Using E-Commerce to Raise Money and Build Stronger Relationshi

E-Commerce: Raise Money, Build Constituent Relationships

August 30, 2005

By Vinay Bhagat

Through e-commerce, nonprofit organizations can raise new funds as well as attract new constituents, encourage them to get more involved, collect information about their interests and motivations, use that information to send more relevant communications and build relationships to encourage loyalty and ongoing support. Several nonprofit groups already run online stores using stand-alone e-commerce tools and services. For example, public radio stations sell premium items, such as videos and T-shirts, outside of pledge drives.

However, many nonprofit professionals have not seriously considered e-commerce as a way to drive fundraising, erroneously believing it is exclusive to for-profit retailers. In fact, e-commerce provides new ways for organizations to raise funds and build strong online relationships with constituents.

E-commerce-based Fundraising

Defenders of Wildlife and the Jewish National Fund are among today's foresighted nonprofits that are achieving tremendous success by selling virtual fundraising "products."

Defenders of Wildlife lets constituents "adopt" wild animals, such as wolves. JNF gives people the opportunity to buy trees for planting in Israel. Originally, people buying trees or the recipients of gift donations received physical certificates. Now, JNF offers virtual certificate fulfillment in the form of a PDF -- a great offering for last-minute gift givers/purchasers.

Cross-promotion

Last year, I went online to buy Valentine's Day roses for my wife. During the purchase process, the site promoted the option to "upgrade" and buy two dozen roses for a little more money. I selected that option. As I proceeded, I was presented the option to add an attractive vase and chocolates for a little more. Again, I selected the option.

A nonprofit organization can apply the same marketing principles. If a shopper is purchasing an item from an organization's online store, the store can offer him or her the option to purchase related items, as well as the option to make an additional contribution to the organization.

Consider this example: A museum could configure its online store to ask a constituent who is buying a $15 individual membership if he or she would like to upgrade to a "family" membership for just $10 more. Or, the store could ask constituents to donate or purchase more to receive an additional benefit.

Building Constituent Profiles

E-commerce can be a great way to start a relationship with a new constituent. It is a low-involvement way for a constituent to interact with an organization. Once a site visitor has made a purchase, an organization can grow the relationship by converting shoppers to donors, volunteers and/or advocates through cross-promotion tactics and other programs.

To foster development of constituent relationships, information about each online shopper's purchases should be added to a constituent's profile in an organization's online marketing database. As an organization collects constituent information through its online store, it will be poised to drive more involvement.

For example, a wildlife preservation group could use constituent profile information to send an e-mail to constituents that have an interest in wolves -- which might include people who have purchased "save the wolves" T-shirts -- encouraging them to donate to a "save the wolves" fund. The organization also could display special wolf-related messages to those constituents when they are logged in to the organization's Web site.

Vinay Bhagat is founder and chief strategy officer of Convio. For more information, log on to www.convio.com