Where do we get new donors from? Part 1

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I’ve been working with quite a number of charities of all sizes recently, both on a consultancy basis and with my fundraising agency Audience. Very many of them are struggling with one issue above all, in the new world of more regulated fundraising and increased donor scepticism where are the new donors going to come form?

There’s been, rightly, much focus in the past few months on existing supporters and how to engage them more to ensure they give more and for longer. People like me have had much to say about how existing supporters have not received the attention they should from any charities and how this needs to change. That’s all entirely true and there’s definitely signs that fundraisers have heard this message and are responding. There’s certainly plenty to do here.

But what if you don’t have the supporters in the first place? Or not enough, even with the most imaginative stewardship and development programme to allow the charity to raise enough money to meet its mission and  serve its beneficiaries. And even with the aforesaid mother of all supporter experiences , donors will still stop giving or die.  So charities still need to find new givers and in some volume.

The question is how? And where from? If you look at all the methods that UK charities have used in recent years to acquire new supporters there are problems with, well all of them.

For many charities the highest volume of new regular givers for the last decade and a half have been dialogue channels (face to face/door to door/private sites). These are now under huge pressure from declining sign up rates and high donor attrition driving down ROI. Agencies have gone bump with alarming regularity. The future with new regulation uncertain.

Cold direct mail has been the main source of single gift donors. But already suffering from very low response rates, this has been dealt a body blow by the demise of charity list swaps (reciprocals) which underpinned an awful lot of programmes. Threatened by future move to opt in and FPS. The other volume sources of direct mail responsive donors have bee inserts. Response rates here have been declining for years while, high opt out or anon rates mean that large proportions of responses don’t turn into donors. Unaddressed mail (doordrops) have similar issues.

DRTV continues to work for charities but only for a select few who have the proposition and the money to do it properly. And perhaps most of all the expertise. It has always been a channel where it’s been very easy for the unwary to lose money and that isn’t likely to change. Similarly press display, which has always been hard to get to work at scale, is an area where there are still opportunities but which is very easy to get wrong.

And what of newer channels and approaches? Lead generation or two step approaches showed a lot of promise for a while. Various media channels from face to face to outdoor advertising to TV at times worked very well in producing leads through value exchange propositions for follow up marketing. But the channels got congested very quickly (remember train panels) and getting a good ROI from a multi stage approach was already challenging before data protection and opt ins became much more onerous and killed this approach for many charities.The same issues were true of text giving which used the same channels with a different payment method.

But that’s OK because we have digital, right? That’s where the audience now is and we have a gazillion cool ways of reaching them.

Yeah, well here’s the thing. For most charities now, any digital channel is producing so few new supporters as to be hardly worth counting. The world wide web is nearly thirty years old and yet for very large numbers of non profits as a channel to produce new supporters it has been a non event. Sure, there are exceptions and some charities are doing well in some specific channels. Facebooks ads for instance are growing fast. But only a small minority of non profits in the UK  both  generate substantial numbers of new donors online and have these form a significant proportion of their overall new donor acquisition.

Actually getting digital to work as a source of new supporters is pretty hard. And again, there are major barriers in many charities to achieving this. Lack of  expertise is a big issue, lack of understanding by senior staff of what is required is probably a bigger one.

So that’s a fairly bleak picture. But hold off the despair just yet. What is happening, I think,  is the end of one fundraising world and the birth pangs of the new one. We are moving away from the fundraising I knew when I joined the industry pretty much at the same time Tm Berners-Lee was inventing the internet.  Then you could put some fundraising copy out in a single channel, count the money coming back and know whether that had worked and if so, do more of it.

What we have today is much more complicated. What will work today is integrated multi-channel marketing at an organisational level. It needs an ability to look across the whole marketing mix and construct a series of messages and have the analytics to work out the most effective combinations. Fundraising basics haven’t changes but the delivery completely has.

In Part 2,  I will talk about how charities can recruit new supporters in the new fundraising world

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small worlds

com-1If you’re one of us who was dismayed by the referendum result,you might be contemplating taking your fundraising experience abroad for a while. Or for ever…

Fundraising is a skill set that is exportable and there are many UK fundraisers working in lots of different markets worldwide. I’ve been fortunate enough to have had experience of fundraising in quite a few different countries. It’s always interesting to see what’s the same and what changes from country to country.

