As part of my thesis research in digital media I sat down with extremely wise and well-respected digital minds in the nonprofit sector in order to investigate the cause(s) of poor donor retention.
In doing so, I naturally uncovered the sector’s position on digital strategy, as well as the consequences of a concerning cultural fallacy preventing the sector from moving in pace with the for-profit world. I also came to an understanding of how adopting a digital-first culture could improve the sector for the better.
What the sector has to say about digital
Over the course of 3 months I interviewed 30 sector digital professionals at a variety of organizations in order to understand their experiences with digital marketing and stewardship. Here’s what some of them had to say:
“At the end of the day, adopting digital is about adopting change, but no one is rewarded for this in the nonprofit sector.”
“One of our clients is investing in digital education for their team as they adopt machine learning and automation into their workflow. I saw first-hand how digital education and proper change management can dramatically improve a culture. If you give people another stone to step on, they won’t feel like they have nowhere to step.”
“Donors can sense a lack of digital strategy and planning when they research an organization online, which they most definitely all do. Digital demands coherence at every level of fundraising, and so it couldn’t care less about the internal hierarchies and siloed structures of some organizations.”
“Well, digital is a silo-buster.”
There are 3 key reasons why adopting a digital strategy is great for your organization and the nonprofit sector — and why you can’t afford not to do it.
#1) Challenge a risk-averse culture and donor misperception that low operating costs mark an effective nonprofit
Efficiency and effective impact are achieved by thoughtful retrospection, informed strategy and an understanding of the problems to be faced, not only with program work, but with fundraising, stewardship, and all other roles and operations.
Proper foresight and planning are as much a part of digital strategy as forecasting is to a yearly budget. Without strategy there is no shared understanding of progress or financial return.
When a culture is digital-first, this means they’ve invested the time to understand where they want to go, why they want to go there, and how they’re going to get there.
Get out of survival mode
My research has shown me that when organizations get stuck in older ways of working and operating, they become unwilling and unable to seek out innovation and positive change. This was what I found to be the underlying cause of all other issues experienced at participant organizations. A lack of capacity to invest in sustainable growth and innovation made for complacency with inefficient technology, overworked talent, low digital education, and a ‘survival-mode’ culture focused on getting donations in the door. This puts an ‘expiration date’ on talent and donors and allows for a ‘survival-mode’ culture to continue.
Donors, as well as fundraising and stewardship professionals should be evaluated on their value over a lifetime, not their value within a year.
Create a digital roadmap
Because of its ephemeral nature, digital is a reactive practise as much as it is an exercise in iterative progress. However, the iterative opportunities that digital provides are only worthwhile when there is a clear and guiding goal as well as strategy — organizations must know where they’re going and where they’ve been. Going through this exercise in any capacity will help your organization think beyond the year, or beyond incoming and outgoing revenue, and begin a journey toward a digital-first culture. Doing so will give your team the perspective necessary to challenge old ways of working, iterate, and continue to reach for optimal change.
The more nonprofits do this, the better the sector will be at redefining what an effective organization looks like, and lead by example. When donors are challenged on their misperceptions, they will be more open to the idea of investing in operations and the proper growth of a nonprofit organization. This will have an unbelievably positive effect on the entire nonprofit sector and will result in optimal efficiency and impact for both donor and nonprofit.
#2) Improve donor retention and turbo-charge growth
The most successful charities I spoke to operate like for-profit enterprises. What’s remarkable about this is that they actively compete with some of the most well-known and successful for-profit brands in existence and, because of this, are poised to increase market share for the entire sector.
Simply put, these organizations placed the donor (or customer) at the centre of every business decision. Their entire digital, communication and experience strategy were built up from a thorough, foundational understanding of who they were talking to. This is where they started and ended, with deep research into their audience and testing of their communications.
Of course, these larger nonprofits have a marked advantage — they are 100x the size of an average nonprofit. This meant they were experiencing a fraction of the barriers other participants were facing when creating and implementing successful, retentive donor experiences. They had done all the right things. They had fostered digital talent and education, set aside resources for digital planning and strategy, and had a working understanding of their audience and how to reach them.
However, I believe this doesn’t have to be the only path to digital success.
