Imagine an America without poverty or disease. A land where everyone is treated fairly, with dignity and respect and without the threat of discrimination or sexual harassment. A country where economic opportunity is available to all. A society with equal access to better education and health care. An environment free from harmful pollution. People spared the violence and crime that isolates so many communities. These and other causes embody the work being done by passionate nonprofits and their business partners around the world.
Although important progress has been made on many of these issues, it’s clear to anyone tapped into their daily newsfeed or network news that utopia is not just around the corner. Solving these entrenched problems is at the heart of what most nonprofits do. And with the shrinking role of government, many of these charities are delivering essential services to offset cuts to social programs.
Yet, the success of charitable efforts is colliding with new methods, technologies and the giving dynamics of a new generation. For many nonprofits severely constrained by small budgets and limited staff, harnessing the technological revolution for social good is still beyond their grasp. Experimentation is risky. The right leadership or processes aren’t in place. Funding mechanisms don’t incentivize or reward collective impact.
Still, progressive nonprofits are learning they can try novel approaches and work effectively in collaboration with others for the greater good. What do they know that other charities don’t? They understand that their impact is not limited by the psychological or geographic boundaries of their own organization’s footprint. They know they have the power to do more as partners in purpose.
Wisconsin Nonprofit Sector Soars
A 2015 report, Nonprofit Wisconsin In Brief, reveals this sector is growing—13 percent since 2005—with nearly 19,000 charities registered with the state IRS. On top of this nonprofit pool are many more religious congregations and smaller groups that aren’t required to file with the IRS, making it hard to pinpoint the exact size of this sector. These numbers include large not-for-profit hospitals and higher education systems that the public may not readily associate with the nonprofit world.
Says David Callahan, founder of Inside Philanthropy, we have too many nonprofits. Many are working on the same issues and jockeying for funding and attention in an overcrowded market. On the one hand, having many voices and diverse groups tackling every angle of an issue can mobilize different donors and attract different constituencies. On the other, when many charities are focused on the same cause there can be tremendous duplication and waste. Like every business, each nonprofit organization requires management, staff, boards, financing, communications and development to run their enterprises. In addition, operational expenses for office space, software, telecommunications, insurance and other benefits also add up.
The proliferation of many small charities working autonomously without collaboration makes it difficult to achieve goals, says Callahan. They simply can’t reach the scale required to have the impact desired. More consolidation and innovation among smaller nonprofits around common causes could help charities not only survive but thrive by exploiting economies of scale and the benefits of a more diverse and knowledgeable brain trust.
Quest for Funding Causes
The National Council for Nonprofits reports that two of the top three trends impacting the sector are: 1) limited resources; and 2) increased community needs driving demand for scarce services. Less government support and reduced private funding are creating a more competitive nonprofit environment. Add to this picture recent changes in tax law and the downward trend in the share of individual households that give to charity, it’s clear nonprofits are being expected to do more with less.
From Health and Human Services charities to organizations supporting Arts, Culture and the Humanities, the diverse pool of nonprofits rely on many of the same revenue resources to accomplish their missions. These include fees charged for program services; grants and donor contributions; investment and other income. Federal, state and local governments also enter into agreements with nonprofits for service delivery, contracts that are often complex, reporting-intensive and plagued with late payments to charities. All these factors contribute to a fragmented giving environment. This can leave donors and funders wondering where all that money is going and when the next request for a gift will come.
At the same time, we have seen the emergence of new approaches to giving. Technology is spurring next-gen philanthropy that few nonprofits have kept up with. In the new data age, we can expect there will be a dramatic shift toward more strategic grantmaking and monitoring for a better return-on-investment (ROI). This means focusing less on what nonprofits do and the number of people they serve and more on measurable outcomes. An outcome-based approach takes sound strategy focused on what nonprofits are trying to achieve, developing the programs with the best chance to make a meaningful difference and measuring success.
Show Me the Data
The wave of Big Data has hit every enterprise including nonprofits. Most struggle with just what data to collect and how to use it. Moreover, charities often lack the software, staff or training to wrap their arms around all that data. A 2016 survey by EveryAction reveals few nonprofits are optimizing their data. Just 6 percent are confident the data they gather is being used effectively.
