The Disruptive Innovation For Charities Essays Examples

Disruptive Innovation for Charities

I found the operational models for most charitable donations to be a candidate for disruptive innovations. It is striking to me that charities which have the least funds for marketing, spend both large sums of money and time on marketing to raise money. Charity is becoming more a commercial activity than a sober solicit. The fast pace o life have mixed the essence of charity under the burden of marketing and advertising.AIP defines an acceptable charity performance to be one where the charities spend about 60 percent or more of their budget on programs, and spend about $ 35 or less for raising $ 100. Most charities do not even meet the definition and are spending about 50 percent of their budgets on different programs, and spending about $ 50 for raising $100.
‘What if’ Hypothesis: Creating a disruptive business model for charities can enable us to render a positive benefit for the society. What if we stand the conventional and hugely ineffective model of telemarketing, list saturation, direct mail, and list rental on its head, and instead come up with something different?
A better and disruptive business model for charities would increase their revenue and cut down costs to enable them to spend more on their charity missions. If we create a set of new and effective practices that can be implemented across the industry, it could make an impact in the form of doubling the money raised.

Potential New Service:

The Charity can be retrieved with cost saving and developing affiliations with principal organization that are benefited. Details of the approach is elaborated hereunder. The idea is to offer consumers a way of offsetting the negative side effects through a positive action and reducing funding raising friction. Hence, turning towards modernization to innovative charity.
There are everyday activities such as electricity and transportation that have their negative consequences for the consumer. The principle here involves giving consumers a way to set off the negative impact of such activities.
For example: The Nature Conservancy partnered with Northwest Airlines for an initiative. As customers utilize the nwa.com reservation system, their Carbon emission calculator will compute the estimated CO2 that will be generated through their flight, and will suggest a voluntary contribution to be given to the Nature Conservancy for removing CO2.
They are effective because they basically catch an individual at a point where they know that they are making a negative impact. Now comparing this with an individual’s state of mind as he receives a mail for a donation- the individual is just home after doing a long day’s work and is not connected to your mission emotionally, as he might only be thinking of just getting out of those cloths of having dinner. So a mail at such time might very well be annoying.
So an idea here could be that instead of regular unleaded, premium, plus, and diesel, the pumps at gas stations could use an “off-set option”, so that the consumers who use the offset option can pay a premium price that would be equivalent to the fund needed to offset carbon. Now imagine that only if a small percentage of the consumer utilize the “off-set option”, even then the amounts that will be raised will not bear any huge marketing budgets or fundraising programs for a charity working for environmental purpose.
Charities incur huge fundraising costs, probably about 50 percent of the amount that is raised on average. Reducing the friction in fundraising by making it cheaper can generate increased revenues. If the charities make donating more accessible and easier, more people would give. Also, through encouraging the contributing members for setting up an annuity gift, charities cold eliminates unnecessary outreach in fundraising, and could instead focus on rendering increased value for the existing donors, and attracting new ones.
Charities can partner with telecommunication or mobile phone carriers for setting up donation by text or through some distinct mobile donation method. This could be in the form of a one-time donation or a recurring donation that is added the monthly subscriber’s plan.
So basically the thing in disruptive innovation is to analyze the objective and the simple dimensions of a business (profit or not profit orientated), and then understanding the need of the target segments for coming up with simple and logical innovations. For instance, like we discussed how a carbon-emission control environmental charity can raise their funds from people directly at the point where they are causing to emit carbon. The reason is that they will be more acknowledging to the result of their action and the option for donating would not require the individual to put in some extra effort or go through some extra procedure.

Bibliography

Clair, Null. 2011. "Warm glow, information, and ineffficent charitable giving." Journal of Public Economics 95 (5): 455-465.