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Tuesday, December 11, 2012

Marketing Philanthropy in Post-Modernity


In 2013, KXSC will hold their first membership drive and fundraiser. We’re hoping to use the crowdfunding platform, Kickstarter, to raise $5,000 in donations. We’re also planning to sign up local businesses and alumni of the station to give matching donations at $500 increments. Thus, if ten matching donations are made, one for each $500 increment of the $5,000 Kickstarter goal, we will raise an additional $5,000. Finally, we are seeking $5,000 in internal funding and grants. Therefore, if all three campaigns are successful, Kickstarter, donation matching, and internal grants, we will raise $15,000 in one month. To promote the station and help ensure the success of the fundraiser, the station is holding eight events throughout the month of fundraising, and will broadcast live 24 hours a day for the last two weeks of the drive.

I have the distinct honor of organizing and executing this mammoth campaign, and have consequently spent a lot of time recently contemplating the nature of philanthropy, and how to best inspire it. This fall I volunteered at the KPCC Leadership Brunch, an event open to members who donate at least $1,500 a year to the public radio station. While speaking at the white tablecloth brunch, Bill Davis, President and CEO of Southern California Public Radio, repeatedly referred to the investment these members had made in the station. Investment is a very different word than donation or gift or charity or subscription. Investment is a business word. Just as one buys stock to invest in a business, these members had bought stock in a public radio station. And, where there is buying and selling, there is marketing. When nonprofits are soliciting donations, they are in fact marketing philanthropy. This shift in fundraising strategy is markedly different than previous social constructions of charity.

Social theorist, Max Weber, wrote about the role of charity within capitalist modernity in his work “Economy and Society”. He mentions how the giving of alms, donations to the poor, was an essential function of Christianity prior to the protestant reformation. Additionally, he points out that the Christian scripture denounces the pursuit of accumulating wealth as greed. Though he does not explicitly mention it, the Catholic practice of tithing, giving ten percent of one’s land and assets to the church, also supports Weber’s argument. Conversely, Weber argues that the Protestant ethic, which flourished in the United States, emphasized the sins of waste and idleness. The potent combination of Protestant ethic and American capitalism created a new social model that valued constant work and morally obligatory thrift, the end result of which was the accumulation of wealth with no obligation of charity. Whereas the Catholic ethic would have considered this the sin of greed, the Protestant ethic simply saw this as the end result of a rational, useful life.

Coupled with Horatio Alger fables and the prevalent mentality of self-reliance, capitalism in America developed from an economic model to a social model. In modernity, poverty was caused by the sins of sloth and carelessness rather than divine decree. While this did allow for the potential of social mobility, other socioeconomic factors made the American dream unattainable for many. The development of the Protestant ethic and American capitalism also changed who was responsible for caring for the poor, and what efforts were considered most effective in curing this social ill. Prior to this socioeconomic shift, individuals gave money to the church, who in turn gave direct assistance to the poor. After this shift, the government and massive foundations established by philanthropists launched institutional programs to enable citizens to help themselves.

Philanthropist, Andrew Carnegie founded the Carnegie Corporation with the goal of “real and permanent good in this world”, as we so often hear on National Public Radio, one of the recipients of the trust to this day. Unlike the church, the Carnegie Corporation does not give direct assistance to individuals, but rather funds major projects that address broader social issues in a manner that ensures lasting effects on society. In the 1930s, The New Deal was signed creating the Social Security System and the Works Progress Administration, national programs designed and implemented by the government to empower citizens to save for themselves and work for themselves. This is a rational, institutional approach to problem solving that defines the mentality of modernity. 

However, as strong as Weber’s arguments are in a modern world, we have generally progressed into an era of post-modernity, and the approach to charity has once again shifted accordingly. Without digressing too much into Foucaultian theory, it is important to note here that Foucault was critical of political reason and rationality, and advocated challenging the rationality of power as well as power itself, if true change was to be achieved. Despite consolidation by major corporations, the internet has created and maintained spaces that allow power and the rationality of power to be challenged. Opportunities for free discourse are essential for questioning power, the first step in challenging power.

