How COVID-19 has changed NFPs forever
For not-for-profits, COVID-19 has laid bare the importance of building diversified revenue streams and supporter segments.
Fundraising, for the most part, relies on a handful of traditional sales and marketing techniques, like direct mail and face-to-face fundraising. These techniques have either evolved or been retired by other sectors.
Such channels do still work for some segments. But there’s a growing discontent amongst charity supporters who demand and deserve better transparency and experience.
Think of face-to-face fundraising, frequently known as “chugging” (or, “charity mugging”), something that works on a short-term results, but could have long-term impacts on trust.
Improving transparency, personalisation and digital integration is on the to-do list of most NFPs. However, COVID-19 has fast tracked this with organisations forced to operate from a digital-first perspective.
75% of first-time digital users will continue to use digital when things return to “normal”. This chart, by McKinsey, shows that offline consumption is unlikely to increase to pre-COVID-19 levels quickly:
Source: McKinsey. Offline consumption will take a while to recover.
Organisations that made shifts to digital integration 3-5 years ago have benefited during this time, and will benefit for months to come. The ones who didn’t will suffer due to their heavy revenue bias to traditional channels.
Fundraising is from Venus, digital is from Mars
Pre COVID-19, it would be common to see: “fundraising sets the targets, digital follows the brief”.
But due to life in iso, digital has been thrust into the spotlight as the main revenue engine requiring the digital team to take the wheel. This is causing friction.
Traditional fundraising techniques won’t float in digital, not if you want a healthy return on ad spend. Equally, digital benefits from cross-channel activation and many digital marketers don’t fully understand fundraising nuances.
This tension is a symptom of a long-running problem
This difficult transition speaks to a greater issue.
Many not-for-profits rely heavily on direct mail and in-person fundraising. Digital is seen as a support to these channels. This is not without reason, of course, these channels are huge revenue drivers.
But digital isn’t new and it’s not going away, ensuring that digital has an equal seat at the table or even digital first will do more than just future proof, it will increase the effectiveness of other channels in a multi-touchpoint fundraising journey.
We’re not saying completely move away from channels or tactics that are working today (that wouldn’t be smart), we’re saying integrate and diversify.
There are great opportunities to integrate your channels, we’re seeing fantastic results out of the UK from merging direct mail with digital asks, layering multiple channels balances risk and reward.
And the opportunities to diversify now are endless. One of our clients has switched to using email as a revenue channel, and has seen a 300% increase in donations in this channel; and the lack of face-to-face contact gives opportunities for charities to move past single-touch street fundraising and instead focus on an online-offline campaign to deliver high quality leads and donors.
Don’t just stick to what’s working now. COVID-19 shows that won’t last.
Right now, work with your digital team
Marketing and fundraising teams must collaborate. With tax appeals coming up, you need to trust your digital team. They know how to best speak to your audience.
Be open-minded. Both teams have valuable insights to share. Digital marketers know the value of digital beyond supporting other channels, and fundraisers can bring a wealth of sales knowledge to the conversation.
We’ve seen clients who show a willingness to collaborate and work together to integrate new channels grow revenue by over 100%.
Don’t expect immediate results from digital, treat it like any other channel
Though digital is the fastest-growing revenue channel, and traditional segments (like older Australians) are now moving online, we need to set realistic expectations.
Too often, we expect digital to have a positive ROI from the get-go. This is unfairly weighted.
Direct mail and street acquisition rarely delivers a positive ROI in year one.
Digital should be treated like every other fundraising channel, with the same ROI expectations.
Discoverability and frictionless user journeys are key to high conversions, but they take time. You must reach and engage through personalisation, set your own benchmarks and test and learn to constantly improve. Just like any other channel, it rarely delivers on day 1 but it will happen more quickly due to the immediate feedback.
COVID-19 has given us a gift, and it’s what we’re seeing in successful organisations right now. Collaboration, innovation and willingness to tear up the rulebook to generate results.