The Fairy Tale of Modern Corporate Fundraising
Once upon a time…
There was a group of corporate fundraisers living happily and peacefully in times of ‘traditional’ media. When trying to raise funds, they would use a letter, advertisement in a newspaper or would simply call and/or visit the companies they wished to attract as donors, sponsors or partners. Money was not impossible to raise as donors remained loyal and did not need much to be kept entertained. Stories told by the fundraisers were easily accepted, as there was not much media to contradict their messages.
Then suddenly everything changed…
The Information Era kicked in: our current age in which individuals have to ability to transfer information freely, and have instant access to knowledge that previously would have been hard – if not impossible – to find. Our current economy is based on sensation and manipulation of information. The poor fundraisers experienced an increasing amount of trouble trying to find supporters for their cause. Their prospect donors and sponsors became a though crowd, hard to convince to give and even harder to retain, as they were a lot less loyal then they used to be in the old days. Their old letters, calls and visit did not do much good, as they were overruled by powerful new media like Twitter, Facebook and other online social networks, blogs etcetera.
The villain called 21st Century had taken control of the fundraising kingdom, creating very demanding, hard to get interested, easily bored potential donors. The villain also got control of the most important target group of these fundraisers: the companies. They turned the companies into very critical institutions who hardly ever gave something away and were even pickier on whom to give their precious support to.
The corporate fundraisers became more hopeless and desperate everyday…
Until a fundraising hero stood up!
One of the corporate fundraisers had been sitting in his office for days and days in a row, just thinking really hard how to solve this all. Then, finally, after many hard days, he came up with a plan: if we simply adjust our strategies and make the 21st Century our ally, we can actually turn this into a positive story for ourselves! He ran off to tell the other fundraisers and they decided to learn all about their supposed enemies, the new/social media, and started using these tools to get the attention of their prospect corporate donors in a fun, attractive way. Once they learned how to deal with the 21st Century potential donors and sponsors by using new tools and methods, it all worked out,
And they all lived happily ever after…
Moral of this story:
It is nowadays increasingly harder for non-profit organizations to attract new funds, especially in the corporate field. This is most likely due to our changing society: everything is fast; changing all the time; information is available everywhere and to everyone; people become more demanding, therefore harder to attract and less loyal, this goes for individual donors as well as corporate donors (who are probably even more critical on who to give money to these days).
I would really like to know from all of you who read my Fundraising Fairy Tale what your opinions and ideas are on: how exactly has our modern society influenced the process of corporate fundraising, according to you?
I am sincerely looking forward to your contributions to my story!
Kind regards from the author: Maartje Natrop
PS: for more information on this topic ( interviews, movies, articles, surveys etc.) check the ‘background information’, on the top right, under ‘topics’!
Welcome to my blog!
This blog was firstly posted on KnowhowNonprofit.org,
I have copied the reactions I got there to give you an idea of the discussion that was going, please add your comment!
LisaArt wrote on May 04. 2010
I believe that so much in live has changed due to the modern society. I also think this is positive. In my opinion corporate fundraising has changed in the sense that the non-profit organizations now have to prove why giving the non-profit org. money would be beneficial to them. I do not think that organizations nowadays give “away” money because they believe in the cause, but because its tax deductible, looks good to the public etc.
maartjenatrop wrote on May 04. 2010
Thanks for your post Lisa, and I agree with you.
Nowadays its more about what you as a nonprofit have to offer than what the donor has to offer to you.
Nice quote from Kay Grace: ”in good times and bad, we know people give because you meet needs, not because you have needs.
However, one more question: do you consider this as a change due to modern society, was this different in the old days or…?
LisaArt wrote on May 05. 2010
thats a good point – i guess its due to modern society – as nowadays in this society everything is about oneself and not about other people, so how can what I do, look good. I think this was not the case before, i also think religion has to do a lot with it. In the past, people gave because the bible said so, nowadays people give because society says so, and because it looks good in the company profile. But then again I could be wrong.
