We recently sat down with Linda Williams, EVP, Chief Strategy Officer, for her perspective on how fundraising is changing and why. She highlighted several catalytic societal trends and industry mindset flips. Here's her take on an evolution that’s shifting fundraising into “marketing to raise funds.”
Q: You often mention how nonprofits are evolving from the inside in response to changing times. Can you give us an example of this?
A: What I'm referencing is that, historically, the function of fundraising has existed separately from the programmatic operations of the nonprofit. There was also a belief that the nonprofit's only "customers" were the beneficiaries (the people served by the mission), while fundraising’s customers are donors, often viewed one-dimensionally as “the money.” But now, there is a greater acknowledgment that for a nonprofit to have a sustainable model, the entire organization needs to embrace the importance of donors and expand their notion of them. This means recognizing that donors care deeply about the programmatic work and its impact, and that they are vested brand advocates contributing to the advancement of the mission. And similarly, there is an expanding notion of a nonprofit’s beneficiaries and the prominent role they can play as the biggest brand ambassadors and financial supporters in some situations. And so, therefore, the lines start to blur where fundraising is increasingly integrated with the programmatic work.
Q: What else is challenging the traditional definition of fundraising?
A: Modern philanthropy is increasingly, wonderfully diverse. There are many reasons for this, including the rising generations — our kids and our kids' kids. These cohorts have quite different expectations about how societal changes should be addressed and why and how much they want to be involved. They care about how organizations they support with their dollars respond to social, cultural, and environmental issues. This became abundantly clear in 2020, a watershed year of social awakening. It was an accelerant of so many societal trends and fundraising's continued evolution.
Q: What do you mean by the social awakening of 2020 serving as an accelerant of fundraising's evolution?
A: I believe it highlighted that seeking to create social impact has gone mainstream, and people have more options to achieve this. Philanthropy used to be something that a specific demographic did at a certain point in their life or during deliberate times of the year. It was often separated from the everyday. But since 2020, creating social impact has moved to the fore of the collective consciousness. And today there are so many opportunities for people to make progress toward these personal social impact goals as they move through their daily lives. Social impact messages and giving opportunities (whether time or money) are ubiquitous — and they are not just being offered by nonprofit organizations anymore. The competition for social impact dollars has expanded to include for-profit companies. In addition to the huge increase in the number of new nonprofits, purpose-driven companies like Toms Shoes, Bombas, Patagonia, and Warby Parker are capturing the share of wallet that was once earmarked for traditional philanthropic organizations.
Because people are changing how they think about making their dollars work, as nonprofit marketers we need to shift our mindset, too. That’s a new messaging challenge that nonprofit marketers will increasingly need to overcome to win over these donors and gain their social impact spend.
Q: How else is the convergence of the private and public sectors affecting fundraising’s evolution?
A: One of the most exciting changes I am seeing is the talent entering the nonprofit space. Historically, career paths were carved in either the nonprofit or for-profit world, and rarely did the two overlap. But now, we are seeing more and more leaders from the private sector joining nonprofit organizations at senior levels, bringing for-profit approaches, and new strategic thinking to nonprofit models. It’s changing the mindset from fundraising to “marketing to raise funds.” What I mean by this is that we’re no longer thinking of fundraising as this highly specialized, siloed function that is separate and apart from the actual business of the nonprofit. These leaders apply business operational principles to create a more sustainable model for long-term impact. There will be investments, tradeoffs, and calculated risks — notions that haven’t always been part of how nonprofits operate. Of course, nonprofits still have a fiduciary responsibility, but the evaluative framework for meeting this responsibility is expanding to include what is required to propel long-term sustainable growth.
Q: To that investment point, what investment has the greatest potential to transform fundraising?
A: The other exciting development is the move by forward-thinking nonprofits toward automation enabled by technology and data. We’ve seen our largest clients invest substantially in their MarTech stack and data capacity. These investments make the operational and mindset shifts that I mentioned earlier less risky.
Breaking down data silos with these investments is crucial to achieving ambitious marketing goals, like increasing your reach, building loyal 1:1 relationships, and creating a frictionless constituent experience. There's so much promise for technology and data to enable long-term, brand-loyal relationships with donors. Part of our mission at THD is to guide clients as they make these investments and support them with our talented strategists and analysts to maximize the lifetime value of donors and supporters.
Nonprofits with ambitious growth goals to fuel their missions will accept the changing times and increasingly focus on brand building and marketing to purpose-minded donors as a business imperative. The organizations that don’t will be increasingly challenged to survive in a world where blurring lines and rapid changes are the only constants.
Ready to implement smart marketing strategies and elevate your cause? Contact us.