As 2012 austerity drives begin and generating revenues becomes an acute challenge for charities, supporter acquisition, revenue streams and looking at trading in new ways are all going to be undoubtedly key themes for the coming year.
From the vantage point that Visceral Business has as change strategists and developers of social capital value, for charities and commercial organisations, we’re involved in creating new social engagement business models that eliminate the ‘for profit’ or ‘not for profit’ conundrum by simply being ‘beyond profit’. These ‘beyond profit’ user-led social business models can make a tremendous difference to charities as they reconcile the challenges ahead and seek to improve operational performance.
The Child’s i Foundation, for example, of which I’m privileged to also be a Trustee, has a cost of donor acquisition rate of 19%, compared to the average standard of around 30%. It uses retailing channels like Shopify to develop event experiences online that give supporters a real stake in the charity that enables them to see the charity as a work in progress, happening in front of their eyes.
Initiatives like Child’s i Baby Shower and ‘Buy a Brick’ have enabled trading, fundraising and involvement to be fully integrated and to connect people socially through networked media as part of the overall experience too. By putting an ethos of being ‘beyond profit’ at the heart of the process, the charity is essentially enabling a community to change a situation, rather than funding an organisation as ‘arm’s length’ consumers. This gives it traction, by weaving retailing, fundraising and supporter involvement fully together.
The retail opportunities and gaps in the local social infrastructures of our communities on the ground, too, that the Portas Review recently identified, we think also herald significant opportunities for charities. The value of not-for-profit brands as social leaders in austere times is increasing. It’s something that can be developed in retail outlets on the high street as part of an integrated, community, social business-led, ‘beyond profit’ strategy.
This year, charities that can empower their people locally and grow their social media networks of influence, can become local destinations points and more successful retailers. There’s a blight of undifferentiated sameness in retail today and in charity shop product too, where creating a philanthropic environment with local partners, coupled with a sense of shared experiences, insights and innovation strategies and focused retailing techniques like category management can really differentiate a charity, as well as make a big difference to supporter engagement and donations.
There’s no doubt in my mind that the retail and supporter experience that each charity has as their own point of difference is going to be hugely influential in determining the success of charities this year, especially as the fight for share of wallet intensifies. With my collaborating co-author in the book Business Model Generation hat on too, it seems clear that in 2012 the business models we’ve been taking for granted may come under intense pressure. The upside is austerity always tends to lead to initiative though, so maybe it’s time for charities to re-imagine the options and the business models that lie behind the challenges ahead? There’s never been a better time to do it.
Anne McCrossan
Anne is a Trustee at the Child's i Foundation, and a Founding Partner of Visceral Business.
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