Breaking the cycle has to become a top-down strategic imperative. Boards need to encourage strategic change.

Time for change?

16 October 2018

Do you know who your customers are and do you value them?

You may think it odd that I pose this question, but ask yourself this: if your organisation had customers, who would they be? Fundraising would probably champion supporters and programming, beneficiaries. I’ve posed this question many times and over the years been in countless debates that never reached organisational consensus. But if we can’t agree on who they are, how can we possibly ever truly value them?

Marketers make the distinction between buyers and consumers – not always the same people – and they value both. Donors and beneficiaries are therefore both our customers. Despite this, our sector’s prevailing default position seems to be that fundraising is a support function and donors a means to an end.

Focusing on high-churn fundraising techniques that drive volume and scale despite high attrition rates, and optimising to the tipping point of increasing attrition, can neither be valuing our supporters nor respecting them. Even if the numbers work on a spreadsheet, does that make it right? What about the individual experience? Likewise, if we have the attitude that philanthropists who want to be engaged in our strategy and ask where their money went are just being awkward, that too is not right.

Breaking the cycle has to become a top-down strategic imperative. Boards need to encourage strategic change.

Our sector has ignored at its peril the insight that more people share negative experiences than positive ones. I suspect most of us agree with this, so what stops us changing things?

Nearly all metrics used to measure supporter value are about money – in other words, their value to us. Very few measure interactions, engagement and derived customer benefit – in other words, our value to them.

Back in 2014 NPC’s report Mind the Gap told us there’s a gap between what the public thinks charities should be doing and what they think we are actually doing. A disconnect between belief and understanding doesn’t sound very sustainable.

Another barrier is the fact that our sector rarely innovates when things are going well, so it’s hardly surprising that we’re finding it hard to innovate our way out of the current crisis of public confidence. We should be focused on finding our own unique paths, driven by our individual organisations’ missions and insights, rather than seeing optimisation of mature channels and techniques as our default setting and considering emulation of other’s successes as progress.

In short, we’re locked in a cycle and need to start redefining our success criteria.

Breaking the cycle has to become a top-down strategic imperative. Boards need to encourage strategic change, even if it means taking a short-term dip to achieve longer-term sustainability. Senior leaders need to rethink strategy and task fundraisers to make the shift, inspiring them to stop focusing on short-term results and using short-sighted techniques. Fundraisers need to be confident to challenge the norm.

Making fundamental changes in what we measure is a good start, like focusing on understanding, consideration, loyalty and influencing, which will drive fundamental changes in how we operate and deliver integration that goes beyond just communications and fundraising, bridging buyers and consumers.

I was recently asked what charity will be like in the future, which got me imagining 10 years from now.

I doubt it’ll be called charity for starters. It won’t be a locked box that sucks money in and pumps out good, with an operating system based on believing it knows what’s best for supporters and beneficiaries. Instead, it will be a facilitator that enables people to connect through networks, people who want to change things for themselves or for others. It won’t just focus on philanthropy as the galvanising foundation and guilt as the trigger of support. Collaboration will be the new competitive advantage. For corporates, it will drive business value and enable them to be better citizens. For individuals, it will enable them to achieve social purpose on their own terms and in ways that are relevant to them.

It won’t focus just on transactions and techniques. Instead it will be centred on engagement. It will have the determination to put itself out of business with the passion and conviction to stop once the mission is delivered.

Do I believe we’ll ever get there?

I hope so. There are enough forces of change to drive significant shifts in our sector over the coming years. We’ll witness consolidation of large charities as traditional income streams stall and fall and it becomes harder to support large complex infrastructure. This will lead to more focus and differentiation. Mergers will become more common and collaboration will become a strategic imperative. Supporters will get more alternatives as more corporates move into the social space, with social purpose becoming part of the marketing mix because doing good is good for business. And in this flux I hope we’ll see disruption by smaller, more agile charities and social enterprises that drives step-change innovation.

So now’s the time to start the change, stop talking and start doing.