Think Like a Startup,

Execute Like a Social Enterprise

A PRACTICAL GUIDE TO ONLINE SUCCESS FOR NONPROFIT FUNDRAISING & MARKETING TEAMS

About Affinity lG
Affinity IG is a boutique interactive marketing agency based out of Austin, Texas, that specializes in online advocacy, content strategy and cause-related marketing. Managing partners Mark Courtney and Liz Moise bring 25+ years of expertise in enterprise technology consulting, interactive development, design and strategy to their practice. Beyond the UX, Design and Development work, standard for any interactive agency, Affinity IG differentiates itself through designing targeted strategies and deploying specialized technologies that increase social engagement and on-site conversion.
Whether that conversion is a registration, sale, donation, download or in-depth engagement, they offer a solution suite centered on turning site visitors or fans into constituents who take action. As both a product and services organization with a passion for increased social good presence on the web, Affinity IG is currently seeking seed fund investment to finish development of 121Giving (www.121giving.com), their first product offering to the nonprofit, social services sector.
Affinity Interactive Group | October 2011

About the Authors

Mark Courtney
MARK COURTNEY

Liz Moise

Tara Judd
TARA JUDD

Barry Finder

is the Founder and CEO of Affinity IG. He brings over 13 years of technical leadership, solution development and client services experience to the agency with a strong background in Enterprise technology consulting with global firms including Accenture and Avanade. Combined with a background in interactive strategy and management he has served as both a trusted advisor and strategic leader working with Fortune 500 clients across multiple industries and channels. He is a social innovator and philanthropist, and the founder of 121Giving. Mark hold a B.S. in Business Computer Information Systems from the University of North Texas with a focus on Business Management and Leadership. is the Managing Partner and CMO of Affinity IG. She brings over 11 years in account service, art direction and interactive marketing in the retail, online products and nonprofit sectors. Over the past two years, she has served as Account Director for a wide range of clients including Central Market, LIVESTRONG, HEB and The Michael J. Fox Foundation. She has a passion for bringing clients ideas to life online, and increasing the social impact of each initiative she helps lead. Liz was the Marketing Director at Austin Goodwill before joining Affinity IG in September 2011. Liz has a graduate degree in Graphic Design from Massachusetts College of Art and a B.A. in English Literature from University of Michigan.
LIZ MOISE

is the Founder and President of Imagine Events. She has a passion for community engagement and since 1995 has served in leadership roles in the nonprofit industry. Her career includes executive and senior staff positions with organizations including the Girl Scouts of Northeast Texas, United Wayof Metropolitan Dallas, Dallas for Children, CASA of Collin County and New Beginning Center. She is an active champion for community collaboration and has served as a consultant to the nonprofit industry since 1998. is a freelance consultant and sociologist. At Wesleyan University, he conducted and published research in both sociology and cognitive psychology while earning a BA (with high honors) and an MA. As a sociologist, Barry seeks to understand contemporary social behavioral trends and to empirically examine social inequality. At the University of Texas at Austin, he coordinated two large research projects studying educational outcomes for low-income children.
BARRY FINDER

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conversion

advocac y

interactive marketing
Preface
Over the past few years the climate has changed for nonprofits. Fundraising is harder than ever, and engaging a new generation of savvy, online constituents is proving to be challenging for many, due to the rapid pace of activity and growth. Through indepth research, interviews and experience, it has become clear that the business-oriented strategies are equally applicable to nonprofits when it comes to engaging online consumers and building trust and long-term relationships. This paper is written with the intent to unpack many of the strategies that are so often held close by agencies or brands, for use in the nonprofit space. This paper is intended to serve as a resource and tool for a broad range of nonprofit leaders who are focused on driving online engagement.

engagement

relationshi p

This audience expects the nonprofit to know where to find them and how to talk to them.

