Wednesday, November 29, 2006

The Long Tail of Cancer Organizations

It's almost enough already from the "Long Tail" department but here's yet another Long Tail post. This one is about Cancer organizations.

Here's a reminder of what the Long Tail is for those who are unfamiliar (annotated with some NPO references):

Anderson argued that products that are in low demand (small charities) or have low sales volume (small charities) can collectively make up a market share that rivals or exceeds the relatively few current bestsellers and blockbusters (large charities), if the store or distribution channel is large enough (the Internet).

My hypothesis is simple - it's about to get really tough for large cancer organizations to keep raising more and more money each year. Over the past 10 years, we've seen more and more small/niche NPO's pop up and quickly ramp up their fundraising to significant levels. While it doesn't seem to be impacting the large NPO's ability to grow annually so far, the % of what the small guys are able to capture grows larger and larger each year.

I've even started to see some articles hinting around that donor actually prefer to give to smaller, more nimble and focused organizations. Distrust from scandals are certainly one reason, but I don't believe it's the main reason. It's not that simple! Consumers demand personalization - and organizations like ACS and LLS can't go nearly as deep into specific diseases as can a niche organization that has singular focus can. (They'll tell you they can and they are, but look closely at how focused some of the more niche cancer organizations have become - MMRF in particular.

I'm obviously making some generalizations here, but I do think this is worth examining. (I'm also trying to incite your comments).

Using Charity Navigator, I built myself a spreadsheet and looked at 16 cancer organizations ranging from ACS and LLS (large) to MMRF, The V Foundation, Lance Armstrong and Midwest Athletes Against Childhood Cancer (all small).

What it shows starts to prove my point.
  • The industry as a whole grew from $999,243,446 in 2001 to 1,268,777,275 in 2004. 27% growth.
    • ACS grew at 10%
    • LLS grew at 36%
    • All of the other 14 orgs grew at a combined rate of 178%
Sure, in absolute dollars, there is no comparison but this is just the beginning. In 2001, the small orgs took 8% of the total market. Just 3 years later in 2004, that percentage had jumped to 18%. That's explosive growth.

The Long Tail of Cancer Charities

What are the takeaways?

If you are a big cancer organization... you better figure out quickly how you can personalize your diseases and avoid looking like a lumbering, dying dinosaur. It would also be a good idea to start to collaborate with all these little orgs dancing around you. And oh yea.. avoid scandals :)

If you are a small cancer org - STAY FOCUSED! Figure out how to deliver significantly more value to a smaller, more focused group of patients, caregivers, donors and researchers.

Tags: , , , , ,

Links to this post:

Create a Link

<< Home