Fundraisers need integrated strategies in cold climate

As they continue to strive to expand donor bases, increase donation frequency and build loyalty and longevity in an increasingly competitive fund-raising environment, Canadian charities are being cautioned to adapt to more effective not-for-profit marketing. ...

As they continue to strive to expand donor bases, increase donation frequency and build loyalty and longevity in an increasingly competitive fund-raising environment, Canadian charities are being cautioned to adapt to more effective not-for-profit marketing.

According to many industry insiders, fundraisers must continue to beef up their emphasis on more ‘traditional’ marketing tactics – not the least of which involves leveraging their existing databases to enhance one-to-one relationships with donors.

At a recent Canadian Market-ing Association Fundraisers conference, Gordon Floyd, VP of public affairs at the Vancouver-based Canadian Centre for Philanthropy, forecast that overall giving this year would increase only marginally – given the slumping stock market and slowing economy. ‘There will continue to be some growth, but it’s not going to be very exciting,’ he says.

Trends in direct response fundraising – factors like a shrinking donor base, the shift toward a greater ‘investment’ mindset among Canadians and the emergence of new types of ‘corporate’ partnerships, among others – may force many fundraisers to review their marketing strategies, he says.

‘Due to a number of reasons, including changing demographics, fewer people are giving gifts – and it’s a base of support that frankly is shrinking rapidly,’ contends Floyd. ‘Secondly, it’s not enough that there’s a need anymore. People want to see evidence of a return on their investment in charitable causes – they need to visualize how their gift is being used.

‘We also know from public opinion research that donors want more information about what’s going on in the charities – how they are using donations and the impact of their work. So the key to increasing and sustaining giving is not fundraising, it’s communication.’

Fundraisers tend to look at direct mail, planned giving and corporate campaigns – those things that have a return on investment immediately – rather than considering integrated communications strategies, says Patrick Ussher, director of the Toronto-based Canadian division of Creative Direct Response International.

‘One of the trends I think has to happen is that fundraisers have to be like traditional marketers – they can’t just look at certain things. As the donor community changes, they have to look at the overall delivery of messages and branding,’ he says.

Fundraisers also need to shift their emphasis away from the expensive task of acquiring new donors, says Tony Lovell, president of Toronto-based not-for-profit direct agency Lovell & Company, and more toward renewing existing donors and breeding long-term loyalty through improved donor services, from something as simple as the speedy return of tax receipts, to delivering personalized correspondence.

‘Donors are becoming more circumspect about who they’re giving to and how much they’re giving and organizations that are aware of that and are dealing with that, are going to be in a better position to survive,’ he says.

Tactics like database marketing – customer relationship marketing (CRM) in particular – are of paramount importance, says Lovell. While many smaller organizations aren’t in a position to begin mining their databases to identify deep-pocketed donors, for example, or divide donors into different behavioral segments, he says, the majority should at least be able to institute some rough database principles.

‘It’s new terrain for many of them – people are feeling their way through as they go. But even in a rudimentary way, you can set up a database marketing program that will improve your response,’ he says, suggesting fundraisers start by making a solid assessment of their organizational structure, donor base, strengths and weaknesses. Beginning to gather information on donors is critical, says Lovell, adding that e-mail addresses, for example, are a classic piece of information that the vast majority of organizations just don’t have at this point.

Equally as critical is learning how donors would prefer to be communicated to, says Neil Gallaiford, president of Toronto-based FRM Consulting.

‘Gone are the days when you could just mail everyone in your file and expect a 15 per cent response rate. Now we’re in an age where you’ve got to be selective about who you solicit and the way in which you do it,’ he says. ‘To find the maximum return on investment you need to identify the donors that you need to talk to, identify your message and figure out the right time to talk to them.’

Fundraisers have to start by figuring out what’s in their database, and how each segment is performing – who their best customers are – and their worst, says Gallaiford.

‘The bar is being raised because there’s so much more competition in the field, and many charities are getting much better and more sophisticated at what they do. The ones who don’t rise to that level will stand out in the donor’s mind.

‘In some ways,’ Gallaiford contends, ‘fundraisers are way ahead of commercial marketers. If you think about it, fundraisers have been marketing intangibles forever. We don’t have a product in the same way commercial marketers do. What we ‘sell’ is a good feeling – the feeling of having contributed or supported some part of society. Relation-ships and the intangibles of that relationship are the primary thing – we only have that good feeling, anything that detracts from that makes us less effective. So all this talk about developing relationships with the customer – that should be old hat to fundraisers.’