The Subscription Economy and Philanthropy
The concept of the “Subscription Economy” was introduced by Tien Tzuo. Tzuo is the CEO of Zuora, a company which helps other subscription-based companies with a variety of services.
“The subscription economy refers to the general trend of companies shifting from the traditional pay-per-product model to a subscription business model. The subscription model involves selling recurring subscriptions to consumers in exchange for access to a product or service over time.” (via ProfitWell) The concept, and a TON of companies following the subscription model have taken off in recent years. It has drastically changed the retail landscape , and is continuing to grow, especially with younger consumers. As you have probably noticed already… it is EVERYWHERE and you can basically get a subscription for ANYTHING.
We as consumers are becoming conditioned to operate this way (for better or worse) and it is the responsibility of the non-profit sector to meet us as consumers where we are. That means taking this massive pool of monthly subscribers, of which we are all a part of (don’t lie, we all know you have at least a wine, a candle or a sock subscription…), into monthly recurring donors. Additionally, these consumers actively seek brands which they can identify with, and which bring them into a larger community. Increasingly, especially with the growth of Gen Z in the consumer pool, consumers want to feel a part of something bigger than themselves.
For the non-profit sector, this should be a natural fit. “While your nonprofit can’t offer goods or services in exchange for tax-deductible contributions, what you can do is communicate the impact of monthly contributions. A regularly scheduled e-newsletter curated specifically for your subscribers is a great way to make them personally feel good about giving to your cause.” (via theModernNonprofit) Newsletters give donors the access they are desiring, and if non-profits can shift to create interactive online communities, this may be an even bigger draw for those looking for connection.
Additionally, the commitment of a monthly recurring donation or a subscription, is one that is longer term in nature. Instead of making the choice to buy a singular product in that singular moment, the consumer makes the choice to commit to a brand or an organization over a period of time. “Once we become members, we don’t reconsider the transaction every month or every year—it’s automatic. And that is very different than something you buy repeatedly—in those situations, like when you buy a candy bar or choose a rental car company, each purchase is an opportunity to reconsider your choice.”(via Classy.org)
Over time, this shift in behavior could have massive positive benefits for the non-profit sector. Early subscribing donors, build habits of philanthropy, and will continue to be philanthropists at every stage of their lives. Even if a donor cancels their monthly subscription to one organization, the habit, and place in their budget will have already been created, for another organization to fill someday, leading to a consistent and sustained giving pipeline for organizations across the world.
