The state of not-for-profit marketing

Experts weigh in on how marketers can curb industry-wide declines in charitable giving.

Charities

Last week, online fundraising platform CanadaHelps released its second annual “The Giving Report” exploring the state of the Canadian charitable sector. For those responsible for driving donations at Canadian charitable organizations, the outlook was not favourable.

Giving is on a decline across all age groups. Only 20.4% of Canadians donated in 2015, down from the 24.6% of them who gave in 2006. Over the same period, the average annual donation per Canadian decreased from $368 to $346.

The report explores these growing “giving gaps” and how larger demographic shifts are creating an “impending funding crisis for Canadian charities.” Strategy spoke with experts in the space about what organizations can be doing to buck the trend and drive donations in an increasingly competitive space.

Building stronger brands

Neil GallaifordNeil Gallaiford (pictured right), CEO of Toronto’s Stephen Thomas, an agency focused exclusively on the non-profit sector, says it helps to start by looking at the organizations that are growing in the face of these challenges, including SickKids, Princess Margaret Cancer Foundation, Doctors Without Borders and UNICEF Canada.

These are just some examples of the groups that he says have developed strong brands as a result of investing in marketing. “It’s no longer enough to just do fundraising,” says Gallaiford. “You need to support your brand in the marketplace.”

Shelley MayerWith its award-winning “VS” platform, he says SickKids has essentially behaved like a consumer brand. It has been able to drive donations by investing in a brand that “serves as an umbrella to everything that they do.”

Shelley Mayer (left), founder and president of Ramp Communications, another agency focused on the charitable (or “social profit”) space, agrees. She says SickKids’ success can be traced back to its ability to leverage important human stories in order to drive donations. The reason is that awareness remains the biggest impediment to fundraising, especially for small charities.

Finding new channels

According to the report, Canadians aged 55-plus collectively donated $6.4 billion to charities in 2015, almost double the $3.5 billion donated by Canadians aged 25 to 54. Gifts from Canadians aged 45 to 54 saw the largest decline in giving, falling 6.4%. Looking ahead, that could lead to a significant “giving gap.”

Brady HambletonIn response, organizations should be looking to build out their digital capabilities, says Mayer, which is something many smaller charities lack. Growing their online presence could help them reach new audiences and drive greater awareness.

Brady Hambleton (right), VP of marketing and analytics for Children’s Miracle Network in Canada and vice-chair of the Canadian Marketing Association’s Not-for-Profit Council, notes that these new channels have allowed organizations to be “extremely smart and strategic with [their] marketing mix,” moving to strategies that are more targeted and personalized, while saving millions in annual media spend.

Gallaiford says some of his clients have had success with “two-step acquisition,” running social campaigns that amount to “hand-raising types of advertisements.” Asking people online to indicate if they support a cause can help organizations gauge the interest of potential donors for future targeting. At the same time, it can help gather contact information that can later be used in follow-up calls or other communications.

Josh McAllisterHowever, for reasons that remain unclear, says Gallaiford, digital channels are less effective at driving repeat gifts. People who give online are much less likely to give a second time when reached through direct mail, for example. But digital channels appeal to younger donors, who are more willing to give a smaller amount on a monthly basis, as opposed to having a “transactional relationship” with charities, he says.

It’s essential that charities engage with younger donors and ensure they have a flexible advertising strategy to engage with various demographics, says John McAlister (above), national director of marketing and communications at Salvation Army. But charities must nevertheless “continue to invest in and foster strong relationships with those 55-plus as they have the financial means and interest to contribute significantly today.”

Taking risks and looking internally

Jason Egbuna (below, right) manager of direct marketing and leadership giving at The Princess Margaret Cancer Foundation, says it’s time charitable organizations start taking more risks and getting more creative with their marketing approaches. “Sometimes you have to just have the guts to say that a campaign has seen its day and that it’s time to pay attention to what some of the trends are and how you can capitalize on them,” he says.

JasonFor example, the Art Gallery of Ontario’s recent campaign is using some foundation funds but is crowdfunding the rest of the $2.3 million needed to open a permanent “Infinity Room” exhibition. “They were smart enough to a) realize that there was something their patrons and donors were passionate about and b) found a way to engage the public en masse,” he says. “That’s thinking differently.”

As the sector becomes more fragmented many organizations all compete for the same cause, Mayer says she would like to see increased collaboration. By fundraising together, groups could avoid “competing against themselves,” she says.

She points to Toronto Foundation, which pools donations and facilitates charitable giving through more than 500 individual, family and organizational funds, as a good example of the model.

Looking internally could also make significant difference. For instance, Ramp Communications was tasked with creating a campaign for the Region of Peel to promote employee participation in their annual United Way fundraising drive. The effort resulted in a 25% increase in funds raised over two years.