Missysilvi wrote on May 09. 2010
I think corporate fundraisers have now (more than before) better access to free tools and information about the companies they want to approach and thus this would (in theory) allow them to be more effective. For example, fundraisers can follow closely certain companies, how they manage their reputations and especially, issues that are important to them. Then they can use that information when “pitching” for donations. They can make impressive presentations proving the company who donating for a certain cause can improve their reputation and indirectly affect their profits. I don’t think there’s anything bad in donating just to appear good, companies need to appear good, but important is to actually be good, (and not just to appear good). However, the other side, people in need, need the donations and they don’t care about the reason why companies donate. The fundraisers want sustainable donations. So nowadays what has changed is that companies (as potential donators) are more under pressure to appera good than before, because the citizen is becoming more and more critical (this is why CSR, corporate social responsibility, is becoming so important nowadays for big corporations). Companies are more responsive (or at least should be) to society and the problems in the world, and are more pressured to help to solve them. This is only to the benefit of fundraisers as they can now use the internet and online media for better monitoring of the behavior of their potential targets (companies) and use that to better convince them to donate.
EstyIce wrote on May 09. 2010
I am doing my work placement at a non-profit organization. What I notice is that corporate fundraising is becoming harder, especially because there is a decrease in the availability of ‘free money’. Previously, companies would make money available to NGO’s which they were free to spend. Sometimes these were even longer-term contracts, with a certain amount of money each year. Right now there is a shift, companies are less generous. This is partly because of the economic crisis. Companies are demanding more information on the company and on specific project. What I see is that companies are very much willing to donate money to specific projects, which fit to their corporate profile. It is therefore a challenge for NGO’s to find the right company to talk to for a project.
This is not necessarily a bad thing. When the right company can be found as a partner for the right project, the two can strengthen each other. The project (and thereby NGO) will have more funds available for a better campaign and the company in return will gain a more positive reputation.
Our ‘modern society’ probably also has had an impact on this. There are a lot more opportunities for both companies and NGO’s to reach their target audience. On the other hand, this poses a problem because of the increased fragmentation of that same audience. So a lot more thought needs to be put behind setting up a campaign.
Ntrip wrote on May 10. 2010
I think the modern society has changed the corporate fundraising a lot!! As others have already stated, companies do not give away money anymore. They always want something in return. People have become more individual because of the modern society. Helping yourself instaid of helping others. Most of the things a company does, they do to make themselves better and gain more profit. Not to help other companies. Moedern society has also made it possible for companies to adversite for free with facebook or other social networks. This way they gain more brand awareness and they do not need other companies anymore. (less other companies). I think it is a very interesting topic because there are so many examples of things that modern society has changed!
Arsh wrote on Tuesday 21:04
I also believe that modern society has changed not only companies, but also human behavior. We are all more driven and sometimes even forced to engage in complex situation, and persuade/ convince others of our believes, or in case of working for a company, our products & services. The whole society is based on persuasion, and convincing others of our own rights, or just in order to earn money. This has both advantages and disadvantages. As fundraisers are forced to learn more about persuasion techniques, and furthermore are able to present their organizational objectives better. However, this is not their general objective, as they often need the money to do their actual job! This makes it in most cases even harder to function their own jobs, as it might become a daily task assigned to a person, to raise funds in order to support the organizational goals, and most important in order to survive! This is in my opinion a disadavantage!
Alvi wrote on Thursday 04:18
Maybe society has changed but not human being or our emotions. There might be some other back reasons behind this decrease. For example, decrease in corporate fundraising might be due to fewer profits of the businesses or lack of trust in an NGO could be a reason.
I believe NGOs should involve donors in planning of spending not only earning from them.
I know few NGOs from England raising funds for India, Pakistan, and Bangladesh, but neither I nor any of my friends have heard about them or seen them active in Pakistan.
So, I think gaining trust of companies is also another big factor to raise funding. They should inform about the way their money has been spent. Certainly, it will motivate them to offer more money.
Ixia wrote on Saturday 12:23
I must say that I agree with Esther. Due to the economic crisis companies are less willing to donate. Besides this, they also seek for organisations that fit their interests and company profile. But as Missysilvi already said, through new technology inventions, like social networks, corporate fundraisers can do research on companies they want to approach and see if their profile matches theirs and thus find a right way of approaching them hoping they will get financial support,
charlyvanvoorst wrote on Saturday 16:48
Hi Maartje, great topic! Interestingly enough I’m just doing studying complexities foreign aid faces to achieve development for my masters. I think that besides the dynamic society we live in today and obviously the financial crisis, part of the issue is also the fact that there are simply TOO many funds. The multiplicity of donors and aid funds, programs and projects makes it extremely complex to envisages and govern these projects. Especially as we are trying to control these projects through a top-down approach -instead, we should be looking from a micro-level at where the funds would be going in order to be efficient. Another possible issue with fundraising for non-profit purposes is the fac tthat we are trying to look for resources in the donor country only (this is called “tied funds”) where the purchase of goods and services for these projects are a lot higher. These distortions are caused by the strategic and commercial interest of the donors, who stand too far from the actual project.
