Imagine yourself gift shopping for a family member. It’s always fun to get people something we want them to have, but typically the best gifts are aligned with the wants and needs of the recipient; not the gift giver.
Looking at things from the business and sales side, a purchase is a purchase and revenue is revenue. So whoever ends up using the product or service isn’t all that important. However from a marketing standpoint, this gifting scenario raises an interesting question: What type of brand messaging will influence the purchase decisions of a customer who isn’t also the end user?
Luckily for most commercial brands, this is a seasonal challenge aimed at boosting holiday sales. However for a donation-based charity or nonprofit, this challenge is business as usual. They are looking for donors to contribute money even though the donors themselves will not directly receive a product or service in return. They might receive a unique experience or recognition, but they likely won’t see or experience the direct impact of their contribution.
So, how can charities motivate donors to contribute to their cause?
We often see charities looking to influence donor decisions through emotional appeal; highlighting a specific cause and then illustrating how donations will help achieve resolutions.
For charities looking to make a continued, sustainable impact on their cause, the ideal donor would be active throughout an extended period of time, year over year, to ensure long-term projects maintain the funding they need.
At a certain point we can see a charity as a service provider whose value proposition to the donor is intangible and difficult to quantify. If a donor is uncertain of the impact made by their contributions, they have the option to shift support to another organization or another cause; similar to a brand losing customers to a competitor.
A successful charity will seek to establish loyalty among its donor group by building strong individual relationships, as does a successful commercial brand. The alternative of maintaining a consistent flow of new, one-time donors can be a costly and time consuming endeavor.
From an organizational standpoint, how can a charity best communicate the value of contributions back to its donors in a way that motivates and inspires continued financial support?
This is where data, analytics and key metrics become the difference maker. There are few better ways to quantify overall impact and intangible value than using numbers people can see and understand.
Consider two hypothetical charities, both focused on providing fresh water to poverty stricken villages around the world:
Charity-1 works tirelessly to grow their global impact and evenly distributes funding to its different project sites. They send a “thank you” letter after donations are made which includes on-site project pictures and generally states how each donation helps provide water for those in need.
Charity-2 also works tirelessly to grow their global impact, however they employ a detailed data analytics platform tracking metrics such as weekly donation amounts, fresh water distribution distance in miles and total gallons pumped at each location. Not only does this help more accurately distribute funding on a need-by-need basis, they share with donors the statistical support illustrating the impact of their contributions. For example, “Thanks to your generosity, last month’s donation count increased by 15% and as a result over 1,000 additional gallons of water were pumped on top of the area’s average. In fact, the increase in funding equipped one project site with a truck now capable of delivering fresh water to villages up to 10 miles away from the source.”
Both of these hypothetical charities are working toward the same goal; providing fresh water for everyone everywhere. The difference is Charity-2 takes a focused, strategic approach to managing their in-going and outgoing activity. By tracking valuable data metrics, the resulting analytics can be applied to resource allocation, individual project valuation, and fundraising or donor loyalty strategies; thus improving the overall organization’s efficiency and productivity.
As of today, advancements in technology have already enabled charities and nonprofits to accurately track and measure their efforts from the ground to the cloud in support of further maximizing value and efficiency.
For a real-world example of how the nonprofit Charity: Water is using data to grow and improve its global impact, READ MORE HERE.
For more information on how nonprofits, large and small, can benefit from data-driven insights – give us a shout.
For over 30 years we’ve held philanthropy and community impact as core company values. Regardless of the cause, we want to help people who help people.