Though Habermas theorized a public sphere in a singular sense that was conducted via in-person communication, the internet has facilitated the development of many public spheres constructed via mediated communication in real time or on demand. The diverse plethora of socially constructed niche communities that collectively form the internet, a medium which has skewed reality enough to make the phrase “in real life” common parlance, fits many definitions of post-modernity.

Hence the rise of media theorist, Henry Jenkins, who champions participatory culture on the internet, and seems especially fond of niche communities of cultural enthusiasts (i.e. nerds of every persuasion from citizen journalists to steampunks). Crowdsourcing has become the central pillar of participatory culture, and many of the most popular websites on the internet derive the majority, if not the entirety, of their content from user-generated activities. Youtube, Wikipedia, and Facebook would not exist without the participation of their users.

While crowdsourcing elicits users’ time, crowdfunding solicits users’ money. Many sites leveraging the crowdfunding form of participatory culture have launched in the last few years. Kiva enables users to offer micro finance loans of as little as $25 to people in need around the world. Users pick their recipient, and can see which other users have also lent money. Spot.us allows journalists to pitch stories, and users can donate money to specific projects to support that journalist’s research. Kickstarter allows artists to pitch creative projects like short films and albums with a specific fundraising goal. Users pledge donations to the project of their choice, and are only charged once the fundraising goal is met or exceeded. If a project does not receive enough pledges to meet its goal in the designated time, than the user isn’t charged. Essentially, a critical mass is required to prove the legitimacy of each individual project. Many successful projects have offered gifts to donors that affect the end outcome of the project. For example, a top donor may have their photo included in the album artwork of a successfully funded project. Thus Kickstarter projects are collectively and socially constructed, while maintaining the individual diversity of projects and users. This is charity in post-modernity. It is vastly different than previous models rooted in the morality of the church or the mandate of social reform to support capitalist growth.

Dr. Bruce R. Sievers from Stanford University has written extensively about contemporary nonprofits, in “Philanthropy’s Role in Liberal Democracy” he discusses the inherent plural nature of philanthropy. For every social issue there is at least one, if not thousands, of nonprofits, charities and philanthropic trusts working to solve it. It has become so popular and easy to start new nonprofits that the phrase “social entrepreneur” has entered common parlance. PBS even produced a documentary series about the recent wave of social entrepreneurship, “The New Heroes”. The PBS website for the documentary gives the following definition “Unlike traditional business entrepreneurs, social entrepreneurs primarily seek to generate "social value" rather than profits. And unlike the majority of non-profit organizations, their work is targeted not only towards immediate, small-scale effects, but sweeping, long-term change.” Social entrepreneurs can leverage social media to quickly spread their message, and are often persuasive regardless of their professional credentials.

For example, Invisible Children, a nonprofit attempting to end the use of child soldiers in Uganda, has spread their campaign to millions of people through viral videos that make emotional pleas and leverage savvy marketing techniques. However, Invisible Children was started by a couple of college kid with no prior experience related to nonprofits, social issues, war issues, or African relations. Before they had ever cultivated a track record of successful change, they had raised thousands of dollars based on a personal video made traveling around Uganda. This would have not been possible without the internet. The pluralism of philanthropy meshes well with the pluralism of the internet, and allows space for individual’s messages to reach collective social groups.

As Dr. Sievers points out, the pluralism of philanthropy is also what makes it essential to civil society, a space for individuals to freely form ideas about social issues. Sievers’ article addresses the relationship between philanthropy as part of civil society and the government, which takes collective institutional action. He warns against individual philanthropists exerting too much control over the civil society agenda, and eroding the government’s power to work towards “common good”. For an example, Sievers sites the influence of Bill Gate’s foundation over public school reform. Bill Gates fits the model of traditional, iconic philanthropist such as Rockefeller, Carnegie, and Ford. All are titans of their respective industries, who amassed enough wealth to form massive philanthropic foundations with the power to heavily sway public opinion. Through their legacy the word philanthropist conjures up connotations of wealth and power. Consequently, when Jay-Z wanted to establish himself as a titan of the music industry, he named his record company Roc-A-Fella Records. Clearly, the name Rockefeller still holds cultural significance.

