Special Exhibits vs. Permanent Collections (DATA)

Special exhibits don’t do what many cultural organizations think that they do. If fact, they often do the opposite. Read more

Eight Realities To Help You Become A Data-Informed Cultural Organization

Is your organization integrating market research into strategic decision-making processes yet? Here are eight important things to keep in Read more

A Quarter of Likely Visitors to Cultural Organizations Are In One Age Bracket (DATA)

Nearly 25% of potential attendees to visitor-serving organizations fall into one, ten-year age bracket. Which generation has the greatest Read more

People Trust Museums More Than Newspapers. Here Is Why That Matters Right Now (DATA)

Actually, it always matters. But data lend particular insight into an important role that audiences want museums to play Read more

The Top Seven Macro Trends Impacting Cultural Organizations

These seven macro trends are driving the market for visitor-serving organizations. Big data helps spot market trends. The data that Read more

The Three Most Overlooked Marketing Realities For Cultural Organizations

These three marketing realities for cultural organizations may be the most urgent – and also the most overlooked. This Read more

Community Engagement

Why Social Media Is The New Force Empowering Giving Decisions

Donate button

Nonprofits recognize that being on social media is good for public relations, but it’s increasingly driving innovation in the fundraising space by informing giving motivations. 

By now, even the most laggard of organizations understands that digital fluency is a pillar of any strategy seeking to engage audiences, cultivate constituent relations, and secure donors.  More than a “next practice,” digital engagement is essential to the relevance and solvency of the contemporary nonprofit organization – simply keeping the doors open requires investments of time, talent, and treasure on digital platforms.

But social media is playing an important role in how people relate to and understand nonprofit organizations beyond simply their ability to converse on Twitter or post pretty pictures on Facebook.  In our progressively crowd-sourced, collectively intelligent, peer reviewed world that values trusted endorsements foremost among reputation-enhancing communication channels, social media is emerging as one of the most important tools in the fundraising toolbox.

The William and Flora Hewlett Foundation recently announced that it is ending its eight-year, $12 million funding relationship with sites like Charity Navigator, GiveWell, and GuideStar – sites that attempt to aid donors in making philanthropic decisions based on “data-informed” factors.  An assessment concluded that, “While the foundation’s effort succeeded at producing more information about charity performance, it did little to change donor’s decisions: They continued to give with their hearts, not their heads.”

In many ways, this acknowledgment of the limited efficacy of these sites in influencing donor decisions is a simple response to a decision that the market had already made years ago – these sites simply have not proven meaningfully influential in terms of motivating “data-informed” giving.  Worse yet, many sophisticated donors recognize the type of data aggregated by these sites as somewhat specious – do lower administrative costs resultant from hiring a lower salaried (and, perhaps, correspondingly less talented) CEO really indicate greater organizational effectiveness than an organization that invests more in its people? An objective final analysis may well conclude that these sites did more to harm philanthropy than advance it by promulgating less meaningful metrics as substitutes for actual performance, and, thus, did nothing more than confuse an already incredibly complex field.

If the Hewlett Foundation’s decision recognizes the dwindling influence of these sites, then what are the information resources that impact and inspire our giving motivations? Increasingly, social media is playing a critical role in distinguishing effective organizations from less effective nonprofits for the review and consideration of the giving public.  Much like the initial aim of sites like Charity Navigator, social media sites empower potential donors to evaluate nonprofit organizations – but they do it with their own hearts and minds, and develop their own criteria for what makes a worthy organization.

Here are three ways that social media engagement on real-time, digital platforms is changing the nonprofit sector and empowering potential donors to make more intelligent giving decisions:

 

1) Social media increases the expectation of transparency  (which increases nonprofit accountability)

On social platforms, organizations are “judged” in real-time. Gone are the days of hiding from crowds in order for the CEO to spend a day crafting a response to a crisis. An organization’s tone, transparency, timeliness, and “touchability” (the four T’s of online engagement) may be observed 24/7 on social media sites. Steep expectations of speedy responses to online inquiries demand that an organization has its ducks in a row all the time – not just when there is an urgent need. In short, how good (and timely!) your organization is at carrying out social care matters.

 

2) It is harder for nonprofits to hide a lack of impact (so organizations must show progress or risk losing donors)

Studies reveal that demonstrating impact is a key driver of giving decisions. Right now, it’s cool to be kind and many organizations are sinking or swimming based on their perceived abilities to actually carry out their missions. Because digital platforms are real-time and supremely enabled to demonstrate transparency, it is easier for a potential donor to determine if a nonprofit is actually taking steps to fulfill its stated mission. Or, rather, if your organization suffers from mission drift, a potential donor may be able to see this based on content posted on social platforms. This one takes some thought for nonprofits because – when it comes to social media – many focus on metrics that mean nothing instead of true key performance indicators. It’s easy enough to increase your fan count, but increasing it with the right people who are willing to act in the interest of your organization and its mission is key.  The best way to get the right people to follow your nonprofit? Focus on your mission and impact.

 

3) Failures are more visual  (so nonprofits must consider potential market reactions)

Have you ever been to an industry conference of for-profit organizations?  While the presentations may feature a smattering of self-serving, promotional case studies, they more often overflow with learning from failures and missteps.  In the for-profit world, failure is a sort of badge of honor viewed as a healthy part of the innovation process (provided, of course, that one learns from the failure and applies this knowledge to a consequent effort).

For nonprofit organizations, making a “mistake” or even sharing a true, hard lesson at a conference seems verboten. “What if admitting that we don’t do everything right all the time results in fewer donors?” “The CEO won’t fund our presence at this conference so that we can share something that we did wrong!” As a result, nonprofit conferences may be good for networking and very, very useless for actual learning as they are generally self-promoting, self-congratulatory hot air festivals by nature (…or perhaps simply by our own perceived necessity).

Social media demonstrates that the market’s reaction to strategic decisions demand that organizations consider their constituents. Remember when Susan G. Komen for the Cure cut funding for Planned Parenthood and social media exploded? Susan G Komen still hasn’t recovered financially – and a large part of this may be due to ongoing social media conversations.

The Komen situation may have revealed a fundamental incongruity with the personal agenda of the organization’s leadership and its stated mission.  A critical aspect of the failure stemmed less from an unpopular, controversial decision and more from the response (or immediate lack thereof) to the market’s reaction.  The lesson is that we need to be ever more “outside-in” in our consideration of a situation and not confuse our internal ability as supposed experts to declare “importance” with the market’s absolute right to determine “relevance.”

The public nature of social media demands that organizations consider market reactions. It makes leadership think twice about the people whom they serve and how they go about their business. It gives the market a voice, and threatens to punish organizations that do not consider the folks who actually matter to the relevance and vitality of your organization.

 

Yes, social media takes time, talent, and treasure – but it’s worth the investment. Those very things that make it hard for some organizations (transparency, demonstrating impact, having the market as the true boss to the boss) will actually help us move toward a stronger, more intelligent service sector that is more effective and efficient at achieving social good.

Getting smart about social media isn’t about adapting to technology. It’s about people. It’s about showing of the true identity of your organization. If you don’t value social media, then you don’t value your audiences.

Hewlett’s funding decision recognizes an inalienable truth: People don’t want a middleman telling them what to do with their money. They want to decide how they feel about your organization for themselves.  Social media is your seat at the table for this conversation with donors.  Speak now.

 

Interested in getting blog posts, tips, and some silly social media geekery periodically delivered in your Facebook newsfeed? Like my Facebook page (or ) Or for more regular sharing of nonprofit marketing information, follow me on Twitter

Posted on by Colleen Dilenschneider in Community Engagement, Digital Connectivity, Financial Solvency, Fundraising, Myth Busting, Nonprofit Marketing, Sector Evolution, Trends 5 Comments

There Is No Mission Without Money: Why Cultural Organizations Need To Get Smart About Pricing Practices

museum admission line

This article concludes a four-part series intended to help visitor-serving organizations understand and respond to emerging trends that will impact their financial and mission-related goals. Learn more about the series here. 

