CM: The New Nonluxury Luxury

Luxury20yacht_2The WSJ had an interesting article last week on how "nonluxury luxury" companies like Amazon, Apple, J. Crew and Starbucks are challenging traditional luxury companies for customers.  Like the luxury brands of old, these upstarts offer new, innovative products and great customer service.

In the words of one former luxury executive, "How come, in the past 15 or 20 years, luxury has become a legacy thing, backwards-looking?"

The same could be asked of the fundraising practices of most nonprofits.  Instead of looking forward and embracing new strategies like--but not limited to--cause marketing, many nonprofits are stuck in event hell with their dinners, golf tournaments and dreaded jail'n bails.  Not that these, like Louis Vuitton bags, can't be popular and successful, because they can.  But as the line between philanthropy and marketing (and let's not forget entertainment) blur, traditional forms of fundraising--and the nonprofits that use them--look more and more like relics.

Take the Jerry Lewis Telethon that benefits the Muscular Dystrophy Association [full disclosure: I started my nonprofit career with MDA and greatly admire their early trailblazing].  When Jerry Lewis started the telethon decades ago it was new, appealing and innovative.  But as the years passed it became stale, passe and at times ridiculous.  Sure, it still raises tens of millions of dollars each year.  But its creative atrophy has taken a heavy toll on MDA, an organization no one would describe as a leader in philanthropy.  MDA is a contestant in a dance marathon that's outlasted everyone but just won't leave, or change his tune.  Is that what you want your organization to be known for?

That's what I thought.  So here are few ways to make sure your nonprofit doesn't outlast its welcome on the dance floor. 

Intermingle the new with the old.  When I started at my current position, I inherited the usual array of dinners, auctions and golf tournaments.  Some of these were successful events that raised good money.  But I didn't want to stick with just these types of fundraisers.  Instead we started our first mobile program with one of our major corporate supporters.  We pursued a venture philanthropy opportunity that didn't materialize, but we learned a lot from the experience.  We established a Boston Marathon training team that further diversified our fundraising and led to a couple good corporate partnerships this past year.  Lastly, we started Halloween Town, which was firstly a major Halloween attraction for the city of Boston.  But even with all these new things, we never forgot our bread and butter programs.  Neither should you.  But don't let them stymy innovation either. 

Don't focus on the money.  If you do, you'll never try anything new.  Instead, focus on the potential of your new idea.  Does it diversify your fundraising? Does it target a different audience?  Does it demonstrate progressiveness and innovation (never doubt the power of being "cool")?  Look at all the big players in cause marketing: Komen, St. Jude, Share Our Strength.  They all began with traditional fundraising vehicles, and could have stuck with them and continued to make millions. But they chose to try new things that had no guarantee of success.  I'm told this is especially true for St. Jude, whose typical donor gives them $10, $15 and $20 gifts.  Thanks and Giving, which St. Jude launched in 2004 was a huge risk (corporate approach, expensive advertising budget, etc.), but they were committed to diversifying their fundraising with new practices.  Fortunately, they've been rewarded by raising millions more.

Don't just be cutting edge.  Cut to the bone.  Show donors that your progressiveness and innovation goes deeper than your fundraising and extends to your mission and work.  At my own job, I often combine talk about cause marketing with education on some of the the unique, creative things the hospital does to live up to its mission of delivering "exceptional care without exception".  Things like a new cancer care facility that consolidates our cancer services in one building so patients have access to the best care without a three-block hike from radiology to their doctor's office.  Things like we're the only hospital in the country to have an on-site food pantry because we found that being sick is only one of the problems affecting our patients.  Hunger is another.  Things like a huge interpreter services program that translates dozens of languages so no one is misunderstood, or misdisagnosed.

If your organization is like mine, innovation isn't a luxury.  It's a nonluxury.  You innovate every day and in everything you do.  And cause marketing is one of those nonluxury luxuries you simply can't afford to be without.