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Aug 27, 2013

Online Integration or Online Disruption?

start finishNearly every consultant in the nonprofit space (me included) has been advocating the concept of online integration. That is, aligning your fundraising messaging online and offline. After a decade of the integrated approach, the Blackbaud benchmark for percent of organizational revenue coming online is a dismal 7%. I don’t know about you, but I was expecting we’d be doing a lot better by now. Could we be wrong about integration?

Recently, I have been in conversations with the Browne Innovation Group. Mike Browne entered the nonprofit world eight years ago after a lifetime in commercial direct marketing. Initially he was “all in” with integrated marketing, but when he saw that it wasn’t moving the needle he rethought everything. Now he is onto a completely different approach to fundraising. Rather than integrating your digital and offline marketing efforts, Mike is an evangelist for a strategy I call disruption.

Disruption is based on the idea that online fundraising is fundamentally different than offline fundraising. Think of offline fundraising as oil and online fundraising as water. So any attempts to integrate oil and water ultimately won’t work.

Why will online fundraising be a fundamentally different model? Demographics. The direct response model (push marketing) has worked extremely well with the Builder Generation and older Boomers. But we all know that the generations following behave differently. Plus, over the past 20 years the internet has fundamentally changed nearly every business model out there. Fundraising is one of the final old school holdouts.

So the Browne Innovation Group is advising and training its nonprofit clients through online e-learning courses to create a whole separate online fundraising unit (Browne has become a Clayton Christensen acolyte). And by separate, I mean totally separate. Ideally the new unit isn’t in the same building as the current development department. Not integration. Disruption.

Here is a very brief summary: The model creates three departments in this new fundraising unit: Content development, donor relations and advancement. The idea is to attract potential donors with relevant information (pull marketing), develop a relationship with them through various media, and then once a relationship is established, ask for their support via for a very minimal monthly gift. Then move the donor up the pyramid.

Note that the disruption model does not replace your current offline fundraising activities; at least not immediately. The idea is to grow your new online revenue model while you are leveraging your current offline model as it wanes. Though there is disagreement as to how soon it will happen; there is consensus that at some point in the future acquiring and cultivation $25 dollars through the mail will no longer be viable. When that time comes, the goal is for organization to be generating replacement revenue with the new model.

Is this the BIG IDEA we have been waiting for? I don’t know yet. What I like about the Browne Innovations Group’s approach is they have thought through the details from soup to nuts. This isn’t just a theoretical model. Nonprofits are adopting it.

Is the new model working?

We at Analytical Ones are going to invest our resources into studying this model and commit to reporting back what we discover. Perhaps the future of fundraising has finally emerged.

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