Austerity measures and the loss of heretofore “reliable” funding mechanisms pitched many European cultural organizations into a tenuous financial state and catalyzed a conversation concerning the sustained solvency of visitor-serving enterprise worldwide. In an increasingly competitive market where volume-based strategies (such as an ever-increasing attendance) are less likely remedies to the new economic reality that emphasizes earned revenues, 2014 will mark the year when organizations will need to “get smart” about leveraging data to develop intelligent, efficient price indices. In turn, analysis of an organization’s pricing structure will likely – and necessarily – foster additional discussion concerning the creation of more effective affordable access programming.

Nonprofits are increasingly competing with for-profit organizations as private companies capitalize on shifts in market behavior toward supporting social causes. The market – and especially millennials – are also increasingly sector-agnostic, meaning that simply being a nonprofit doesn’t necessarily indicate to audiences that your organization is providing more social value than a private company.   This is one of the reasons why visitor-serving organizations that highlight their mission outperform museums that market themselves primarily as attractions. 

It’s time to pause and think about your organization’s relevance – and relevance is determined by the market and the support that your organization is able to summon. In short order, museums that cannot survive a “natural selection” and appeal to audiences will sink due to lack of support (relevance), while those that remain solvent and vital (while also pursuing their mission), will enjoy sustained success.

 

1) Here’s why your organization needs to think about revenue and pricing right now (and more than ever before):

 

A) In general, fewer people may be attending your organization because of negative substitution of traditional visitors so increasing attendance may prove challenging in the near-term.

Visitor-serving organizations’ (VSOs) “historic” visitors are leaving the market at a faster rate than new high-propensity visitors are entering the market, creating a negative substitution phenomenon that does not paint a bright future (or present, for that matter) for VSOs. In fact, for every one historic HPV that leaves the market, they are being replaced by 0.989 “new” high-propensity visitors. That may sound like a small difference, but these people add up! Keep up your hard work reaching your traditional audiences and – for no fault of your own – negative substitution factors would suggest that an organization currently serving one million annual visitors will attract 946,000 visitors five years from now (that is 54,000 fewer people, and a likely corresponding decline in membership and program participation). This troubling “glide path” also considers that you’ll be doing everything that you can do to meet your current audience’s needs, and continue to market to them like exceptional rockstars! This data suggests that the key to long-term organizational solvency is to evolve our engagement strategies to include your emerging high-propensity visitors.

The good news: If museums begin to target and cultivate new audiences now, we should start to observe a broad attendance turnaround in year 2019 as emerging audiences (such as English as Second Language households) continue to acculturate into the “mainstream” market and if millennials (who will dominate the market in terms of number and purchasing power) have been engaged by VSOs. But the attendance trend still stands: In spite of overall population growth and even if your organization does its very best and starts evolving right now (as you should in order to get things back up when the market is ripe around 2019), there’s a good chance that your attendance numbers may flatten out these next few years.

 

B) Expensive special exhibits are often financial drains when compared to the potential alternative uses of these same funds.

Despite clear data that utilizing special exhibits to cultivate visitation is an ineffective long-term strategy and has particularly costly and detrimental consequences for organizations, many VSOs (and museums, in particular), get wrapped up in this bad, bad practice when times get tight.

In my world, we refer to organizations that prioritize special exhibits over building affinity for permanent collections as committing “blockbuster suicide.” And – though I won’t throw any organizations under the bus by mentioning their names – I’ll bet that you can think of an organization or two that has “committed suicide” in this way and is now in quite a financial pickle.  These museums train even their closest constituents to wait for expensive exhibits in order to motivate a return visit. Not only is this plan ineffective and ridiculously short-sighted, but it’s also very expensive.

In an economy that increasingly relies on maximizing earned revenues from a finite audience, the margin of financial success is very small. Many organizations cannot afford expensive vanity projects that do little to improve net revenues but add significant costs to their financial model.  Alternative uses of funds that focus on improving the visitor experience frequently realize better returns than the costs to actualize a “special” exhibit.  While many organizations have become very astute at calculating per capita revenues, it may also be wise to similarly calculate the per capita operating costs attendant to serving your visitors.  We reliably observe that exhibits increase per capita operating costs at a level that exceeds any short-term increase in per capita revenues.  In other words, there is little evidence to recommend the viability of special exhibits as a sustainable revenue maximization strategy.

 

C) Visitor-serving organizations that discount to increase word of mouth and drive attendance experience the backlash of negative reputational equities.

What about social media? Can’t we use that to drive attendance? Yes, data suggest that utilizing social media to increase reputation in order to drive attendance is effective and indeed you should! However, when times get tight financially, we see many organizations resort to offering discounts via social media…and offering discounts via social media is a big mistake. This practice cultivates a “market addiction” that has long-term, negative consequences on the health of your organization.

Moreover, the more steeply you discount, the less likely visitors are to return. (Here’s the data again). People also tend to value what they pay for. Those who visit your organization at a discount are also statistically less satisfied with their experience and report more negative reviews than those who come in at full price (Hey, you devalued your brand first!). So much for crossing your fingers for better word of mouth as the result of a discount…

 

 

2) Now look at how most organizations decide how to price for admission:

Many organizations price their admissions based on what we at IMPACTS have termed “unintentional collusion.” Take a look back in time to your most recent conversation about pricing. The origin of your pricing framework probably went something like this:

IMPACTS unintentional collusion pricing

This happens because organizations misunderstand a fundamental principle of pricing.

Museums actually have different reputational equities and thus differing values that the market is willing to pay for a unique experience. If you’re a zoo that is charging the same admission as a nearby children’s museum (or vice versa), then your organization may be ignorantly “leaving money on the table” by relying on the comparative price of a neighboring or “like” organization. Each museum actually has an optimal price index (often best derived as the result of data-based price analyses) wherein the optimal price to visit an organization maximizes revenues without demeaning attendance potential. Along these same lines (and for the reasons stated above), I’d like to offer up a concept that is increasingly critical for the long-term health and vitality of many VSOs:

The amount of revenue that your organization secures is more important than the amount of attendees that walk through your door.

Many executive leaders and board members have a shockingly hard time understanding this necessary – and completely pragmatic – evolution in visitor-serving “business” practices. Many have been hardwired over time to think of success as the number of people that walk through the door. (Why do we even think this way anyway?! It’s an outdated preoccupation with a relatively meaningless nonprofit output.)

The most direct and savvy way to reap the benefits of your labors cultivating evangelists and working to increase your reputation?  Utilizing it to increase your revenue. And when attendance plateaus at the time that your brand is at its most premium, the most efficient way to do this is to adjust your admission price accordingly.

 

3) Optimized pricing will necessitate conversations about affordable access programming that serves lower-income and other underserved constituencies (in other words, programming that actually works)

If your organization has been value-advantaged (“leaving money on the table”) when it comes to your admission price, then raising the price of tickets may, indeed, increase the barrier for low-income households to attend your organization. Because affordable access is often a key part of many organizations’ missions – or even required in order to be eligible for certain grants and government funding opportunities –  getting smarter about pricing will mean getting smarter about affordable access programs as well.

Experience at IMPACTS has shown time and time again that many affordable access programs are extremely inefficient. Specifically, many affordable access programs achieve startlingly little in terms of providing targeted benefit to low-income households and, instead, allow discounted access to those who would otherwise be able and willing to pay full price. These programs are neither capturing low-income households, nor are they increasing revenues so that museums may more effectively and efficiently fulfill their missions. They are glorified discount programs that organizations offer so that they may check off a symbolic box of “affordable access.”

