From Donor to investor

Juan Luis Martinez: Professor at Instituto de Empresa

17 December 2002

In times past, when fundraising campaigns were designed, planned and executed, behavior analysis of those providing financial resources to aid social causes was based on the premise of a donation. Captivated by the righteousness of a cause, or moved by social awareness, people reached into their pockets and made a financial gift.

The qualitative jump facing those dedicated to "social marketing" can be summed up in one phrase: "from donor to investor."

In times past, when fundraising campaigns were designed, planned and executed, behavior analysis of those providing financial resources to aid social causes was based on the premise of a donation. Captivated by the righteousness of a cause, or moved by social awareness, people reached into their pockets and made a financial gift.

But as a result of the natural maturing process of funding behavior patterns, together with awareness and information campaigns run by NGOs, the media and governmental agencies, donors are now starting to be more demanding when deciding where to direct money they set aside for altruistic ends.

[*D Social investors demand transparency *]

On the one hand, they demand transparency. They want to know what proportion of the resources will go directly to those in need, and what percentage will be spent on maintaining the organizational structure needed to provide the social services in question.

Potential benefactors now pose other questions about results. How much good is achieved with the funds they raise? It is no longer simply a question of knowing, for example, that for every 100 euros bequested, 90 reach the beneficiaries; but rather what impact those 90 euros have on resolving their problems. Backers are also concerned about the effect their contributions have on the consolidation of the institution involved. Do the 100 euros absorbed by the organization really generate added value for the aid work it carries out?

We may deduce from these three considerations that fund providers no longer treat their collaborations as mere donations. Rather, they now consider them as investments, and investments in social causes. Though the amount may be little, it is logical that they expect some return, or social dividend, and appreciation, or a strengthening of the aid process, so that the impact proves irreversible. The result is that changes have to be made, both in arguments used when trying to attract them, and in the overall design of the marketing strategy behind these campaigns.

Planning and selecting the media, identifying the different benefits of each NGO (working methods, ideological orientation, approach to aid work), specification of funding sources (incorporate new contributors, retain current ones, increase the amount of contributions) are all points that must be reconsidered - not just to monitor effectiveness, but also to meet the demands of the new scenario, and the new profile of donors - of investors in social causes.

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