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Do Loyalty Programs Have a Place in the Nonprofit Sector?

When we talk about loyalty the first things we think of are retailers, restaurants, or service companies, but wouldn’t it have a place in any type of transaction?

Any time there is an interaction and a subsequent transaction, monetary or not, loyalty should be a part of your conversation.

Where there is a physical transaction there should be loyalty, and if it’s an emotional transaction there should be loyalty as well.

One example where you might not think loyalty plays a role, but really can, is fundraising.

 

Explosion in the Fund-raising Category

In what has become such a crowded space the fund-raising category has seen an incredible explosion over the past several years tied to innovations like Text to Donate, Crowdfunding, Subscription, and charitable single-day events such as Giving Tuesday.

Today, nearly 70% of the U.S. population donates while each person donates to an average of 4.5 charities and, on average, 1 out of 2 is enrolled in a subscription-based (monthly) giving program. Millennials are the highest percentage with 84% donating to a cause, giving $481 annually.

With fierce competition for a fixed amount of dollars, individual charities need to find new and innovative ways to keep and gain share of donors.

Years ago, there were several large charities like Red Cross, Salvation Army, United Way, and the American Cancer Society which attracted the bulk of donations.

But today anyone can start a charitable drive.

When a natural disaster such as a hurricane occurred in the past, it was the Red Cross and Salvation Army on site that would advertise for donations to help the cause along with a few local charities.

Today, when those events happen 1,000 micro-focused fundraisers pop up besides those of the large established ones because the Internet affords that opportunity.

So, how can individual charities, especially the established ones, retain their best donors?

Why Fundraisers Should Consider A Loyalty Strategy

Fundraisers should consider a comprehensive loyalty strategy, beyond just the halo euphoria surrounding an act of charity, and incorporate that two-way street of loyalty.

This is something I personally experienced recently.

I was diagnosed with a health challenge that required me to have a pint of blood drawn every week for six months and now on a consistent, but less frequent basis. I never gave blood because I hate needles, but I didn’t have any choice.

When I went to the New York Blood Center (NYBC) to donate the first time I filled in my paperwork to receive my donor card.

After three weeks I received my card in the mail and was told to register it online to help track my condition and learn how I can get rewarded beyond the good feeling of someone receiving the gift of my blood.

I went online and NYBC has a great program where I received points for each pint and those points could be redeemed for gift cards, travel, merchandise and even a charitable contribution to another charity.

Wow, what a great idea!

There is such a blood shortage today and NYBC sourced new ways to keep current donors coming back and reward those who are just trying it for the first time.

There are several other charities embracing this approach and have leveraged this strategy to help increase their donor amounts or reward those who subscribe.

But there is a great opportunity out there.

People are being rewarded emotionally and transactionally, encapsulating both elements of loyalty.

What Can Charities Do?

Charities can leverage loyalty to accomplish several important goals:

  • Reward existing donors to maintain share of wallet
  • Help increase donation amounts for receiving an ongoing benefit
  • Incentivize donors to subscribe to automatic withdrawals for consistent cash flow

When somebody holds the door open for you and you say, “thank you,” that gratitude is the simplest form of loyalty.

Let’s think about all those ways loyalty is applicable, like in fundraising, and see if we can help enhance that experience.

Tom Baker

Tom Baker has been Vice President of Strategic Partnerships, at Clarus Commerce since late 2015. He has been partnering with retailers for the last 18 years delivering innovative solutions to impact companies' bottom lines. As part of this process, Tom has spent thousands of hours in retail locations and call centers listening, learning and providing advice on how to maximize every customer touch point. He has worked for leading brands creating new consumer engagement strategies, products & services and revenue generation for such companies as Dun & Bradstreet, Oxford Health, GE & Time Inc. His specific areas of focus have been in business development, brand management, direct & digital marketing, new product development and client services. Tom enjoys volleyball and watching his daughters dance. He's a passionate, lifelong fan of the NY Yankees, Giants & St. John's.

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