Table of Contents
2.0 Fundraising in the 21st century.
2.1 Concept of fundraising.
2.2 Sources of fundraising.
2.3 Fundraising challenges.
2.4 Cycle of fundraising.
3.0 Digital marketing for fundraising by charitable organizations.
3.1 Marketing challenges faced by charitable organizations.
3.2 Overview of digital marketing.
3.3 Digital marketing for fundraising.
As the world becomes more digitally connected, digital marketing increases. Digital marketing strategies create cost-effective connections with specific audiences (Barbu, 2013). Instead of investing resources in messaging a broad audience, digital marketers target the exact demographics most likely to respond (Stone and Woodcock, 2014). Digital marketers analyze the online behavior of users to contextualize the marketing message for each recipient (Stone and Woodcock, 2014). Digital marketing influences social behavior through audience engagement (Kabadayi and Price, 2014). Digital marketing is often less expensive and more effective than traditional marketing. Small organizations seldom possess the resources necessary for large, traditional marketing campaigns (McGovern, 2012). Nonprofit organizations require marketing to generate donations but frequently struggle to generate enough income for any marketing strategy (Bennett, 2014). Nonprofit organizations can benefit from digital marketing strategies, but often lack the skills to execute them (Bennett, 2014; Management Team, 2013). As funding decreases in the nonprofit marketplace, organizations must seek new funding sources, including international donors (Management Team, 2013).
Fundraising is a fundamental activity for non-profit organizations. As the objective of such organizations is not to accumulate capital and produce a profit but is following humanitarian targets, they have to find ways to gather the money to sustain themselves, their activities and developing the mission. In the past 20 years, the fundraising processes have experienced deep changes. The main cause of these can be identified with the development of the World Wide Web, which drastically changed the way in which people are exposed to information (Ayer et al., 2019). The way in which brands, politicians and organizations communicate with the masses deeply changed with the creation of the internet and of social media. In this very competitive environment, NPOs, NGOs, and charities in every country have to build a careful and effective fundraising plan in order to identify the right demographics, assure them a strong online presence, create awareness about the cause, and gain new donors.
The age of door-to-door knocking, paper advertising and mailing newsletters came to an end. To be correct is better to say that all of these processes heavily shifted to their online counterparts. Digital communication and content creation skills became important for NPOs as for every other brand that tries to break even in this 21st century’s info-storm (Bennett, 2013). When a company, or an NPO, fails in the digitalization process or makes it happen really slowly, generally means that is leaving money on the table. This means that the development and the success of the organization itself are slowed down, or even compromised. Thus, charitable organizations have to keep up with the modern digital trends in order to implement an effective fundraising strategy.
2.0 Fundraising in 21st century
2.1 Concept of fundraising
Ayer et al. (2019) defines fundraising as the process of soliciting financial support and is an essential way for most non-profits to bring in revenue for their organization’s mission. Fundraising is about so much more than just asking for money. It also consists of ways for charitable organizations to build relationships, bring in foundation support, and attract new donors. According to this, is clear that getting liquidity with no long-term plan is not what a serious fundraising plan should aim to. The whole process should be aimed at a bigger picture for a long-term, sustainable and profitable relationship with the donors. Greater Bennett (2013) says the true purpose of fundraising is to raise donors. The only way you can raise money year after year is by developing a broad base of loyal individual donors who are committed to your work. To raise donors, an organization needs a firm understanding of its identity and mission so that it can tell its story in a compelling way that attracts individuals to its cause. On top of this, fundraising requires thorough planning and a willingness to make use of helpful resources, relationships, and information. The fundraising comes down to “the ask,” but much planning and work must proceed at that important moment.
2.2 Sources of fundraising
There are different ways in which an organization can raise funds where key sources are private donations, foundations and corporations, and each of them historically accounts for a larger or smaller share of the donation flow. Bennett and Savani (2018) found that the main donors in modern fundraising are private donors, which donations account for almost 80% of the total. This figure reflects a trend that is established historically, as private donors have accounted for the biggest share of donations, even before the digital age. Known this trend, looks clear that a big part of the effort that organizations should focus on for the future is to reach potential private donors and to find effective ways to communicate with them, in order to make them engaged with the cause and, eventually, retain the donors and making sure that they keep on donating over time.
2.3 Fundraising challenges
Organizations that operate in the non-profit sector have to face challenges that are becoming bigger and bigger with the years that pass. First of all, according to the publication Berman et al. (2016) funding coming from government support became more limited in certain countries in the past 10 years. For example, US-based charities can nowadays count on an average of 10-15% fewer funds given by the government. As a consequence, it becomes every day more important to be able to get donations from external sources, especially from the biggest pool of potential donors: privates. Here is where the marketing component (and alongside, digital marketing) of an organization becomes vital for the survival and the growth of a company. It has become evident in the past decades how non-profit organizations need to put efforts into creating large-scale marketing campaigns in order to enhance their fundraising activities. This is a pain point for many organizations, as they are often lacking the budget for such operations (Worth, 2017) as well as specialized employees to manage them. In this scenario, digital marketing offers a cheaper, reliable and scalable alternative to traditional marketing for these organizations that have the funds to hire specialists with the right skills………………………..