Meeting the Specific Challenges of NGOs
Most Non-Governmental Organizations (NGO’s) are well versed in the basic drivers of their programming and understand the factors that affect their everyday management decisions: RFM segmentation, response rates, gift size and frequency, postal rate changes, etc. They know how these factors influence decisions about scoring targets, personalizing offers, and improving donor specific team or unit economics. However, few non-profit operators take a step back to consider how factors like macroeconomics, competition and long-term brand equity also impact their results.
The nonprofit sector is not in isolation; it is a part of the broader market economy. It represents more than 5% of the economy in the United States, both in the form of the goods and services that nonprofits provide, as well as the amount of money that individuals and institutions spend on nonprofits. Macroeconomic factors, competitive pressure, and the equity or trading value of their brand is often a very new (advanced) analytical context for non-profits. These are factors that influence the rest of the U.S. economy as well, and when added to the analysis mix, are shown to have a significant impact on the success—or failure—of fundraising efforts.
There are three key areas for NGO's that are most often missed or underrepresented in fundraising analysis and decision making:
The use of Macroeconomic factors like GDP, S&P 500 Index, Tax Policy, interest rates, unemployment rates, and population growth
Competitiveness; versus key competitors, across major areas of fundraising investments – Media channels like DRTV, Digital and Mobile channels, PR, Partnerships, new channels like crowd sourcing, social, ALSO content and targeted messaging
Brand Equity; it’s no longer enough to focus on just short-term revenue performance. The strength or longer-term value of the (Charity) Brand and the organizations ability to calculate and leverage that value as part of its on-going investment and programming strategy is critical.
Giving USA 2018 (the industry standard report) reports that American’s set a new record in giving over $400 billion in contributions across the board (individuals, foundations, bequests, and corporations). These contributions were driven principally by the stock market, tax policy changes and surging economic conditions.
The report goes on to say that this growth in giving is applicable to virtually all charitable subsectors, suggesting that charities are connecting effectively with their donors and demonstrating their impact and case for support. However, not all organizations are experiencing growth, and certainly not at the level of many top donor-funded foundations.
How long and high will this rising tide run? How long until many non-profits are again facing challenges in the form of lackluster revenue growth and declining donor files? How can NGO’s benefit more today, predict better outcomes and future proof themselves by investing in their brand and ways to achieve and sustain share of giving advantage going forward?
These answers are at the heart of better data integration, advanced analytics and optimization, including the skillsets to address and activate change in your sector. If you’re overly focused on Microeconomic factors, burdened by traditional benchmarks or internal tactics that have run their course then Marketscience can help. Insights, simulations and predictions from advanced models and optimization tools and the training to help you put it to use are at the core of our business.