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2012: How Technology and Consumer Trends Will Continue to Drive Change In the Nonprofit Sector

 

The world of consumer marketing and technology is changing rapidly and these changes are driving changes within the nonprofit sector.

Ten years ago, less than $250 million was raised online; eight years ago, Facebook did not exist; five years ago, the iPhone did not exist; and the category of software as a service was formally established just ten years ago.

As a technology entrepreneur with a passion for marketing strategy and the nonprofit sector, around this time each year, I like to pause and make predictions as to the changes I foresee. As a change agent, I also like to articulate my perspectives on changes that I consider important to embrace. My predictions and recommendations are based upon working with nonprofits large and small, from following global technology and marketing trends, and from conducting formal market research.

Below are the top five predictions for the nonprofit sector in 2012.

  • Online and new media channels will continue to extend their influence: Online remains the fastest growing giving channel. The median online fundraising growth rate among Convio clients from 2009 to 2010 was 20%. The percentage of funds raised online however varies greatly. In a recent survey of nonprofits engaged in direct marketing, we found that 29% of groups were raising less than 5% of direct response funds online, whereas 26% were raising more than 25% of funds online. More and more new donors and contributions are being brought in by online channels, and younger direct mail donors are opting to give online as well. Online’s influence outside of transactions is growing as older donors engage in web based communications and advocacy, but continue to give via the mail. New media channels, i.e. social and mobile, are also starting to have a material influence. Some organizations have reported a lift in donor loyalty associated with social engagement and one of our clients reported that 15% of direct response TV respondents were accessing their website from a mobile device. Nonprofits that do not have an online marketing strategy that at least contemplates new media channels run the risk of being left behind.
  • Peer-to-peer marketing will continue to be more important: Direct communication by brands (both on the commercial and nonprofit sides of the equation) will have less impact on the donating/buying decisions of the population. Instead, consumers and donors will increasingly rely on referrals and guidance from friends, family, co-workers and participants in social media and review sites to make decisions. This trend will be more pronounced with younger generations, as demonstrated by the data in our Next Generation of American Giving study in 2010.
  • Donor fatigue will get more pronounced: The amount of communication we receive across mail, email etc. has become increasingly overwhelming. As new channels are added to the mix – text messages, RSS feeds, tweets, Facebook posts, etc. – it only compounds the problem. It is easy to get lost in the mix and it is easy to turn off supporters with excessive or non-tailored communications.
  • Supporters want to control their experience: In the for-profit world, consumers are increasingly given the opportunity to tailor how they are communicated to – to turn off direct mail communications, to prescribe the frequency of emails they are sent, and to filter their content preferences. This desire for control is naturally extending itself to the nonprofit sector. The burden of expectation for nonprofits to provide a similar experience to their supporters will gain significant momentum in 2012.
  • Integrated marketing practices will mature: Today, most nonprofits communicate through multiple channels and sometimes across multiple program areas – communications, advocacy, fundraising, special events etc. However, in many cases there is not a great deal of strategy applied to how communication efforts should be coordinated and integrated. Increasingly organizations are building integrated communication calendars, and ensuring that campaigns are thematically consistent across channels. Few are however differentiating communication strategies by different audience segment, e.g. recognizing that younger donors may prefer a different communications mix. Even fewer are holistically leveraging data captured across channels to refine their communication and solicitation strategies. Leading retailers by contrast are for example analyzing which consumers click through on emails in order to ascertain who to direct mail spend towards, among lapsed customers etc.

In 2012, nonprofits will be challenged to think differently about the way they engage with their supporters. The macro economy continues to pose challenges to fundraisers. The presidential elections risk mindshare and potential contribution diversion away from nonprofits to the candidates. Consumer expectations continue to be set by for-profit marketers. New technologies continue to emerge and have more impact. The nonprofit sector will have no choice but to become more sophisticated and savvy when it comes to supporter engagement. For those nonprofits that embrace new engagement opportunities and harness technology strategically, it’s a very exciting time that holds tremendous promise.

 

The preceding is a guest post by Vinay Bhagat, Founder & Chief Strategy Officer of Convio. If you are interested in submitting a blog, please send your name, contact information, and a sentence or two about the content of the post to trustblog@guidestar.org.

Topics: Technology Communications Nonprofit Sector