Improving fundraising efficiency of small and medium size Swiss NPOs using online solutions
by Kabil Nageswarakurukkal.
To raise funds, the most prominent Swiss NPOs invest every year in aggressive off-line marketing strategies such as direct mailing, television spots, ads in newspapers and magazines, promotional posters and membership subscriptions collected on the ground. These “mass marketing “strategies have a high cost.
On average Swiss NPOs spend 21.2 cents to collect 1 CHF. Half of the organizations have a small return on fundraising investment (ROFI), collecting less than 5 CHF for every franc spent to raise funds. While wealthier NPOs can afford to pay for offline fundraising campaigns despite the low returns, small NPOs are looking for a better ROFI.
The 50 biggest Swiss NPOs collect more than 67% of total national donations, 99.35% of these are collected offline (post check, bank check,…). Only 0.65% of donations are collected online (online payment systems, credit cards, sms,…). (ZEWO, 2015)
Why has online fundraising in Switzerland not yet taken off even though 86% of the Swiss population between 16 and 74 years old are using the internet regularly and 90% of them were active online shoppers in 2015?
How can small Swiss NPOs improve in order to increase their online fundraising efficiency?
To find answers to these questions, this research was divided into two parts. In the first part, a qualitative approach was chosen to understand NPOs’ fundraising strategies. Interviews were done with people who are responsible for fundraising within organizations. From these interviews, the answers were analyzed to find similarities and differences in NPOs’ approach to fundraising. The findings helped to define the second part of the research, which used a quantitative approach to understand donors’ behaviors.
A survey of 20 questions was used to investigate potential donors’ online attitudes and habits. The design and the distribution of the survey were made mainly online to limit the population of the research to a stratified sample, which consists of people who are daily internet users.
In this research, 85% of surveyed people are online shoppers, and most of them are between 16 and 50 years old. Moreover, almost half them have made online donations. A strong correlation is proven between the online shopping and online donation behaviors.
Most of the donors did not know that online giving is cheaper for organizations regarding fundraising investment. In fact, almost 44% of donors that give off-line don’t know about the advantages of giving online. A strong correlation is shown between the lack of information about the cost-effectiveness of online donations and off-line donation giving behavior.
Donors are more interested in the causes that NPOs serve than in any rewards they may receive from the NPOs. While 69% of participants do not care about gifts or rewards, they will be happy to receive tax benefits.
The results of the NPO interviews and the donor surveys were analyzed using stakeholder and issue matrix analyses. These analyses formed the basis of an eight points strategic action plan, covering three areas that small NPOs can use to improve their online fundraising efforts. The three clusters encompass social, communication and financial aspects.
A strong online interactive relationship is necessary to build a community of supporters and donors. This cannot be done without a good social and communication strategies. Online marketing campaigns have to be designed in innovative ways to involve supporters and donors in challenges and activities, which attract more supporters and more donors and enhance the community. Viral content (videos, infographics, and photos) and person-to-person influence help NPOs spread their campaigns in a cost-effective way.
From the financial perspective, NPOs have to provide reliable and flexible online payment options for donations. In addition to direct appeals for money, NPOs could also look at operating an online store to raise funds.
The main objectives of this thesis were to address the question “how Swiss small and medium-size NPOs could improve their fundraising efficiency using online solutions.” The strategic action plan offers an easy to use tool, which any small Swiss NPO could use to improve their online fundraising capabilities.
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