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Shopping Around; why charities shouldn't always rely on commercial sector solutions

Everyone working in a charity is looking for the next big thing that will help them deliver their mission. How can we grow? How can we get more money in? How can we do things more efficiently?

Everyone working in a charity is looking for the next big thing that will help them deliver their mission. How can we grow? How can we get more money in? How can we do things more efficiently? Unsurprisingly, charities often look to the commercial sector to learn lessons and see what can be useful. But, but, but… I can’t help thinking that sometimes we look to the commercial sector for an answer when we shouldn’t.

Charities and companies undertake many of the same activities, like retail for instance. Although charities’ shops and catalogues have added complications like volunteers or stock donation, their business model is essentially the same as that of their commercial counterparts. Another example is the provision of services; delivery is the same, even though the principles may be different. Clearly there are lessons and experiences in these areas that charities can and should use to be as effective as possible.

The voluntary sector has undoubtedly benefitted from developments in the commercial marketing world. Indeed, advertising, market research and brand development are just a few disciplines now commonplace in modern charities that came directly from the commercial sector. Another is audience or market segmentation, which started in the commercial sector in the 70s and 80s and is now a well-used voluntary sector tool. We’ve completed six of those in the past few years for charities of different sizes, a sizeable increase from the two we did in the five years before that. We've also got a free report on the benefits of segmentation here.

There are obvious benefits provided by the commercial sector, but it’s not always the best choice. So, when are we the same and when are we different?

It may sound obvious, but it lies in the nature of the relationship between charity and donor. No other sector has to raise money through donations to do their work and there’s a big difference between a ‘purchaser’ and a ‘donor’.  If I buy food and I don’t like it, or it’s low quality, I’d throw it away and not go back. However, if I make a donation and then something happens to make me doubt it has been used well, I’d feel conned.

When I go into a clothes shop, I might go home with a dress, but when I make a donation I don’t get anything concrete in return.  While these are all ‘transactions’, the motivations and the exchange are of very different types. In addition, the motivations are very different - I give because of something I feel strongly about, something that happened in my life or to a loved one (the top three motivations people cited in our Charity Awareness Monitor). Trust is at the heart of that relationship because there is (generally) no tangible product in return.

This is a fundamental difference between charities and the commercial sector and it must be a consideration when implementing any crossover tactics. Trust is so important in the voluntary sector and it fluctuates widely. This isn’t the case for other areas or institutions. Of course, trust matters for every brand, be it commercial, public or voluntary, but it is especially important in the donor relationship. One of the ways that we can build trust is by understanding and responding to the motivations and needs of this audience.

So when faced with tight budgets and short deadlines, how can we do this?  Of course, as a researcher I am going to say research, but it really is fundamental to understanding ‘why’ and it needn’t be an expensive process. You need to make sure you use every opportunity you have to gather data on your supporters and here are some tips on how to do it:

  • You can collate all of the anecdotal feedback you get from donors over the phone or at events
  • Make sure you understand what donors’ complaints are
  • You could add a couple of questions when a new donor signs up to understand why they have started giving
  • Use your supporter survey and research completed by other departments to mine all the knowledge available. It’s often surprising how much already exists
  • Use publicly available data like our free reports to build on your knowledge - ‘Getting the Message Across’ discusses donors concerns and how to respond
  • If you have the money, commission research or segmentations to understand what makes your audiences different

Above all, set aside some time to sit down with people from different teams to examine what you’ve found and learn from it. The relationship that charities have with their donors is a precious one. It’s not driven by a desire for profit or the latest designer handbag.

By all means, let’s use developments and experience from the commercial sector to improve the work of charities, but remember that the reasons that donors give is the same reason people work for charities; to change the world for the better.

Michele Madden

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