Understand what your donors want from you
Even the largest organizations had a loose understanding of their audience’s values and motivations for giving — arguably the most important piece of insight when conducting a digital strategy. Some of the most innovative and well-respected companies in the world have started by simply interviewing their constituents in order to understand their needs before attempting to meet them. I would say, start there.
Start by interviewing lapsed donors and high value donors to understand their motivations for continuing and discontinuing their contributions to you. If done the right way, it doesn’t take many interviews to start hearing themes in their answers. Learn from that and iterate toward a better communications and fundraising program. Better yet, use that qualitative data to better understand how to keep more of your donors. Digital strategy and Design Thinking have a beautiful chemistry.
Take a Design Thinking approach to understanding your impact on beneficiaries and uncover new, more compelling ways of communicating what it is that you do. Then, combine your newfound knowledge of your audience and your unique value to focus your communications. By optimizing your content and communications for your audience you might find you need less resources to conduct successful marketing and stewardship efforts.
Deliver real value
Adopting digital into your culture will allow you to continually optimize your fundraising as digital is, in essence, a process driven by continual feedback from your constituents, teammates, analytics and beneficiaries. Embrace digital and you will be better primed to create successful donor experiences and programs that continue to deliver increasing value for everyone. When you continue to deliver valuable impact and effectively communicate that value, your retention will dramatically improve as will your growth.
Think about the kind of impact improving your retention by ten percent would have — you would likely double your net growth. Do that and you’ll be well on your way to leveling up your impact.
#3) Uncover inefficiencies and improve your operating costs
As beautifully stated by one of the wise and eloquent people I spoke to during my investigation, digital is inevitably a silo-buster. I learned through my research that when IT systems are siloed, often are people and teams.
Again, this all ladders back to a lack of capacity to invest in technology and continues to be an important problem for many of the participants I spoke to. I don’t have an answer to this. However, I would like to point out that there are reasons, outside of budget constraints, that it continues to go unsolved.
Adopting a new piece of software is a matter larger than data migration and proper onboarding. New software is more than beefier dashboards and faster processing speeds. With new technology comes an entirely new way of working together. This change should be considered culturally as well as logistically and operationally.
I believe this is where most of the technology in the nonprofit sector misses the mark.
Create a digital-first culture
It takes considerable talent and resources to properly manage the adoption and implementation of technology over time. I often heard of cases where this was not done, and, as a result, data was left unmanaged and unclean, leading to unreliable analytics and forecasting. When fundraisers and stewardship professionals can’t trust the data in front of them, there is a reversion to manual process. This unnecessarily and artificially inflates the amount of resources needed to carry out important, revenue generating tasks and causes undue waste. This may be the result of databases built for the wrong audiences, and/or outdated systems, but I believe this can be avoided at the onset with proper technology adoption at a cultural level.
Which brings me back to the benefit of a digital-first culture and way of working.
When you have an open, digital-first culture that is ever-reacting to the ephemeral nature of digital, change management becomes easy and inefficiencies are naturally phased out. This is of course only achievable and productive when there is clear direction and strategy in place, and when everyone is on the same path. When there is a shared objective, inefficiencies and barriers will become more inconvenient and felt by more people.
When you begin to adopt a digital-first way of working you will be naturally equipped with a perspective on what’s working and what’s not, simply because you and your team have a better understanding of the why behind your work.
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Education may be the place to start
Which may be true for most, if not all, systemic and wicked problems.
I will in no way pretend to understand the day-to-day challenges and nuances of working in this world. However, I will urge everyone who’s been compelled enough to read this far, and who is in a leadership role, to seek every opportunity to educate themselves and others in digital thinking and working.
There’s more to “digital” than you think
What I can tell you is that digital is not a magic switch. Simply having a website optimized for mobile and a few email and social campaigns a year will not give you access to a digital audience, nor will it be fiscally viable. Without strategic planning rooted in an understanding of your impact AND your donor, you will likely be leaking resources and missing out on revenue opportunities faster than you can recover donations.
What’s worse, without thoughtful change and strategic foresight organizations run the risk of becoming irrelevant to a new base of donors who expect more than their parents did. Now is the time to seek education in the future of giving, and rethink what it means to be an efficient and effective nonprofit sector.
Further reading:
David Johnston: Canada’s strong culture of giving is in danger
Low risk approach to high reward discovery
2018 Fundraising effectiveness report [PDF]