Recently, I’ve been to some countries where fundraising as it’s recognised in the UK is just starting. With different projects I’ve travelled to Nigeria and Georgia (the country) and seen the early days of fundraising programmes in countries with no tradition of of charitable giving outside religious contexts. What’s fascinating is to see how general fundraising principles apply in such markets, what is the same everywhere and what can be completely different.

A common feature, everywhere, is that charities are convinced that their cause is uniquely difficult and unattractive to their countryfolk. “People in Nigeria/Georgia/Narnia will never give to children/old people/environment/talking animals”. But then you find someone, somewhere in Narnia actually is raising money for talking animals and doing pretty well. Not all causes are equally popular and every cultural context is different but it is striking how often  a fundraising approach that works in one country is also effective elsewhere.

In Nigeria,  a country that would not normally be regarded as a place where funds are raised rather than spent,  ActionAid are pioneering face to face fundraising and DRTV. Results are very interesting, there are not a lot of donors  but average gifts are remarkably high. Georgia is starting to develop a fundraising sector led by SOS Children’s Villages with local charities quick to follow.

Some techniques work in a very similar way in most countries they’ve been tried. Face to face fundraising is now a commonplace  of emerging fundraising markets such as India, Brazil and Indonesia. DRTV campaigns run by major international NGOs such as Save the Children work successfully in lots of countries with essentially the same creative approaches and formats. Digital fundraising also seems to be an area where broadly the same elements are successful in many different places.

But there are always differences and nuances in individual countries whatever the outward similarities in approach. So DRTV works in a very similar across Europe except that celebrity endorsements are much more important in countries like Italy and Greece than in northern Europe. And Italians prefer to respond to ads by phone whereas Swedes,for example prefer to give by text message. Indian fundraising is complicated by  the idiosyncrasies of the banks so charities employ a host of men on scooters to go and collect cheques from individuals who have pledged over the phone. In every country the local cultures and context determine the messages and mechanisms that work.

Successful fundraising everywhere is based on asking for money appropriately. That’s very different in Chinese culture for example than in Europe. But everywhere, fundraising fundamentals are the same. The compelling and emotive proposition, a clear call to action and good stewardship and reporting back are what makes the difference between fundraising success and failure everywhere.

Even in Narnia, probably..

 

 

Certainties in uncertain times

downloadThere’s still lots of uncertainty how all the changes to fundraising and data protection regulation will work in practice. There’s plenty of  frightening statistics being bandied around on the potential financial impact of the Fundraising Preference Service and the new EU data protection regime. Professor Adrian Sargeant has estimated the likely reduction of UK charity income from these changes as £2 billion a year, a stupendous figure representing an enormous amount of charity services that won’t be delivered. But the truth is, until we see how these changes and the many questions of detail that they raise are implemented, we don’t really know.

We do know, however, that the new world of UK fundraising will be one where the active consent of individuals will need to be obtained before they can be directly communicated with. That consent once obtained will need to be maintained actively. In effect we will need to secure permission to ask. Again and again.

This will be enormously challenging for charities. For those that have individual giving programmes with large numbers of supporters, developing and managing an effective permission based fundraising approach creates a host of practical difficulties.

But I maintain that this change will be, in the long run, a good thing and in fact creates tremendous opportunities for those organisations that can develop methods of reaching and engaging supporters in the new environment.

I think we can see what will be the keys to  success in the new fundraising world.  A clarity of strategy and the reasons individuals should support the charity. A move away from campaign based or channel based activity to a holistic supporter centred methodology. Integration of messaging, approaches and, above all, data across the whole organisation. An end to “fundraising” and “communications” departments as jealously competing baronies and a tumbling of the barriers that divide the charity’s mission activities from how they are communicated and marketed.  Proper information systems that everyone in the organisation uses to make evidence based decisions.

What is needed is an integrated marketing approach which is fundamentally data driven and is implemented across a plethora of channels and platforms, all of which work in parallel to engage, motivate, inspire and ask. It will be digital at the core because it is about data. But it will encompass all methods of communication and interaction from a coffee morning to a virtual reality simulation.

Many organisations have been doing all this for years. The trouble is, not many of them have been charities. The Amazons and Facebooks have been operating on this basis since they started. Charities have been agonisingly slow to move in this direction. This has to change.

We are seeing lots of charities talking about making these kind of changes. Some are already implementing them. Those who get this right will dominate the  UK charity sector in the years to come.

