We looked at how PH distributes what it offers donors by way of philanthropic experience. This included looking at whether the PH offerings stood out in their niche area.
Business Model: Service Provider
Most charities like PH operate as service providers. Generally described, a customer pays a service provider to do something on his or her behalf—typically something that the customer wouldn’t have time or expertise to do well on their own. At Peruvian Hearts, a customer (donor) pays (donates) money to PH who then executes the educational services for the girls that have been outlined. The philanthropic experience for the PH donors is tied to knowing how and how much of their donations actually made it to the girls.
We made two observations about challenges that PH faces as they operate as a service provider.
Observation #1
Service providers can struggle to distribute a service that doesn’t stand out from other services in the same niche.
To effectively distribute its service, Peruvian Hearts must be able to differentiate itself from others in the same niche area. The following list outlines general reasons why differentiation for a service provider, like a charity, can be problematic:
Challenges as a Service Provider
Implications for PH
It’s also valuable to be perceived as the path of least resistance (low price in terms of effort): be hassle free and easy to engage with.
A straight-forward approach to what PH offers can simplify the promotional effort.
Observation #2:
Differentiation is harder with a broad set of service offerings.
It is tempting for a service provider to list out all the possible ways one might engage that provider for services. At first it might seem counter-intuitive, but a multitude of choices can actually make it harder to choose. If a service provider brings a lot of possible options to a niche that already has a lot of options, it can be that much harder to stand out.
For example, listed below are the offerings listed on the PH website:
- Donate by check
- Donate in someone’s honor
- Donate with a credit card
- Donate items
- Donate time
- General Sponsorship ($1,000/annually)
- Empower Sponsorship ($2,000/annually)
- Dream Sponsorship ($5,000/annually)
- Secondary School Scholarship ($500/annually)
- Partner (Corporate relationship?, reward?, repeatable?)
- Volunteer (Travel)
- Host Fundraiser
- Youth and Clubs (More of an idea, no concrete experience offered here)
There’s a great deal on this list, which is largely due to the flexibility it has as a charity: it can leverage nearly any donation of any kind to realize its mission. But from a distribution-strategy standpoint, this might be a risk. A would-be donor might pass over Peruvian Hearts because he or she can’t make a practical connection between their philanthropic goals and the broad, generic ways listed to participate.
We will look at how the distribution of philanthropic offerings can be simplified and focused based on the needs and interests of the PH philanthropic audience.