As visitor-serving organizations realize the need to pay attention to pricing and maximize their investments, there will be incentive to re-evaluate affordable access programs so that they actually work. Namely, that they provide an opportunity for low-income households and other targeted underserved audiences to visit the organization without concurrently discounting admission for those who would be willing to pay full price for your unique experience.

All of this is a long way of saying that nonprofit organizations are finally going to have to think about money and stop defending outdated nonprofit dogmas that tend to demonize revenue as a “necessary evil.”  Museums, zoos, aquariums, performing arts and other cultural organizations are big business – accounting for $135 billion in annual economic activity and more than 4.1 million jobs.  Instead of considering volume of visitation as a key performance indicator, we ought to instead focus on meaningful outcomes and recognize that our collective ambitions to achieve social good require revenues.  In other words, there is no mission without money. 

 

*Photo credit: Telegraph, AP (The photo choice has nothing to do with the Metropolitan Museum of Art’s pricing!)

Interested in getting blog posts, tips, and some silly social media geekery periodically delivered in your Facebook newsfeed? Like my Facebook page (or ) Or for more regular sharing of nonprofit marketing information, follow me on Twitter

Posted on by Colleen Dilenschneider in Community Engagement, Financial Solvency, Myth Busting, Sector Evolution, Trends 3 Comments

How to Utilize Social Media to Actually Cultivate Donors (And Why You Need To Do It Right Now)

marketoonist community management

This article is part of a four-part series intended to help visitor-serving organizations understand and respond to emerging trends that will impact their financial and mission-related goals. Learn more about the series here. 

Conversations involving social media with many fundraisers often result in eye-rolling and a terse, “That’s not my job!” as those tasked with securing an organization’s contributed revenues deflect responsibility to the marketing/PR team. Here’s the thing though: Online engagement has evolved to the point where it is nearly impossible to optimize fundraising efforts and maximize donor retention without utilizing digital communications – and that includes social media.

All signs (consumer motivation data and social media behavioral trends) are pointing toward the need for organizations to look beyond “vanity metrics” like fan and follower count and focus on the quality and strength of varied relationships formed on social media platforms – particularly ones that drive the gate (if you’re a visitor-serving organization) or cultivate monetary support. Simply put: A fundamental shift is occurring in terms of how successful organizations view online fundraising and donor cultivation.

Here are three critical items for organizations to come to terms with that affect how your organization may optimize social media and online donor cultivation:

 

1) Once and for all: Realize that the quality of your fans and your ability to activate them in your interest is significantly more important than the quantity of your fans

Would you rather have 100,000 Facebook fans or 1,000 active donors and supporters? Chances are that your organization is hoping to utilize social media to get something done rather than utilizing social media for social media’s sake. It’s time that we call vanity metrics exactly what they are and break through the noise of social media metrics that misleadingly influences too many organizations. In many situations, it’s an organization’s very desire to utilize social media metrics and data that lead strategy execution astray. Let’s start actually thinking about what these metrics mean.

The problem with metrics like fan and follower count is that they actually mean very little for your organization – especially if the increased reach is falling on ambivalent ears. What matters is not how many people ‘like’ you online but who you are able to activate through engagement online.

The days of “one size fits all” outbound social media communications are officially over. Your organization’s fans and followers are not all of equal value to your nonprofit’s relevance and long-term solvency – and treating every “like” the same way means purposely sabotaging your ability to achieve organizational goals through social media. (1) Members/donors, (2) Influencers, and (3) Evangelists are three categories of fans that have particular payoff to your nonprofit. Intelligent, strategic organizations benefit by creating content that stimulates these particular stakeholders.

A mission-related post may get less general engagement, but your reputation increasingly has a direct correlation to the level of support your organization secures. Securing a content share from a member (thus allowing for personal promulgation of your brand from someone to whom your mission has meaning) is more important than a content share from somebody who just thinks you posted a pretty picture (but doesn’t feel a connection to your organization). The market is the arbiter of your organization’s success, and knowing what makes your high-value supporters and evangelists (not just your overall target market) tick is critical for building the most helpful community for your organization.

 

2) Make online personalization part of your engagement and donor cultivation strategy

Personalization is one of the biggest and most discussed (and arguably one of the smartest) conversations taking place for all organizations and businesses right now. Case-in-point: I’m honored to be a keynote speaker at MuseumNext, Europe’s conference on innovation in museums, in June of this year and personalization is so increasingly critical to organizational success that it is identified as one of the four, key themes of the whole conference. I think they hit the nail on the head: “Our audiences increasingly expect experiences which are tailored to them. How are museums moving beyond one size fits all to accommodate the different needs of individuals?”

Opportunities for personalization (which increases relevance, garnering attention and aiding in building affinity for brands) are being explored for onsite experiences – but this mindset also must be applied to online engagement. Specifically, potential donors/members, influencers, and evangelists increasingly require personalized communications in order to optimize chances for activation (i.e. behaving in your organization’s interest).

How can you utilize personalization to cultivate donors online? A key to online personalization is actively engaging select audience members instead of being passive – or just waiting for them to tweet you or write on your wall. For starters, know who your stakeholders actually are and how they behave online (this often starts with compiling a list of key stakeholders and their social media platforms). This isn’t rocket science: Make a private Twitter list and pay special attention to your key influencers’ tweets, be active, and wish them a happy birthday (for example)! Other ways to create these individual touch-points is through diligent social care, or “social CRM” (responding to individual comments and questions on social media platforms in a timely and thoughtful fashion) – a community management necessity that is too often overlooked.

“Yikes!” you’re thinking if you’re a leader in your organization, “this is going to require a lot more manpower!” Yes. Yes, it is…but the importance of digital touch-points will not disappear any time soon.

 

3) Most importantly: Stop treating online donor cultivation as a separate beast and understand that it is a cornerstone of a broader cultivation and retention strategy

I often get the feeling that executive leaders somehow believe that supporters who give or may be cultivated online must be aliens who exist only online …or that online donor cultivation may be somehow different than offline donor cultivation. Here’s news that should be refreshing and empowering to organizations that are a bit intimidated by digital platforms: It’s not.

As a reminder: A donor online is still a donor “in real life.” Their money is still money, and their support is still support. They have the same motivations as offline donors, expect the same treatment, and expect the same personalization and attention as those who choose to give via a different method. Simply put, they are human.

Cultivation should happen for individual donors both online and offline. Instead of conceptually carrying out varying initiatives online for “online donors” and offline for “offline donors,” organizations should realize that online donor cultivation is not separate but, instead, an integral aspect of a broader cultivation strategy.

In sum, instead of viewing “online giving” and cultivation as a donation conveyance channel, smart organizations are realizing that it is an increasingly important (and expected) component of a broader donor cultivation and retention strategy, and that it – like all other fundraising communication methods – is more about the people than the platform or giving method.

At the end of the day, fundraising and donor engagement initiatives will continue to evolve in the online space – just as more traditional engagement methods evolve. This evolution will necessitate more informed, personalized donor cultivation leveraging real-time platforms.

 

Interested in getting blog posts, tips, and some silly social media geekery periodically delivered in your Facebook newsfeed? Like my Facebook page (or ) Or for more regular sharing of nonprofit marketing information, follow me on Twitter

Posted on by Colleen Dilenschneider in Community Engagement, Digital Connectivity, Financial Solvency, Fundraising, Myth Busting, Nonprofit Marketing, Sector Evolution, Trends 3 Comments

Finding: Museums That Highlight Mission Financially Outperform Museums That Market Primarily as Attractions (DATA)

seafood watch

This article kicks off a four-part series intended to help visitor-serving organizations understand and respond to emerging trends that will impact their ability to achieve their financial and mission-related goals. Learn more about the series here. 

