It was one of those “aha moments” — an unforgettable, connect-the-dots moment, when everything suddenly, somehow changed. It was, without question, the most transformational epiphany in my professional life.
It was the Spring of 2005. I had the great privilege of spending a morning with Dr. Peter Drucker. He would pass away later that year.
After hearing my brief life story, which he listened to with genuine interest, the “Father of Management Science,” perennially recognized as one of the 100 most influential people of the 20th century by Time Magazine, asked me the question, “what is the most influential and powerful organization in our world today?”
Without really pondering Dr. Drucker’s question I answered, “the Church is the most influential and powerful organization in our world today because Jesus Christ is head of the Church.”
In his respectful old-world manner, Dr. Drucker, himself a person of profound faith in Christ, countered “you are incorrect.”
Then for the next hour, he explained and demonstrated that “the most influential and powerful organization in our world today is the business enterprise.”
A Key Competency That Nonprofits Lack
He explained that the formidable influence of the business enterprise in our world is the outcome of one critical competency that business enterprises often exhibit, and that nonprofit organizations, by and large, typically lack.
“That competency is the capability and capacity to respond to change,” he asserted. “And not only are business enterprises adept at responding to change, many of the very largest business enterprises actually lead change in our world.”
He gave several examples of business enterprises that lead change, the “who’s who” on the exclusive Fortune 100 register. “It’s one of the key factors that differentiates the Fortune 100 from the Fortune 500,” he acknowledged.
Dr. Drucker then challenged me to consider orchestrating my professional life around helping nonprofit organizations respond to change in today’s world. That part of our conversation was like a lightning bolt. I spent the next decade in two “change” roles for the world’s largest direct marketing agency, working with faith-based nonprofit organizations helping decision-makers and strategy implementers respond to change.
As that morning in April 2005 with Dr. Drucker was winding down, I asked him a final question, “Sir, what is the specific change that I should help nonprofit organizations respond to?”
Dr. Drucker, who was acclaimed for dozens of key predictions of the 20th century — including the decline in manufacturing as the essential provider of wealth and jobs, the rise of Japan as a global economic superpower, and that “knowledge workers,” a term he coined, would dominate the workplace of the future — spent our final hour describing what today is known as “The Experience Economy.”
Today’s Experience Economy
That pivotal conversation with Dr. Drucker occurred in 2005. In 2011 the landmark book, The Experience Economy by Joseph Pine and James Gilmore was published, defining today’s Experience Economy as the next economy following the Agrarian Economy, the Industrial Economy, and the most recent Service Economy. (An interesting side note — direct response fundraising success rates were highest in the Industrial Economy. They declined in the Service Economy. In today’s Experience Economy, direct response fundraising success rates are even more of a challenge.)
Today the Experience Economy is the definitive underpinning and central operating ecosystem of the American Economy and the global economy.
If you are a nonprofit organization competing for the attention and generosity of donors in today’s marketplace, you must understand, re-engineer, and optimize your fundraising strategies and activities around today’s Experience Economy. You cannot use last-century approaches to engage the next generations of donors if you want to create faster, better, and more sustainable revenue generation today.
Learn to Thrive in the Experience Economy
If you are interested in learning more about how you can engage the generations that operate within the Experience Economy, register for one of the upcoming workshops — The Generosity Boom Is Here: The New Rules For Fundraising With America's Wealthiest Generation.
Attending this workshop is critical for understanding your donor base, because:
Today, the three American generations I call the “Experience Generations” — Baby Boomers, Gen X, and Gen Y (Millennials) — account for three-quarters of all financial giving to charities, and comprise 88 percent of the donor universe.
Each “Experience Generation” now spends less time and money on goods, services, and offers, and more on experience engagement. Here are the percentages spent in the “Experience Economy” for each generation: Boomers|72 percent, Gen X|81 percent, Millennials|87 percent.
Today, the vast majority of the Experience Generations go out of their way to avoid all direct marketing methodologies. Even though Boomers grew up with direct mail, less than 5 percent of America’s wealthiest generation will ask “what came in the mail today?”
In 2007 I became the first person in the nonprofit sector to become certified in the science of CXM (Customer Experience Management), which is taught today in leading business schools. My instructor, one of the world’s most recognized CXM authorities, asserted “the nonprofit industry should be all over experience engagement because nonprofit organizations can generate the “transformation” value that an experience offers, more easily than for-profit businesses.”
As the Senior Fellow for Philanthropy Innovation for the nonprofit DXM Institute for Changemaking Innovation, the first experience-engagement think-tank in America’s nonprofit sector, I promise you a learning experience that will change the way you engage donors and succeed in fundraising.
Register to attend — The Generosity Boom Is Here: The New Rules For Fundraising With America's Wealthiest Generation, and learn how you can succeed in the ever-changing fundraising landscape.
Thank You, Sister Georgette
Finally, allow me to close with a brief tribute to Sister Georgette Lehmuth, the CEO/President of NCDC.
Dr. Peter Drucker was always adamant about “favoring the future over the past and focusing on opportunities, not problems.” In speaking about the nonprofit sector’s inertia to change, he once said, and I paraphrase, “we keep doing what we’ve always done because of our ego or because we've invested so much in it. We believe if we can just give it one more push, results will improve. Instead, we should be focusing on the things that have a better chance of creating tomorrow.”
In the very brief time I have known Sister Georgette, her deep wisdom and farsightedness have especially reminded me of Dr. Drucker. Thank you, Sister Georgette, for giving me the opportunity to help Catholic fundraisers focus on the things that have a better chance of creating tomorrow.