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The Landscape
Within many nonprofits today, the divisions and rivalry between Marketing, Development and IT teams are as real as those within the corporate environment. Yet, due to the prevalence of social engagement online in the past five years, Marketers have begun to overlap more frequently with Fundraisers and IT as they engage with obtaining and maintaining online donor relationships. In this landscape, both Marketing and Development teams are focused on nurturing existing constituents and bringing in new stakeholders and dollars while, typically, Development teams are exclusively responsible for donor stewardship. However, nonprofits struggle to get results as they rely only on traditional fundraising models. Many smaller nonprofits are benefiting from leveraging social media channels, tools and interactive agencies. With resources scarcer and budgets tighter than ever, it has become essential to make use of these resources.
THE GIVING TREND

effectively used without partnership and expertise from both Marketing and IT leadership. With consumers spending time online more than ever, online giving stands to increase greatly. (Source: The Cygnus Donor Survey: Where Philanthropy is Headed in 2011) Longer-term, strategic philanthropy campaigns have significant benefits for both corporate sponsors and nonprofits, but research indicates that there is much opportunity for improvement. Fundraisers run most strategic philanthropy initiatives, but only 31% of nonprofits said they frequently or always are introduced by their philanthropic contacts to marketing and sponsorship personnel, while an equal number said such connections are made rarely or never. (Source: IEG Corporate Donors Receive Charity: Sponsorship Benefits At No Additional Charge) Lack of collaboration and strategy between Marketing and Development will continue to be a determining factor for reaching new donors and increasing online fundraising. The collaboration with IT teams will also be important as they often hold the keys to the technical solutions needed online, including CRM systems, along with website hosting and Development. The takeawaytighter collaboration between teams presents a significant opportunity for the majority of nonprofits to increase both individual giving through online channels and long-term sponsorship dollars.

Charitable giving is a $300B market in the United States. Of that market, $30B is attributed to online giving. (Source: Giving USA Foundation, 2010 Report) Online giving is an increasing segment of overall giving and opportunities will continue to be lost if nonprofits dont focus on an integrated team approach to marketing online. Although various sources put online giving at less than 10% of the individual giving market today, it is a growing revenue channel that cannot be ignored. It also cannot be

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A Growing Market for Onling Giving

In a March 2001 article in The Chronicle of Philanthropy, James Austin, McLean Professor of Business Administration at the Harvard Business School, forecasted, By 2010 one-third of money donated will be given online. Among many reasons, he claimed that technology will make giving easier, attract more first-time donors, and stimulate bigger-thanaverage donations. However, the 2007 American Express Charitable Gift Survey found that only one in every 10 donors gives online. It can seem easy to dismiss these statistics, assuming that online donations will not reach the projected percentage of overall giving in the near future. At the least, the disparity between the two statements makes it appear as though Austins prediction was incorrect. However, Austin provided several caveats to his claim, including institutional changes that must occur within nonprofits in order for these groups to recruit a sizeable number of donations online. In case-study instances where nonprofits have heeded this advice, the proportion of gifts they receive online approximates (and sometimes exceeds) Austins hypothesized 33%. Furthermore, survey data from givers shows that the reason many chose not to give online was because nonprofits lacked online visibility or did not have the technological infrastructure capabilities for processing their donations. Taken together, these points show that, with some work, nonprofits could boost the proportion of gifts they receive online. According to Austin, e-philanthropy is an additional resource in managers portfolios, and figuring out why and how to use it is essential. It is not a question of discarding old ways but rather integrating new technology to create a more powerful mix. Accordingly, a nonprofits online outreach needs to fit cohesively with its overall campaign strategy. Most importantly, Austin stated, Technological advances are occurring with increasing rapidity. Therefore, nonprofit groups should not get too comfortable with current e-philanthropy systems and arrangements, because better ones will emerge. The trick is not to be petrified into inaction by this prospect, but rather to accept fluidity and recurring adjustments to the norm. Sticking with one online approach (or failing to jump online because it is a daunting medium) needs to be avoided. As peoples relationship with the Internet continues to grow, develop, and change, so too must nonprofits online identities. So how can we explain the fact that approximately only ten percent of donations are occurring online today? Because not all nonprofits have taken the steps they can and should take to modify outreach to donors, build an effective web presence and implement technology capable of handling donations. It is within reach, and the market is growing online.

