How Market Research Can Keep Your Nonprofit Competitive Amid Declining Donor, Volunteer Support

Together, America’s 1.8 million nonprofits and charitable organizations serve critical functions in our communities, providing food, healthcare, shelter, clothing, education and inspiration. They are also dependent on these communities for financial and tactical support, which is quickly becoming scarce. 

While the actual totals are still being calculated, overall giving was 10.5% less in 2022 than in the previous year, and individuals restricted their giving even more, decreasing contributions by more than 13% when adjusting figures for inflation. 

What’s more, giving as a percentage of individuals' disposable income has reached a 40-year low, topping out at 1.7%.

It’s not just the money that’s drying up. Charities and nonprofits are experiencing a decade-long decline in volunteering. Collectively, less than a quarter of Americans volunteered with a formal nonprofit at least once in the past year. 

This means that these organizations are experiencing fierce competition for financial resources and human capital. 

That’s why it’s more important than ever for nonprofits to understand their constituents' needs, allowing them to provide a value proposition that attracts the financial support and volunteer hours required for success. 

Market research is the conduit for understanding constituents' needs in order to communicate the right message to the right person at the right time, empowering nonprofits to segment and ensure relevant and impactful calls to action. 

For some nonprofits, allocating time and money to market research can feel counterintuitive to investing their limited resources, prohibiting them from giving as much attention as possible to the mission. In reality, this information provides exponential returns on investment, allowing nonprofits to understand which audience segments are most likely to donate or volunteer.

Here are three best practices for conducting market research effectively, collecting feedback that will help drive impact and executing that feedback to take meaningful actions this year.

1. Understand the Goals and Objectives

In the initial phase of any project, it is crucial to clearly understand and define the goals and objectives, ensuring that there is buy-in from all stakeholders involved. This process often involves navigating a landscape filled with various departments and stakeholders — each possessing their own unique set of needs, challenges, and objectives. 

The diversity of these elements can make alignment a significant challenge. In some cases, the complexity of differing departmental needs might necessitate conducting multiple distinct studies tailored to the specific requirements of different departments. Prioritization based on the most pressing issues is key.

By identifying the core reasons behind the most pressing research, the findings it aims to uncover and the steps that will be taken based on the actionable insights derived from the research, nonprofits will be able to get the most out of their efforts, ensuring that every dollar invested achieves its desired outcome. 

2. Secure a Research Partner 

Nonprofits often don’t maintain in-house market research teams, or they depend on a small team with limited capacity. 

One effective solution is to consider tapping into outsourced research teams. This approach requires careful consideration and planning, both in terms of how to integrate these external resources effectively and how to manage the process of gaining stakeholder buy-in. 

Outsourced teams can bring not only additional manpower but also specialized expertise and a fresh perspective. 

When choosing a partner for research support, select a partner that:

• Has in-depth nonprofit research experience.
• Provides a senior-level researcher as your day-to-day point of contact.
• Offers custom solutions with competitive pricing.

The right research partner can be especially helpful when it comes to alignment. They can help manage and streamline the stakeholder buy-in process, ensuring that all parties are aligned with the project's goals and objectives. Their proven experience can be a valuable asset in achieving a comprehensive and effective research strategy.

3. Involve All Stakeholders

Information is only power if it is implemented, which requires the right people to have the right information. Involvement starts at the beginning. For example, integrating all stakeholders when setting objectives and crafting research questions encourages buy-in and participation, making the entire research process more impactful. 

Moreover, involving both volunteers and staff in this process and ensuring their buy-in along the way sets a solid foundation for implementation at the end of the project. This strategy democratizes the research process and reinforces the commitment of all parties involved, leading to more effective and sustainable outcomes. Experienced research partners can help with this process too.  

When conducted intentionally and implemented effectively, market research enhances program effectiveness, volunteer recruitment and fundraising.

This process doesn’t have to be overly complicated. Start small by picking a pilot project that can provide opportunities to practice implementing research-based workflows into your organization, demonstrating the value of market research and increasing your team’s confidence as market research informs the organization’s holistic approach to community care and support. 

As nonprofits look to carry out the incredible work in their communities, they can provide the insights and information necessary to thrive in an increasingly competitive and resource-restricted nonprofit environment. 

The preceding post was provided by an individual unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of NonProfit PRO.