Fundraising: Donor-based Strategies

Lessons from Network Marketing

Your friends and associates are your most fruitful group of investors. You comfort, ability, and engagement of this group can yield a sustainable funding base. Most of my clients are floored to understand the difference between friends and donors in order to connect with them as a funding source.

111646755The similarity is obvious. With friends and donors your goal is to nurture a relationship through sharing. The difference is in what is shared. For friends, you share as much of yourself without reservation. Friendship takes years to develop and strengthen. With donors, on the other hand, you are sharing details of your activity and impact. They know you through what you do. They give because they share your view and vision.

An effective donor strategy, like network marketing, is to understand that everyone who donates will not be a personal, intimate friend. They will increasingly be friends of friends. Eventually, donors will be associates of associates. Your task is to create a central affiliation that makes the donors feel a part of the personal, intimate work you are doing. Information sharing may be in the form of annual reports for large donors, but the average donor will require much more engagement. Events, newsletters, calls from associates, and letters from your clients are solid strategies for keeping donors informed. The most effective donor-based systems will include both form letter communication and individualized communications.

Lessons from Product Sales

The lesson of product sales is to provide a commodity. Commodities are things that people see as required for daily life. Typical examples are milk, bread, and eggs. New examples are cell phone covers. Most people who see my phone question why I do not have it in a cell phone cover. I respond, “it was designed not to need one.” They are incredulous. Marketing and maybe a dropped phone have convinced many of the need for a cover. Yet, many purchase covers that do little to protect their phones. How do you create a commodity? First you have to know the difference between a commodity and a fad. A fad is a sales increase for an item with little utility. Think beanie babies, garbage pail kids, or Duck Dynasty memorabilia. A commodity is an item that has a great deal of perceived utility. Like the cell phone cover, people perceive them to be useful. The point for you to realize is that people perceive value in multiple terms. Purpose is one, but do not forget status, emotion, and competition.

3226199In the mind of the purchaser, cell phone covers have the purpose of protecting your phone. Hundred-dollar versions exist that do just that. But, the utility of the idea allows many $5 versions to flood the market alongside those proven useful even though the┬áless expensive versions┬ácannot fulfill the perceived purpose. Maybe it’s just a status symbol. The cell phone cover is seen as a necessary accessory. Some have adopted the view that a cell phone is incomplete if it does not sport a cover.

By “emotion” I mean to point out that beyond status, some buyers have an emotional, personal reason for purchases. The cell phone cover can be a unique expression of who they are, a team they support, or a cause they respect. Other times, the buyer is just keeping up with the competition. If everyone in the office has a certain brand of cell phone cover, some feel that they must follow. Donors have the same motivations. It is paramount that you position your funding opportunity by purpose, status, emotion, and competition. The result is to commoditized your fund as vital and automatic. Giving to your fund will be a routine activity if daily living.