12 10 % of Industry Online 8 6 4 2 0 2002 2003

eCommerce and Online Giving

Commerce Giving 2004 2005 2006 2007 2008 2009

(Sources: U.S. Department of Commerce, Giving USA, Blackbaud, American Express)

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eCOMMERCE AND ONLINE GIVING

The U.S. Department of Commerce reports that eCommerce represents a steadily growing percentage of overall retail sales. Over the past year eCommerce has grown from less than 2% of overall retail sales to more than 4%. Apprehensions about online shopping such as those regarding fulfillment and returns, and security of credit card data, are diminishing. Consumers are becoming comfortable and in some cases reliant on the convenience of eCommerce. These obstacles that could have been barriers for nonprofits have instead left the opportunity wide open for nonprofits who wish to connect with an ever-growing audience that is comfortable transacting online.
THE PROOF IS IN THE PUDDING

This collaboration of Marketing and Development within nonprofits is proving to be instrumental in maximizing cause/brand exposure and involvement. In addition to this, a number of nonprofits have invested in recruiting gifts online and have seen excellent outcomes. Though it may seem obvious, it is critically important to note that each of these groups saw an increase in donations they received online only following work done to expand their online presence. Examples listed in Chronicle of Philanthropy include the following:

We can learn from both on- and off-line examples of nonprofits that have embraced intentional collaboration between Marketing and Development teams. Relatively younger nonprofits have shown fresh innovative approaches to melding Marketing and Development mentalities in their online and off-line approaches. From grassroots fundraising to merchandising and celebrity cause/brand affiliation, there is no question that Marketing has been instrumental in taking some of the relatively newer agencies to the top of their cause-based league. Susan G. Komen, charity: water, LIVESTRONG, and The Michael J. Fox Foundation each have taken marketing to new heights both online and off-line. When you look under the hood of these organizations, it is the collaboration of Marketing and Development that is moving them closer to the donor relationship, as their collective use of technology allows them to engage in a more connected and seamless manner.

Mercy Corps says that online contributions accounted for 35% of the 215,110 donations of $1,000 or less that the organization received in 2009. At this time they had been investing in online fundraising for approximately a decade. The Leukemia & Lymphoma Society, an early adopter of online giving, raised nearly $79M online in 2010. The Texas Childrens Hospital expanded its efforts to promote online giving in 2008 and online gifts rose nearly 70% from $428,000 in 2009 to $725,000 in 2010.

Although online strategy is more about marketing and less about direct fundraising, both teams have a similar goalpersonal connection to and engagement with organization stakeholders. The approach, strategies and investments are different, but the goal is the sameto engage the public and increase resources for the organization.

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Filtering the Noise and Taking Action

Now we move on from observation to tips on the best ways to accomplish these goals. When it comes to the online world, the honest truth is that there is more noise than music. Put your filter on high and understand that there are a lot of people who really want to help, but it doesnt mean that youre ready. Think baby stepsand be open to the idea that taking a step back might be your first baby step. Social media is not a required tool for all nonprofits (or all brands for that matter); it is simply one of many online channels including websites, email and blogs. The key to deciding which channel to participate in is to define what type of organization you are and how you want to engage with your constituents.
Today, social-media-based fundraising is minimal, at best. Recent reports show a small percentage of followers (16%) said they were more likely to take an interest in following a nonprofit if it appears on a friends following list. But that will change as younger generations increase their capacity to give. (Source: Cygnus Donor Survey Report 2011) Many have already rushed into the stream to visible and active, but that doesnt equate to acquisition, retention or even a one-time donation, for that matter. As much as the sea of social media experts may tell you, there are so many things to consider before you seriously invest in the social media or peer-to-peer fundraising bandwagon. Start a collaborative roadmap and strategy, one that Marketing owns and is thereby incentivized to develop and foster well. Tools will continue to pop up and, as painful as it may be in the beginning, the decision-making about when and if and why to adopt them needs to be fluid and collaborative between Marketing and Development teams. Development teams can incorporate online strategy into the annual fund plan in partnership with Marketing, and Marketing can build Development strategy into their annual Marketing plan. Through strategic and deliberate planning, these tools can be less daunting. One of the hardest things for a nonprofit to do is to decide what tools to embrace online, for fear that there is a better option right around the corner. Combined with the fact that ROI is being scrutinized even more within nonprofits, teams remain frozen in making a choice on what to invest in. With so much noise and trepidation, the importance of strategic partnerships with interactive nonprofit agencies cant be understated or overlooked.
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Whether youre a smaller nonprofit, in which Marketing and Development may be the responsibility of only one or two people and youre embracing a more community-based approach, or a larger nonprofit that has the departmental resources to invest in building the right team, if you embrace a vendor mindset as opposed to a long-term partner mindset when you call in the experts, what you do online will continue to be tactical and reactive instead of strategic and productive. While many nonprofits have historically gotten by in the online world with pro bono project work from vendors, the future of nonprofit success online will be proportional to how effectively they invest in a strategic approach and long-term partnerships with interactive agencies that align with the space. Online giving strategy execution will become as valuable and niche as eCommerce is today. Selecting the right tool for the task at hand calls for expertise in this area. And similar to the challenges that corporations face online; theres no silver bullet. Diversification, differentiation, creativity and a strategic approach will all remain critical success factors.

