The Most Valuable Non-profit Brand of the World (2/2015)

This post is an excerpt of the article “The Most Valuable Non-profit Brand of the World – United Way and the eight principles of strategic fundraising” in Fundraiser Magazin 2/2015.

At the end of the nineties, the Executive Board of the largest fundraising organization worldwide, United Way of America, realizes that he has a problem: Since the big scandal in 1992, when then-CEO William Aramony was found guilty of fraud and personal enrichment, donations for the organization working for US communities had declined by more than 25 percent. United Way seems to Americans as a bureaucratic monster that collects with the social pressure donations at the workplace that actually nobody wants to give any more. Because nobody knows exactly where they go.

United Way, the “grand old dame of American Fundraising”, collecting since 1887 donations for local non-profit organizations across the United States seems to be finished. Several emergency measures fizzle without effect. This is when the Board grasps at the last straw: reinventing United Way.

Around the millennium United Way launches one of the biggest brand campaigns that have ever been implemented by a non-profit organization. Several agencies determine the most auspicious target groups and develop respective communication strategies. Competitors are identified as benchmarks, and finally the old fundraising organization United Way is re-invented as a “Community Impact” organization.

United Way had learned, in time of greatest need, to think and act market-oriented. To do fundraising strategically. The learning dividend: According to a brand valuation by Forbes magazine in 2010 United Way – in the meantime merged to United Way Worldwide – is, with an estimated brand value of $ 14.3 billion, one of the most valuable brands in the world. Just behind Pepsi and before Nike (!), IKEA and Gucci.

Strategic fundraising, as practiced by United Way since then, is oriented towards the whole donor market. Strategic fundraising means identifying donor target groups that fit to your charity and addressing them in “their language”. It means recognizing where you are better than others – and not to be afraid to communicate it. Seek a position in the donor market, which signals to the donors: This is us. We are unique. And you can belong to us.

Nowadays, several departments at the United Way headquarter are taking care of brand management, market research and benchmarking. With Success: The annual donations have increased by 2013 to $5.2 billion (!).

Strategic fundraising and brand management – even if looking complicated at first glance – are not reserved to large NPOs such as United Way. Small, community-based charities benefit from a strategic approach to fundraising as well. The key point is a market-oriented approach in fundraising, not the use of an array of professional marketing instruments.

There are now United Way chapters in Europe, such as in France and in the United Kingdom. Maybe it’s worth it to stop by there and get some ideas – or do some benchmarking, as United Way would say.

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The Guiding Principles of Strategic Fundraising (3/2014)

A strategic approach is always a long-term approach – or in other words: an early planning. Elements to be planned include according to the Swiss fundraising consultant Dr. Peter Buss primarily: addressees (i.e. target groups), offer (mission or project) and communication,i.e. the presentation of your organization to the outside. This process can be understood as the beginning of brand building.

The extent of such a brand management can be exemplified by the German development aid organization Welthungerhilfe. Its brand identity is composed of dozens of individual components. They include a clear mission (fight against hunger), a uniform corporate design – reaching from a defined green color scale to pre-defined keywords and sentence fragments – and a collection of well-defined stories. Donors – especially companies – no longer want to be asked for quick money. They look for long-term co-operation and sustainable projects.

Strategic Fundraising puts its eyes – like the strategic marketing – on the market (for donations) and thus considers the donor as a customer. The offer to him is the help to help others. It is scientifically proven that most people have the desire to support people who need help. Often, however, they are hindered to do so – due to distance, missing time and/or due to lack of the necessary expertise for help (e.g. medical knowledge). At this point the charity steps in and acts as an agent for help.

The perception of a donor being a charity’s customer has implications: No organization has to beg its customers for donations (begging is not an appropriate marketing strategy). But every NPO has to meet the needs of their customers (such as done by any successful company). Today most donors do not give out of sympathy or duty. Young donors rather wish to change personal lives and – just as important – seek to belong to a group that shares similar visions and values​​.

I believe nonprofit organization should follow a much more customer-oriented approach in fundraising. Strategic Fundraising does not need high-level marketing managers. Strategic Fundraising is first and foremost a philosophy and an attitude of mind which can be adopted by any organization, regardless of size and turnover.

The customer is always right. – Be prepared. Your donors might be always right, too.

Note: This article is a translated and slightly shortened version of my blog post 6/2013.