Wednesday, June 4, 2014

BIG’s Blog: What is the alternative?

What is the alternative to not donating to your organization?

Silly question, right?

The alternative to not donating to your organization is to donate to another organization, right?

But how about the alternative of not donating to any organization?

Or, how about this … never ever donating?

Professionals in philanthropy tell us that the United States is stuck at about 2% of gross domestic product (GDP) going to charitable and other philanthropic causes (north of $320 billion a year). And we have been stuck at that same percentage for over 20 years. This means that as more nonprofit organizations come on the scene, we just divide the money pie up in smaller and smaller slices. Kind of makes it hard to grow doesn't it?

So what is the problem? Why can’t we break above 2%?

The philanthropy professional class’ answer is that we just need to “give more.” But that just lets them off the hook, especially those in fundraising. People in philanthropy use examples like, “If everybody gave up a morning coffee for a year it would mean an additional $220 billion to charities.” Like giving up a coffee is going to happen!

But … as usual … they are missing the bigger point, which is that too few people give.

The “audience” of people who give to charitable or philanthropic causes has been defined by how nonprofit organizations connected with them. Meaning that if you missed the message, it hit you at the wrong time, or it “wasn’t your thing,” you didn’t give. And today that is the real number that is stagnant.

The “audience” for giving has been defined by how charities communicated and marketed themselves.

But the good news is that the "audience" paradigm is fading as the new "Internet" paradigm is essentially taking over. And this offers the opportunity to start growing again.

What is the audience paradigm and what is the Internet paradigm?

The audience paradigm is what we have all grown up with. This was the world of scarcity. You only had a few TV channels, a few radio stations, and maybe, at most, two newspapers in your town. In direct mail, it was the sum total of the limited lists available for you to rent. All the media were owned by a few (scarcity) so you paid dearly for the privilege of using a media. And of course that is where the eyes and ears were. And it worked ... until it didn't.

The "audience" paradigm isn't working well today, is it?

And why is that?

The "Internet" paradigm is taking over.

The Internet destroyed traditional media monopolies. Local print newspapers, print magazines, television networks . . . and twenty years ago, would you have imagined that the U.S. Postal Service might go out of business? All brought about by the invention of the Internet… hence the Internet paradigm.

We all understand the concept of a media-based audience. An audience is a set number (readers, viewers, number of names on a mailing list, etc.).

With the Internet, although it is true that at any single moment in time, theoretically, there are X number of people on the Internet, as you expand that single moment in time, the number of people on the Internet becomes the total number of people who can connect to the Internet, which is about 2 billion today. That's pretty close to infinite isn't it? And that number keeps growing.

Still isn’t clear? Okay, look at it this way. If you print and mail 10,000 newsletters and mail them, your audience for that newsletter is 10,000. But when you put up a Website, even if you never update it (which of course would be stupid), what is the size of your audience? Right! The number is essentially all the people connected to the Internet … essentially infinite.  

So the Internet paradigm is destroying the whole limitation idea of “audience.”

So as the audience paradigm begins to decline in effectiveness, since virtually everyone has moved to the Internet, doesn’t it become obvious that your future is online?

But being successful on the Internet doesn’t mean you use the same "push" message marketing you used in advertising during the audience-based scarcity of the media era. In fact, using marketing or advertising as you have used it in the audience paradigm isn't going to work. New paradigm ... new approach.

But the really good news is that the Internet paradigm can grow and scale beyond anything we have seen using the audience paradigm.

You do want to grow don't you?


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