Data suggest a “new” draw to your organization that is now key to engaging both visitation and donor support. Well, actually, it’s not “new” – it’s the reason why your organization exists: Your mission. How credibly the market perceives your organization in terms of your ability to effectively deliver on your mission has a very strong positive correlation with your organization’s financial performance.

An analysis of the recent financial performance of a large and representative number of visitor-serving organizations coupled with the public perceptions of these same organizations reveals an outcome that may not be surprising for those who keep tabs on consumer behaviors: Organizations perceived as “best-in-class” in terms of mission delivery reliably outperform organizations that rely more on their reputations as “attractions” when it comes to their financial bottom lines.  In other words, mission and business are not in conflict – being superlative at your mission is good business!

There are three overall findings relating to the “mission is good business” trend:

1) Organizations perceived as more credible actors in terms of fulfilling their mission financially outperform peer organizations whose reputational equities relate primarily to their roles as attractions

IMPACTS collects and analyzes attitudinal and awareness data for 224 visitor-serving organizations in the US (and that may even include your own). This data and analysis informs the development of key performance indicators that reveal trends and correlations affecting visitor-serving enterprise.  The charts below indicate the relationship between 35 visitor-serving organizations’ financial performance in terms of “revenue efficiency” coupled with the market’s perception of these same organizations’ “reputational equities.”  (In the interest of maintaining appropriate confidences, I’ve “anonymized” the findings)

First, a few quick definitions (with advance apologies for the analytical jargon):

Revenue Efficiency: A composite metric contemplative of onsite-related earned and contributed revenues (e.g. admission, contributions, grants, membership, programs) contemplated relative to the cost to deliver onsite services (i.e. operating expenses) and the number of persons served onsite.  Generally, a more “revenue efficient” organization exhibits more favorable financial key performance indicators (e.g. greater revenues, greater net operating surplus) and reduced financial volatility than does a less revenue efficient organization.  Data informing the IMPACTS revenue efficiency calculation are commonly available in an organization’s financial statements, annual reports, and Form 990 filings.

Reputational Equities: A composite metric contemplative of numerous visitor perceptions such as reputation, trust, authority, credibility, and satisfaction that collectively indicate the market’s opinion of an organization’s relative efficacy in delivering its mission.  As mentioned previously, IMPACTS collects perceptual data from 224 visitor-serving organizations in the US to inform its reputational equities calculation.

KYOB aquariums reputation and revenue

Aquariums are a good place to start because (a) in addition to tackling the mission of inspiring audiences, they are also increasingly engaging audiences on broader conservation issues; and (b) aquariums tend to be more reliant on earned revenues than their museum and zoo brethren who may have greater public funding and/or endowment support. In short, absent the safety net of large endowments and government appropriations, aquariums are among the most market-driven businesses in the nonprofit sector, and translating positive reputational equities has an enormous financial benefit for these organizations (and, in inverse, lessened reputational perceptions bear tremendous risk to an organization’s bottom line).

Generally, revenue efficiency follows reputational equities (so working to increase reputational equities tends to positively affect revenue efficiency). Thus, we can reasonably surmise that year 2014 may bring continued challenges for Aquariums H, I, K and L should they choose not to prioritize remedy for their lacking perceptions as credible actors when it comes to delivering on their missions.

KYOB zoos reputation and revenues

Much like aquariums, the zoos that are perceived as credible actors in regard to their mission achieve the greatest revenue efficiency. Again, in the example indicated by the assessed zoos, the relationship between reputational equities as a predictor of financial success is clear and compelling.

KYOB museums reputation and revenues

Again, when segmented by museums (in the above example, all of the assessed organizations would be rightfully classified as either “art” or “natural history” museums), the trend holds true: Those museums perceived by the market as the most esteemed in terms of fulfilling the promise of their missions achieve the greatest financial performance.

You’ll notice that out of the 35 organizations represented in this assessment, Museum H is the only organization that does not indicate the relationship between reputational equities and financial performance – and, even in this exception to the trend, the difference is very slight.

 

2) Your organization must increasingly be MORE THAN an attraction but it still must be an entertaining destination.

The reputational equity metric is contemplative of overall satisfaction and data indicate that providing an entertaining experience is an extremely important component of visitor satisfaction. To be clear: The data do not support abandoning efforts to deliver an entertaining experience in the hopes of enhancing your organization’s reputation as a credible, mission-related authority. Instead, data support efforts to underscore your social mission and demonstrate topic expertise alongside location-based content to help drive visitation and provide insight into the entertaining and inspiring experiences that you provide.

Simply put, people want to visit organizations that are more than just attractions.

 

3) The importance of underscoring reputational equities is likely to grow as millennials increasingly comprise a greater percentage of museum audiences

The analysis indicating the relationship between favorable reputational equities and financial performance for visitor-serving organizations aligns with multiple findings concerning the influence of social missions (in business-speak, think “corporate social responsibility”) on consumer purchasing behaviors. Namely, people – and especially millennials – are more likely to purchase products that support a mission.

The data has long suggested that millennials are particularly public-service motivated, and as Gen Y has become a more powerful market segment (indeed, millennials are the largest generation in human history), organizations have experienced a “market shift” in support of organizations that support “social good.”

That sounds great for educational, conservation, and cultural organizations such as museums, aquariums, and zoos, right? Well…maybe not…especially because millennials are generally sector agnostic. Millennials tend to support organizations and businesses that appeal to them regardless of whether or not there is 501(c)3 designation involved. (In other words, while the IRS may care about your tax-exempt status, the market increasingly does not!) This means that in terms of securing support, many nonprofits are “competing” directly with for-profits for the market’s time, attention, and resources.

Organizations that have marketed themselves too heavily as attractions without underscoring their mission and social impact have lost a valuable opportunity to differentiate themselves as superlative to a critical demographic. Potentially worse yet, they may have built their reputations based on motivations that millennials don’t care about. Case-in-point: Take a look at what millennials want out of a zoo, aquarium, or museum membership compared to older generations.

Organizations that the market favorably perceives as more than “just an attraction” tend to financially outperform organizations perceived primarily as attractions.  Money follows reputational equities. Zoos, aquariums, and museums that have been trying to “sell” the wrong brand attributes may find themselves struggling even more in the future as emerging audiences emphasize mission and social impact as vital attributes of the relationship that they seek with the organizations that they support.  Year 2013 was only the tip of the iceberg. Perceptions are changing and the data affirms a strong, encouraging trend:

Finally, it’s cool to be kind.  More than that, it’s plain good business.

National Aquarium cleaning debris

National Aquarium

Interested in getting blog posts, tips, and some silly social media geekery periodically delivered in your Facebook newsfeed? Like my Facebook page (or ) Or for more regular sharing of nonprofit marketing information, follow me on Twitter

Posted on by Colleen Dilenschneider in Community Engagement, Financial Solvency, Fundraising, IMPACTS Data, Myth Busting, Nonprofit Marketing, Sector Evolution, Trends 1 Comment

What Museums Can Learn From Online Dating (Hint: Touch Really Matters) (VIDEO)

*Accessing this post via email and having problems viewing the video? You can watch it here

Is social media hurting the onsite visitor experience? Data suggest that in today’s world, museums need to be masters of both offsite communication (social/earned media) and onsite, face-to-face communication in order to be successful. Increasingly, a museum’s business strategy cannot thrive without one or the other.

Here’s a handy (pun intended) concept that I recently presented for thinking about the relationship that “digital touch” and “physical touch” play in driving museum visitation and maximizing visitor satisfaction.

Westmusings

I was honored to have had the opportunity to take part in the Western Museum Association’s first-ever WestMusings: Ten Minute Museum Talks in October in Salt Lake City.  What Museums Can Learn From Online Dating briefly traces a museum visitor from the visitation decision-making process through a museum visit and demonstrates how “digital touch” and “physical touch” work together to “seal the deal” of getting folks in the door to experience sparks of informal learning.

