Developing Target Markets During a Recession

A Planned Development Strategy for Fundraising

Jun 12, 2009

During a recession, nonprofit organizations must be efficient in their fundraising. Developing target markets as part of a planned development strategy is wise.

When nonprofit organizations start planning development strategy for fundraising, they seem to forget the source of the funds that keep their organizations alive and operating. During recessionary times, nonprofits need to target the giving markets that are easiest to convert from awareness to dollars. This helps develop the central theme of efficient fundraising.

These are times when nonprofits lay off workers, shorten the workweek, cut professional development and cancel capital projects. It is vitally important to create a planned development strategy for fundraising that will comply with the current state of the economy.

Development of Primary Target Markets

Develop budgets for fundraising expenses that will have a quick, lasting impact. Now is not the time for gala events. Keep expenses low while capitalizing on the primary network of the organization.

In development of primary target markets, nonprofits should aim at those donors that are closest to the operations of the nonprofit. These might include: board members, development team, staff, current donors, current volunteers and current members.

These are the people that are most passionate about the nonprofit succeeding and therefore most likely to donate on a recurring basis that increases annually, just by being asked.

The primary target market can be swayed by one-on-one conversation with someone high in the organization or a personal letter from a board member or Executive Director. Although top-tier people know they are needed and wanted, continue to let them know of the positive effect they’ve had on project outcomes specifically and the organization in general.

Secondary Markets are Related to Primary Target Markets

In defining target markets, the development staff needs to keep reaching for those that are close to the organization- those that are familiar with the organization and are attending functions and events regularly. They are more than likely close friends or associates with someone in that top level of strong supporters.

Sometimes relatives can also be involved, but to a lesser degree than others in their family have been. A smart marketing ploy can help strengthen ties with less-active relatives. This second tier, being close to the active membership, makes them a target market behind the top tier, who are instrumental in persuading them to start donating on a regular basis.

Individuals in this secondary market would be those that have attended events, have donated in-kind gifts, or have purchased a service. They generally can be approached by a combination of personal phone calls from the development staff or emails and letters from marketing.

Target Marketing Prospects

Prospect marketing of total strangers is the most expensive group to apply fundraising to on an ongoing basis. Why? They are not a proven source of donation. Some people are inclined to giving as part of life, while others feel everyone should look out for himself or herself. Also, because little is known about this market, it needs funding to help increase awareness, a necessary long-term strategy for revenue generation.

Judith E. Nichols, author of “Targeted Fund Raising,” says in her book, “ the goal is to choose a logical outreach audience. Your efforts are positioned at getting that first gift.” Once the first gifts are attained and a pattern is established, the marketing staff starts to understand the position it takes to win these donors to their cause.

Nichols goes on to say, “Testing, rather then research, makes sense in trying to identify broad groupings of first time donors.” The U.S. Department of the Interior keeps giving by demographics, the results of which are attainable for free. Test marketing to a specific demographical group on a sample basis to discover their value to the nonprofit on a donor basis is advisable in order to keep expenses down.

These groups are where online social media marketing is making inroads. It is the attempt to get small, but first time, donations so that a relationship (social) can be developed to insure the gradual increase of funds over a longer period of time.

These are successful strategies for nonprofits and should be used during slow recessionary times. Take another look at the nonprofits’ planned development strategy for fundraising to see if the money is being spent wisely and efficiently. If not, make the needed adjustments in order to weather the economic turmoil. Remember the importance of placing most of budgeted funds in the primary target market before pursuing the other two.

Targeted Fund Raising: Defining and Refining Your Development Strategy, Author Judith E. Nichols, CFRE

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