Is the corporate sector the real charity competition?

Is the corporate sector the real charity competition?

Have you ever wondered whether charities are too focused on competing with each other? Have you ever found it difficult to differentiate one charity from another? Have you ever experienced a wave of disillusionment as the possibility hits you that charity marketing is all a big waste of time and resources that doesn’t really benefit anyone?

I certainly have.

The early stages of my career were firmly in the corporate sector but for the last 5 years I have worked mainly with charities to help them communicate more effectively. During this time the high amount of inter-charity competition has niggled at me. However, it’s lately struck me that we create a more positive framework if we step back from the sector and see the role of charities in general as stealing market share from the corporate sector. At a theoretical level this framework offers reassurance to me and others about our work in charity communications, but it is also an unsettling framework that demands new ways of thinking and working.

A particularly helpful resource on this topic that has shaped my thinking is Dan Pallotta’s TED talk challenging the way we think about charity, published in March this year. If you haven’t already, I’d recommend you give it a watch.

Who is the competition?

Over the years I have often asked this question of our charities. The answer normally involves a list of other charities in a similar sector. I have now stopped asking. Instead I ask about leading organisations in their sector - who can we learn from?

While in a very real sense charities are competing against other charities for people’s attention, a small-minded assumption that the pot of money up for grabs is finite remains pervasive. If this is true then all the money charities spend on promotion is inherently inefficient. Some such inefficiency could be justified because it keep charities on their toes but this can only go so far.

Many charities still see marketing spend as unavoidable inefficiency.

We need a better answer to this question.

Increasing market share

Charities should be getting people to give more, full stop. Not just diverting giving between charities.The sector should focus more on diverting people's spending from consumption to giving. Companies invest millions in creative and scientific marketing strategies. They convince people that they will be happier if they buy more. This is our competition. The charity sector should lead the way in understanding how and why people spend money. Only then will charities succeed in changing consumer behaviour.

Charities need to engage more clearly with their strategic competitive advantage set against competitors who are outside of the sector.

Potential for growth in individual giving

Is it realistic to expect charities to have a significant impact on the number of people who give to charity and the amount they give? The international figures suggest it is. Individual giving as a percentage of GDP varies significantly from country to country and this variation point to areas of potential growth.

CAF’s World Giving Index 2012 revealed striking differences in levels of participation in philanthropic giving between relatively affluent countries.... in the 25 wealthiest countries there is no clear link between Gross Domestic Product (GDP) per capita and giving.

-- Future World Giving 2013, CAF

Total giving in the UK is about 1% of GDP, which is about half the level of giving in America (Financial Times, 2013).

CAF’s latest World Giving Index gives a more nuanced assessment of levels of generosity across the globe. This take into account additional factors such as the proportion of households who give. See their visualisation below:

CAF World Giving Index

Innovation

Charities have been trying to expand their market share for years. Just think about all of those Christmas gift catalogues. But parochialism still pervades the sector. Charities need to raise their game and be more strategic about how they challenge the dominance of consumer brands.

I should clarify here that I am not encouraging the dualistic view that charities are good and companies are bad. Socially motivated companies have a huge role to play, but that’s another blog post.

Charities need to engage more clearly with their strategic competitive advantage set against competitors who are outside of the sector. This doesn’t just go for the big charities, though they probably need to lead the way. Small charities can use their particular strengths (localism, focus, etc) to reach new people in new ways.

A few ideas to get you started

  • Try engaging with your supporters in more participative ways. Read Mary’s post on whether crowdfunding is a viable option for charities.

  • Consider running events that bring supporters and beneficiaries together, using a free platform like EventBrite. Don’t be shy about charging an entry fee as this can actually increase attendance levels.

  • How about current clients? For some charities current clients can be advocates and supporters of the future. Consider setting up supporter schemes for those who don’t currently have the funds to give.

  • We need greater levels of innovation than this, which will only come from a fundamental change in thinking. Consider putting together a strategy for engaging with new people in your local area or other interest group. Focus on reaching people who aren’t already engaged in charity giving. You might find it useful to look through my post on creating an integrated communications strategy.

  • If you have other ideas please share them in the comment section below!

Date: 
7 August 2013
Andy Pearson