Use E-Commerce to Raise Money, Bolster Relationships

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Several nonprofit groups already run online stores using standalone e-commerce tools and services. Many health organizations, for example, sell educational materials. Public broadcasting stations often sell premiums such as videos and T-shirts outside of pledge drives. Religious groups frequently sell books and tapes.


But many nonprofit professionals still have not evaluated e-commerce as an option for fundraising, thinking it is exclusive to for-profit retailers. Yet e-commerce offers new possibilities to raise money and build strong online relationships with constituents.


Why should nonprofits sell goods and services? People frequently are more willing to buy a product or service before they make a donation. An online store can initiate or develop a relationship with a prospect. Offering merchandise online also can garner more revenue from current donors and prospects.


But remember that product and service merchandising should be consistent with an organization's mission. The items an organization sells should reflect what it does. Groups that use premiums for fundraising also can use e-commerce to gain more revenue by selling the leftovers.


Beyond merchandising: e-commerce-based fundraising. A trend in e-philanthropy is "e-commerce-based fundraising." Groups like Defenders of Wildlife and the Jewish National Fund have achieved tremendous success selling virtual fundraising "products."


Defenders of Wildlife lets constituents "adopt" wild animals such as wolves. JNF lets people buy trees to be planted in Israel in return for a certificate. Historically, the fund sent donors or the recipients of gift donations physical certificates. Now it offers virtual certificate fulfillment in the form of a PDF, a great facility for last-minute gift givers/purchasers. The fund has even taken the e-commerce-led fundraising approach a step further by letting people pre-purchase multiple tree certificates for a discount and bank them for future distribution as gifts.


Cross-promotion. Last year, I bought Valentine's Day roses for my wife online. I intended to buy a simple bouquet of a dozen roses. During the purchase process, the site promoted the option to "upgrade" and buy two dozen roses for just a little more. I selected that option. As I proceeded, I was given the option to add an attractive vase and chocolates for a little more. Again, I selected the option. The site upsold and cross-promoted effectively. These marketing principles can be applied in a nonprofit context. If someone is buying an item from an organization's online store, the store can offer the option to buy related items or make an additional gift contribution.


Consider this example: A museum could configure its online store to ask a constituent who is buying a $15 individual membership whether she wishes to upgrade to a "family" membership for just $10 more. Or, the store could ask constituents to donate or purchase more to receive an additional benefit: "Your current total is $75. If you spend just $25 more, you will receive a free ticket to our upcoming exhibit."


Building constituent profiles.E-commerce can be a great way to start a relationship with a new constituent. It is a low-involvement way for site visitors to interact with an organization. Once a site visitor has made a purchase, an organization can expand the relationship by converting shoppers to volunteers, advocates and/or donors through cross-promotion and other programs.


Organizations can use online stores to identify new constituents and then deepen relationships with them over time.


Nonprofits should integrate their e-commerce solutions into their overall online constituent relationship management technology and strategy. For example, store purchase information should be added to a constituent's profile in an online marketing database. Upon checkout, encourage new constituents to opt in to ongoing e-mail communication. Collect more information from new constituents about their interests and preferences as they check out.


As organizations collect constituent information through their online stores, they are poised to drive more involvement. A wildlife preservation group could use this profile information to send an e-mail to constituents who have an interest in wolves, which may include people who bought "save the wolves" T-shirts, encouraging them to donate to a similar fund. The organization also could display special wolf-related messages to those constituents when they are logged in to the nonprofit's Web site.


E-commerce lets nonprofits raise new funds and reach new constituents, encourage them to get more involved, collect information about them, use that information to communicate messages relevant to them and build ongoing relationships.


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