As the UK fundraising market approaches maturity, Tony Elischer predicts there are tough times ahead. Australasian nonprofits should take note of the implications.

As the UK fundraising market approaches maturity, Tony Elischer predicts there are tough times ahead. Australasian nonprofits should take note of the implications.

While the UK environment for fundraising appears to be relatively healthy at present with the majority of nonprofits achieving or exceeding budget – it would take considerable research and analysis to understand what’s really going on and what’s working and what isn’t.

One element that is certain is that income growth from individuals is from existing donors, donor development, and not from donor recruitment. In the current climate it is very difficult for nonprofits to grow their donor base.

In preparation for possible hard times ahead or simply to help protect against increasing competition, it’s useful to think of the lifecycle of the UK market place and where it’s currently placed.

As a review or planning framework, lifecycles help order your thinking about strategies and tactics that need to be adopted to ensure continued growth. Too many people take the market for granted and simply “go with the flow.”

Of course you cannot control the factors driving the market, but you can invest time reading and reacting to the trends. It’s the combination of all the different external factors that shape the market for fundraising, whether through lifestyle changes in society, the economy or technology.

There are five lifecycle stages: introduction, early development, development, maturity and saturation. Time and profitability are the markers that track where something is at – a product, market or organisation.

At each of these stages different strategies and tactics are demanded, with the focus on reading when something hits maturity and deciding whether to change, invest further to protect or allow it to go into saturation/decline, minimising investment and maximising income while you can.

Every nonprofit is progressing along several lifecycles simultaneously at different levels, the key ones being: their cause in the market place lifecycle, organisational development/maturity lifecycle, individual fundraising program lifecycles and the overall market lifecycle for giving.

In the UK, the overall market lifecycle is rapidly reaching the limits of its maturity phase and, in time, certainly in the next decade, will start to go into decline in the format within which fundraising professionals currently work. Factors driving my prediction of heavy challenges ahead are:

Can we just “come clean” and admit that cold direct mail is no longer a viable way to build a donor base
The heavy investment and focus on getting/converting committed donors means that acquisition programs are becoming increasingly expensive and incremental donors are costing more
We all know that donor development is the future. But, beyond the need to build relationships and meet the needs of donors, we have to recognise that the “less pleasant” side of our thinking has to be to “lock” donors into our brand, effectively drawing their focus away from the wider market. This is a tough agenda and one that will challenge comfort zones, but it’s better to be realistic about the direction in which we are driving our strategies.
Emergency fundraising appeals over the last eighteen months have achieved extraordinary levels of response, but, in the main, these donors fail to convert to on-going supporters
While bequests continue to hold their own, more investment is being placed in marketing this area, but will it really grow the pot or simply redistribute it? If we believe all the demographic trends and the changes in society, this area is due for a period of decline or, at best, minimal growth.
While the corporate sector shows some sign of shift towards recognising the value and importance of linking to the not-for-profit sector, it is clear that any projected growth will be on a “slow burn” basis and the short-term growth potential will go to a limited number of partners who have grown their brand to align more with companies and their needs.
We are still too slow in new program/proposition development, but we’re very quick to follow others, thus making the lifecycle of new ideas shorter as the market saturates quickly, e.g. virtual gift initiatives, wristbands. If we continue to work in this way with fewer players willing to lead, we must be prepared for the lifecycle consequences of new fundraising ideas. Unless they are massive they are likely to be short-lived or quick to settle into maturity!

So against these and other factors, how do you view the future lifecycle of the market for fundraising? Where are you investing? How constant is change in your programs? What are you doing to assess/track the market cycle? Or are you simply plodding along believing all this is far too strategic and big picture to ever impact on your fundraising decisions!