From Legacy to Leadership: Is Philanthropy Ready for the New ...

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From Legacy to Leadership: Is Philanthropy Ready for the New Consumer? Mirm Kriegel

The new economy has created a reset moment that’s changing how we live and work. And it has profound consequences for philanthropy. Over the past several months, some of the nation’s most iconic nonprofit brands—Nature Conservancy, AmeriCares, Red Cross and the Boys and Girls Club—announced sizeable layoffs and service cuts, while smaller, more nimble organizations like charity: water and Stand Up to Cancer tweeted their way into prominence, mobilizing tens of thousands of people in cities around the world.

As competition for mindshare and resources reaches new heights and power shifts from the few to the many, the way forward starts by understanding, engaging and empowering the new consumer.

This single snapshot speaks volumes about the challenges facing the philanthropic landscape in a world that’s adapting to radical social and economic change. Trust in our institutions has eroded while a spirit of entrepreneurship has soared. Today, organizations are forced to re-imagine how to do more with less. To survive in this new economy and restore public confidence, they have no choice but to innovate and ask: How do we reduce costs, increase our reach and multiply our impact? Innovation is no longer the exception; it’s the new imperative. From its roots in academic enclaves like Stanford Business School, social innovation has gone mainstream, moving into the halls of power under an administration that understands the value of collaboration and partnership. Social entrepreneurs are breaking boundaries and blurring lines between nonprofits and for-profits, combining social purpose with financial promise as they look to create innovative, sustainable revenue streams. Consumers, too, are driving this transformation—by holding nonprofit organizations to higher standards, asking tougher questions and seeking more impact for every dollar or hour they invest in social causes. The opportunity has never been greater for nonprofit organizations to re-invent themselves around the new innovation imperative. As competition for mindshare and resources reaches new heights and power shifts from the few to the many, the way forward starts by understanding, engaging and empowering the new consumer. They are, after all, your next donors. From Legacy to Leadership: Is Philanthropy Ready for the New Consumer?

©BBMG 2009

Meet the New Consumer BBMG’s 2009 Conscious Consumer Report explored consumer attitudes, behaviors, preferences and priorities during a moment of great social and economic transformation. Based on our national poll and in-depth ethnographic interviews, the study showed that Americans are re-evaluating what truly matters in their lives and seeking brands that deliver both value and values. Specifically, consumers are looking for brands that offer personal relevance, social purpose and meaningful participation. At BBMG, we believe that realizing the potential of social innovation requires brands to deliver on these multiple dimensions of value by defining and realizing what we call a Triple Value Proposition™ that integrates practical, social and tribal benefits into their DNA.

PRACTICAL

TRIPLE VALUE PROPOSITION

Triple Value Proposition To realize the promise of social innovation, brands must ask and answer three questions. Practical Benefits: How does this brand improve my life? When BBMG asked U.S. consumers which social issues are the most important to them personally, health care, education, safe drinking water and cures for diseases like cancer, AIDS and Alzheimers were at the top of the list. At the bottom: global warming, wildlife conservation and human rights. The difference? Issues that rise to the top are seen as more immediately relevant to their daily lives. In this age of increasing demands and doing more with less, consumers are looking to support organizations that deliver direct personal and practical benefits. They’re asking: How does this brand directly improve my life? As the ethos of philanthropy moves from charity to enlightened self-interest, few nonprofit brands have caught up to this shift, with many still focusing squarely on altruism. In an ever-crowded marketplace, brands break through by speaking not just to consumers’ impulse to do good, but also to their selfinterest. Organizations whose causes land at the bottom of the priority list must reframe their case as relevant and essential to people’s daily lives. For a wildlife conservation group, for instance, this means moving the message from “Stop off-shore drilling in Antarctica” to “Renewable energy will save you money and create new jobs.”

SOCIAL

TRIBAL

Realizing the potential of social innovation requires brands to deliver on these multiple dimensions of value by defining and realizing what we call a Triple Value Proposition™ that integrates practical, social and tribal benefits into their DNA.

In an increasingly interdependent world, what happens on one end of the globe impacts our lives—whether our health, our wallets or our own well-being. Unique, relevant and empowering brands illuminate our interdependence and make the connection to donors’ self-interest, which, in turn, helps to distinguish them from the competition. Social Benefits: How does this brand help me make a difference in the world? As simplicity replaces consumption in this new economy, Americans are searching for a sense of purpose and asking: How does this brand help me make a difference in the world? They’re eager to make decisions that meet their practical needs and also align with their values. Indeed, this spring, Harvard Business School graduates created the MBA Oath pledging to From Legacy to Leadership: Is Philanthropy Ready for the New Consumer?

