Value proposition is a widely used concept, even though there is no unique definition of it. Traditionally, scholars tended to relate it to entrepreneurial and marketing practices, especially in the for-profit sector. For instance, value proposition has been often defined as a statement listing the bundle of benefits a certain product or service can offer to a customer segment (Lanning, 1998; Buttle, 2009). Here, the focus is on customer value, as well as on the reasons why customers should buy a certain offer over alternative ones.
However, in recent times the concept of value proposition has pushed the boundaries of its conventional applications even further. As a consequence, older definitions of value proposition paved the way to new ones, able to fit not just with traditional for-profit companies, but also with other kinds of socially-oriented firms, such as charities and social businesses. As a matter of fact, as discussed in other articles, these particular organizations have to simultaneously create value for at least two very different targets: on one hand “beneficiaries”, on the other one “donors” or “customers”. This is why the concept of value proposition already started to widen its scope, moving from “reasons to buy something” (an older definition that solely applies to customers) to “reasons to use something” (a definition that can, apart from customers, can apply to donors as well as beneficiaries).
Now, when designing value propositions in the non-profit sector, practitioners can find an extensive range of tools they can take advantage from. In this article, we take a brief look at a tool called “Value Proposition Canvas” and then discuss how fundraisers can start using it today to better understand their donors and then choose fundraising programs accordingly.
Value proposition canvas: a brief overview
Introduced in 2014 by Alex Osterwalder, the “Value Proposition Canvas” is a visual tool developed to help product managers, business designers and innovation experts dig into the potential fit between a customer profile and the value proposition offered. Thanks to this tool, it is indeed possible to map out needs and demands of a specific customer segment, and later understand if (and how) a certain product/service is able to deliver concrete benefits and value to this target. As seen in the picture below, the Canvas is comprised of six building blocks.
Customer profile (right side)
This section of the Canvas is used to describe and analyze a specific customer segment, by mapping out their:
- Jobs-to-be-done = functional, emotional and social tasks, activities or jobs a customer need to perform, to get done;
- Pains = any sort of obstacle, risk, negative experience that impedes the customer from getting the job done;
- Gains = benefits, delights, aspirations the customer actively seeks, expects or wishes for.
Value map (left side)
If the previous section of the Canvas is all about the target, this one focuses instead on the organization. Through the value map, it is possible to examine existing value propositions or design new ones, by brainstorming over:
- Products/services = the list of products or services customers could use to get their jobs done;
- Pain relievers = how the product/service reduces or removes customers’ pains;
- Gain creators = how the product/service generates those gains sought by customers.
Value proposition canvas for fundraising
No matter what their social cause is, charities run their activities thanks to individuals, companies or foundations who decide to support them. Just like customers do for traditional, for-profit firms, donors provide charities with the money these organizations need to be up and running. In return, they expect to get some value out of the act of donating. Thus, they too have pains, gains, and jobs (surely emotional and social, but sometimes also functional) they want to get done.
I already know that some readers might be afraid of this perspective, finding it quite disturbing. But let’s be honest here: to some extent, fundraising should be considered as a “product” (surely different from other ones, yet still a product) out there in the market. And just like traditional products and services must create value for the market segment they intend to serve, fundraising should do the same for its “target” donors. Think about it: if donors are not handled with care, eventually they will stop donating and will run away from the organization. If they don’t have a positive, remarkable experience, eventually they will stop donating and will run away. If they feel they are not getting any value out of their donations, guess what? They will stop donating and will run away.
This is why the concept of value proposition inevitably applies to donors too, and why fundraisers could benefit from using Value Proposition Canvas for fundraising purposes. In fact, as previously said, the Canvas allows you to easily map out and visualize key needs and desires of a specific segment. Then, the ideation of new products, services or interventions follows. So, why not adopting this tool to better understand donors and to choose the right fundraising ideas, methods, projects accordingly?
As mentioned, the Canvas helps understand if key aspects of a company’s offer fulfill the needs, expectations, desires, and asks of a certain customer segment. Also, it is an extremely powerful tool when it comes to design brand new value propositions from scratch. Because of the way it is structured, Value Proposition Canvas may be used not just for customers, but potentially for any type of stakeholder, including beneficiaries and, of course, donors.
Value proposition canvas for fundraising: a few examples
Let’s discuss a couple of examples now, to comprehend what using Value Proposition Canvas for fundraising purposes might look like. Please bear in mind that these examples are fictional, but the same logic can apply to real, existing charities or fundraising initiatives.
Imagine you are the fundraising manager at a brand new Italian charity, fighting school drop-out and educational poverty in southern Italy. First, you need to ask yourself: who could potentially be interested in supporting this cause? Probably there are at least 3 different donor segments:
- mothers-to-be and young mothers, living near cities with high drop-out rates;
- old, wealthy, highly-educated individuals, who want to use their money for a greater good;
- locally-based entrepreneurs, interested in having their brands associated to a social initiative.
Once selected the segment to focus on, you can start using the Canvas mapping out jobs-to-be-done, pains, and gains of your target. Here are how the first section of the Canvas might look like for our segments.
Segment no.1: mothers-to-be/young mothers
Even if these profiles might not have any child at school at the moment, they will probably have at some point in the future. Because of that, the jobs they need to get done mostly relate to understanding what causes school abandonment, recognizing patterns/behaviors that might lead to premature drop-outs, and supporting local initiatives that prevent (or tackle, at least) such problem. In terms of pains, they probably don’t know where to find reliable information about this topic and don’t have time or specific skills to give a helping hand in volunteering for education. Also, they feel scared, afraid they will let their future children down if they don’t do something about it immediately. Finally, when it comes to gains, they don’t want to be left alone, they want to prove they are good mothers (or mothers-to-be) and they wish they can secure a brighter future to their children, even though they may have limited economic resources due to their young age.
