'Spare Change' Giant Bstow Shows Innovation Happens In Nonprofits, Too
The lion’s share of donations still come in from licked envelopes with a stamp and a check inside, according to my own straw poll of a number of charities from Goodwill to my local food bank. In short, it’s outdated and it turns out non-profits are looking to technology to grow their impact with just as much tenacity as their for-profit counterparts. Herein lies a B2B sales opportunity of monumental proportions.
“Non-profit could possibly be the biggest misnomer in modern corporate history,” says Bstow founder and CEO, Jason Grad. The head of the biggest company in the “round up” space that works with hundreds of major non-profits says that “non-profit” doesn’t mean that charitable entities don’t share many of the same concerns as their for-profit counterparts. It takes capital to run these organizations and like the rest of the world, “they are constantly looking toward innovation to increase margins.” A raft of companies, including Bstow, focus on providing both industry-standard tools for fundraising along with new innovative tools to match trends in financial technology.
Not-for-profit companies might not have a for-profit tax structure or pay dividends to shareholders but they need funds left over after expenses in order to grow, help more people in need, and hire the best employees possible. For-profit companies often grow at any cost. The unique challenge for non-profits is that fundraising and marketing expenses need to be a fraction of operational expenses to run programs in order to create a strong narrative and be highly rated by charity-rating organizations.
Given the perpetual struggle many charitable organizations face in their quest to bring in more than they spend, and because of the importance of effective margins for their donor narrative, a bottom-line value proposition becomes both critical and highly effective. “We saw a need early in our product development to help non-profits connect directly with their donors so that they could conduct fundraising more easily,” says Grad. “We also knew that we would have to help them keep more of the money they collected by reducing fundraising costs.”
Regionally, Utah Food Bank is working on some specific goals that demonstrate a change in what they are looking for from business-to-business vendors to enhance their financial standing. They already have a solid base of existing donors, and are looking to engage more millennials who are comfortable using Venmo and Paypal when donating online. Knowing that the next generation of donors won’t respond to direct mail campaigns, Utah Food Bank is turning to online sources.
Nationally Lymphoma Research Foundation is making a similar shift. According to Dennis Chillemi, Senior Director of Development, “We are fortunate to have such loyal supporters, but after three years we tend to lose about 30% of them. We are now making it easier to sign up on their own online, and stay connected with us longer.” Lymphoma Research Foundation is rolling out a Cheerful Giving campaign to attract younger, tech-savvy donors.
Goodwill of Orange County has posted 11,000 Instagrams, has picked up 35,000 followers on Facebook, and is also using the cheerful giving online app. For a non-profit, that’s a lot of social media activity. “We want to increase online giving through a mobile-friendly platform,” explains Eric Smissen, Senior Manager of Media and Branding. “We’re always looking for new ways to interact with our supporters.”
Are you seeing a pattern? Non-profits are focused on increasing funding and keeping more of it to expand their reach. Help them accomplish these goals through your B2B offerings and you’ll be an indispensable member of their team.
The shift to online giving is especially important to non-profits now and in the coming years. “Right now, more than 90% of charitable donations in the US are made in cash or check,” said Grad in an interview with Barclays Bank. “Over the next 10 years, I am confident this is going to move online.” In an email exchange with me, Grad noted that some of the biggest non-profits are seeing “tens of thousands of donations per month” on Bstow’s white-label products that let donors pay charities directly and bypass classic means of charitable giving.
Bstow partner, the United Kingdom-based banking giant Barclays Bank, is ramping up an effort to help more than 10,000 of their own non-profit banking customers run their fundraising operations more efficiently. This underscores the huge opportunity in this under-served sector. Moving the transactions online has added downstream benefits, too, like easier record keeping for tax preparation and faster funding response times in the event of an immediate humanitarian crisis. Grad pointed to a recent example of fundraising for Puerto Rico citizens impacted by the 2017 hurricane season. Between Facebook, GoFundMe, and Bstow top charities raised tens of millions to aid victims.
No matter what you offer to non-profit organizations, sell it as a means to bring in more money, lower expenses, or both.
By Larry Myler | Published by Forbes | Read the article