Affinity marketing is an effective fund-raising strategy for education institutions.
The economic debacle of September 2008 left in its wake major economic losses at both corporate and personal finance levels. Equally disturbing, a looming economic uncertainty ensures this: fund-raisers will need to work even harder and smarter to capture dollars.
Although higher-education institutions have a track record of weathering these storms better than many other non-profit organizations, fund raising will be more challenging for colleges and universities. In addition to becoming better informed about market conditions and trends affecting their development efforts, development officers and their teams need to adopt strategies that will enable their supporters to continue contributing.
The July 15, 2008, issue of Inside Higher Ed reported that, based on a Council for Advancement and Support of Education (CASE) forecasting tool, "giving to schools and colleges will increase by 5.3 percent over the next year, representing overall growth, but given weaker economic conditions, below the 7 percent average annual growth rate over the last 20 years."
This finding predates September 2008, when the nation suffered its worst economic crisis since the Depression. It's a fair assumption that in the near future, contributions will be down. As if that's not enough incentive to seek out new fund-raising strategies, consider the increasing competition for contributions. In 1994, there were an estimated 500 U.S. registered public charities; today that figure exceeds 1,000, according to the National Center for Charitable Statistics (NCCS). If you consider the total of all tax-exempt organizations, the NCCS places that figure at 1.48 million. With increasing competition and decreasing contributions, education fund-raisers need other ways to attract support for their schools.
In affinity marketing, a non-profit organization partners with a for-profit organization. When the non-profit or its supporters purchase a product or service from the affinity marketing partner, a portion of the proceeds from the sale are returned to the non-profit. If the product or service is an everyday item that most consumers and businesses use, the partnership can be lucrative.
For instance, imagine if half of your alumni bought their wireless phone service from an affinity marketing partner. Every time those former students used their phones, a portion of the call proceeds would be given back to the school. The percentage of the sale give-back can be as high as 10 percent. Now, imagine if a percentage of the other individuals in your development database and a percentage of the local businesses that support the school also buy their wireless phone service from that partner.
The benefit for the education institution? Funds that can help pay for a new athletic center, science lab, theater or high-tech classroom.
Other commonly used products or services that are ideal for affinity marketing partnerships: computers, other telecommunications products or services (e.g., long-distance phone service, Internet service), cable television, credit cards and office supplies.
To ensure a successful affinity marketing partnership, seek out partners that demonstrate certain key traits:
- Shared values
First, a partner should value the institution's mission and genuinely want to see goals achieved. That may sound like a platitude, but it isn't. Real affinity marketers often have missions that mirror that of their customers. Instead of simply selling products and services for a profit, they want to be a part of the non-profit community because they, too, share the "giving back" philosophy. In addition to giving a portion of their profits to their customers, many also have vibrant volunteer initiatives, are members of various non-profit organizations, and regularly participate in the fund-raising and awareness-building events of local schools, museums, charities, churches and missionaries.
- Strong commitment to customer service
The last thing schools want to do is to compromise their relationships with valued alumni, corporate supporters or individual philanthropists by linking themselves with an affinity marketing partner that does not provide a quality product or good customer service. An affinity marketing partner should offer high-quality, reputable-brand products and services with solid performance features backed by strong product warranties and customer-service policies. A company's customer-service philosophy can be evaluated by asking simple questions such as:
- What training programs are in place for your customer-service representatives?
- Is there a call center for questions or technical support?
- What type of technology do you use to monitor customer inquiries and services?
An affinity marketing partner should provide an assuring response to each of these questions. The partner also should have customer-service representatives that are trained in products and services, as well as customer-service policies and procedures. Continuing education should be a priority. The partner's call center also should apply modern technologies, as well as customer relationship management (CRM) software that enables representatives to access customer information on a real-time basis while on the phone with customers, and facilitates order entry, maintenance and robust reporting capabilities.
This latter point is important for an institution's development office, which must maintain positive relationships with contributors and keep track of funding sources.
- Fiscally sound with a proven track record
An affinity marketer should have a strong infrastructure and reputable management. Also, the company should be able to demonstrate a track record of satisfied customers. Asking for references of customers and contacting them for their assessment of an affinity marketer's service record is advisable. Going forward, the affinity marketer should keep the institution informed of all supporters' purchases, usage patterns and inquiries.
Strategies for a new economy
In the past, individuals represented the largest sector for giving to non-profit organizations. The Giving USA Foundation reported that in 2006, 75.6 percent of all contributions to non-profit organizations, including colleges and universities, came from individuals. They contributed $222.89 billion dollars that year. The rest of the breakdown was as follows: foundations: $36.5 billion (12.4 percent); bequests: $22.91 billion (7.8 percent); and corporations: $12.72 billion (4.3 percent).
Individuals represent the largest constituent of givers and also could represent the largest opportunity in an affinity marketing partnership. Imagine reaching out to every student, alumni, faculty member, administrator and member of the board with information about a new affinity marketing partner and how the purchase of a phone or Internet service could provide dollars for the college. Imagine the potential funds that could be raised through their ordinary purchases from an affinity partner. The potential is there for enlightened development officers who recognize that hard times demand new strategies.
Estimated number of registered public charities in 1994.
Estimated number of registered public charities today.
Source: National Center for Charitable Statistics (NCCS)