NONPROFITS ONLINE - THE LANDSCAPE Marketing, IT and Development

Website Management

Donor Relationships

Event Production

Marketing
Marcom Email Social Media/Blog Website Content Advertising & PR Sponsorship & Event Collateral

IT
CRM Systems Donation Systems Website Hosting Internet & Support

Development
Donor Email Planned/Annual Giving Sponsorship Event Management Online Fundraising

Online giving strategy execution will become as valuable and nich e as eCommerce is today.

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Turning Visitors into Engaged Advocates

Where do you begin turning the corner? Here are some key areas to take a hard look at as you work to shift your organizations approach to online fundraising as well as the use of online resources to enhance donor stewardship and increase retention. Having a strategic partner with expertise in online giving can be a huge help in addressing these questions.
CLEARLY DEFINE YOUR ONLINE INTENT

NONPROFITS ONLINE - POTENTIAL COLLABORATION Marketing, IT and Development

Why are you online? What is the purpose of your website and other online presences? Can you come up with 8 or 10 reasons? Your replies should not include vague reasons such as, were on the Web so people can find out more about us and our purpose or were on the Web because our audience is there and we need to be able to communicate with them. While these statements may be true, they dont articulate what you expect to accomplish for your organization with the necessary level of conviction and clarity. Keep it down to three clear goals for any given time period (i.e., per year, biannually) and benchmark everything you do. Similar to the hedgehog concept driven home in Good to Great, your online intent should reflect two or three simple, finite goals that your entire organization can get behind and keep clearly in mind during the year. If a given idea doesnt directly correlate with the collective purpose, dont invest in it; rather focus your energy and resources on projects that drive your goals. Many organizations miss the boat entirely in this regard; a lot of intent is never identified and clearly articulated. You must understand how each channel will be used to communicate with stakeholders and what response you want from their interaction.

Collaboration Points
On & Offline Donor Segmentation Strategic Philanthropy Cause-Brand Positioning eMarketing Strategy Interactive Partnerships

FOCUS ON HOME BASE AND MEASUREMENT Marketing

Marcom Email Social Media/Blog Website Content Advertising & PR Sponsorship & Event Collateral Online Fundraising

IT
CRM Systems Donation Systems Website Hosting Internet & Support

Development
Donor Email Planned/Annual Giving Sponsorship Event Management

An online audit is a great place to start. Evaluate your site to determine if your mission, purpose, impact and brand are designed to reach new audiences. You can get creative, because your traditional fundraising isnt going to rely on the online channel in any case.

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One of the biggest gaps in large nonprofits is meshing the physical (development fundraising) with the digital (interactive marketing). Few organizations actually do this effectively. You would expect your inperson audience to convert into being a part of your online audience, but studies show that this is not happening. Meshing the physical with the digital can be challenging but when Marketing and Development frequently collaborate there is a much better opportunity to do so. When executed in an informed and effective way, the online conversation between the current or prospective donor and the nonprofit flows with more continuity and less redundancy, especially with younger audiences. Youre talking to information-age cohorts who arent focused as much on the information as they are focused on connecting, feeling, and experiencing what a difference you make every day. But you cant do this if you dont have the behavioral data and tracking in place. If you can be smart about how you open up the next dialog with your audience, including the right context from when you last engaged, you can make people feel more connected, thus driving engagement. But you need to ask yourself how you are really doing this in the digital landscape. Are you being cohesive online and off-line? Do you really know whom you are trying to target through each online channel?
ARTICULATE YOUR ONLINE AUDIENCE