Here are those slides about reputation up close (what motivates the visitation decision and the diffusion of messaging).

While I spoke about museums in connection to online dating, I had the opportunity to take part in the WestMusings initiative with three, fabulous museos who imparted their own wisdom regarding museums and their connection to similarly creative topics: Scott Stulen of the Walker Art Center spoke about cat videos, James Pepper Henry of the Heard Museum spoke about culture clashes, and Carrie Snow of the Church History Museum spoke about roller derby (in full roller derby attire, no less)! Intrigued? Check out their WestMusings here.

 

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Posted on by Colleen Dilenschneider in Community Engagement, Digital Connectivity, Financial Solvency, IMPACTS Data, Myth Busting, Nonprofit Marketing, Sector Evolution, Trends 2 Comments

Leisure Activity Motivation: How People Decide to Attend Your Museum or Visitor Serving Organization (DATA)

MET museum

When it comes to motivating attendance, data suggest that offerings outside of your visitor-serving organization’s walls often play a greater role than what is inside.

Wondering why you’re not getting more people through the door of your museum or performing arts event? It could be due to many factors – both internal and external. Often, visitor-serving organizations (VSOs) get wrapped up in their own content and confuse the role that these offerings play in motivating visitation. Namely, they think that their own content or visitor experience plays the primary motivational role. However, data indicate that an organization’s own, internal offerings generally matter less to visitors than does the market’s perceptions of the surrounding macro-environment when it comes to motivating leisure visitation.

The chart below (featuring data collected by IMPACTS) illustrates findings related to leisure activity motivation. In other words, it demonstrates the primary motivators that determine how the market decides what to do with its leisure time. (The x-axis demonstrates the percent of respondents identifying that aspect/activity as a primary motivator. Respondents with multiple primary motivators are also represented.)

IMPACTS leisure activity motivation

This data features several, key takeaways for visitor-serving organizations:

 

1) “Critical mass” plays an important role in motivating leisure activity

“Yeah, yeah – VSOs in bigger cities have more people around and thus usually get more people to come through the door,” you’re probably thinking…but there’s more at play here than one might initially think. Major metro markets contain a density of attributes and experiences such as the ones indicated on this list. However, data suggest that in terms of motivating leisure activities, some markets have stronger, “standalone” motivators than others and merely being a major metro market can be a less enticing draw than possessing a mix of other attributes. A certain way to ensure that your organization is being considered as a viable destination is to be surrounded by a core, critical mass of other leisure opportunities. Consider the Monterey Bay Aquarium (to mention a frequent example for me): Monterey itself is not a major metro market, but the aquarium’s proximity to the waterfront, unique dining, golfing, and other specific opportunities create a density of experience that makes the location a viable leisure destination. In other words, the combination of these attributes – coupled with the appeal of the aquarium – are enough to motivate people to travel 2.5 hours from a major metro market (San Francisco) to visit the aquarium.

 

2) More than ninety percent of people need external motivators in order to attend your museum or performing arts event

Visitor-serving organizations may overestimate the motivational qualities or singularity of their own offerings in driving activity motivation. The modest influence that visiting a museum (9.9%), a zoo, aquarium, or science center (8.9%), or a performing arts event (4.2%) has on the leisure decision-making process is relatively low when compared to the influence of other visitor experiences or destination attributes. This means that more than 90% of people need additional, external motivators to enter your marketplace. A museum could put a visit to a destination over the top, but it’s generally not a primary motivator. This makes sense when contemplating the opportunity trade-offs attendant to leisure decisions: Visiting Aunt Janet sounds great – but if you could visit a major metro with unique shopping near the water – and visit a museum – you might make a different decision (and maybe even bring Aunt Janet)!

 

3) Who people are with still often beats what they are doing

The highest primary motivator of leisure activity is visiting friends or family (70.4%). This mirrors other data supporting the finding that who visitors are with often means more than what visitors see when they go to a museum or other type of visitor-serving organization. This is worth extra attention, as the greatest motivator according to the market is not tied specifically to a physical aspect or feature of a destination, but rather the draw of being with loved ones.

 

4) What is good for your city in terms of increasing critical mass is also good for your organization

This is the essence of the “rising tide lifts all ships” theory of visitor engagement. Organizations that see other activities or experiences as competition for their potential audience’s time may be missing the mark. It may go without saying, but communicating the availability of unique shopping and dining, celebrating historic assets within your community, and highlighting hiking, swimming, golfing, or other activities that take place outside your walls also helps you better engage your own visitors.

Occasionally, museums and other visitor-serving organizations want to “silo” their organization as a more influential, standalone experience – a perspective that may be incongruent with the way that the market contemplates its leisure investments. Organizations should be careful to not forget that before a visitor can engage with your content they must first choose to visit your destination. Your visitors’ experience is often connected to the other experiences around you that make up their day. Promoting the robustness and vitality of neighboring organizations and the macro community is increasingly a wise strategy to maximize visitor engagement.

 

Quick note: I am pleased to be bouncing into Salt Lake City on October 12th to deliver a WestMusing: 10 Minute Museum Talk at the Western Museums Association Annual Meeting closing ceremony before hopping on the plane back to London! I’m thrilled to be delivering the talk alongside four great brains. If you’ll be there, come say hi or connect via one of my social channels!

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*Top photo credit to nypress.com

Posted on by Colleen Dilenschneider in Community Engagement, Financial Solvency, IMPACTS Data, Myth Busting, Nonprofit Marketing 1 Comment

A Cure For Point of Reference Sensitivity: Why Visitor Satisfaction For Your Nonprofit Is Lower Than It Could Be

opinion_of_our_productIMPACTS data indicate that visitors to zoos, aquariums and museums (and other visitor-serving organizations such as historical sites, theaters, symphonies, etc.) who have never previously visited any other like organization rate their experiences 18.1% higher in terms of overall satisfaction and 14.8% higher in terms of value for cost of admission than visitors who had previously visited any other zoo, aquarium, museum, etc. Further, as the number and frequency of one’s visits increases, a visitor’s level of satisfaction and perceived cost for value of admission tends to decrease.

This is just fine if your art museum (for instance) is the first art museum that your every guest has ever visited, but it has a host of potential repercussions on your organization’s bottom line (like tackling a social mission and achieving long-term financial sustainability) if you’re the second art museum someone visits. Or third, or fourth, or fifth….

This phenomenon is known as “Point of Reference Sensitivity” and suggests that the market’s expectations are being constantly reframed by recent experiences. In short, as the market gains familiarity with an experience, it becomes increasingly harder to “impress” the market.

So, what can be done to minimize the deleterious effects of Point of Reference Sensitivity? [I will henceforth refer to Point of Reference Sensitivity as “PoRS” because a) that’s just the kind of relationship that we’ve developed and b) it sounds a bit like a disease, which may be appropriate.] PoRS is an important consideration for visitor-serving organizations with regard to key performance indicators, and not even the very best visitor-serving organizations in the world are immune to its negative effects. The commonality of PoRS, however, does not mean that it is unimportant to your own organization’s reputational performance. Just because many other organizations suffer from PoRS doesn’t “even the playing field.” The market – not other organizations – are the ultimate arbiters of your organization’s success…and data suggest that despite your best efforts (great exhibits, well-trained staff, thoughtful access programs), you are still likely to experience a decline in satisfaction over time from a sizable portion of your audience simply because folks visited other organizations before they walked in your door.

The good news is that strategic prioritization and effective PR/communications practices may provide both prophylaxis and remedy against even the most stubborn case of PoRS.

What causes PoRS in visitors?

