Nonprofit Industry Focus: Leveraging Personalized Donor Experiences As a Tool for Unlocking Access to Restricted Funds
Donor Expectations in a Modern World
Nonprofits are organizations that operate with the primary goal of serving the public good, rather than generating profits for their shareholders or owners. The engine that keeps nonprofits running is donations. In fact, of all donations made to nonprofits, 71% come from individual donors.
While donors present an important piece to any thriving nonprofit, they also have expectations of their own. Tackling the most pressing issues facing our communities is not enough, nonprofits are expected to be creative and interactive with their donors. As nonprofits continue to try to find the next wave, they might be missing the most dependable way to engage with donors, technology. Technology can be used to define the journey your donors will follow during the donation process, and create a layer of transparency and tangibility that donors are excited to experience with their nonprofits.
While there are many ways to help solve increasing donor expectations, technology needs to be at the forefront of nonprofit’s strategy. Many technologies exist to help gain insights, optimize, and personalize a donor’s experience. At the core of a great donor experience is transparent communication and an understanding of their interests and needs. Nonprofits that prioritize technology solutions, like omnichannel contact centers and customer data platforms, will be best equipped to create that experience. Ultimately, those with this knowledge will be best suited at adapting to modern day trends as well. These characteristics will meet the expectations of their donors and generate funds through effective campaigns.
Social Media Campaigns that Started It All
Since the invention of social media, generating virality has been a key strategy of nonprofits. The more people that know about a cause, the more likely they are to donate to it. As a result, nonprofits have been forced to get creative. Some of the earliest responses to this shift were campaigns that created a “social currency” associated with donating. Most famously, this occurred in 2014 with the ALS “Ice Bucket Challenge,” where donors were encouraged to nominate three friends and dump a bucket of ice water on themselves. This campaign enabled The ALS Association to increase its annual funding for research by 187%. This set the gold standard for using a social media campaign to generate funds and raise awareness about a cause.
A Shift in Perspective – to “Impact-Driven Philanthropy”
While an integrated social media strategy has been well-established over the last decade, a much larger communal expectation is forming that nonprofits are slowly coming around to; nonprofits must provide a personalized experience for their donors. Their donors want to be able to take ownership over some of the change, not just be a part of it. This growing, and somewhat controversial, trend of the nonprofit industry is called “impact-driven philanthropy” or “outcome-oriented giving.” This approach to philanthropy revolves around the idea that there should be a clear output for a donated input. Impact-driven philanthropy recognizes that donors want to know that their contributions are making a tangible difference in the world.
One great example of this was #TeamTrees, a fundraising campaign by Jimmy “Mr. Beast” Donaldson and Mark Rober, two famous YouTubers. #TeamTrees was a simple, yet effective campaign. The campaign partnered with the Arbor Day Foundation and pledged to plant one tree for every dollar given and went on to raise over $20 million dollars as of February 2023.
The #TeamTrees campaign is an interesting model to study. While much of the success can be attributed to its co-founders ability to produce viral content, it also represents that donors want a layer of tangibility to their donations. People understand trees are good. People understand that if they donate a dollar, a tree will be planted. People are comfortable with donating after seeing this feedback loop.
Living in New York City, I’ve heard personally from many people that they “would give a homeless person food, but would never give them cash.” When asking them to explain, I’m often presented with the reason for this is because they’d like to exercise control over where their cash would go. They don’t want to provide cash that could be used for purchases like drugs and alcohol. This example is a microcosm for how modern donors approach unrestricted funds. They expect transparency, visibility, and recognition from the nonprofits they contribute to. This extends to where their specific donations are being used. Only 20% of nonprofit funding in the United States is unrestricted. Unrestricted funds are monetary donations that are not allocated to a specific program, project, or expense.
In an ironic twist, all of these expectations create a “shareholder” like mentality in donors towards the nonprofits they contribute to. It’s not enough to be a good cause, the donors need to see “the tree planted” to make it worthy for them. But, not every situation is so simple. Referring back to homelessness, 1 in 3 homeless individuals suffer from chronic substance abuse issues and 1 in 4 suffer from a mental illness. The work in these cases goes beyond crowdfunding affordable housing for an individual. It’s important that nonprofits in this space also have resources in their organization that provide individuals with or direct them to counseling, healthcare, and educational or career opportunities. The nonprofit often has a deep understanding of what the appropriate balance is in their budget to allocate these funds. However, that doesn’t necessarily align with the donors expectations of where they want to see their money go.
Creating a Personalized Donor Experience
The easiest solution would be to start to provide a tangible return for a donation. For example, the World Wide Fund for Nature (WWF) incorporated symbolically adopting animals as a way to donate to the nonprofit. Symbolically adopting an animal comes with a photo, certified adoption certificate, and plush of the animal. These little gifts are good reminders for what the overall mission of the nonprofit is contributing towards.
At the heart of it though, donors just want to feel involved. Luckily for nonprofits, technology has never made it easier to include and connect people, or to create a feeling of engagement. Utilizing a technology can help provide a personalized experience for donors. One technology that could be helpful at providing a personalized approach is a Customer Data Platform (CDP). A CDP is a tool used to collect, unify, and manage customer, or in this case donor, data from various sources. By using a CDP, a nonprofit could gain a holistic view of their donors and their behavior across different channels, including their browsing history, social media, email campaigns, and donations. This unified data can then be leveraged to orchestrate an engaging and personalized donation experience. Donors can even be segmented based on their shared characteristics, so that campaigns and experiences are tailored to specific audiences. For example, donors that are between the ages of 18-25 and in a specific geographic area could proactively be sent events raising donations or awareness at universities. Or, back to the WWF or #TeamTrees example, maybe advertising a free day at a zoo or arboretum for college students in support of a cause.
Another option is creating an omnichannel contact center, particularly one that leverages chat and chatbots. This opens up your nonprofit to providing 24 hour engagement with your donors, without the need of staff and volunteers. For example, if a donor initiated a chat conversation about how to donate, but had some reservations about where the money would go, you would have automated options such as displaying web pages or knowledge base articles on where the funds go. If they haven’t opted out of notifications, you could also send proactive messages to engage your donors. You could text them when important milestones are hit, when funds have successfully been used to the outcome they donated towards, or a “memory” commemorating a date the previous year in which they donated. The best part of this is that it allows your staff to handle the conversations that require a human touch.
Bringing Technology Into Your Nonprofit
Overall, nonprofits have many options to react to the modern needs of donors. However, it’s important for them to align with the right set of technologies to do this. Through technology, you open doors for your nonprofit to engage with them on a more personal level. Donors will begin to trust your nonprofit more and you’ll begin to understand them better. That bond will likely make the experience more rewarding for your donors, and create a sense of comfort when donating, whether it be restricted or unrestricted funds.
If you’re a nonprofit interested in learning more about a CDP or omnichannel contact center, schedule a meeting today. VPS partners with industry leading communication and customer journey technologies and can help your nonprofit engage your donors more expansively and knowledgeably.