Interview Transcript

Your client is an online fundraising platform. They want to increase tie-ups with NGOs, SHGs, and big businesses. Examine the problem and provide recommendations. 

Alright, I would like to understand the client a little better. 

• Does this platform cater to a particular cause or is open to all social issues?
• When did the online fundraising platform start?
• Are there any previous tie-ups with NGOs, SHGs or businesses?
• Our main revenue source?

The platform is opening to all kinds of social causes. It is functional from 2020. There has been a tie-up with an NGO for 6 months and an SHG for 14 months. The main revenue source is 1-2% of the donations made and the revenue from advertisements.  

Understood. Are the scale of operations limited to a specific area or do they cover the entire country? Also, do we accept donations internationally? Do we take the covid period into consideration while proceeding with the case? Were the tie-ups done at overlapping durations or was there any time interval? 

The scale of operations is PAN India and no, the donations are not accepted internationally. No need to put emphasis on covid period while proceeding with the case. Tie-ups were done at overlapping durations. 

Before I begin with my analysis, I would like to clarify my client’s objective: do they want to increase their number of collaborations and improve credibility? 

Yes, that is right.

To increase the number of collaborations, I would first begin to understand which are the most common causes that are funded on the platform. That will filter out the organizations with which we can target to collaborate. In India, according to me the common fundraisers are for causes related to health and medical expenses, education, animal rights, and child welfare. 

The aforementioned causes are correct. But the most popular cause is medical treatments and expenses. 

Alright, since we know the most popular cause, we should be targeting the organizations that align with this respective cause.

Fair enough. What kind of organizations do you think would be interested in health-related causes and how would you identify them?

 NGOs, SHGs, and NPOs working towards health causes or providing medical benefits would deem fit for such collaborations. To ensure that the chosen organization would have a system in check, that would monitor their community interaction, their allocation of funds, their impact metrics – like the number of people on board, medical professionals on board, etc. Big businesses like corporate hospital chains – Medanta, Apollo, and Max Healthcare would be open to collaborating as a part of their CSR initiatives.

How would a fundraising platform fit in the CSR initiative of these organizations? 

A fundraising platform wherein the majority of the donations are for healthcare expenses/needs would be a viable fit for the CSR initiatives which mainly focus on pro bono services and spreading awareness about disease prevention and cure. 

How about you estimate the total revenue that can be generated from the platform donations and the tie-ups? 

Okay sure. To estimate the total revenue that can be generated from the donation platform, I would begin by calculating the total number of possible donors in India. For this, I would filter the population of India (130cr) using the urban-rural divide – 35 and 65%. I won’t be taking the rural population into consideration due to resource limitations. Now for the urban population, I will divide the population on the basis of age groups. Now I will further take the income divide to calculate the population that is eligible to donate. People in the age group 0-18 and 60+ will not be considered as usually they don’t have any regular source of income and hence might not consider donating. This would give the total addressable market for this industry. Further, I would take into account the different methods that are used to convince people to donate on various platforms. These include – in-person persuasion, social media, non-video media, video media, and cause-oriented websites. Now assuming that a certain percentage of the TAM will be covered under the purview of each method, like 30% of the people will be reached out to via persuasion, 20% by the website, and so on. Then a conversion rate can be taken for each of the methods, using which I would arrive at the total number of people who actually donate. 

How will you come up with a conversion rate for all these different methods? 

 We’ll have to keep in mind any normal customer reaction to all these methods as the basis for coming up with a conversion rate. The method which directly makes an impact on the customer will have the maximum conversion rate, similarly a video based method which appeals to him/her will also have relatively high conversion rate, as compared to a non-video method. The website is the primary source of awareness, so trust factor will play a role and eventually lead to a good conversion rate.

Okay, then according to you which of the methods you stated above would have the highest conversion rate?

 As per my understanding, the highest conversion rate will be out of persuasion, i.e. 50% because mostly when people talk to others about the causes, they are urged to donate.

Fair enough, you can continue with the guesstimate.

 I will also consider the frequency of donations. The most common frequency will be once a year and the least common is 6 times a year. The majority of the population will be donating once a year and a small proportion – about 10% – will be donating on the highest frequency – 6 times a year. Using the frequency, we will be able to obtain the total number of donations made. Further, to calculate the total amount of the donations, we will differentiate the donation size – Rs 100, 200, 500, 1000, etc. We can distribute the number of donations as per the ticket size, like 30% of donations are of Rs 100 and 10% are of 2000 to arrive at the total donation amount. Further assuming that of the total donations received, 15% would be our market share, we arrive at the total donations for our platform. Then the funds received from partnerships and tie-ups are also added to calculate the total funds raised. 1-2% of this would be our total revenue. 

 That’s a good approach. I think we have come to the end of this case.

Thank you.

Case Facts

• An online fundraising platform, that is open to all kinds of social causes, functional from 2020.
• Ongoing tie-ups with an NGO for 6 months and an SHG for 14 months.
• Main revenue source- 1-2% of donations made & revenue from advertisements. 
• Objective to increase the tie-ups with NGOs, SHGs, and big businesses.