Our recent work with a large research institute, hospital foundations and other not-for-profits (NFPs) has reiterated that seeking and securing the donor dollar is highly competitive…and that competition continues to increase. Where we get most excited is where we see innovative models of traditional fundraising and where these are integrated with other income generating activities. Within the traditional fundraising bucket, it is apparent that community fundraising (i.e. securing donations from members of the general public) is evolving and undergoing some major shifts. In this blog, we share some recent insights from our work in the space and thought leadership that has come across our desks.

With a growing number of Australian charities and a decrease in the number of Australians giving, fundraising is not getting any easier for the 54,000-odd ACNC registered charities (or 600,000+ NFPs including those not registered). Then again, it’s not all doom and gloom as the trend is for those Australians who give to charity to give more. Leaders of organisations that rely heavily on donations must take note of this and consider if ‘pure’ fundraising is the right strategy for income generation, financial sustainability and ultimately their impact.

The psychology of giving is important

We give to charity because either it makes us feel good, or out of a sense of obligation, or sometimes a combination of the two. You’ll probably support a colleague if they asked you to donate $20 for neglected guinea pigs on the condition they jog 10km, right?!?!

Have you ever given to charity and not felt the warm glow you were expecting, even for a cause you feel passionately about? If you’ve experienced this, how many of your organisation’s donors are in the same boat? And if they are donating primarily out of obligation, does it even matter?

Elizabeth Dunn’s TEDx Talk, “Helping others makes us happier, but it matters how we do it” prompted me to reflect on our experience with how not-for-profits conceptualise philanthropy, approach fundraising and engage with their donors.

Amongst other things, the talk highlights a project called Group of 5, which started in Canada and is now being developed in Australia and the UK. The model is simple – five people come together to financially sponsor and socially support a refugee in their community. There are three key reasons why this model engages supporters more deeply, and why those involved are giving far more than they would have otherwise.

1 Social connection

Financially and socially supporting a refugee may seem like a big ask to most individuals, but knowing it is a team effort with shared responsibility and neighbourly support can significantly lighten the task. This sort of approach can have a range of other positive benefits as well. By bringing people together to solve society’s wicked problems, we create or deepen our community connections. We find friends, meaning and support in our social networks. We have fun and are inspired by the actions of others, especially when we see them doing great work.

As well as competition, there is constant talk of collaboration, cooperation and collective impact in the social sector. This can look many ways – from a coalition of organisations to a group of supporters. Just about all of the organisations we work with recognise the power of individuals and institutions coming together to solve our social and environmental challenges.

The takeaway here is to think how you can build communities of supporters, not just individual donors, to help them meaningfully engage with one another around your cause. In doing so, you will not only be deepening your donors’ connection to your cause, you’ll be helping to strengthen social networks and address other social issues like isolation and loneliness.

2 First-hand experience of the problem or cause

The groups that rally around an individual or family get direct experience of the problem, the solutions and positive outcomes. They hear real stories about the challenging conditions the individual has endured, from someone with lived experience. They see how the support they provide makes a difference, as the beneficiary’s confidence grows, happiness increases and fears subside. The impact they are creating is immediately visible to those who are giving.

It isn’t always possible or appropriate to directly engage your supporters with the social and environmental issues you are addressing, but how can you move towards this? For example, virtual reality is developing at a rapid rate. The potential for increasing awareness, knowledge and empathy towards your cause and work, without requiring supporters to come into direct contact with your beneficiaries, is growing daily.

3 Increased sense of ownership and accountability for solving the problem

Engaging with huge issues like famine or climate change can be overwhelming, and we can feel disempowered by the immensity of the task at hand. By focusing on solving a smaller problem (e.g. how do I help a specific refugee), the opportunity to help becomes much more tangible and achievable. In addition for the case of refugees, we may consider those needing our help to be different to us, part of an ‘out group’ that we are less inclined to support. By meeting and getting to know the individual we support or the issue we are addressing, our sense of responsibility increases.

Another way to increase our sense of responsibility is to demonstrate how we, as individuals, can make a difference through our behaviour. The current focus on (reducing) single use plastic is a great example of this, with many people having a sense of both accountability and power to make positive change. This can be a great motivator for action, especially for those who want to make a difference but cannot afford regular donations.

The question to ask here is how to go beyond asking your supporters for dollars. Are there other or complementary ways they can make a difference so it is meaningful to them?

What if these approaches aren’t really possible for your not-for-profit?

With more charities seeking contributions from fewer individual donors, it might be time to reconsider your income generation strategy. Are there government, philanthropic or corporate funding opportunities that you could pursue? Or could you investigate a social enterprise or commercial venture that generates earned revenue to support your work? From our perspective, growing and diversifying revenue always comes back to the value your organisation provides.

Unless your donors are receiving more than a tax-deduction at the end of the year, their giving is unlikely to be a sustainable revenue source. We love working with for-purpose organisations to help evaluate and enhance their strategies and business models to be more resilient, financially sustainable and impactful. If you are interested in learning more, take a look at our whitepapers here and here, or drop us a line. We love to drink coffee and have a chat.