Thoughts

My First Impressions of the Third Sector

By Shimon Davidowitz

I have spent the last 10 years of my working life in the corporate world in several consulting roles across various industries. I now find myself, for the first time, working in the wonderful world of nonprofits. This is not to say that I have never had any exposure to the nonprofit environment. On the contrary, I have spent many years involved in a variety of different organisations. However, this has always been in a volunteer capacity. Working full time as a fundraising consultant and giving day campaign manager is an entirely new ball game .

Since making the switch, I have noticed some glaring contrasts between the corporate and nonprofit worlds. I found these differences to be quite thought-provoking and worth sharing as food for thought.

Disclaimer: This article is not based on any market research and the sample size is probably too small to apply these observations to the entire industry. These are purely my own observations based on the various not-for-profit organisations with whom I have worked over the past month.

The difference that I noticed in my very first meeting, and that has been present in every meeting since, is the unbridled passion these people have for their organisation and the cause towards which they are working. I am not suggesting that people working in the corporate world are miserable and lack passion for what they do on a daily basis, but there is a palpable energy and enthusiasm that I never experienced during my corporate life. Their passion and enthusiasm are contagious, and I can’t help leaving meetings feeling uplifted with a sense of hope that there are true heroes in our midst. However, there is an unfortunate downside to this. Sometimes the passion and desire are seen as a replacement for business acumen. Acumen that is often needed, especially when the nonprofit is dealing with budgets and expenses that stack up to a medium or large corporate entity. In this day and age, when investors and major donors are keeping a close eye on ROIs, bottom lines and targets, the question begs to be asked: Is passion enough?

Now, I am not suggesting that all nonprofits need to turn into corporates. No, this would probably be the end of the third sector. But there are clear lessons that can be learned from the corporate world. One that comes to my mind, is how one views and understands one’s customer, or in the case of nonprofits, one’s donors and supporters. Corporates spend hundreds of thousands of dollars annually on market research, studying customer psychology and trend analysis, purely so they can get a better understanding of what the customers’ needs are and how best to accommodate them. Successful businesses do this so well that they are able to anticipate their clients next move well in advance and thereby dominate the market with products and services. What I have noticed with nonprofits is that there seems to be a lack of understanding of what their supporters want and how they think. There does not seem to be any active research done in this area, the lack of which often leads to a disengagement from their ‘clients’. When it comes to appeal time, this disengagement can cost the organisation dearly.

Another interesting observation I came across was the slowness and sometimes unwillingness to adapt to change. In this case I am particularly referring to using technology, social media and other unorthodox approaches to fundraising.

Corporates understand that a failure to adapt to new technologies usually leads to a rather hasty extinction. The banking industry is a perfect case study. Once seen as the stuffiest and most traditional industry, they now lead the way in innovation and modernisation in many countries around the world. The transformation to include technology-based platforms was based on a deep understanding of how their clientele do their banking in the present day.

I have been met with the same reaction on quite a few occasions while presenting to boards in the last few weeks. As soon as we use words such as giving days, crowdfunding, or technology platforms, the eyes glaze over and they switch off. There seems to be this unwritten rule amongst charities and nonprofits — it’s almost like a tradition passed down from generation to generation on how to conduct annual fundraisers. Anything outside the structure of prepaid return mail cards, gala dinners or capital appeals has no space in the calendar. Again, this is a generalisation based on some of the organisations I have dealt with in recent weeks. There are many organisations who are beginning to see that the traditional ways still work to a degree, they are on the decline. They are actively seeking newer methods to shake things up a bit. It is these same organisations which are trying harder to engage their supporters more frequently, and putting more effort into understanding their ‘client’s’ needs.

It has been a rollercoaster introduction to this fascinating industry and I have already learned so much. I have a feeling that it is only the tip of the iceberg and what lays beneath the surface will bring me many highs, lows and challenges in the foreseeable future. It is our role and aim as fundraising consultants to help these organisations maximise their potential so that they may do what they do best: make the world a better place!