Term Paper on "Marketing Fundraising: The Importance of Donor Segmentation"

Term Paper 3 pages (1096 words) Sources: 1+

[EXCERPT] . . . .

Marketing

Fundraising: The Importance of Donor Segmentation for Non-Profits

When marketing a new product, any for-profit company will naturally attempt to define and segment its likely target market. It will ask: what unmet need of the consumer does this innovative good or the service fulfill? How is this product development unique, in terms of its price, style, or purpose? The question of market segmentation is no less pressing for a not-for-profit organization. In fact, the fundraising task of a non-for-profit is in many ways more difficult than a corporation because the rewards for a prospective donor are often more elusive. Are the projected rewards those of personal fulfillment and a sense of social approbation for doing a good thing? Or are the projected rewards for the donor the sense of making a contribution to society, by furthering the mission of a worthy cause and organization? According to Phillip Kotler, "the organization's board, staff, volunteers, donors, and collaborators" are all equally important in a nonprofit's success in realizing its mission. (Kotler, 1997: 56)

First of all, to define its donor base the not-for-profit must define its purpose as an organization. This, in essence is the product that the organization is 'selling.' The worthiness of the cause is the presumed reason for the donor's desire to give to the organization. The nature of the cause will also determine the type of appeal used for fundraising. Merely because a cause is worthy does not mean that it will automatically draw donations. The organization must define its core audience of donors. This is again much like one would market any product or service. Is the target audience of the fundraiser primarily young or old? Male or female? Or a mixture of both? Is its geographic base broad or narrow?

For example, a local PTA or even the American Humane Society will have a much narrower demographic and/or geographic outreach (parents and the local community or animal lovers and owners) than a charity with a cause that touches many different demographics of lives, like the American Heart Association. A local organization with a narrow audience can solicit funds door-to-door, or use personal appeals, or at very least, carefully allocate its funds so that only likely donors receive mailings, for example. A national organization with a specific demographic can use mailing lists of women, pet owners, or persons who have donated to similar charities in the past.

Once the broad target donor market has been designated, next the nonprofit must determine what type of appeal is likely to draw such a market segment. An audience of affluent persons interested in donating to a worthy charity with a great deal of cache might like to participate in a celebrity auction. This has proved lucrative for causes such as AIDS awareness, aid to 9/11 and Hurricane Katrina victims, and other highly publicized causes where people may wish publicize their status as generous gives as well as make a contribution to a worthy charity. Other charities, such as health-oriented organizations like the March of Dimes or the American Lymphoma Society might wish to emphasize the health-conscious focus of its likely donor base and conduct a walk-a-thon, to draw attention to the cause as well as mobilize the core audience of donors in an event they find socially… READ MORE

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