Changing Donor Mentality About Core Costs

Core funding can provide non-profit organizations (NPOs) with resources and an invaluable opportunity to plan, improve and innovate their charity works. It gives confidence to organizations to leverage technology well into the future when core costs are securely funded. But the reluctance of donors to fund costs such digital strategy can be a major bottleneck to the effectiveness of these charities.

Donors prefer to make philanthropic grants for actionable projects with obvious outputs. While some donors might yield to the idea of funding recurrent costs to support a charity, some non-profit organizations simply fail to produce a budget clearly outlining their anticipated core costs.

A non-profit organization looking to further its charity work through thought-out digital initiatives will first need to understand why donors are reluctant to fund core costs. Some of the reasons are:

Donor Attitudes

Donors are often reluctant to fund core costs and would want their donations to be earmarked for funding tangible programs such as building 3 classes or immunizing 1000 children in a developing nation. They want constant reassurance that every extra dollar gave will spread the program further, rather than being used to cover constant costs such as rent and digital strategy costs.

Awareness

On the other hand, there is a cluster of donors who have a limited understanding of just how far their core funding helps the NPO produce its daily charity work.

While fixed costs may appear irrelevant, they are in fact the key drivers to extra income generation. An NPO with a great digital strategy is more likely to lock new prospective donors by using the internet to outline their mission, objectives and actionable programs.

Value Proposition

Explaining clearly what core costs are, why they’re necessary, and the difference they can make could go a long way to offsetting a donors’ perceptions of these costs. Many charitable organizations lack a clear plan on how they’ll spend extra donations that come their way. This is counterintuitive.

A charity organization must emphasize the importance of back office support funding if they are to woo more donors funding the bottom-line costs.

Hostile Legislation

Some governments may also limit unrestricted donations often looking at NPOs as competitors for donor resources. While this is not common, it can be a put-off to donors looking to fund core costs.

Growing Digital Initiatives

In the age of Digital Darwinism, non-profit organizations are under immense pressure to adopt new technologies as a vital mechanism to fund their charitable works. NPOs can dramatically scale their donations and widen their Donors' pool by leveraging technologies such as cloud, mobile, crowdfunding, crowdsourced data, social communication, instant and mobile payment technologies, data and analytics

NPOs can use technology to market their cause, fundraise and share information. They can get donors to give unrestricted grants by actively showing that, indeed, their funds have contributed to and impacted on charity works. By allowing funders to own attributable projects, they can be more convinced to get in some sort of collaboration and hence offset some of the fixed costs.

Changing Donor Mentality

A non-profit organization can use targeted education to enlighten donors on the need for funding digital transformation and give confidence in its promise. An NPO can also establish and use methodologies for digital transformation to shift donors’ outlook.

Ultimately, if an organization is able to secure core cost funding for digital transformation, they can then adopt progressive technologies to further their cause. Such would include:

Mobile: Ensure the organization’s content and the message is current and optimized for mobile functionality.

Data and Analytics: NPOs can use analytic technologies to determine which communications channels their donor base prefers, which messaging approaches are more effective, use data to understand a donor’s propensity to donate and increase recurrent giving.

Cloud: Cloud storage can allow an organization to have their operational data and materials on the go. Cloud technologies will enhance network security, operational efficiency, and overall service quality.

Social media: a substantial investment in social media can mean all the difference to a charitable organization. From live tweeting of events to creating shareable Facebook infographics, social media is a gamechanger for NPOs. A website that seamlessly integrates with the various social media pages makes it easier for prospective donors to follow your cause, through consistent, intelligent and impactful social content.

Video: If NPOs core costs are handled, they are in a better position to focus on creating compelling visual stories that capture the hearts and imaginations of their audience.


The point is if NPOs can change the donor mentality and convince them to fund core costs for digital initiatives, only then can they be disruptive and efficient in accomplishing their cause. NPOs with a greater digital integration are more likely to engage a more diverse audience of donors than ever before.

Sufficient core cost funding would allow an NPO to attract and retain experienced digital experts. With the speed, efficiency, and agility that digital platforms provide, the NPO environment is ripe for disruption. Organizations with enough fixed costs funding will be more likely to actively shape their future, and that of the causes they support.

As a digital agency OPIN understands what non-profit organizations have to do in order to increase donations and engagement with their mission. As the digital world expands, non-profits have to be able to evolve and develop their online presence in order to keep donors engaged. OPIN has worked with many non-profit organizations including SOS Children's Villages Canada to revamp their website in order to do just that. OPIN looks forward to working with more non-profit organizations worldwide.