Segment no.2: old, wealthy, highly educated individuals
Wealthy individuals are older than the previous target we analyzed, having daughters/sons who already graduated from school. Now that their “children” are grown-up and independent, wealthy people may aim to use their finances wisely, for a greater good. As school and education were the main drivers behind their personal success, they want to feel useful and make substantial contributions for younger generations of students. They too have their own pains though: for instance, they are afraid people may engage with them just to take advantage of their wealth. Also, they feel they are getting older: the older they get, the lesser the time they have to make a positive impact. This is something that strongly relates to the gains they seek: they want to feel valuable, appreciated and respected. The kind of people to look up to and think highly of.
Segment no.3: local entrepreneurs
Entrepreneurs, too, might be interested in supporting charitable causes, especially those promoting change at a local level. But why so? In terms of jobs-to-get-done, entrepreneurs often seek public recognition and advertisement. Other than that, they also want to attract new customers and, if possible, increase employee satisfaction. When it comes to their pains, finding new customers or right “channels” to promote their brands is usually difficult, time-consuming. Besides that, they might not know how to improve employee commitment and morale. Lastly, the gains they seek are mainly associated to legitimizing their brand, enhancing their credibility and starting stable, profitable collaborations with non-profits.
At this stage, donor profiles have been properly investigated. Fundraisers can now use the other section of Canvas to brainstorm and come up with new propositions able to match with donors’ implicit desires and explicit needs. Here are few examples of “value maps”, developed for each donor segment:
Segment no.1: mothers-to-be/young mothers
For mothers, nothing is more important than taking care of their children. Thus, this target is likely to get deeply committed to our cause, as they want to constantly provide for their children’s future. Here, continuity and regularity are key concepts to leverage. Because of that, a monthly giving plan could be the best fundraising “product” to offer them: affordable, regular donations (donors’ budgets might be limited) to remember every single month they too are good mothers. Also, we have seen that this target aims to be able to recognize worrisome behaviors and prevent their children from abandoning school. So, they might find value in receiving monthly newsletters containing information and practical tips written by child psychologists. Finally, we said that they are scared of feeling left alone: why not creating a Facebook group or an online community, where mothers are able to share their stories and get in touch with each other?
Segment no.2: old, wealthy, highly educated individuals
Wealthy individuals sound like the perfect target for major gift programs. Since they seek trustworthiness and transparency, the founder of the charity should be the one approaching them first, in order to build trust and strong, meaningful relationships. Furthermore, as they want their money to generate positive change, probably is best to propose tailored, long-term projects, giving them a reason to look forward again to time passing by. Lastly, we said they want to feel appreciated and respected. As donating should have its own perks, benefits such as handwritten letters at the end of the year or personal invitation to special events would be highly appreciated by this type of donors.
Segment no.3: local entrepreneurs
Entrepreneurs can surely be interested in corporate sponsorships. As a matter of fact, sponsorships often ensure publicity and exposure to different market segments. Even more, the value can be added by combining the sponsorship with employee volunteering programs, that are able to drive employees closer to the cause the entrepreneur decided to support. All these initiatives can help business-owners having their brands associated with charitable causes and getting seen as socially responsible companies, at least by local communities. Depending on how well the sponsorship performs (in terms of ROI, visibility, etc.), an entrepreneur may agree with the charity to initiate ongoing collaborations or further support new interventions.
Now that every section of the Canvas has been properly filled out, changes inside the left blocks can be made, since some of the donors’ pains, gains, or jobs might have been left unmatched or need further attention. Once the brainstorming is over and the different propositions sound convincing, fundraisers are ready to go out and start testing them.
As seen so far, the concept of value proposition has been widely discussed by scholars, with dozens of different definitions and interpretations. Among the tools, practitioners can use to ideate and design better value propositions for their targets, Value Proposition Canvas surely comes first.
Introduced by Alex Osterwalder, this Canvas helps map out and visualize customers’ pains, gains, jobs-to-get-done, and, from there, brainstorm over new products, services, or interventions to offer them. Even though this tool was initially conceived for businesses dealing with customers, the same principles can apply to charities and donors too. Thus, this article dug into the main reasons why fundraisers should consider using the Value Proposition Canvas for fundraising purposes and provided with a few practical examples of how to do it.
In conclusion, thanks to this tool fundraisers can more easily comprehend their donors and develop fundraising ideas, methods, projects able to match with their targets’ inner desires and needs. But what about you? Are you ready to learn more about the Canvas and start crafting today’s new, remarkable value propositions for your donors?
Francis Buttler, 2009. “Customer relationship management: concepts and technologies”; Elsevier Ltd.
Michael J. Lanning, 1998. “Delivering profitable value: A Revolutionary Framework to Accelerate Growth, Generate Wealth and Rediscover the Heart of Business”; Perseus Publishing.
Alex Osterwalder, 2014. “Value Proposition Design: How to create products and services customers want”; Strategyzer.
Marco Cornetto is a project manager and business developer at SocialFare, the first Italian Center for Social Innovation, based in Turin. His main focus is on supporting formal and informal teams refining socially-oriented business ideas and help them develop new, sustainable business models. Also, Marco is the founder of Social Business Design, an online platform dedicated to business modeling for social innovation. Marco has an academic background in “Entrepreneurship and Design Thinking for Social Innovation”, and he is currently studying “Fundraising for the Third Sector” at the University of Bologna. Before moving back to Italy, Marco spent his last few years living, working, and volunteering in Australia, Netherlands, Spain, and Vietnam. Check out Marco’s LinkedIn profile for further details about his projects.
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