The Donor Acquisition Model is Broken

Date: 09 February 2021

Category:

Strategy

“I don’t really care how you raise money, just don’t spend too much…”

New donor pipelines are drying up and persuading existing donors to keep giving is harder. It’s even becoming almost downright impossible for some important causes given the restrictions and cancellations of live events and gatherings. For many not-for-profits, foundations and charities the last 12 months have been horrible and have presented challenges that some of them might not recover from.

Some of the most noble missions on the planet have been crippled because they can’t raise money the way they used to, and the relationships they have with their donor base has shifted. Significantly. And for many, merely making the shift from live to virtual events hasn’t been enough – not even close – and frankly, that was never really the answer anyway, and results have suffered.

Results mean money in the bank. But let’s be clear – we aren’t talking about revenue from the sale of consumer goods; we’re talking about funding research, providing essential care and treatment and creating an opportunity for people to live fuller, longer lives. When donations to noble causes stop or decrease significantly, there’s a chance that means that people will suffer and perhaps die because the programs they count on aren’t funded the way they need to be.

This isn’t a case of finger-pointing; it’s the reality of our shared situation. The economy is taking a hit, businesses everywhere are struggling, people are losing their jobs, and many are uncertain about what could possibly happen next. How does a generous act of kindness stand a chance compared to the choices of making rent, paying employees or dealing with a virus that continues to mutate and evolve faster than we can deal with it?

Maybe it needs to be more than an act of kindness. Perhaps we need to reconsider how we’ve created an environment where not-for-profits are destined to, more often than not, fail. We’ve tasked these missions with tackling and solving some of the most pressing problems facing the human race: cancer, poverty, hunger, our environment, mental health and the basic provision of care. And yet, we’ve placed so many limitations on how they raise money that their ability to spend money to make money – such as the way consumer-centric business models have the luxury of operating – is severely restricted. The allowable cost allocations for not-for-profits is completely out of whack given the nature of their missions, while consumer brands can spend themselves into bankruptcy for products that arguably feed a materialistic want versus an intrinsic human need. It’s backwards.

The model is broken and if we don’t fix it, shame on us.

We’ve talked about how it would be a shame if we went back to the way things were before the pandemic. That this pandemic may actually be a catalyst for getting back to basics by helping us refocus on community, family, the simple pleasures of being together and celebrating what we need to help us live healthy, happy lives.

The same is true for the corporate culture, which seems to be coming out of this mess in decent shape. What a shame it would be if we simply reverted back to making money at the expense of a very real need. Perhaps now is as good a time as any to challenge the model so that the success of corporate brands has a greater opportunity to influence the success of these missions that desperately need access to more funds.

If not-for-profits, foundations and charities can’t spend enough to raise enough to finally find a cure for cancer, ensure the World‘s children are fed and provide care across a variety of needs, then we need to solve these problems a different way.

What if the model was different? What if those missions could spend what they should spend to raise the funds they need? Think about the difference they could make on society if they could leverage the budgets required to convert at the scale needed to make more of an impact? It could truly change the landscape of giving and philanthropy. It could accelerate access to care, cures and treatments. That’s the kind of change that benefits everyone.

The bottom line is we won’t fund these causes the way we need to and at the speed we need to under the current model. Let’s start with that and agree we need to make it easier to acquire new donors, keep the existing ones and show them why they should continue to give – and give more if they can.

There could and should be a more integrated role for corporate brands – not just in the form of event sponsorships or single, larger donations (which are incredibly valuable), but in helping causes access their customers with a view to help them also become donors.

It will take all of us to respond to the call of these missions we’ve entrusted with finding cures and funding research, treatments and programs. Otherwise, missions will continue to struggle and in the current environment, some of them will fail.

Article by Dave Cliche, President & CEO at TMD

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