©BBMG 2009

“serve the greater good,” not just their “own narrow ambitions.” Greed is out; a spirit of generosity is in. Traditionally, nonprofits have been best at articulating their social purpose. This is, after all, tied to their organizational mission and their reason for being. Outlets for giving, volunteering and advocacy are all clear and direct ways to engage supporters and provide a sense of purpose and meaning. But in this age of accountability, social purpose is about more than just delivering services—it’s about delivering impact. Consumers want to see a direct benefit on every dollar they invest and every action they take on your behalf. Emotional stories are still important, but they’re only part of a brand’s success. For the new consumer, the real measure of trust and loyalty isn’t based on what you’re offering, but how you’re delivering. Whether it’s gifting a goat or selling eyeglasses in developing nations, demonstrating impact is essential for nonprofits and foundations to establish a unique, compelling brand. Tribal Benefits: How does this brand connect me to a community that shares my values? The new consumer wants to be involved. They’re looking for the chance to be part of something bigger than themselves and to find meaning and value through participation. They’re asking: How can I connect to a community that shares my values, hopes and aspirations? As organizations look to build trust and deepen relationships, how they inspire and involve donors and potential supporters becomes all the more important. The BBMG study revealed a major finding when segmenting consumers based on attitudes, values and levels of engagement. Enlighteneds—the ten percent of Americans most driven by their values when making decisions—are three times more likely to be influencers who shape the conversations and behavior of the other 90 percent. They’re three times more likely to talk positively (and negatively) about a brand to their friends and family, and to co-create content and spread the word. In short, they’ll do your work for you—if you’re in their favor. Social media has transferred ownership of brands to consumers, giving rise to the power and influence of tribes. Our research indicates that companydriven advertising is the least trusted source of information. For brands to have credibility, they must have a strong following of outside champions—their Passionate 10 Percent™—to help create a community of true believers.

Top Issues:

56%

Health care

52%

Education

51%

Safe drinking water Researching cures for diseases like cancer, AIDS and Alzheimer’s

46%

Renewable and alternative energy sources like wind and solar power

41%

Fair wages and safe working conditions

34%

Poverty

32%

Cruelty to animals Global warming

29%

World hunger

29%

Conservation of wildlife and environmental habitats International human rights

40%

26%

23%

S1. Please indicate how important each of the following issues or problems is to you personally? (Percentage responding “one of the most important issues”) Source: 2009 BBMG Conscious Consumer Report

So how can organizations move from cultivating single donors to building a community of passionate champions? First, they need to see their consumer base as a powerful source of insight, innovation and influence. This means relinquishing top-down control and inviting them in to shape the conversation. When organizations create opportunities for engagement—including platforms of expression that show identification and belonging—donors and supporters can share the benefits of their actions with others. Brands that open their doors to authentically engage and empower their Passionate 10 Percent™ will be better positioned to build trust, win loyalty and drive innovation and impact.

From Legacy to Leadership: Is Philanthropy Ready for the New Consumer?

©BBMG 2009

Philanthropy’s New Imperative As philanthropy responds to the new consumer, the criteria for successful nonprofit branding is changing. Organizations will no longer be defined by pure altruism but by enlightened self-interest. They’ll no longer be measured by the problems they address but by the solutions they deliver. And they will no longer be shaped by the power of a few but by the voices of many. Obama’s success embodies this paradigm shift. He articulates why his policies are relevant to every American. He measures government not as “too big” or “too small,” but by whether it works. And he has effectively democratized giving by tapping into the power of tribes, illustrating a widespread communal effort that embraces and empowers the new consumer. The traditional model of relying solely on a handful of major donors to drive impact is no longer sustainable, as Madoff victims—many of them once megadonors—can attest. Philanthropy today is rooted in a spirit of opportunity and an ability to adapt— collaborating with partners and creating a culture of inclusion. It’s about embracing new strategies that build on existing development strengths while broadening the base of participation. And it’s about recognizing that some of your most loyal, vocal and generous supporters—your Passionate 10 Percent™—can come from unexpected places. In this age of radical transparency, nonprofit organizations must show how they live their values in every action and interaction. By engaging the new consumer, yesterday’s nonprofit brands can move from legacy to leadership and become tomorrow’s passion brands. Demonstrating personal relevance, driving social impact and mobilizing a community of true believers ensures that consumers share in the conversation, help spark innovation and change the world.

Philanthropy 1.0

Philanthropy 2.0

Altruism

Enlightened self-interest

Focus on problems

Focus on solutions

Delivering services

Delivering impact

Single donors

Community of believers

Donations-driven

Sustainable revenue streams

Top-down

Bottom-up

Power of the few

Voices of many

By engaging the new consumer, yesterday’s nonprofit brands can become tomorrow’s passion brands.

Mirm Kriegel is Director of Philanthropy and Social Enterprise at BBMG, a nationally recognized branding and integrated marketing firm dedicated to creating innovative brands that engage and inspire today’s increasingly conscious consumers. www.bbmg.com

References: The Chronicle of Philanthropy, Feb. 12, 2009: Letting Go: Layoffs at nonprofit groups are spreading—with many more expected in coming months; http://philanthropy.com/free/articles/v21/i08/08001301.htm Social Media Portal, Feb. 5, 2009: Twitter community organise charity: water’s global Twestival event; http://www.socialmediaportal.com/News/2009/02/Twitter-community-organise-charity-water-s-global-Twestival-event.aspx The Chronicle of Philanthropy, Apr. 16, 2009: White House Appoints Head of Social Innovation Office; http://philanthropy.com/news/government/7874/appointment-of-white-house-office-of-social-innovation-head-confirmed Stanford Social Innovation Review, April 16, 2009: The Innovation Imperative, Mario Morino; http://www.ssireview.org/opinion/entry/the_innovation_imperative/ The Economist, Jun. 4, 2009: A Hippocratic oath for managers: Forswearing greed; http://www.economist.com/businessfinance/displayStory.cfm?story_id=13788418  Triple Pundit, Apr. 23, 2009: Delivering Value with Values: BBMG’s 2009 Conscious Consumer Report; http://www.triplepundit.com/pages/delivering-value-with-values-bbmgs-2009.php

From Legacy to Leadership: Is Philanthropy Ready for the New Consumer?

©BBMG 2009