Hope this helps at all but please contact me if you need any clarification… Good luck with your research, very interesting topic!
corporatefundraising
May 18, 2010
I do believe companies will think twice before they will invest in any non-profit organization. I also think faith of consumers and corporations have declined, when you frequently read reports of high excutives getting slumps of bonuses to keep them happy. Although times are changing, it doesnt mean it can’t be done. Look at Haiti! have a natural dissaster, media attention and you got what you ask for (money).
Sergio
May 19, 2010
I think a lot is allready covered and I do believe that because of the information overflow we are well aware and sceptic about what to believe or not. we know and believe that everything is about making profit and money and that also counts for non-profit institutions. As well If one srews up and it blows over the media, we will be convinced that it is pretty much what’s going on everywhere. A lot of scandels for charity had made us boubt the true mission behind it and I must confess that I doubt it myself as well – they pay great salaries when working for a charity and have a lot of BBQparties that makes you wonder where your money goes.
Even that said – a lot of companies just donate to charity for some extra publicity and nothing more.
It’s all in the game
skakovski
May 20, 2010
Not only do new media have an impact on fundraisers, most companies are forced to change their business models. I guess it’s a lot easier nowadays to raise funds because of the all the differant channels and networks you can rely on. Note that you DO have to distinguish yourself these days in order to succeed.
Ps. what a coincidence your final paper is about fundraising in the non profit sector, my internship is at a non profitable fundraising company!
Lennart Gish
May 21, 2010
@ Sergio: I suppose you are talking about the latest Unicef scandal…
I can understand that these events make the (both individual and corporate) donors loose faith in the charities they support. Smaller non-profits usually work with a small, low-paid staff and a bigger amount of volunteers, these financial scandals would never occur with them, but they do suffer under the increasingly negative image of the industry, caused by such negative events.
I don’t think however that that is directly related to our modern society or changing patterns in the corporate fundraising industry…
@ Skakovski: you state a lot of profitable companies support non-profits for the publicity it generates, which I can confirm, I spoke to many experts in the field and they all state that the focus nowadays lies in ‘return on investment’ (that is a typical aspect of fundraising in modern society), it has to be a win-win situation for both parties, and for the profitable company that can be indeed a commercial win, like publicity or building a ‘CSR-proof’ image. However, does it really matter? As long as they non-profits receive support from cooperations to execute their plans, I believe the reason behind the corporate gifts does not really matter…
@ Lennart: I agree, there are many (new) possibilities in using multichannel (social media) strategies, like reaching a bigger and broader target audience for example. It is also very true that you have to distinguish yourself from others non-profits, you have to be able to show the urgency and authenticity of your goal in order to generate corporate support, companies are much critical in who they support nowadays, I do think that’s another typical aspect of corporate fundraising in the 21st century…
corporatefundraising
May 21, 2010
Just got a comment on my old blog with some good points, so decided to copy past it here
Magazineinfluence wrote on Friday 11:58
Modern society goes along with modern people. Modern people have access to lots of information and are, way more than back in the days, curious about where their money exactly goes too.
I don’t think modern society is totally the reason why the process of fundraising is changed so negatively. The financial crisis is also a huge reason why personal and corporate fundraising is very hard nowadays. Also the in the amount of fundraisers increased enormously! Back in the days there were for example 10 fundraisers, nowadays there are 100! It’s not easy to choose where to send your money too cause there is so much information and the ideas of all are so alike…
Even though modern people are more web based people, in my opinion fundraising asks for personal contact. People and companies expect more from the fundraising organizations in words of information, distinguish and results… Give that and you’ll find the money…
maartjenatrop profile
maartjenatrop wrote on Friday 13:38
I agree: the financial crisis is indeed another major factor of influence on the corporate fundraising sector, making companies more critical on who to give their money to, and also companies giving more non-monetary support (knowledge, skills, products, volunteers) instead of money, because when the economical situation is not stable, there is simply less money in the corporate budget to give to charity.
