By Guest commentary Friday, January 3rd, 2014

By Cynder Sinclair

Cynder Sinclair

As one of the largest employers in the Tri-Counties and a provider of vital services, the nonprofit sector is critical to the region’s well being.

Let’s look at trends nonprofits will experience in two key areas for 2014: fundraising and marketing.

Greater accountability

Since 10 percent to 100 percent of nonprofit revenue comes from charitable giving, fundraising is a key component of the nonprofit business model. The old single-channel approach to fundraising — annual appeal letters and special events — seems inadequate today. In 2014, watch for continued shifts in the way nonprofits use technology and marketing to find donor dollars.

Online methods of raising funds increased by 10.7 percent in 2012 while giving as a whole grew by only 2 percent. Predictions are that online philanthropy will continue to grow in popularity — with donors as well as fundraisers.

Mobile will overtake desktop donations as more donors show preference for giving on the move. The Chronicle of Philanthropy predicts 2014 will see nonprofits stop thinking about mobile in isolation and instead integrate mobile into their overall fundraising plans, social-media strategies and even program work. Using multi-channel marketing to reach people via mobile, Web, social media and email will require solid analytics to track and leverage donor engagement.

One of the biggest trends in fundraising, social impact investing, requires measurement of program outcomes. The outlook for 2014 calls for  growing demand for nonprofits to articulate results they hope to achieve and track whether those results are actually happening.

Nonprofits have long focused on the outputs of their work: number of people served and types of services provided. But the sector is increasingly being asked to articulate and track the outcomes they are achieving.

How are people’s lives changing because of the work a nonprofit does? Increasingly, funders and other supporters are demanding proof of social change. That means nonprofits must develop their own theory of change — how they use community resources to create change to a social problem — and then measure whether that theory is becoming a reality.

Even the federal government is embracing this trend through its so-called Pay for Success program. The dual theory of the Pay for Success (or social impact bond) program is that the risk is borne by private investors and the taxpayers ultimately save through cost-saving innovations.

This coming year will find a growing number of nonprofits and foundations moving beyond just collecting data about their programs and starting to use that information to improve performance.

Cause-related marketing

This year will also show an increase in  cause-related marketing among businesses, which is good for their nonprofit partners.

Have you noticed the dramatic increase in business marketing campaigns highlighting nonprofits? This is not an accident. Statistical research identifies cause-related marketing as a powerful strategy for both businesses and nonprofits.

Cone Communications recently released the results of a global survey that found that 81 percent of consumers want to do business with companies addressing key social and environmental issues.

Ninety-four percent of survey respondents said they are likely to switch brands to support a cause.

Businesses are jumping on the corporate social responsibility wagon as they see their popularity and customer loyalty soar whenever they shine the spotlight on nonprofits they support. And the nonprofits love it, too. Not only do these groups benefit from the increased visibility — which is important because most don’t have a budget for marketing —  but being linked with upstanding businesses increases their credibility among supporters.

Businesses used to think that corporate social responsibility was an option. Clearly it no longer is. They need consumers. And consumers want to support good causes through their purchases and by shopping with companies that are responsible throughout their business operations.

• Cynder Sinclair is the founder of Santa Barbara-based nonprofit consulting firm Nonprofit Kinect. Contact her at [email protected].