From a marketing perspective, there is no difference.
Whether you are trying to get people to buy or give, both require solid marketing strategies and tactics. Both are financial transactions involving an exchange of money in return for something of value. Both are not “required”. And both include some level of fairness.
Let’s consider what happens when you give a waiter money (a tip) in exchange for service compared with giving money to a homeless person.
Waiter => restaurant provides opportunity for customer (donor) to feel that they were involved in a fair exchange since they received good service (value) in exchange for money
Homeless person => nonprofit provides opportunity for donor (customer) to feel that they were involved in a fair exchange since they were provided the opportunity to make a difference (value) in exchange for money
I think the problem with fundraising is that some nonprofit staff think fundraising is “different” from other forms of marketing and sales when it isn’t. That is actually why too many organizations are so bad at raising money. Sorry folks, we need to face the fact that retention rates are at all-time-lows!
Bottom line: There is no difference between buying and giving. So, in order to inspire a monetary exchange (for profit or nonprofit), you must provide value to others.
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I caution us to take a close look at this, there is a distinct difference between consumer driven transactions and philanthropy. While some of the fundamentals of the “transaction” between buying and giving are the same, in a consumer transaction there is, no emotion, no relationship, no identification of value beyond immediate gratification. The value donors place on their giving is much more complex. Some non-profits have taken their fundraising in a more retail direction, many are now coming to realize that consumer behavior is different from philanthropy and modifying their approach. While I agree that we (non-profits) have a “product of value” to offer and as such have a responsibility to to prove and report on that value, which I would call non profit marketing, it is far different.
Hi Karen- Thanks so much for your thoughtful comment.
I hope you don’t mind but I have to respectfully disagree with his part of your comment.
“in a consumer transaction there is, no emotion, no relationship, no identification of value beyond immediate gratification.”
In 1996 I bought an old house in Bethesda, MD and I began to rent it out with a dream of knocking it down and rebuilding a new home in its place. That purchase (consumer transaction) was the single most emotional purchase of my life. The person that sold the property was a wonderful old man I knew for many years. We had a relationship (to say the least). And, finally, I delayed my gratification by renting the old house until 2006 (10 years!). That’s when I had enough money and strategic financing to go forward with my plan.
Greg — yes, there is a difference and it is a huge one. In giving, there is a much higher expectation of integrity and responsiveness. The bigger the gift, the more trust is involved. The writer of the article above contends that the reason that retention is so low is that organization do not “provide value” to their donors. I don’t know about that correlation — it could be true. But I think comparing giving with buying obscures what the real value is.
Your response to Karen recalls a highly emotional, relational purchase of a house. It’s a great example of how a purchase CAN have emotional weight. (I would say my purchase of my Prius last year fits into that category — first car I ever felt any attachment to.) But there is no obligation on the part of home buyers and sellers to enter that kind of relationship. When the sale takes place, each person signs a ream of papers that protect each other — and the banks — from fraud. There is no trust in that exchange. When you make a gift, however, you trust that the organization is going to prove worthy of your trust.
Thanks for you comment Paul. I see the value in your point. And, yes, some purchases require contracts. Some don’t.
But, similarly, don’t some gifts require contracts? A will is a contract. A pledge to fund the building of a hospital wing would require a contract, right?
I guess I believe that both donations and purchases involve an expectation of integrity and responsiveness. I’m not sure that I agree that a donation requires a higher expectation. But this discussion is quite fascinating. Thank you so much for contributing!
There is a huge difference. And while good marketing is important to lead others to buy and give, the motivations for the transactions are different. In a purchasing transaction you are buying a product or service for your own benefit, unless of course you are making the purchase to then give it to someone else. Now in giving, your motivation would be that a cause you care about would be served by your gift. Now of course you can say that part of the motivation may be a tax benefit or that it will make you feel good to give. However, you can have the tax benefit by giving to any charity — and that is seldom the only motive for making a gift. I don’t know anyone who has ever consciously made a gift to a charity just to feel good.
[…] while back, I wrote a blog post about the difference between buying and […]
I caution us to take a close look at this, there is a distinct difference between consumer driven transactions and philanthropy. While some of the fundamentals of the “transaction” between buying and giving are the same, in a consumer transaction there is, no emotion, no relationship, no identification of value beyond immediate gratification. The value donors place on their giving is much more complex. Some non-profits have taken their fundraising in a more retail direction, many are now coming to realize that consumer behavior is different from philanthropy and modifying their approach. While I agree that we (non-profits) have a “product of value” to offer and as such have a responsibility to to prove and report on that value, which I would call non profit marketing, it is far different.
Hi Karen- Thanks so much for your thoughtful comment.
I hope you don’t mind but I have to respectfully disagree with his part of your comment.
“in a consumer transaction there is, no emotion, no relationship, no identification of value beyond immediate gratification.”
In 1996 I bought an old house in Bethesda, MD and I began to rent it out with a dream of knocking it down and rebuilding a new home in its place. That purchase (consumer transaction) was the single most emotional purchase of my life. The person that sold the property was a wonderful old man I knew for many years. We had a relationship (to say the least). And, finally, I delayed my gratification by renting the old house until 2006 (10 years!). That’s when I had enough money and strategic financing to go forward with my plan.
Greg — yes, there is a difference and it is a huge one. In giving, there is a much higher expectation of integrity and responsiveness. The bigger the gift, the more trust is involved. The writer of the article above contends that the reason that retention is so low is that organization do not “provide value” to their donors. I don’t know about that correlation — it could be true. But I think comparing giving with buying obscures what the real value is.
Your response to Karen recalls a highly emotional, relational purchase of a house. It’s a great example of how a purchase CAN have emotional weight. (I would say my purchase of my Prius last year fits into that category — first car I ever felt any attachment to.) But there is no obligation on the part of home buyers and sellers to enter that kind of relationship. When the sale takes place, each person signs a ream of papers that protect each other — and the banks — from fraud. There is no trust in that exchange. When you make a gift, however, you trust that the organization is going to prove worthy of your trust.
Thanks for you comment Paul. I see the value in your point. And, yes, some purchases require contracts. Some don’t.
But, similarly, don’t some gifts require contracts? A will is a contract. A pledge to fund the building of a hospital wing would require a contract, right?
I guess I believe that both donations and purchases involve an expectation of integrity and responsiveness. I’m not sure that I agree that a donation requires a higher expectation. But this discussion is quite fascinating. Thank you so much for contributing!
There is a huge difference. And while good marketing is important to lead others to buy and give, the motivations for the transactions are different. In a purchasing transaction you are buying a product or service for your own benefit, unless of course you are making the purchase to then give it to someone else. Now in giving, your motivation would be that a cause you care about would be served by your gift. Now of course you can say that part of the motivation may be a tax benefit or that it will make you feel good to give. However, you can have the tax benefit by giving to any charity — and that is seldom the only motive for making a gift. I don’t know anyone who has ever consciously made a gift to a charity just to feel good.
[…] while back, I wrote a blog post about the difference between buying and […]