All of this is easy to say. It will be really, really hard to implement. There will lots of  false starts and blind allies. There will be snake oil merchants peddling panaceas to be avoided. But this can work. This will work. And the time to start is now.

Where will new donors come from?

silver bulletOn Wednesday, the latest Future of Fundraising* debate took place in London. These events  involve couple of dozen leading fundraising practitioners chewing the fat on the major issues facing the sector today.

This time we addressed one of the most pressing concerns of UK fundraisers, in a context of falling response rates and increased regulation, how do we continue to find new supporters for our charities and where will tomorrow’s donors come from?

While I’d like to say that we solved this particular conundrum and identified plenty of low cost sources that would bring in new supporters by the bucket load, that would be stretching the truth. What we did do was to highlight some of the thinking and approaches that charities will need to adopt if they are to successfully reach new donors in the new world of fundraising.

We agreed that the current crisis facing UK fundraising has been building up for a while. And part of the fundamental issue has been too many charities trying to reach the same audiences using common channels and identikit approaches.  There have been too many instances of non profits chasing volume over quality and failing to properly respond to supporter motivations or wishes.

Members of the group thought the idea of “cold” recruitment is itself part of the problem. Charities need to start by understanding who their current audiences are and to find the groups of people they are able to specifically relate to. So for service provision charities, they need to talk to their constituency of people affected by their issue and secure their support as advocates and donors. Charities need to overcome silo mentalities that prevent fundraisers talking to service users or that separates fundraising from the people delivering the programme.

This approach of finding the people who care about your cause applies to all charities. Direct marketing fundraisers need to think like their major gift colleagues. Who are the people with both the capacity to give and the propensity to give to your issue? How do you reach them and who are the people in your network who can help you get to them?

In today’s world, where technology allows us to target communications at an individual level, the idea of mass mailings, mass face to face or mass anything is anachronistic. We need to use the available tools to create one on one relationships as commercial marketers have been doing for years.  But this means charities need to revolutionise their approach to data and information management. Too many charities have antiquated and incompatible databases and senior staff who don’t understand how to use data to drive effective marketing.

Similarly, charities need to become radically better at integrating their activities at every level. Integrating “fundraising” with “communications” (it’s the same thing). Integrating activities across multiple channels. Developing a holistic approach to managing relationships with supporters.

There’s lots of good examples of charities doing good things in all of these areas. We heard about organisations getting really serious about supporter care, investing in having proper conversations with their donors. There’s lots of innovation going on with communications, for example using videos and virtual reality to engage with audiences in new ways.

But the key to success will be to do all of this in an integrated way across organisations and to do this for the long term.

Sadly, there’s no silver bullet for charities to use to find new supporters.  But there’s philosophies and approaches that will work. None of it is easy to do and there will remain the temptation to look for the short cut to success.

That as we’ve seen, quickly becomes the long road to nowhere.

*if you’d like to be invited to the next Future of Fundraising debate, drop George Milne at Audience a line george@audiencefc.com

 

 

 

 

 

How to do fundraising in a real crisis.

downloadFundraisers have a bit of a tendency to think that the grass is greener for other charities. It must be easier for them, right?

I think dogs eat children’s homework more frequently than this particular fundraising excuse proves to be true.

But if you worked for ActionAid Greece and suggested that fundraising might be a tad less challenging elsewhere, you’d have a point.

To say that the Greek economy and society has gone through a difficult time of late is a statement akin to suggesting that the Titanic had a bit of a buoyancy problem.  Since 2010, the economy has shrunk by over a third and unemployment has risen to levels higher than in Germany during the Great Depression. A fifth of Greeks don’t have enough money to pay for basic food essentials.

And now Greece is in the front line of the European refugee crisis with thousands of desperate people fleeing war stranded in the country as other EU member states shut their borders.

So how does a charity that raises money to support poor communities in Africa (mostly) deal with a situation like that? How can you fundraise at all in that context?

ActionAid Greece have of course been hit by the crisis. They’ve lost supporters and income. But while other international NGOs have seen dramatic income declines, ActionAid have fallen back only very modestly. Last year they raised more money from individuals than every other charity in the country, over €8m.  Their average supporter gave them over €250 a year. In Greece. Now.

