So you want to grow your income? Use the C word…
On May 13, 2013 At 2:00 pm
Responses : 2 Comments
At =mc we’ve been working a lot recently on fundraising and income growth strategies with a range of agencies- from global ones like UNICEF to national ones like AIDS Fonds/Stop Aids Now! in Holland. We’re also helping a number of local museums in the UK cope with local government cutbacks.
The strategies we were discussing for these agencies were obviously very different and were designed to deliver very different outcomes.
But in each case we ended up asking five key questions, each based around the letter C to establish readiness for growth. To check how ready you are to grow ask yourself questions based on the 5 Cs.
CONTEXT: what does your environmental scan- PEST and SWOT, benchmarking, trends analysis, gap analysis- tell you about the opportunities that are out there? Before taking action you need to explore the market you want to work in for whatever it is you want to do. Understanding context is key. So there are some further questions from this first one. For example: Are there enough HNWI prospects with enough capacity to deliver your campaign target? Does the channel you want to use- DRTV/F2F – work in that setting? Does your cause even have enough traction to generate support now- or do you need awareness before fundraising?
At a local level if you’re working on earned income for your museum is there demand for and the ability to pay for that service? Do people want a café, a meeting room or a conservation service?
COMPETENCIES: do you have the skills, knowledge and abilities to make the strategic change for growth? So again there are some further detailed questions. What experience do you have, or need, to launch a major donor campaign? Do you know what is the best channel or channel mix to use for the new strategy? Do you have, or can you get, the awareness-raising/PR/publicity skills you need to underpin the change. What else do you need to be good at to succeed?
Being good or even excellent in one area doesn’t mean you necessarily be able to translate to the ‘next’ space – so being good at conservation as museum doesn’t mean that you can necessarily make a fee-earning business conserving objects for local businesses. The core competence here is probably is sales and marketing- not conservation.
COMPETITION: who else is in the ‘space’ you’d like to occupy or explore- and how strong are they? It’s tempting to try and enter a space that looks attractive. But will the competition see you off? Some further questions here too. Who else has a major donor campaign ‘on the go’ and what % of your potential prospects have they already got involved in their campaign? Are any competitors more effective in the channel you want to use- and are there other channels available? Is another charity or NGO more closely associated with this issue- HIV/child rights/ecology- than you are and so stronger…?
If you want to build a café in your museum what’s the café competition like locally? In every case you have to think about how could you gain competitive edge. (A better macchiato? A cheaper one?) If you don’t have that edge you’ll struggle.
CASH: Do you have enough capital to invest in the new strategic area? Tough questions now. Have you costed all aspects of the major donor campaign- from funding prospect research to hiring senior staff? Do you have the $1M+ you need for the big DRTV campaign- and how long can you spend for to get a result? Is another, larger NGO, able to outspend you and so maintain its dominance in the issue you want to make yours? It’s important here to know how much capital is needed- starting under-capitalised will doom you to failure.
If you want to expand into earned income what’s an acceptable RoI? Your museum may need to spend money on facilities like new toilets or catering facilities to attract business hires. Where can you get capital or even a soft loan?
COMMITMENT: This is really the killer question, and maybe the only one that really matters. Does your senior team or your Board appreciate the time and effort they need to give for the major donor campaign? Do they, and maybe even you, appreciate the risks- financial and reputational- associated with the campaign effort and the channel you’ve chosen? (Think of the antipathy F2F arouses.) Are they happy to stake out a new ‘claim’ for an area of activity and re-orientate policy or service to ensure you deliver on the promise you’re making to donors?
If you run an earned income activity at the museum will you be able to withstand the torrent of abuse about ‘selling out’ that will surely come from any commercial activity? Not everyone sees growth as a good thing. Commitment really counts in growth. Maybe more than anything else.
Five tough issues you need to address as part of your growth discussion. You need to live with the answers or adapt.