Well the new economy has pretty much dried up the free flow of money. In many cases folks are more concerned about their mortgages than tax shelters.
With daily twists in the market, new challenges crop up both in business as well as personal growth. Much venture capital has dried up, earnings reports are down and everyone knows someone whose life plans have been stalled or thrown off course by layoffs and disappearing options.
While many old challenges still affect non-profits, the new economy has boosted the need to stay competitive, including the non-profit version of customer relationship management, donor relationship management, or DRM.
The business approach for some of the more successful non-profits has always been grass roots volunteerism and appeals. The products they offer beyond incentives like tote bags and coffee mugs have mostly been intangible - satisfaction, tax write offs and the knowledge that they have helped better the world in some way, something much more difficult to sell than a computer, car or set of dishes.
Past success may have depended entirely on event marketing, direct mail or telemarketing instead of a balanced marketing plan. Not all of these organizations have maximized the potential of corporate appeals, planned giving. In order to grow, a non-profit must react to the donor’s needs and support the donor’s preferences for contact frequency, past donations and volunteer decisions.
As communication channels and options grow more sophisticated, so must the approach of the non-profit change with the times. An email appeal or acknowledgement can be less expensive than a letter, an electronic debit for donations may be less costly to track and process than checks and cash.
When looking at a non-profit organization that has grown their donation base into the multi-million dollar range, assumptions may be that there are basic business building blocks and infrastructure in place. This may not be true. Grass roots appeals may have led to low cost operations, groupings of many small chapters, independently working and growing. Key personnel may wear many hats and thus cannot lend the appropriate attention to donor cultivation, corporate appeals and donor retention.
This may not be the most effective business model, or the most profitable approach but we are talking about organizations that have grown under the radar and used their limited resources wisely. The question is not the last step but the next steps to implement or maintain DRM.
A successful operation built on grass roots appeals and volunteerism may not have an IT infrastructure to support email appeals and acknowledgements, website contributions and interactive volunteer scheduling systems. There may not be business rules in place and a hierarchy standard from chapter to chapter.
Resources are better spent when organized. Even the most staunch organization supporter will not appreciate receiving three calls about the same event or four copies of the same appeal letter.
The chapters, the pieces that support the whole may conduct fundraising management as simply as keeping note cards in a file or as sophisticated as a bricks and clicks mega-corporation. Tools that meet the sophisticated needs of a northern California chapter may be too expensive and the functions offered might be too overwhelming for the smaller branches located in rural or less populous areas.
Today, non-profits fight for their share of dollars coming in and out. The dollars and pro bono contributions from Silicon Valley will likely start to dry up in 2001, so how can a non-profit survive, much less grow, and grow effectively?
Review the Old Rules
The standard business rules apply that may not have been worked out by the grass roots organization – streamline communications, standardize training and operations, establish business rules based around the tactics that have worked best. Share the best practices and make them standard. Share and communicate regularly what works and what doesn’t.
In other words, make sure the basic building blocks of success are in place before tossing technology solutions into the mix.
Technology can be the most confusing part. Just like any small business wanting to grow, costs and benefits of technology need to be established. What are the basic needs? What do we need vs. want? Can the costs be amortized or subsidized by donations?
Should a non-profit insource or outsource IT functions? Is there a centralized database or data warehouse that technology can be built around?
Can the non-profit stay ahead of the technology curve without diverting funds from their primary cause?
There are over 60 companies offering more than 100 software solutions for managing combinations of fundraising and memberships, including marketing and contact management, volunteer scheduling, auctions, events and of course accounting. Just like the non-profit industry, these solutions range from grass roots free-packages to multi million dollar enterprise wide management solutions.
Where does all of this fit into the new economy?
In looking to the new millennium, business can change on a dime and so must the non-profit follow suit. With technology and software growing at an incredible pace, any commitment must be carefully considered. Any company can develop from a small package to an industry leader in a matter of months. Likewise, industry-leading software can become cumbersome and outmoded quickly.
Choices have become harder and come more quickly, with many more options and features. Managing the cause, the donor and the means of continuing is a complex and often daunting task. The challenge today is not only in how one earns their money, but how one spends it. This too applies to the non-profit sector.
And most importantly, just like in the for-profit world, it is easier to keep a donor than to gain
a new one.