THE VALUE OF TARGETED MESSAGING Advocacy and Engagement

Millennial Consumer

Established BabyBoomer

Channel: Online Only Social Media Blog/Website Engagement: Cause-Brand Campaigns Social Fundraising Celebrity Endorsement

Channel: On & Offline Email/Direct Mail Editorial Coverage Engagement: Personal Outreach Traditonal Fundraising Opportunites to Influence

Marketers know all too well that you cant talk to everyone with one message or tone. But what if you could take your audiences/goals/ messages and direct them, maximizing your impact? Take a moment to think about who your audience/market is, and when and where they might be spending time online. Are you trying to reach moms? CEOs?

What Matters Most: Transparency and Consistency Recogniton Tangible Impact Dialogue and Genuine Message

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Teens? Young professionals? What are their habits, on- and off-line? Build a strategy to approach each of your targets based on their habits. Of those who give online, 61% say they would prefer to be communicated with and to give online, exclusively. In fact, 49% said that over-solicitation has the potential to cause them to give less. (Source: The Cygnus Donor Survey Report 2011) This audience expects the nonprofit to know where to find them and how to talk to them. Redundancy says to them that the nonprofit hasnt made a point to know them even though they have chosen to get to know the nonprofit. Behavioral, social profile and customer lifecycle data is now available and much work is being done to leverage these insights in corporate marketing. Make full use of this in your nonprofit; it can be of immeasurable benefit. Just as this data can be used in Development with specific stewardship and engagement strategies, it also can be used to great and much wider effect when marketing and tailoring specific messages to specific audiences digitally and through online interaction. Identify personas that represent your key constituents and the actions you want them to take. Three is plenty. For example, you may define as a key constituent a high-income individual who frequently donates or sponsors your events on an annual basis. The action you want this person to take is to continue to donate or sponsor your events, to increase their gift, and to spread the word to their peers. There are also softer goals or conversion metrics that marketers are more familiar with.

REACHING YOUR AUDIENCE 1. Identify where to reach your audience. For example, you may determine that the best way to initially reach highincome individuals is via individual in-person meetings. Perhaps the best way to reach your younger online demographic is via social media. 2. Focus on conversion. Conversion is an interactive term most often used in the eCommerce world. It means getting the people in your audience to complete a task or a goal that will make it possible for them to get more connected to what you do and what you stand for. These actions can include peerto-peer sharing of content or the activity of reading information on your website or social presence, or even event signup or registration. Its important for your Marketing and Development teams to define these conversion goals in alignment with your key personas. 3. Divide and conquer on communication. Marketers and Fundraisers are equally capable of converting constituents into donors, so decide which team should address each and, together, create a messaging plan and calendar to reach the segments of your audience. Determine how the online gifts from these donors will be stewarded.

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Think Like a Startup

THINK LIKE A STARTUP, EXECUTE LIKE A SOCIAL ENTERPRISE FOCUS ON SYSTEMS INTEGRATION AND STRATEGIC PARTNERS

Just as successful corporations create tight collaboration between their sales and marketing teams, so should nonprofits. Marketing should be at the table when Development is discussing developing their annual fund strategy and they can be given ownership of specific online fundraising goals. Marketing is quite capable of developing and executing strategies that compliment Developments revenue goals, but not if the silent divide between them is keeping the organization from reaching its full potential and maturity. The us vs. them mentality between Marketing and Development is no stranger to any organization but it takes the right leadership to truly shift an organization to create effective crossfunctional teams that compliment each others objectives and work together to maximize donor relationships. Opportunities for strategic philanthropy, whereby corporate philanthropic dollars are augmented with additional spending to promote the companys involvement and the cause, are often lost in the gap between Marketing and Development. In the online world, the potential for these relationships to be nurtured and further developed is extensive and Marketing should be encouraged to foster these relationships, playing a key collaborative role in their engagement with the nonprofit.