These trends are troubling since data factors into everything from donor management and fundraising to marketing and social media. High-impact organizations are making data a fundamental part of their cause-related marketing and decision making. Take global nonprofit charity: water, for example. According to Chief Water Officer Christopher Gorder, data is the charity’s change accelerant. Data is part of the nonprofit’s everyday workflow to guide where, when and how its projects to bring clean and safe drinking water to developing nations are funded.
Since its founding in 2006, charity: water has helped more than 7 million people in 24 countries get access to clean water with community owned projects. Private donations cover the charity’s operating expenses, so 100 percent of individual donations support causes.
To help evangelize its mission, charity: water readily shares its core brand assets with supporters, inviting them to tell their stories, help with fundraising and make the most of the nonprofit’s community centered approach. These brand relationships extend to major corporate partners like Google and Caterpillar. Brand partners reap the benefits of cause marketing campaigns, employee fundraising drives, integrated events, social media amplification and other integrated tactics to shine a spotlight on the world’s water crisis.
Social Responsibility Meets Collective Impact
From venture philanthropy to social entrepreneurship, today we are seeing the evolution of purpose-driven branding like never before. The concept of Corporate Social Responsibility (CSR)—businesses acting in the greater interests of society—emerged in the 1960s but really took off in the 21st century. Purpose-driven and powerful organizations like Walmart began imposing this discipline throughout their supply chains, establishing criteria and shared goals for environmental causes and social benefit. Annual CSR Reports became as ubiquitous as annual financial reports for publicly traded companies.
Proponents of CSR initiatives commonly refer to businesses’ need to support the Triple Bottom Line: people, planet and profit. But measuring the value of social impact is difficult.
The Impact Genome Project
Jason Saul, who serves on the faculty of Northwestern University’s Kellogg School of Management, says it’s hard to quantify the social dimensions consumers attribute to brands and companies’ CSR efforts. To meet this challenge, he and his team have been working hard to come up with standardized data and benchmarks for measuring the promise and impact of social programs. He calls his new solution The Impact Genome Project (IGP). The IGP is an effort to catalog hundreds of thousands of published and unpublished research studies and evaluations. Saul and his team are basically coding the “genes” that drive positive social outcomes and progress on causes.
Using the Genome, he says we can develop predictive models and tools that can radically improve the ROI in social change, saving millions of lives and impacting billions of people. The IGP comprises over forty genomes, from youth development to criminal justice to arts and culture. Its cost is $50,000,000. Additional investments will be needed to build the capacity for 5,000 charities worldwide. We have evidence-based policymaking, investing and marketing, why not apply this standard to causes and social impact, Saul asks?
Whether or not the IGP succeeds is beside the point. Our data-driven economy is here to stay. Digital technology is transforming every aspect of our society. So, it’s no great leap to assume that data will also transform philanthropy as more grantmakers, business partners and individual donors call for greater transparency, accountability and proof that what they are funding to support causes is working. Under this scenario, competition for funds will certainly become even more fierce. Priority will be given to nonprofits working effectively to make the most impact. Charities failing to make the case for social impact risk being left behind.
Cross-Sector Collaboration
One way that nonprofits are bridging funding gaps: collaboration with other charities to improve or increase services offered, a tactic reported by 51 percent of nonprofits in a recent Nonprofit Finance Fund survey. Some are extending their collaboration across sectors, working with like-minded charities, government, businesses, grantmakers and others on shared causes for collective impact.
In fact, a growing chorus of voices are calling on nonprofits to engage in more cross-sector activity to address society’s most urgent causes. They point out that while there are many charities (hundreds, perhaps thousands) focused on ending poverty; improving education, health care and the environment, solutions are often siloed or piecemeal. With so many disparate programs it is often difficult to tell what real impact they are having. Leading the chorus are thought leaders like Jeannie Becker and David B. Smith, consultants focused on developing purpose-driven leaders. They write in the guide Cross Sector Leadership:
In this century society will confront obstacles of unparalleled complexity. Critical issues such as climate change and water scarcity, the widening gap between rich and poor, declining educational outcomes, and cultural conflicts demand our full attention.
Becker and Smith argue solving complex problems requires engaging both the people affected and the underlying systems at work.