Moreover, the Kickstarter model harkens back to an even older form of philanthropy: artistic patronage. All of the projects on Kickstarter are creative in nature, and donors dictate what projects are actually made. One of the pledge levels for most projects includes a gift of a copy of the artistic work, so in essence donors are buying the art before it is made. Finally, some projects have allowed the donors to influence the end product. So, the donors can participate in the artistic process. This could also be referred to as commissioning. Unlike prior forms of artistic patronage, the artistic patronage on Kickstarter is accessible to many. This is the influence of post-modernity, mechanical or digital reproduction, and the plurality of the internet. Whereas before only a Medici could commission a great painting or only The Salzburg Court could sponsor a talented composer, now anyone with an extra $10 and access to the internet can participate and support the creation of art. However, connotations of luxury persist. Though the cost of entry has lowered, and increased access, there are still barriers to entry. The most valuable donation gifts on Kickstarter still require a pledged investment of hundreds or thousands of dollars. The ability to sponsor good art still requires a certain amount of discretionary income, time to cultivate taste, and understanding of web technology. These are luxuries that not all Americans can afford. Though Kickstarter has made great strides in bringing philanthropy of the arts into the digital age, artistic patronage is an activity that appeals to a particular socioeconomic class.

As previously mentioned, new social entrepreneurial organizations can make persuasive appeals for donations based on emotion rather than reason. In an article published in the journal of Cultural Anthropology, “The Impulse of Philanthropy”, Erica Bornstein juxtaposes accountable giving with impulse giving, using several nonprofits in India as examples. She argues that donations given with the expectation of accountability are more institutional and less like gifts, which are given impulsively. Though the article is somewhat culturally specific to India, Bornstein’s suggestion that more importance be placed on the impulsive nature of philanthropy is far more broadly applicable.

Soliciting charitable donations online is vastly different than collecting donations via telemarketing or direct mail. Websites like Charitynavigator.org allow users to shop around for nonprofits to support on their own time. A series of effective posts on Facebook might inspire a friend to give without a second thought. There are now a million charities to support and a million reasons to give. That calls for a very different approach to fundraising than calling a previous donor during dinner and hurriedly guilting them into making another donation with one of a few scripts given to the telemarketer. In the post-modern, digital era nonprofits must cultivate niche markets, and appeal to the individual desires of donors. For many people, the desire to give is best appealed to spontaneously and emotionally.

Thus far this paper has established three strategic elements of post-modern philanthropy:
-          Philanthropy is pluralistic, like the internet.
-          Philanthropy is a luxury that has become more affordable.
-          Philanthropy is more often given impulsively.
These components suggest that nonprofits can learn something from how corporations market luxury goods, induce consumers to by impulsively, and leverage the internet to increase sales. Imagine what Amnesty International might learn from Amazon.

The book “Guerrilla Marketing for Nonprofits” by Conrad, Adkins & Forbes begins with a chapter explaining why nonprofits need good marketing. The authors point out that the nonprofit segment of the U.S. economy has been growing at a 65 present rate. This means increased competition. Additionally, the recent recession has reduced the discretionary income of most households. This means scarcity of resources. Finally, many nonprofits have begun to combine revenue-generating systems with traditional fundraising systems, which have put them in competition with for-profit businesses. For example, the various gifts a NPR member can select when donating to NPR, can also be bought individually for profit on the NPR online store. If a nonprofit hopes to compete in a broadening, diversifying market during a period of scarcity, then good marketing is essential.

