New and Shiny Fundraising
2nd October by Tobin Aldrich
For as long as I've been in fundraising, charities have been looking for the next big thing that will transform their income generation fortunes. If anything, this seems to have got more and more attention over the years. Today, no self-respecting fundraising strategy is missing a major section on innovation and the majority of the bigger and many medium sized charities have innovation teams or departments all industriously searching for new products, services or approaches that will transform their performance.
One of the dangers of having done anything for a long time is that you get increasingly jaded and think you have seen everything before. Astonishingly, fundraising has changed quite a bit since I wrote my first appeal letter and there have been significant changes in approaches and technologies that have driven this change. Where would we be without face-to-face fundraising or digital acquisition for example?
But (and this is a big but), there have been a long list of things that have been tried and really haven't worked. Of course just because a particular cause unsuccessfully tried some approach in a specific channel many years ago doesn't mean that it will never work for anyone else but we do need at least to know what happened before and learn from it. What is an issue of execution or channel maturity perhaps and what is a more fundamental problem in the psychology of the approach.
The heavy investment by charities in innovation approaches in recent years does not seem to have actually produced all that much in terms of really new approaches that are making a significant different in the market. The approaches that have done are not really new at all. Face-to-face and digital have been around for over two decades now. It’s hard to think of many really new approaches in the last two decades that have had been really significant in income terms. There’s certainly technologies that have attracted lots of attention such as blockchain/crypto, NFTs, not to mention AI but little evidence any of this is revolutionising fundraising just now.
Of the initiatives that have come out of the big charity innovation teams that have gone into the market these seem to be mostly either pretty tactical, deployments of existing approaches in different channels or with creative spins, or seem to be things that are actually more in the field of social enterprise (stuff you can sell) than fundraising. There are enormous opportunities here of course but there’s a strong argument that charities are the wrong vehicle to deliver for profit activities. Unless there’s a particular reason why a charity has a competitive edge selling products (for example a charity shop which gets its stock donated), why wouldn’t a social entrepreneur use the flexibility of the market to raise capital for an idea and then if it works, donate the money they make? I can’t think of any big charity trustee board I have experienced that would be the right governance structure for a risky, entrepreneurial social business.
This isn’t an argument that charities should neglect innovation but it needs to be put in to context. The fundamentals of fundraising haven’t changed during my career and these had existed a long time before that. The core of having a really strong and compelling case for support that is relevant for your audiences and being able to demonstrate the impact you are making remains unaltered. There’s no shortcut that allows you to avoid having that and no shiny new product will compensate for its absence. If you want to improve your fundraising, always, always sort out your core offer first.
The bar for a really new fundraising approach that no one has tried anywhere is a really high one. It is much more likely that successful innovation for your charity can be achieved by taking an approach that has worked somewhere else that is new for your audience.
Our top tips for innovating successfully in your fundraising programme are:
Get the basics right first. Make sure you have really landed your case for support and core donor offer.
Develop an innovation framework. The bulk of your investment should usually be in optimisation of your core programme. Only once you have maximised this should you be looking at introducing activities that are entirely new.
Look at what others are doing. In particular look at outside your immediate sector at related areas. There’s much that mainstream charities can learn from Higher Education for instance and vice versa. Look for successful ideas that are readily transferable.
Test cost-effectively. Take an MVP approach that allows you to take an idea to market as quickly and cheaply as you can.
But test rigorously. Ensure that tests are developed that are meaningful, results are measured consistently and learnings are captured.