiphany” in finally figuring out that what they are doing isn’t working anymore.

Those two groups represent probably less than 5% of all nonprofit charitable organizations.

What about the other 95%?

Well, let’s talk about the 95% by contrasting them with the 5%, and let’s start with a long-established and very large organization that had a major wake up call; the American Red Cross.

In 2005 the American Red Cross was wholly unprepared for reacting to a major national disaster in the Internet age. The Red Cross fundraising organization was caught flat-footed in 2005 when Hurricane Katrina ravaged the Gulf Coast and New Orleans. America opened its wallet but the Red Cross could not keep up. Many people couldn’t donate online, they didn’t receipt donors, and months afterwards they could not account for the funds or show where the funds went. Transparency was a disaster.

But what was the reaction of Red Cross leadership? Fix it!

By the time of the earthquake in Haiti in 2010, the recent flooding in the northeast in 2011 and Hurricane Sandy this past October, Red Cross systems, online capabilities, communications and reporting transparency were superlative.

The other group, the newcomers, are also making huge headway. They have no legacy methods of fundraising or built-in constituencies both inside and outside the fundraising organizations, so they go with what they can afford and that means online. Apparently nobody told them they can’t grow revenue year-over-year, and most have been rapidly growing revenue because they are online competing for donors with other young start-up nonprofits.

So what about the 95%?

Well, I can only hope that you experience a “wake up call” or “epiphany” because if you don’t, the picture isn’t pretty. And the medium size charitable organizations that have been overly dependent on direct mail appeals will get hit the hardest. The big guys like the American Red Cross will just get better and better and the new startup fundraising groups who are young, hungry and tech savvy will just keep growing.

So what should you do?

Seth Godin, the marketing and organizational thinker, has a suggestion: “If you are serious about building a new sort of asset, or experiencing the cutting edge of technology, or rebuilding the way you grow, the first way to demonstrate that seriousness is to put your heavy hitters in charge of it, while refusing to pay attention at all to the people or the metrics of the old thing. Easier to say than to do, but consider how the upstarts that are eating your future are allocating their time and their talent.”

And we should add a third group for you to worry about. That group would be fundraising organizations - just like yours - that are already moving to transform their fundraising.  


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