Qualitative research related to these findings suggest that PoRS may be due, in part, to a “been there, done that” mentality that tends to accompany repeat visitation to “like” organizations. The research suggests that this sentiment stems from a perceptual belief that “like” organizations (think of one zoo compared to another zoo, or one art museum compared to another art museum) share an elemental “sameness” that challenges the market’s ability to differentiate the unique attributes of individual organizations. Further exacerbating PoRS is the premium that we tend to psychologically ascribe to “firsts” – first love, first car, first baseball game, first kiss. When someone first visits a zoo, it may be the first time that they have ever seen live animals up close, but upon visiting a second zoo, there is a loss of “newness of experience.” There may be other factors that contribute to PoRS: Perhaps the first zoo visited is in an individual’s hometown and is a point of civic pride. Perhaps the newness of the experience is matched with a memory of sharing the experience with a favorite friend or family member, thus creating a unique, personal remembrance that is difficult to duplicate and impossible to top.

How is PoRS hurting your organization?

Reputation is a leading driver of visitation, and reviews from trusted resources (such as word of mouth recommendations from friends, peer review sites like Yelp or TripAdvisor, and even social media) are the strongest contributing factors to building your reputation (12.85x greater than any paid advertising channel). Aside from the more obvious impacts of lower guest satisfaction metrics and potential declines in the likelihood of repeat visitation, PoRS may also affect your organization’s word of mouth value. This may result in securing fewer visitors, fewer opportunities to cultivate donors with affinity for your organization, and fewer evangelists to amplify and promulgate your organization’s mission.

How can your organization overcome PoRS?

Data based on visitor feedback suggest that the solution may be very simple in theory: Be more unique. One way to do this is to utilize social media and other communication resources to underscore what differentiates your organization as a unique experience. Focusing more on your mission – as opposed to your existence as a “destination” – may help. An emphasis on mission-related content may allow your organization to increase its relevance beyond being a visitor-serving destination on real-time, online platforms by more actively defining the public perception of your museum. If your organization can cultivate a reputation as “more than just a visitor-serving organization” prior to a guest’s arrival, then your organization may also improve its satisfaction-related metrics.

It seems that our mothers were onto something – “You’re judged by the company that you keep.” PoRS is particularly insidious amongst the perceptual middle ranks of visitor-serving organizations – those places that are so “destination-focused” in their communications that they end up positioning themselves as “just another museum” (or zoo, or aquarium, or botanical garden, etc.) The overcome may be in elevating your organization from the sameness of a sector by differentiating not only your experience, but by the means by which you achieve your mission (the impacts that you have and the differences that you make).

As stakeholders for visitor-serving organizations, we tend to believe that the entities that we serve (or support, or visit) are unique and superlative.  Our challenge – and, indeed, our opportunity – is to similarly articulate these differences to our visitors so that they, too, consider us as more than a place. What makes your organization unique is probably not the artifacts that you house, the collections that you keep, or the building within which you keep them. What makes you unique is the outcomes that you achieve by fulfilling your mission… and communicating these outcomes is the best defense against a nasty case of PoRS.

 

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Posted on by Colleen Dilenschneider in Community Engagement, Financial Solvency, IMPACTS Data, Sector Evolution, Trends 3 Comments

A Hint for the Future of Museums: Europe is Looking to US Aquariums

In my line of work (developing predictive data) and my spot in that line (analyzing and applying data on behalf of organizations equally concerned with social and fiscal bottom lines), opportunity often comes from keeping a pulse on the market. Along these lines, I’ve recently experienced shifts in my professional world that may be illustrative of the future of museums and the broader nonprofit community.

"7 hours and 57 minutes until I am officially based out of Chicago AND London! Let's do this!"

“7 hours, 57 minutes until I’m officially based out of Chicago AND London! Let’s do this!” (4/1/13)

In April, I officially joined the ranks of part-time expatriates (and long-haul commuters) when IMPACTS asked me to help open our London office while also maintaining a “home base” in Chicago.  Preparations for our London office enabled me to hire a Digital Marketing Manager to provide additional support to our projects, and also challenged me to be more thoughtful about how I could focus my efforts to best serve our clients.  A few months removed from my hop across the pond, I’ve been reliably asked two questions from colleagues, other museum professionals and even friends and family – the answers to which are closely related and may provide interesting insight to the museum industry:

1) Why London?

The obvious answer: proximity. I am in London largely because it is an accessible base for much of the work that IMPACTS is currently performing on behalf of visitor-serving organizations (e.g. museums) throughout the Americas, Europe and the Middle East.

The more interesting answer: market demand in Europe for the American nonprofit business model. You read that right! Any quick glance at the news tells stories of shifting economies that have created an unprecedented struggle for many of Europe’s most treasured museums.  While not-too-long ago many of the elite European institutions might have politely sneered at the suggestion of adopting a more “American model” of doing business (especially “nonprofit business!”), these sentiments are quickly shifting.

The “American model” (as it is colloquially referred to in my dealings) is a euphemism for a visitor-serving business that doesn’t rely on government support (or grants or endowments) and, instead, is a market-driven enterprise whose success hinges on engaging a diverse, sustainable constituency.

In other words, many of the world’s greatest museums – the ones that we Americans revere and admire with a distant and mysterious “otherness” – are looking to U.S. visitor-serving organizations as sources of inspiration, innovation and know-how when it comes to reinventing their business models to best respond to their current economic conditions.

2) Why do you spend so much time working with aquariums?

It’s true. I do find myself increasingly spending more time and energy working closely with aquariums. Here’s the end-game: We have an interest in aquariums because they are often cited by our clients as best-in-class practitioners of the “American model.” (Stick with me, other-types-of-museum folks. I’ll connect the dots…)

IMPACTS works with nearly every form of visitor-serving organization from art museums and symphonies to science centers and botanical gardens, and there’s one thing that we’ve found to be generally true: The market-driven practices developed by aquariums may have the greatest impact and “usability” for exalting the entire visitor-serving industry.  While the role of aquariums as models may seem surprising to many of America’s most venerable museums, the relative esteem with which U.S. aquariums are internationally regarded evidences itself in my work on a daily basis. In fact, the European organizations (including many art museums) that I work with have less interest in the “best practices” of American art museums and, increasingly, more interest in those of American aquariums.

Here’s why.  There are two conditions that make U.S. aquariums of particular interest to the global museum and visitor-serving industry:

 

A) The U.S. aquarium business model is motivated by market demand (and not overly dependent on grants, endowments, or government funding)

This is not to say that aquariums do not seek to obtain grants or secure government appropriations – but, as a group, the chart below indicates that aquariums tend to rely least on contributed and dividend revenues when compared to other types of visitor-serving organizations:

IMPACTS Visitor Serving Organization Earned Revenue

Theoretically, if government funding were to cease on a macro-level tomorrow, aquariums (as well as select museums, theaters, science centers and other more self-reliant organizations) may have the greatest chance of keeping their doors open long-term.

Also, after evaluating a representative sample of 224 U.S.-based visitor-serving organizations, aquariums generally have the smallest endowments relative to their annual operating budgets – perhaps suggesting that aquariums must be particularly attuned to the market since they have less “cushion” in their revenue streams. We see outcomes of this market responsiveness all the time: While some museums are hiring extra grantwriters and expanding their lobbying efforts for funding, many aquariums are hiring social media and online community managers because they understand that digital engagement helps drive attendance. Of course, smart museums also realize this and are hiring these kinds of people, too – but as the chart below illustrates, the lack of a “safety net” places a particular financial imperative on aquariums to be responsive to market opportunities:

IMPACTS - Visitor Serving organization endowment backstop

 

B) Many aquariums regularly invest in active, global, social missions that extend beyond education and research

I can hear you now: “But all museums aim to change the world!” I know. This does not mean that other missions are any less important – simply that many organizations with which I work consider aquariums to be at an interesting intersection between topic expertise and “right now” relevance…particularly when it comes to prominent, controversial issues such as climate change and other environmental topics. In short, while the social missions and operations of aquariums tackle education and research (two critical items that are also common among other, select visitor-serving organizations), they also take up the battle of ocean conservation. The initiatives attendant to this addition are particularly timely, global, and live in a rather elusive “save the world” space.