When I visited them last week, they explained how they had achieved this nearly miraculous performance. Critically, they are a child sponsorship charity and supporters have stayed primarily because they don’t want to let their sponsored children down (the money goes to the community not the child but it is this one on one connection that makes child sponsorship such a powerful fundraising proposition).  But ActionAid have also taken engaging with their supporters extremely seriously. Each year, they take dozens of supporters to see the projects they are supporting and these trips focus on real engagement between sponsors and communities. Child sponsors work alongside locals, building schools or planting crops, learning as much as they can how the others live. These donors come back from the trip as evangelists for ActionAid’s work. A third of new child sponsors are recruited by existing sponsors, many by those who have experienced field trips.

I was also impressed by the way ActionAid Greece works. Where other charities are bedevilled by silos and different teams pulling in different direction, ActionAid have programmes, fundraising, communications and advocacy in one integrated team with common objectives. United by shared passion and commitment to the mission.

So, next time you are complaining about how hard fundraising is for your organisation, consider Greece. And remember that even under the toughest conditions a donor-focussed approach with strong, compelling and integrated messaging will still work. It’s good fundraising that makes a difference between success and failure. Always.

Could the FPS actually work?

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Yesterday the working group on the Fundraising Preference Service (FPS) published their initial report which sets out their “top-line thinking in relation to fundraising and other forms of communication, and the practicality of addressing different communication channels.”.

I have set out my concerns about the FPS before. I don’t think this is the best way to deal with the challenges that the sector faces in finding appropriate ways to communicate with actual and potential donors and I think it will, along with a series of other changes already in place, result in significant net loss of charity income which will mean serious reductions in the services delivered by charities to beneficiaries. I think in (possibly) reducing some donor annoyance we will manage to harm much more seriously vulnerable people who rely on charitable support. That makes no sense to me.

But we are where we are. The FPS working group are a good bunch of people who include, refreshingly, actual fundraisers and they are clearly taking a pragmatic and thoughtful approach to creating a preference scheme that might be workable.

So what do I think of their initial thinking. There are a number of considerations;

What channels are covered?

A key issue is to what communications channels will the FPS apply to. The working group are quite clear,  confining the scope of the scheme to (addressed) mail, telephone and email. Telephone includes mobile and therefore presumably text and any other messaging.

FPS will apply at an individual level, not a household level.

So, to be clear, registering for the FPS means that the scheme will only apply to those contact details an individual has registered. So if an individual has multiple addresses or phone numbers or changes contact details, they will only be registered with the FPS if they notify the preference service. And many forms of fundraising, eg face to face, social media, unaddressed mail and inserts will not be covered.

This is entirely pragmatic and it is almost impossible to see how the scheme could be implemented practically beyond mail, phone and email. But it rather makes a nonsense of  the term Fundraising Preference Service. I think the disjunct between what the scheme actually does and what donors will think it does will become increasingly problematic over time.

What communications does this apply to?

The working group have attempted to distinguish between fundraising communications and other charitable communications. This is a particularly slippery area but they’ve had a decent stab. What they say is;

We propose that the FPS should apply to fundraising communications, ie communications carried on for gain and wholly or primarily engaged in soliciting or otherwise procuring money or other property for charitable, benevolent or philanthropic purposes.

Accordingly, registration with the FPS should not prevent other forms of communication between organisations and individuals where the purpose of the communication clearly is not a solicitation.

In particular, FPS registration should not prevent the following.  

Communications for the effective administration of any direct debit or other financial arrangements that exist at the point when an individual registers with the FPS. It is essential however that such correspondence is not used as a means to ask for additional or higher contributions.  

Messages of thanks for donations received, on the understanding such communications do not then take the form of some further ‘ask’.  

Communications including information about the organisation’s activities and how to get involved, newsletters about participation events and sponsorship opportunities.

There are number of problems with this formulation. The term “communications carried on for gain” is at best incongruous in a discussion of not for profit activities and at worse, deeply ambiguous. It would be better removed already, leaving us with wholly or primarily engaged in soliciting (money/property) which seems something we could work with. I would however add, “directly” to this as one could argue that all or at least most communications between a charity and its supporters have a primary purpose which is generating or sustaining contributions. However, the distinguishing feature ought to be whether the communication has a direct ask via some form of response mechanism.

I think the list of exclusions is very helpful. It is unclear though whether contacting someone who has cancelled or lowered their regular gift to ask them to reinstate it is prevented or not (I would say not but does that mean you could contact someone later?).

