The “Netflix Model” for Donations

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In the age of the internet, the world is at your fingertips. Business transactions can cross thousands of miles in a matter of seconds when using online platforms. For nonprofit organizations who take advantage of this connectivity, the opportunities for growth are endless.

Seeking and Retaining Donors

When seeking donors for your organization, retention and sustainability are key. Innovators in the digital world have made it easier than ever to collect donations online, through social media platforms and text messages. This accessibility becomes an issue when it turns into forgettability. It is all too easy for donors to make a one-time donation when they see an ad on their Facebook feed, and then to forget about the organization entirely. Even worse, potential donors may simply scroll past and ignore the campaign entirely. That is why companies must focus on ways to retain donors over the long-term and companies such as Netflix have done this well.

Understanding the Netflix Model in Terms of Your Non-Profit
Netflix, a company with a net worth of over $100 billion, has mastered one key marketing concept: subscribing. Netflix customers don’t have to pay each time they want to access its services. Rather, they make one easy monthly payment, often automatically billed to their account. This seamless payment system gives customers access to a wealth of entertainment options. At the same time, it gives Netflix the security of a steady stream of revenue.

Nonprofits can apply this model to their own fundraising. By recruiting subscribers rather than donors, nonprofits can work against the donate-and-forget mentality with subscribers who will offer continuing support. In addition to this support, the non-profit should identify ways to offer the donor a wealth of benefits in a similar way that Netflix offers a variety of entertainment choices. The non-profit can offer a variety of ways that a donor can help the non-profit. For example, there can be options to feed a hungry child, cloth or provide housing to the homeless, and much more.

One example is Catholic Relief Services (CRS) which takes this approach with their monthly-donor program called “Footsteps in Faith”. CRS emphasizes these monthly donations have an impact on the people they serve as well as on the organization itself. Monthly donors aren’t just people who give money: they are valuable partners who work with the organization to promote a good cause. Rather than supporting one specific effort, they are given the opportunity to support a variety of efforts within a non-profit.

How to Implement the Netflix Model

Using the subscription model with your donors can be a great benefit to all involved. Ensure that the option to give monthly is visible and accessible on your website. Promote your monthly donation option via e-mail and social media to optimize results.

Many organizations will separate out donors who give monthly from their general group of donors. For example, CRS refers to its monthly donors as a group called “Footsteps in Faith.” These monthly donors have a distinct status in the organization. Another helpful approach is to send one or two e-mails that are specifically targeted to monthly donors or make specific content about the organization’s work only available to monthly donors. The bond between donor and organization is important. Finally, the gratification when giving offers a positive reinforcement to donors to continue to do so.

If your organization is new to fundraising, be sure that your organization is in compliance with all internal revenue guidelines and laws for non-profits. Contact us today at Gonzalo Law for a complimentary consultation at ngonzalo@gonzalolaw.com!

References:
1. Fundraising, National Council of Nonprofits. https://www.councilofnonprofits.org/tools-resources/fundraising (Accessed 5/10/2018).
2. 5 Nonprofit Fundraising Challenges and Trends in 2017, by Kari Abitbol. 1/17/2017. https://www.lexisnexis.com/communities/lexisnexis_biz/b/bizblog/archive/2017/01/17/5-nonprofit-fundraising-challenges-and-trends-in-2017.aspx (Accessed 5/10/2018).
3. 3 of the Biggest Struggles for Nonprofits (and How to Overcome). https://nonprofithub.org/fundraising/3-of-the-biggest-struggles-for-nonprofits-and-how-to-overcome/ (Accessed 5/10/2018).
4. Neftlix Model Turns “Donors” Into “Subscribers”, by Mark Hrywna. 2/6/2018. http://www.thenonprofittimes.com/news-articles/netflix-model-turns-donors-subscribers/ (Accessed 5/10/2018).
5. The Netflix Effect: 4 Key Takeaways for Online Fundraising, by Philip King. 8/17/2016. http://www.nonprofitpro.com/article/netflix-effect-4-key-takeaways-online-fundraising/ (Accessed 5/10/2018).

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