It’s a seemingly at-odds and extreme combination:  Aquariums may be considered among the most “for profit” of organizations in that they rely heavily on earned revenues, but they also aim to be among the most globally impactful among organizations pursuing active, social missions.

 

I “go deep” in my work with aquariums because helping them evolve and perfect their business model to remain solvent in both fiscal and social terms provides the lessons that help other organizations achieve their similarly aspirational ideals.

I’m intentionally speaking in terms of sector generalities – not all zoos rely on government funding, not every museum lives on its endowment, and, for that matter, not all aquariums are truly bringing their A-game to the “save the ocean” effort. The organizations operating with the objectives of being both market-relevant AND “big mission-serving” (aquarium or not) may be our best models for the future of museums. They can survive on their own, and they can do it while serving a very large-scale social mission.

 

Interested in getting blog posts, tips, and some silly social media geekery periodically delivered in your Facebook newsfeed? Like my Facebook page. Or for more regular sharing of nonprofit marketing information, follow me on Twitter!

Posted on by Colleen Dilenschneider in Financial Solvency, IMPACTS Data, Myth Busting, Nonprofit Marketing, Sector Evolution, Trends 3 Comments

Time, Treasure, Talent: Priority Confusion on Nonprofit Boards Limits Success (STUDY)

Finding: Nonprofit board members grossly overestimate the importance of their own time and talent, and believe personal philanthropy to be the least of their responsibilities in the “time, treasure, talent” continuum.

time treasure talent

For nonprofit executive leaders, “Give [money], get [money], or get off [the board]” seems to have been a board development maxim since the beginning of nonprofit-time. Despite this fact, many CEOs consistently struggle to raise meaningful funds from their board members. This may be due to a convenient untruth that board members may be using as an excuse to sidestep the “give, get, or get off” maxim: The belief that time, treasure, and talent are of equal value to a nonprofit organization.

A recent study conducted by IMPACTS reveals that, among visitor-serving organizations, there is a stark perceptual delta between executive leadership and board members when assessing the primary asset that board members bring to their organizations. And perhaps unsurprisingly, this difference of opinion regarding board responsibilities is pronounced within “smaller” organizations (i.e. those serving 500,000 or fewer visitors annually).

IMPACTS (the predictive technology company for which I work) was engaged to develop intelligence and analysis concerning the efficacy of nonprofit boards of trustees.  The related research and interviews sought to improve the understanding of the optimal role of the board as it relates to the governance and operation of the contemporary, nonprofit, visitor-serving organization.

The data collection processes included quantitative intelligence gathering and qualitative interviews with both the executive leadership and members of the boards of 49 nonprofit, visitor-serving organizations (e.g. aquariums, museums, performing arts organizations and zoos).  The study sought to include a broad, representative sample of nonprofit organizations of various types, usage levels, and annual operating budgets.

 

1) Staff leadership believe that securing funds is by far the most important role of board members

 

IMPACTS staff perspective of board role

Giving/securing “treasure” for an organization is clearly identified as the most important role of a board member by CEOs and other executive leaders. Lending “talent” (think of an attorney on the board providing legal counsel) holds significantly less value according to these same leaders.

Qualitative assessments from leaders reveal that the delta between “treasure” and “talent” may be in large part due to an organization’s strong preference to buy talent with treasure (as opposed to relying on the “in-kind,” donated talent of their board members). Executive leadership tends to believe that this type of “hired,” on-demand, best-in-class talent puts the organization in a better position to succeed than does a board member who is potentially less specifically qualified and/or has less time dedicated to the organization. (Not to mention the fact that many nonprofit organizations have conflict of interest policies that limit or restrict a board member’s participation in aspects of the organization’s operation.)

 

2) With the exception of larger organizations, board members believe that lending their own talent is their key role and raising funds is the least of their responsibilities

 

IMPACTS Board perspective of board roles

An argument may be made that organizations serving greater than 500,000 annual visitors are necessarily larger operations and may reliably attract more experienced, “sophisticated” board members than smaller organizations. This type of board member may have more experience on a greater diversity of boards, and may have a better understanding of the needs of nonprofit organizations and their own role on the board.

 

Key Finding: Nonprofit board members over-emphasize the importance of their own time and talent

 

IMPACTS Board and staff perspective of board roles

Some may say that my interpretation of these assessments assumes that the nonprofit CEOs have a better perspective of what will lend success to an organization than board members themselves. I’d like to propose an alternative point of view in regard to the survey outcomes: Board members seem to believe that their biggest contribution is a thing that the organization isn’t always asking for (i.e. their respective talents), and the single thing that many organizations require most to keep their doors open is the very thing that many board members do not view as their primary responsibility (i.e. treasure). From this perspective, some organizations serving 500,000 or fewer visitors per year (or boards of any nonprofit organizations with “smaller” annual revenues) may be stuck in a cycle:

Nonprofit board members may disproportionally view their own “talent” as beneficial because they don’t perceive that the organization possesses equivalent talent on-staff. So, because the organization lacks internal capacities, its board members disproportionally value their  own (occasional, off-staff) “talent” – but in valuing their talents over their “treasure,” they limit the organization’s ability to develop more robust resources and capacities. Thus, the organization comes to depend on board “talent” largely because its board members choose not to alternatively supply the organization with sufficient “treasure.”

Does this mean that board perspectives are unimportant? Most certainly not. The experiences and connections afforded organizations by their board members are important assets. However, if they don’t positively impact the long-term solvency of an organization in a meaningful way, then these connections may not be worth as much as “status board” members seem to believe them to be. Connections, networks and experiences are all latent benefits that may be made manifest in terms of an organization’s financial health. Unlike these potential latent benefits that board members lend to an organization, donations provide direct benefit.  Ultimately, organizations quantify financial health in numbers – and numbers don’t lie.

 

In Their Own Words:

“I think that it takes all three (i.e. ‘time, talent, and treasure’) to be a great board member. Arguably the greatest talent of all is realizing that your time is less valuable than your treasure.”- Chief Executive Officer, attendance = 500,000 – 1 million 

“A particular challenge for many of our new board members is the time that it takes for them to understand that we didn’t ask them on the board because of their professional abilities and talents. We asked them on the board to gain access to the wealth that the practice of their professional abilities and talents has enabled.”- Vice Chairman of the Board of Trustees, attendance = 250,000 – 500,000

“I’m proud of the way that our board has evolved. It now understands it has an absolute and significant giving imperative. With all due respect to our board members’ abilities and talents, if you don’t give in a meaningful fashion, then you are short for our world.”- Chief Executive Officer, attendance = >1 million

“It drives me crazy that we still have board members who think that their job is to critique staff decisions, plan galas, and stuff envelopes. As a donor, it is embarrassing that the outside world considers these people to be my peers.” – Member, Board of Trustees, attendance = 100,000 – 250,000

“The best thing about leading a large organization was saying goodbye to the ‘bake sale boards’ of my past where every financial crisis was met with a social-status-elevating fundraiser that never netted any real funds but was deemed a success if it got the chairwomen mentioned in ‘Town & Country.’”- Chief Executive Officer, attendance = >1 million

“As a board member, you have two obligations: Number One is your fiduciary obligation to the organization. Number Two is your financial obligation to the organization. The entire ‘time, talent, and treasure’ discussion is bunk – a board member’s duty is to ensure that the organization is able to buy the time of those resources possessing the most talent.” Chief Executive Officer, attendance = 250,000 – 500,000