The group has asked for comments whether the scope of communications prevented should cover raffles and lotteries and trading activities. It’s difficult to answer this definitively. It’s very hard to see how a trading promotion (which could be for absolutely anything) sent out by a limited company can be covered by a fundraising scheme. But will donors see it like this? Raffles and lotteries are arguably more recognisably fundraising activities but can you logically  include them and exclude trading?

Signing up for the scheme

The working group have talked about sign up for the service being via website or call centre. I see absolutely no one paying for the substantial costs of a manned call centre for this service so I’d explicitly say this scheme should be web only.

I’d also explicitly prevent individuals signing up on behalf of others unless they are their legal guardians or have a power of attorney. I can’t see anything else being enforceable. While everyone is concerned about protecting the vulnerable, it is impossible for any third party service to determine who is and who is or is not vulnerable and we need to rely on the existing safeguards of UK law.

Exemptions

The scheme would be much less of a blunt instrument if individuals were able to exclude their favourite charities from the blanket communication ban. Or just to exclude particularly irritating charities.

This wouldn’t be hard to do in an online sign up process if a look up against the Charity Commission database was provided. The costs of paying for such functionality might be something that charities were prepared to fund. I don’t agree that providing such a feature would make sign up more burdensome, it would be a step that those people who genuinely wanted to block everyone could skip.

Relationship with other preference services

The group says that the FPS should not replace other existing preference schemes, MPS and TPS and charities will still need to check against these databases too.  But what they ought to add is that the same definitions of what constitutes a fundraising/sales call ought to apply to all. The ICO should be asked to accept the final FPS definitions for the schemes they enforce.

And if the suggestion to allow individuals to exempt specific charities from the communications ban ought to apply to the other schemes too. So if  someone has both given their telephone data to a charity and said they want to receive information from that charity via the FPS, the charity should be able to call them.

The working group on the Fundraising Preference Service ought to be thanked for wrestling with the many problems that implementing the FPS throws up. While I still disagree with the basic premise of the scheme, the group are doing their best to make sense of it. I’d encourage everyone with an interest to participate in their consultation, Please send your thoughts to George Kidd george.kidd@fpswg.org.uk by 31st march.

Brave New Worlds

brave new world

I can’t remember a time when there was more focus on  fundraising innovation in charities. Everyone I speak to seems hard at work searching for the next “big thing” or even quite little, but new thing.

This is hardly surprising. With falling results from established channels and a seemingly endless barrage of media criticism producing a raft of new  restrictive regulation, UK fundraising has never seldom felt so beleaguered. At a time when reduced public expenditure is hitting charities’ income from government, fundraising from private sources is becoming ever harder.

The most far-thinking charities are therefore turning to innovations to provide the growth they need to provide for. So significant resources are being invested in developing new approaches,channels and products. There’s some really interesting work going on and quite a few promising ideas being developed. We are, for example, seeing social media (particularly Facebook) come into its own as a fundraising channel, seeing lots of organisations focusing on supporter engagement to improve donor recruitment and retention. There’s a lot of work on micro-donations with development of schemes such as pennies and a penny for london.  Lots of people (including me and  my friends) are working on using mobile technology to change how charities talk to their supporters. New event ideas appear every day, it seems. There are interesting trading ventures being developed and new approaches and thinking being applied to the humble charity shop. And I think that the impact of crowdfunding and new forms of social finance on fundraising is only just beginning to be felt in a significant way.

This is all very exciting. No one loves innovation more than me and I think it’s healthy for fundraising to be regularly re-invented.  But we also need to keep our sense of perspective.

There are, as we all  know, no magic bullets in fundraising. It’s a myth that there are. The search for new approaches needs to not be at the expense of the old. I’ve been struck recently by a number of people who ought really to know better talking about regular giving in the UK “declining” (it’s not) and talking about one off donations as the new way forward. Well, as our cousins over the water would say, do the math on that. I’ve got a mass of lifetime value data that tells me that regular givers are orders of magnitude more valuable than cash donors. I don’t see that changing any time soon.

The basics of good fundraising don’t change. The channels we use, how we use them are evolving all the time but what makes people give and why doesn’t.

So when we re-invent fundraising let’s not forget what we’ve learned. Engagement without a purpose is just entertainment. People don’t give unless they’re asked. They give emotionally not rationally. And you ask for buttons, that’s what you’ll always get.

We need innovation in fundraising. I’m optimistic that we’ll see lots of new approaches being tried very soon. But it needs to build on what we know or we’ll be expensively relearning the lessons of the past.