Stanford Social Innovation Review : Ask An Expert : Where can I get market research for our new fundraising model?

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Jan Leeman on Market Analysis

We have developed an innovative tool for in the nonprofit sector that will aid all 501c firms to create a sustainable fundraising model. Who should brunt the cost of our financial tool? Do we price the product so that donors will have no costs and the NPO covers all fees? Or, should we share the cost between donor and NPO? Where can I get market research on such a new concept in the social enterprise communities?

Perhaps gathering data on Charitable Remainder Trusts and Charitable Lead Trusts would be helpful. The Charitable Lead Trust (CLTs) shares many characteristics with the CPA, so data on the number and size of CLTs, the fee structure for CLTs, etc. may be helpful in coming up with ideas for pricing your product.

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I would suggest you share it widely and let a number of nfps try it out. if it catches on, you can find funding by nfps wanting to use it and pay for it or perhpas grants if you are a not for profit.

»» Posted by: june bradham on August 21, 2008 06:19 PM

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Your questions indicate that you are still unclear as to the true target market for your product. I suggest you take a hard marketing approach and find a few NPOs to provide the service/product to pro bono. Then, you could set up a situation where they are obliged to give you insight as to the usefulness of the tool, financial results from its use, etc. (much like ongoing focus groups). Subsequently, you can build real-life case studies regarding the cost/benefit of your tool at little to no cost to your company. The process of building case studies will help you build a revenue model as you will then understand the true target market for and beneficiaries of your tool (whether they are donors, NPOs in general, Resource Development departments within NPOs, VPs of Development, Boards, etc.). Only by understanding your EXACT target market and the pain points your tool relieves or the benefits your tool provides will you be able to clearly and concisely answer your questions stated in your original posting. After learning more, our organization may be willing to help you learn about your target audience as we are considering a variety of fundraising models and strategies to add to our repertoire. Best of luck.

»» Posted by: garth jordan on August 26, 2008 12:59 PM

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