I also totally agree on the fact that you say there are to many fundraising parties nowadays, many of them with same goals. The supply has become bigger than the ”demand” (or, the ability of donors to give).
I was on a congress yesterday, called Civil Society 2010 (a congress where all important parties in the philanthropy and corporate sector come together) and one of the conclusion of the day there was that there should be a better cooperation/organization amongst non-profits. If these organizations start working together, more donors/supporters could be reached!
corporatefundraising
May 21, 2010
Even in better times, I think that raising money from corporates has always been one of the most difficult areas of fundraising.
Although the very largest companies have their own grant making trusts, corporate giving, in my experience, has been mainly through donations in-kind rather than cash. The exception to this can be through staff fundraising.
Charities looking for corporate support need first to build a relationship with the companies they identify, but this takes time. Research into possible supporters is a good investment but some charities are unwilling to invest in the time needed to produce results – probably because they need the money now.
But all this only really applies to charities seeking substantial support. The smaller groups I have dealt with have nearly always been successful in getting low value vouchers from retailers to spend in their store or small gifts as raffle prizes – but, again, rarely cash.
I found that smaller voluntary groups looking to raise money were very resourceful and hard working but short on ideas, so I produced a list of “200 Fundraising Ideas for Voluntary Groups”. It will eventually be a book, but in the meantime it is still a list.
If you want a copy of the “200 Ideas……” , it’s available as a PDF file. Send me an email at socialprofit@hotmail.co.uk and I will forward it to you.
Dennis Yeomans
May 22, 2010
Well I can only agree with a lot that has been stated above. Indeed the amount of information that both corporates as individuals can find has made them more cautious about who they want to donate money to while at the same time they generally have less money to donate due to the economic crisis. What I believe has the most influence is the fact that nowadays far more non-profits exist as in the past as well as many more corporates exist. In order for the corporates to become noticed in the market they will want to work with a non-profit organization that relates to them the best and offers them the best image. I do not see this as a negative thing. I am a big fan of the work of non-profit organisations but they have to earn the donations they receive.
icmme
May 24, 2010
@icmme: I think you make a good point when you state that non-profits have to earn the donations they receive. That is exactly why profitable companies have become more critical in supporting nonprofits nowadays, there are so many of them and they expect the ones requesting their support to be really able to show why they deserve it/why they should be supported and not another similar organization, what problem they focus on and how they are going to solve it and urgency: why their cause really needs attention now.
But is guess that’s indeed not a negative thing, just a challenge!
What do the rest of you think?
corporatefundraising
May 25, 2010
I think that because of all the new media on internet, for instance Twitter, Facebook and the innumerable amount of blogs and forums, all organizations have become more transparent. This goes for profit- as well as non-profit organizations. Every organization has a website and the whole world can see just what the organization is about. In the old days, before there was internet, you needed to do more ‘field’ research if you wanted to know more about an organization and nowadays you can read everything you want to know online.
In my opinion, this development makes companies that want to donate more critical towards non-profit organizations that need donations. The image and profiling of the non-profit organization has to be a perfect match with the image and profiling that a company seeking for a good cause wants to establish. Companies want their (good) name to be linked to a non-profit organization that enhances their intended image. For example, a company that sells glasses and contact lenses sponsors a non-profit organization that trains guide dogs (for blind people) because that enhances the image they want to create.
In my view, because everything about every organization is available online, the matchmaking process between a company and a non-profit organization is far more complicated than before.
Liset
May 31, 2010
Just got a new comment via another source which I wanted to share with you:
David Huidekoper, Wednesday June 2nd 2010:
What a lot of people forget is that most companies who engage in corporate fundraising, are in it for their own benefit. The ability to tie your company name to a good cause adds to your corporate image, but it is a complete facade in many cases. For example; BP sponsoring a ‘green’ solar powered car race to show the public that they are engaged in eco friendly areas, is 100% false advertising of course. The biggest oil company in the world does not give two shits about ‘green’ energy, but it improves their image and society more or less demands that all companies have certain eco-standards nowadays.
Social Media has given new opportunities for fundraising and seeing that fundraising is usually done in favour of a good cause, this is a good development overall. If you look at it objectively, the only thing that is important is that money can be raised more easily with the help of social media, regardless where it comes from.
So yes, a good development, even though it allows true corporate identities to hide behind a false image perhaps.
Maartje
June 2, 2010