The framework for collective impact grew out of an article in the Social Innovation Review in 2011. Collective impact goes beyond the principle of two-way collaboration. Instead, the goal is to develop purposeful intent and activities around a single cause, problem or issue. The collective impact approach builds on the strengths of individuals and groups, moving the initiative forward using a community wide strategic lens. Ideally, collective impact projects will be inclusive of voices representing the community, and tackle policy changes to make lasting systems change.
Milwaukee Tackles Teen Pregnancy
In 2017 the Collective Impact Forum embarked on a field-wide study to answer this question: to what extent and under what conditions does the collective impact approach contribute to systems and population changes? They studied 25 sites across the U.S. and Canada as part of the Collective Impact Research Study. One important program they studied, the Milwaukee Teen Pregnancy Prevention Initiative, is now a model case study for collective impact. This program is spearheaded by United Way of Greater Milwaukee and Waukesha County in partnership with the Milwaukee Journal Sentinel, the city’s health and education departments, and many more nonprofits.
Here is a recap of the program’s key metrics from The Bridgespan Group:
Focus: Teen pregnancy; metrics tracked include teen birth rate
Founding date: 2006
Leadership: United Way of Greater Milwaukee and Waukesha County
Results: The teen pregnancy rate in Milwaukee dropped 31 percent between 2006 and 2011, from a high in 2006 of 52 births per 1,000 teenage girls. By 2013, the rate dropped much further—decreasing 56 percent since 2006, far exceeding the collaborative’s original goal of a 46 percent reduction in teen pregnancy.
Milwaukee’s experience over the last three years: Milwaukee’s teen pregnancy prevention initiative is a story of cause focus and continuity in its partnerships and its methods. It’s far-reaching impact is the result of a community wide, multi-media campaign featuring hard-hitting creative and provocative social marketing overlaid with group education in the schools and after-school programs. Integration and sharing a consistent message was clearly a key part of the program’s success.
Milwaukee has now set a very ambitious goal to reduce the teen pregnancy rate another 50 percent by 2023. Serve Marketing, a nonprofit ad agency founded by Gary Mueller and led by Laura Gainor, has developed the brand look and messaging for all media-driven teen pregnancy prevention campaigns for United Way since 2006.
The Power of Cause Collaboration
As nonprofits struggle to fund their programs and services, investments in infrastructure and overhead—websites, software, social platforms, processes, marketing, PR, and measurement tools—falls further down the list of spending priorities. The Stanford Social Innovation Review describes this paradox as The Nonprofit Starvation Cycle. Because the public has been conditioned to believe nonprofits must maintain low overhead, the resources to market their causes, program solutions and success stories are scarce or nonexistent.
Unrealistic expectations about what it costs to run a successful nonprofit force many into untenable positions. According to the National Council of Nonprofits, the vast majority of charities have operational budgets under $500,000. Despite these fiscal constraints, most are asked to meet growing demand for services without the marketing advantages the for-profit sector enjoys.
It often takes awareness on a mass but targeted scale to get your audience to even know that you exist. Building awareness about causes is no different. What’s more, unless charities continuously engage their donors and advocates they risk losing their support. Loyalty only lasts if it is nurtured. That’s why most skilled communicators adhere to the Marketing Rule of 7: the idea your audience must hear your message at least seven times before it registers and even more times before they act on it.
Since consumers are now bombarded with hundreds of ad messages in virtually every part of their daily lives, consistent and cohesive communication is essential to break through this cluttered media environment. Your passion alone for your charity’s cause is simply not enough.
Co-Marketing Clout
Many nonprofits have discovered the value of developing marketing partnerships with leading brands through cause marketing campaigns, sponsorships and other social impact activities. But small charities without marketing in place or robust media channels for brands to tap into miss out on these opportunities.
However, the co-marketing model allows collaborators to share creative resources and develop joint media opportunities. Co-marketing has tremendous, untapped potential for nonprofits willing to put causes first, their organizations second. With the increased pressure on nonprofits to deliver on their missions in creative ways, pooling resources to collaborate on co-marketing activities makes both financial and strategic sense. Here are a few other benefits to consider:
- Increased reach and impact on causes from a more targeted marketing effort using robust media options (paid, earned and owned);
- Access to new skills and networks through the collaborative insights of the executive suite, field teams and board members;
- A chance to leverage the extended relationships unique to each charity;
- Better creative and communications materials to deliver a cohesive message aligned with each charity partner’s mission and purpose;
- Shared risk for trying new methods and proving results; and
- The opportunity to accomplish together what none of the individual charities could achieve alone.
