Getting Forward To Normal: Understanding What Business Nonprofits Are In

"The railroads are in trouble today not because that need was filled by others (cars, trucks, airplanes, and even telephones) but because it was not filled by the railroads themselves. They let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business. The reason they defined their industry incorrectly was that they were railroad-oriented instead of transportation-oriented; they were product-oriented instead of customer-oriented." - Theodore Levitt's “Marketing Myopia”

In the 61 years since Levitt's class was published, we've seen many organizations that have been challenged by knowing the real nature of their business. Mobile phone makers that thought they were in the phone business lost to those who were delivering connectivity to people and applications. Brick-and-mortar stores lost out when they thought they were in the business of physical stores instead of the business of selling goods whether in the real or virtual world. Companies that view themselves as movie makers or comic book publishers or sports networks or toy companies have yielded to the juggernauts who view themselves as entertainers.

All these challenges stem from thinking the tangible thing we do is more important than the meaning people get from what we do. For nonprofits, this can manifest when we do these three things.

1. Focus on an Organization Instead of a Mission

In my salad days of doing state legislative efforts, I had the honor of working on MADD's Campaign to Eliminate Drunk Driving. On one key piece of legislation, another allegedly anti-drunk driving organization was considering joining our coalition but backed out. Their reason: "If we eliminate drunk driving, then we'll be out of a job."

It should go without saying that part of running a nonprofit is to solve, once and for all, the issue we aim to address. It should, but it doesn't. Too often, we view the business we are in as preserving the organization for which we work instead of solving the mission for which we work.

2. Focus on a Delivery System Instead of an Impact

As I said last month, organizations during the pandemic that worked on their physical infrastructure have not been as successful as those working on their digital infrastructure.

This is because, as nonprofits, we realized that our charters were bigger than a place or a delivery system. Museums have been successful when they focus on their education, entertainment and awareness missions. Those organizations that would normally try to feed kids through schools had to find other ways to operate. That's because their mission isn't "feed kids through schools"; it's "feed kids" and, until the pandemic, schools were a reliable place to find kids. That's why No Kid Hungry not only created their own Free Meals Finder, the nonprofit partnered with another app-maker to help connect kids with meals in their communities.

And this doesn't just have to be programmatic — we can do this in the development sphere.

3. Think of a Channel or Delivery System for Fundraising Instead of the Emotional Transformation of a Donor

Digital outreach to donors, including the dreaded Zoom call, has been effective at maintaining and growing connections with donors across organizations. That's because the goal with these donors isn't to reach them in face-to-face visits or galas; it's to reach them.

Still, channel thinking pervades how we think about donors: that's a mail donor, he's a digital donor, she's a multichannel donor. Even if it's true that someone only wants to give through mail or online or the like, these channels of transaction aren't necessarily the only channels of influence. That "mail donor" may have given because of a radio PSA, DRTV spot or digital ad. Our fundraising business isn't reaching donors through an assigned channel; it's reaching donors and touching them emotionally with the impact they can have.

This also highlights a potential competitor to the traditional nonprofit: other ways to "give." During the pandemic, more and more people said they gave charitably by shopping locally or loaned a friend or family member money.

For the donor, the importance of this gift can be the same. Studies show that giving isn't about the emotion a fundraising ask makes you feel; it's about the projection of what a gift will make you feel. Thus, if buying something local in a pandemic makes you feel like you are contributing in time of need, that itch is scratched.

But that gift won't ever change the system. Giving to support a friend's medical bills won't ever stop medical bills from being high or from others getting the disease your friend has. Shopping locally can help a local business but it can't change the circumstances of local businesses. Giving to a crowdfunding campaign can help the one but not the whole.

That's what is unique about the nonprofit value proposition. If we are simply dopamine merchants who help people feel good about the good they are doing in the world, we are competing with these efforts that are great for the specific but don't help the general.

We must be in the business of more than this. We must sell the broad change that people want to have in the world. And we must do it with people who have that need to make that change deep in their soul.

The other transportation systems are coming — are you a train company or a transportation company? Are you one of many ways a good person can do a good thing or have you created a unique way that fulfills a deep yearning for your donors?

Editor's Note: This is the fifth part of the six-part series, Getting Forward to Normal.

Getting Forward to Normal

Part 1: What Ketchup Packets, Yeast and Nonprofit Mail Pieces Have in Common
Part 2: The Road Ahead for Museums and Cultural Institutions
Part 3: A Bump in the Road for Monthly Giving
Part 4: The Need for Digital Infrastructure
Part 5: Understanding What Business We’re In
Part 6: The 2022 Fresh Start Effect