“Honestly, our board is a joke. They want to derive every social benefit and milk every professional network that comes from being on our board, but they don’t think that they should pay for the privilege. We’ve let ourselves become a status symbol…the worst sort of trophy wife. What I would do to fire the whole lot of them and start over!” Chief Executive Officer, attendance = 500,000 – 1 million

“On our board, it is both implicitly and explicitly understood that you pay for the privilege of your vote. There is no representation without taxation. If you don’t like our arrangement, then, frankly, we’d prefer that you not serve on our board.” – Chief Executive Officer, attendance= >1 million

“Over the years, I’ve been asked to speak to other boards about how they, too, can increase their respective board giving capacities. Invariably, they cite an inability to ‘attract heavy hitters’ to their boards. I ask them to survey the room – the so-called ‘heavy hitters’ don’t keep company with people who don’t value personal philanthropy. No one wants to be the deep pockets on a board who subsidizes their fellow board members. So, if a board wants to raise more money, the first step that they need to embrace is significantly increasing their own personal giving in the hopes of attracting more like-minded philanthropists. The second step often involves stepping aside and allowing these philanthropists to assume your position on the board. The best board donors try to replace themselves with even better donors on a regular, ongoing basis.”- Chairman of the Board of Trustees, attendance= > 1 million

“I appreciate how invested with their time our board members are, but I’d be lying to say that I didn’t wish that they weren’t equally invested with their money. We struggle to meet the giving benchmarks of our peers. My board’s answer to EVERYTHING is ‘Let’s have a fundraiser!” or “Let’s try for this grant!” – never anything out of their own pocket. They’re in love with other peoples’ money.”- Chief Executive Officer, attendance = 250,000 – 500,000

“A sure sign of a lousy board is a bunch of ‘talented’ people on your marketing committee. That’s where organizations dump the folks whose sole currency is hot air.”- Chief Executive Officer, attendance = 100,000 – 250,000

 

Interested in getting blog posts, tips, and some silly social media geekery periodically delivered in your Facebook newsfeed? Like my Facebook page. Or for more regular sharing of nonprofit marketing information, follow me on Twitter!

Posted on by Colleen Dilenschneider in Financial Solvency, Fundraising, IMPACTS Data, Myth Busting, Sector Evolution 7 Comments

Urgent Evolution: Marketing Your Nonprofit to the Audience of Tomorrow (DATA)

IMPACTS Historic visitor substitution

There are many reasons why your visitor-serving organization should be marketing to Millennials and other emerging audiences in order to ensure its long-term relevance and solvency. However, the single most urgent reason to target these audiences is that the “historic” museum visitor market is slowly dwindling, and organizations that do not evolve their marketing strategies risk long-term survival.

At IMPACTS, we collect ongoing, nationwide (and crazy-massive) data sets of the US market, and have uncovered the demographic, psychographic and behavioral attributes that tend to suggest one’s likelihood to go to or otherwise support a visitor-serving organization (zoo, aquarium, museum, botanic garden, performing arts organization, etc.). We call folks possessing these indicators high-propensity visitors (HPVs). While individual organizations may have slightly varying HPVs, we’ve found that there are several characteristics that a vast majority of organizations’ audiences share. And we’ve found something alarming: visitor-serving organizations’ (VSOs) “historic” visitors are leaving the market at a faster rate than new HPVs are entering the market, creating a negative substitution phenomenon that does not paint a bright future (or present, for that matter) for VSOs.

In fact, for every one historic HPV that leaves the market, they are being replaced by 0.989 “new” HPVs. Sound like a small difference? These people add up! Keep up your hard work reaching your traditional audiences and – for no fault of your own – negative substitution factors would suggest that an organization currently serving one million annual visitors will attract 946,000 visitors five years from now (that is 54,000 fewer people, and a likely corresponding decline in membership and program participation). This troubling “glide path” also considers that you’ll be doing everything that you can to meet your current audience’s needs, and continue to market to them like exceptional rockstars! This data suggests that the key to long-term organizational solvency is to evolve our engagement strategies to include our emerging HPVs. This means – as an industry – evolving our target audiences.

Though we observe broad negative substitution indicators for VSOs nationwide, the specific data referenced above contemplates VSOs residing within the top 50 metro markets as determined by Nielsen (a cohort representing nearly 70% of the US population).

 

Why is this happening? Our data points to three primary reasons:

 

1)   Rich, white people are having fewer children.

(Too blunt or refreshingly direct?) For the vast majority of U.S. visitor-serving organizations, this demographic represents their historic visitor. These folks are statistically more likely to have the household income, leisure interests, educational attainment levels, and psychographic profiles that tend to suggest an increased propensity to visit a museum, zoo, aquarium, botanic garden, performing arts venue, etc.

 

2)   The United States population is growing increasingly diverse with folks that aren’t currently planning a visit to your organization.

(I’m going for “charming directness” again!) Museums and other cultural visitor-serving organizations have not yet succeeded in breaking the conceptual barrier of being top of mind destinations for non-HPVs. At IMPACTS, we see disappointingly low perceptions of zoos, aquariums, museums, and performing entities as “a place for people like me” in the minds of emerging audience members.  (We call these perceptions “attitude affinities.”) Though select organizations are successfully executing strategies to engage these emerging audiences, the large-scale wave of change that we are seeking may only occur when we can alter the overall perception of VSOs as a sector.

 

3)   Millennials are taking over the market, but VSOs are reluctant and/or slow in figuring out how to attract them.

Millennials can be a gosh-darn confusing bunch for older generations to understand. As digital natives, we simply think differently. If you feel like your organization is always trying to play catch-up to capture this audience, it’s because most VSOs are!

Millennials (born roughly 1980 to 1995) represent the single largest generation in human history (nearly 20 million kiddos larger than the Baby Boomers) and too few organizations are currently cultivating them as donors or even potential visitors. Some aren’t targeting Millennials because older generations just don’t see how they could be that important in driving business (“My kids can’t dictate how I do things!”) Well, most Millennials aren’t kids anymore, and the sheer volume of this generation means that they are already starting the lead the market. Some believe that Millennials just won’t be significant donors so they aren’t cultivating this group (despite evidence that – despite debt and student loans – this generation is incredibly confident about its financial future and may be more financially responsible than older generations). Other VSOs aren’t targeting Millennials because they simply don’t know how or don’t have the proper skillset on staff. (If that’s your thing, here are some baseline pointers for marketing to Millennials). Regardless, this is a demographic that nonprofit organizations simply cannot afford to ignore. As “historic” HPVs – who think and behave in a way that executive leaders understand – leave the market, there will be a void. In fact, this largely contributes to the negative substitution at hand.

 

In sum, visitor-serving organizations need to evolve their target audience in a big way. And they need to work together to do it soon. Data suggests that many visitor-serving organizations are already observing the challenging effects of  negative substitution (e.g. declining attendance levels).  Of course, this doesn’t mean altogether ignoring the “historic” visitor that is currently many an organizations “bread and butter”…because, indeed, these people will continue to visit (albeit in increasingly smaller numbers).

Negative substitution quantifies the urgent need to evolve, and moreover, compellingly indicates the risk of “standing still.” In order to foster a change in market perception of VSOs as welcoming and relevant, organizations will need to start adapting their engagement strategies and outreach initiatives. Perhaps you’re thinking, “Really? Another thing that I need to worry about in the midst of so much market change?” The answer is, “Yes.” Let’s start worrying. Let’s evolve.

 

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Posted on by Colleen Dilenschneider in Community Engagement, Financial Solvency, IMPACTS Data, Millennials, Myth Busting, Nonprofit Marketing, Sector Evolution, Trends Comments Off on Urgent Evolution: Marketing Your Nonprofit to the Audience of Tomorrow (DATA)