If wishes were horses, nonprofits would all be riding high on the passion and commitment of their most ardent supporters. Unfortunately, without effective marketing in play, too often their message is rarely seen or heard.
Getting Your Message Across
Even iconic nonprofit brands can find they have lost their way in the new giving economy. That’s why one well-known nonprofit with an enviable reputation, Habitat for Humanity International, decided on a rebranding campaign in 2016. Leadership at Habitat recognized the dynamics of giving are changing and the nonprofit needed to change with the times. Since its founding in 1976, the grassroots, Christian-based charity has struggled with getting its message across to key stakeholders. Despite strong brand recognition, few really understood Habitat’s cause, what exactly it is that Habitat does or how they do it.
So, with the help of the branding agency Little, Habitat conducted a massive consumer survey to uncover its weaknesses and misperceptions about how the charity fulfills its mission. The biggest fallacy: the belief that the people helped by Habitat get their homes for free (in fact, they help build their homes and pay a mortgage). In addition, research revealed that although consumers don’t necessarily support housing as a cause, they could get behind the idea that having reliable shelter alleviates poverty and leads to better health, two benefits from having a stable home.
Habitat honed its approach, messaging, visual imagery and other branding elements through focus group testing. The new brand message became: Habitat builds strength, stability and self-reliance through shelter. Habitat launched its new brand strategy in October 2016 and provided local affiliates with new creative that could easily be customized. Just as important, new brand guidelines explained the rationale for the change, the specific reasons behind the research-based strategy being implemented, who the nonprofit’s most promising donors and volunteers are, and how to reach them.
Habitat Finds its Message
The new branding campaign and creative materials developed for Habitat now has affiliates in every state, county, community and more than 70 countries around the world “speaking with one voice,” says Chris Clarke, Habitat for Humanity’s senior vice president for marketing. Building on its new brand platform, Habitat launched its first-ever national fundraising and cause awareness campaign in the Spring of 2017.
#HomeIsTheKey used the hashtag and branded retail products; corporate sponsors like Nissan; celebrities like HGTV’s Chip Wade and the New York Mets as national partners. Launched at the Met’s season home opener, the campaign generated massive media attention. Throughout the month of April, the nonprofit leveraged its social platforms and in-store retail environment at ReStore outlets everywhere. This year, Drew and Jonathan Scott—popular hosts of HGTV’s Property Brothers—share the campaign spotlight.
Since small charities don’t have the resources or brand equity a large nonprofit has, creativity is required to generate attention and messaging that resonates on a similar scale. Why not work together as partners in purpose to craft memorable communications campaigns that achieve the desired effect?
The Future of Philanthropy
As Boomers retire, trillions of dollars will transfer to the next generation of heirs, millennials. Unlike their parents, millennials:
- Love crowdfunding and social giving;
- Are passionate about causes, not a particular nonprofit or charitable organization;
- Feel driven to enact change today, not in the distant future;
- Expect constant connectedness; and
- Don’t like nonprofit “self-talk” unless it is backed up by tangible results.
Not only do millennials bring these expectations to charities, they also set a high bar for accountability and transparency. This requires changes to how charities tap into this pool of potential donors and volunteers. For instance, although overall giving grew by about 1 percent in 2016, online giving grew 7.9 percent largely through the generosity of tech-savvy millennials, according to consulting firm Blackbaud and its Annual Giving Report. Nearly 17 percent of online donations were made on a mobile device.
The millennial generation is now the largest living generation, surpassing Baby Boomers in 2016. Life-changing events, such as the shooting at Stoneman Douglas High School in Parkland, Florida, are transforming this generation into activists on a scale not seen since the Vietnam War. They are driving more brands to adopt socially responsible marketing. They expect employers to take a stand on humanitarian and social issues, regardless of how big or small the company may be. They want to have a personal connection to the causes they choose to support and to know that they are part of the solution.
Millennials are coming of age at a time of unprecedented technology change, factors that should spur more nonprofits to seek collaborative opportunities and shared solutions in the new giving economy. If not now, when?
If you are interested in exploring opportunities to achieve more for social causes through co-marketing for collective impact, please contact me at: mary@liftreputation.com or 414-429-6180.