“Guerrilla Marketing for Nonprofits” goes on to advocate a variety of practices that are common among corporations, but may be new concepts for many nonprofits: crafting precise messaging, creating organizational identity, focusing on demographics, understanding the marketplace, generating news worthy publicity, building relationships, and changing consumer behavior. For nonprofits that have relied on conventions of religious, moral, and social obligations to motivate philanthropy these marketing techniques may seem foreign or even offensive. However, religious, moral and social obligations function best in pre-modern and modern societies. As society progresses in to the post-modern era, these conventions will prove less and less effective.

Unfortunately, a study published earlier this year in the Journal of Public Policy & Marketing by Scott L. Newbert found that industry entrepreneurs were more likely to use established methods of effective marketing than social entrepreneurs. If nonprofits want to successfully navigate the realities of post-modernity, then they must leverage the more compatible characteristics of contemporary philanthropy: digital pluralism, affordable luxury, and impulsive giving.

Most college radio stations function as nonprofits, often modeling themselves on larger nonprofit public radio stations. They receive grants from their colleges similar to the CPB grants public stations receive, and then they also hold on-air fundraisers similar to the membership drives at NPR member stations. As more and more college radio stations simulcast their terrestrial broadcasts online, it behooves them to take advantage of the post-modern characteristics of philanthropy. I certainly plan to take pluralism, luxury, and impulse into consideration when designing and implementing my college radio station’s first fundraiser next year.

Even for-profit online stations may want to consider alternative revenue streams, like crowdfunding. I recently interviewed Tedd Roman, Executive Producer of Indie 103, Josh Landow, General Manager of Y-Not Radio, and Scott Fleisher, Content Director of TuneIn, and all agreed that advertisers had yet to catch on to utilizing online radio as an advertising platform. Essentially, listeners are transitioning to online radio at a much faster rate than advertisers. So for now, online radio is experiencing increased costs without increased profit. This is why services like Spotify have adopted integrated revenue models. Listeners can either choose to listen to revenue-generating advertisements, or pay a revenue-generating monthly subscription. Kickstarter does not require projects to be strictly nonprofit. Though the initial cost of recording, producing, and pressing an album maybe covered by pledged donations, the artist is free to profit from the album in a multitude of ways, including digital sales and licensing, after the fundraiser and initial project are completed. While the radio industry is in technological flux, it makes sense to consider a diversity of business models and marketing techniques to appeal to the pluralism of internet users in a post-modern age.

Works Referenced

Aitamurto, T. (2011). The impact of crowdfunding on journalism. Journalism Practice, 5(4),         429-445. DOI: 10.1080/17512786.2010.551018
Bornstein, E. (2009). The impulse of philanthropy. Cultural Anthropology, 24(4), 622-651.

Carvajal, M., Garcia-Aviles, J. A., & Gonzalez, J. L. (2012). Crowdfunding and non-profit           media. Journalism Practice, 6(5-6), 638-647. DOI: 10.1080/17512786.2012.667267
Foucault, M., & Faubion, J. D. (2000). Power. New York: New Press.

Jenkins, H., Ford, S., & Green, J. (2013). Spreadable media: Creating value and meaning in a      networked culture. New York: New York University Press.

Levinson, J. C., Adkins, F. J., & Forbes, C. (2010). Guerrilla marketing for nonprofits. Irvine,       CA: Entrepreneur.

Newbert, S. (2012). Marketing amid the uncertainty of the social sector: Do social             entrepreneurs follow best marketing practices? Journal of Public Policy & Marketing, 31(1), 75-90. doi:10.1509/jppm.11.038

PBS. (n.d.) The new heroes: What is social entrepreneurship? Retrieved from:             http://www.pbs.org/opb/thenewheroes/whatis/

Sievers, B. R. (2010). Philanthropy's role in liberal democracy. Journal of Speculative        Philosophy, 24(4), 380-398.

Weber, Max (1978) Economy and society, vol. 1. Guenther Roth and Claus Wittich, eds.   Berkeley: University of California Press.

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