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Wednesday
Jan052011

Trends: Internet Demographics and Embracing Failure

The Millennials, Gen Xers, and the Matures

Millennials (ages 18-33) are an important demographic to the nonprofit sector. They are tech savvy. They love their gadgets and are constantly on the web via laptops and mobile devices. According to Pew’s latest study, “they still clearly surpass their elders online when it comes to many communications and entertainment-related activities, such as using social network sites and playing games online.” Interestingly, the fastest growth has been the Matures (ages 74 and older). Social network site usage among the Matures has quadrupled since 2008, from 4% to 16%.

Is your nonprofit tracking data on followers and fans from your social networks? What age groups are they comprised of?

Also noteworthy from the study, Gen Xers (ages 34-45) are more likely than Millennials to visit government websites. Given their interest in civic engagement and information, are Gen Xers more likely to visit nonprofit sites then Millienials? And if so, what is your nonprofit doing to make your website engaging to both Gen Xers and Millienials from an advocacy and donor perspective?

Nonprofits, Innovation, Failure, and Donations

Seth Godin says nonprofits need to stop operating like businesses. For a large part of history, nonprofits dealt with anonymous donors. That’s changed over the years, particularly with the internet boom. Now that nonprofits know who most of their donors are, where they live, and other pertinent info, nonprofits should “treat different people [donors, activists] differently,“ said Godin during an interview with Peter Panepento at the Chronicle of Philanthropy.

Nonprofits must spend time building connections, but that’s difficult to do if nonprofits are trapped in a corporate box and don’t have an end goal that essentially puts them out of business. There are only a few organizations such as the Juvenile Diabetes Foundation that publically say they will close up shop after they meet their ultimate mission (finding a cure). Godin says that this corporate mindset of continuing to be in “business” and evolve into other issues is problematic.

If nonprofits want to transform themselves they need to embrace failure (much like the technology and startups sectors). Are boards of directors prepared to fire senior staff or executive directors who have never failed before (aka not taking enough risks and innovating)? Godin argues that because nonprofits don’t have money loving shareholders to answer to, nonprofits should be failing fast to build community and connections along the way to figure out what’s going to help them meet their ultimate goals. If you are not willing to embrace failure, don’t go to work tomorrow, said Godin.

After Godin’s interview, Frank Barry over at Blackbaud posted what fundraising looks like today and how the internet and digital communication has affected the nonprofit sector over the years. Here’s a quick peek into some key statistics.

[Troublesome] Fundraising Stats

  1. First Year Donor Retention is 29.3%
  2. Fundraising Email Response Rate is 0.13%
  3. 67% of donors plan to eliminate or reduce support to nonprofits that over‐solicit
  4. Only 26% of Nonprofits Rated their Websites Very Effective
  5. Recurring Gift Donors only accounted for 10% of all US Donors



Reader Comments (3)

The most important part of making mistakes is learning from mistakes. The tech sector embraces failing fast because it helps the team learn quickly what went wrong and what to do next. Failing fast is also beneficial as the team doesn't sink in sizable amounts of resources into something that is wasted. Learning is the key value.

My hope is that the non-profit sector can take tech frameworks, such as agile development, SCRUM, lean startup methodology, PDCA, and rapid prototyping to quickly create and refine projects and programs. This is similar to what the Network Non-profit talks about in micro-planning.
January 6, 2011 | Unregistered CommenterRob Wu
Good stuff Rob. Thanks!
January 6, 2011 | Unregistered CommenterAllyson Kapin
Brilliant, but painfully wrong. Seth Godin exhibits his usual flare for pushing ossified organizations in the direction of the new and interesting. That is a very good thing, especially on the branding/marketing front. However, his analysis of the relationship nonprofits have with donors now and his expectations for the types of relationships they can develop in the era of social media acquisition are deeply flawed. Charitable organizations that have focused predominantly on direct marketing are well advised to consider much of what Godin says because donors don't want to be treated as an anonymous mass. Fortunately, most organizations which make a significant investment in fundraising intelligence and staffing do not do treat their contributors that way. Every day, universities, hospitals, museums, environmental charities and many other organizations of scale are building strong, sustainable, high value relationships. These relationships are akin to the type of large institutional shareholder relationships Godin alludes to in his comments, which explains why in part organizations can't act as they did in 1820 or 1920. Strong nonprofits are corporations, not social clubs run by volunteers. By and large, organizations with infrastructure, staffing and budget are in the best position to attract significant donations and successfully and independently pursue their missions. Having an org chart and a ten year plan doesn't mean a charity is ineffective. Quite the contrary. Nonprofit organizations must have the resources to pursue their missions. Asking everyone across the various social networks to contribute small amounts to achieve a mission quickly and then shut down is not the best way to attract and sustain the 1% - 5% of the donors who give 90%+ of the charitable gifts and expect results. Seth Godin is a brilliant guy. I just wish he knew more about what really makes a great fundraising program so that he could offer us all some advice we could truly use.
January 18, 2011 | Unregistered CommenterJay Frost

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