Similarly, it is important that IT and Marketing as well as Development teams collaborate on technology decisions. Gone are the days when a technology decision made in a vacuum by the IT team did not affect other teams. The CMS, CRM or email system you chose or even the calendaring system that you choose can affect all teams. Too often, nonprofits position software and waste a lot of money on technology that does very little for efficiency and/or collaboration. Being dependent on technology that isnt complimenting your larger strategy, or works against you, is not worth the investment or the energy to maintain. The right technology partner will help you strategically develop a plan, determine the most effective tools to reach the objectives of that plan, evaluate lower cost options and be creative in making them work together for your cross-functional teams. This is not something that happens overnight, but its never too late to start making choices with a proper mindset. Begin with your goals and strategy and find tools to accomplish these. Too often, nonprofits begin in the opposite way, selecting the tools first and then beginning to alter strategy and goals because the technology they have is not capable of doing what they really need. Strong technology partners should be thinking bigger picture and thinking in your best interest. They should be educating you up front. If youve having to ask the questions first, move on.

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Manage Change and Drive Collaboration

PRESENT YOUR VALUE

CSR and Marketing departments inside corporations are missing online strategic philanthropy opportunities, because of the way in which they are being positioned. Of corporate giving professionals, 44% say they dont see the value of the partnerships or sponsorships being presented to them by nonprofits. (Source: IEG SR Sponsorship Spending Report 2009) This could be due either to the way in which the value is presented, or to the match between the nonprofit and the corporations objectives. Marketing professionals can help clarify and articulate the value of a partnership or sponsorship in language that resonates. Brands are becoming more sophisticated and are looking for more integrated partnerships as a platform to bring purpose. They are moving away from weeklong or monthlong single activations that are disconnected from their brands. They want integrated, multifaceted partnerships. (Source: IEG -Corporate/Nonprofit Partnerships: A Unique View From The U.S. Fund For UNICEF 2011) Taking advantage of this shift, now is the ideal time to start looking at online efforts with focus and strategic intent for donor engagement and fundraising potential.
CONTINUALLY MANAGE CHANGE AND DRIVE COLLABORATION

When you find that you have gaps or you need long-term support, be sure to choose consultancies or agencies strategically, finding those who can support your initiatives. Form strong partnerships and you will get stronger results. This type of change can impact the whole organization in a positive way, from the number of constituents you reach to the donations you receive, and more.

COLLABORATION IS KEY 1. Collaborate between Marketing and Development to identify target sponsors and marketing partners. 2. Clearly present a co-branded campaign concept to the corporations that fit your values or cause. Include the number of people you can reach, the demographics of your constituents and other key customer-focused data in your presentation. 3. Collaborate on the presentation or pitch as well as the follow-up conversations with corporate partners. Determine how the online gifts from these donors will be stewarded.

Long-term, all teams should plan together and collaborate on goals. Often Marketing, Development and IT teams are responsible for educating their organization about the trends online and with technologies, so why not do it together?

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Additional Resources
American Express Charitable Gift Survey (2007) http://www.philanthropy.iupui.edu/research/amex_gift_survey.pdf Blackbaud Online Giving Report (2010) http://www.blackbaud.com/files/resources/downloads/WhitePaper _2010OnlineGivingReport.pdf Chronicle of Philanthropy Though a Tiny Part of Giving, Online Appeals Lure Small Donations. Nicole West, 2011 http://philanthropy.com/article/Online-Fund-Raising-Is/65091/ Chronicle of Philanthropy Web-Savvy Supporters Help Make Online Giving an Expanding Bright Spot. Noelle Barton and Maureen West, 2011 http://philanthropy.com/article/Online-Donations-GrewFast/127306/ Corporate/Nonprofit Partnerships: A Unique View From The U.S. Fund For UNICEF: http://www.unicefusa.org/assets/pdf/A-Unique-View-From-The-US-Fund-For-UNICEF-IEG-Sponsorship-Report.pdf Cone Cause Evolution Study (2010) http://www.coneinc.com/research/archive.php Cygnus Donor Report Survey (2011) http://www.cygresearch.com/files/free/US-2011-Cygnus-DonorSurvey_Report-Executive_Summary.pdf Giving USA Foundation Report (2010) http://www.givingusa.org/gusa/gusa_order.cfm IEG SR Sponsorship Spending Report (2009) http://www.sponsorship.com/IEGSR/2009/07/27/SponsorshipSpending-On-Causes-To-Total-$1-55-Bill.aspx

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