Fundraising Appeals

Is Your House In Order?

If you saw the recent “Show Me the Money” story on Channel 7’s Sunday Night or heard influential 2GB radio journalist Ray Hadley a few days later, then you know the spotlight is once again on Australian fundraising – and not in a good way.

Pareto’s Benchmarking Report 2017 clearly shows that two decades of great growth in fundraising income has contracted.  And that the dependency on Face to Face Fundraising needs to be considered with the trends.

Our team have been working with both the FIA and PFRA to supply them with figures that show the value of long term donor relationships and the multiplication effect of the initial investment in fundraising that can be realised if we look beyond the first 12 months.

Lessons learned from Britain’s not-for-profit sector, tells us to prepare for the change and ensure Australian Charities have their house in order.

You may remember that 2015 was called the summer of charity discontent in Britain.

Months of fundraising criticism by the media, politicians and the public, including donors, resulted in a devastating loss of trust and public confidence in Britain’s charities.

Shocked by this national outrage, the UK government demanded an investigation.  Sir Stuart Etherington, chair of the review panel, said ‘… charity fundraising has never been more important … this is why it is particularly crucial that we get fundraising right.’

Part of getting fundraising right was the formation of the Commission on the Donor Experience. Their role? To produce an authoritative report on the fundamental ideas and strategies that will put the donor at the heart of fundraising – not fundraising targets.

Almost two years on, the Commission has released the first of its summaries.

The 6Ps: a blueprint for transforming fundraising for good is the first in a series of planned reports that aims to change forever the donor experience and the way that fundraising is done in Britain.

I urge you to download this report – with thanks to SOFII – and share it with everyone in your organisation.

The CDE’s first findings show you practical ways to help fundraisers everywhere deliver happy, satisfying and effective experiences for donors.

Please do contact me or your Pareto Account Director with any questions you may have.

Dearne Cameron

CEO Pareto Fundraising +61 (0)2 8823 5800

New Australian Donor Numbers Fall for First Time in Two Decades

The latest Pareto Benchmarking figures show that the number of new donors acquired by the 82 participating charities in 2016, was less than in 2015.

These charities include a majority of charities raising over $20m in 2016, and a good selection of medium sized fundraising organisations as well.


With more than 65% of all regular givers and appeal donors acquired by face to face or direct mail, whatever happens to these two channels influences the big picture more than anything else.



Direct mail grew solidly until last year despite postage costs increasing dramatically, the Australian dollar falling from 1:1 to 1:0.75 and Australians falling from being ‘the wealthiest people in the world’ to just pretty rich (on average!)

By the end of 2015, intense acquisition strategies from many charities, large budgets and our small population of people aged over 65 (the average age of a direct mail donor is around 73) led to many charities simply running out of new people to ask.

Unless charities have great mid, major and bequest donor strategies in place, direct mail has slipped from being a great acquisition tool to just an OK one.  Annoyingly we haven’t a ‘replacement’ channel working at scale to bring in the older demographic.


However, direct mail can’t be looked at on its own as its about the donors not the channel in isolation. The long term benefit is really in bequests.  Despite taking many years, the potential of direct mail with a good bequest program in place is extraordinary.

Just 5,000 new direct mail donors could be worth $5m with a good legacy marketing program.*

Unless you are an animal charity or responding to intense media covered disasters, my advice is to only invest in direct mail acquisition if you have plans in place for donor retention, upgrade (of mid value donors) and especially that bequest fundraising plan.

The other dominant channel is face to face, I have been predicting a peak in face to face volumes for about three years. I guess if you predict your football team will win every year, people forget all but the year you got it right!

Unfortunately I hung in there, and this time I was right. Fewer new monthly givers signed up through face to face in 2016 than 2015.

Despite all this, face to face is still miles ahead of any other channel for acquiring large volumes of monthly givers, and beats direct mail without bequest follow up on five year return on investment.



We have had good growth in online lead generation and phone calls, but the volumes are still comparatively small.  TV, radio, press ads and other channels are just a blip on total volumes, but very important to the few charities getting it right.

New monthly givers signed up by non face to face channels usually have better retention, but there simply aren’t that many of them.


So what does this mean for Australian charities?

We have a small population, our costs are higher than most other markets and our average donations much higher.

We have to really look after the donors we get.  I have mentioned mid value, major donors and bequests already – and they are key – but critically we need to increase our focus on donor love (donor care, supporter service, whatever you call it in your organization).

Here are my tips for all charities fundraising through individual gifts:

  • Be on top of your data.  Measuring campaigns is fine but you really need to be on top of tracking key indicator numbers, key performance indicators and running ongoing analysis to identify trends. And this is for your whole program, individual programs, donor segments and even some individual donors. Produce monthly reports, or even better dashboards, and make sure they are understood and the information is acted upon. It is important to make sure the quality of your data is managed effectively. It’s all well and good to make ‘fixes’ with an agency or mailhouse, but make sure you apply any fixes in your systems too, otherwise it may not be ‘fixed’ for the donors next interaction.
  • Acquire more donors.  If you are acquiring donors and modeling a break even within two years – don’t stop! In fact, if there is any more capacity you can use (e.g. lists or face to face go for it. Just make sure you check the compliance credentials of any suppliers).
  • Know your donor.  A true donor communication survey is key for donor care, major donor work, bequests and more.  It can even help with future direct campaign results!  Key to good donor care is to understand your donor and use a survey year after year.
  • Thank properly.  This doesn’t mean just send a receipt with a short thank you letter.  Every time we conduct mystery shopping, charities come up badly.  Donors deserve a beautiful thank you letter, telling them how their gift will help.  Then they should get a follow up telling how it DID help.  Hardly anyone does this, so, it is easy for your charity to have the best donor care around.
  • Ask properly.  Personalise copy.  Not just name and address, but donation amount, reflect their support, personalise paragraphs depending on their survey responses and previous donations. It is important any personalisation included relates to the donor, and isn’t just changing an adjective in the copy depending on their giving level. Take time to think about where the donor is in their giving journey, what they’ve told you and ensure your copy reflects this well.
  • Use the Pareto Principle. Donors who give larger than average gifts will likely give you more larger gifts.  You don’t have resources to spread equally, so prioritise those with the best potential to give more.  About half your donations will come from just five per cent of your donors.  Use the survey and look at previous giving to work out who they are.
  • Meet donors. The best fundraising happens face to face, but any full time major donor fundraiser who spends more time NOT meeting donors is either under supported or in the wrong job.  There are usually around 220 working days for a full time person.  A full time bequest or major donor fundraiser should be spending 180-200 of those visiting donors.  ALL fundraisers would be speaking to donors. Making thank you calls, checking in on how the fundraising you do feels for your donors. Aiming to understand more and more about your donors. If you have not spoken to a single donor in the last month, pick up the phone now
  • Hold staff and suppliers accountable.  Make sure they know what is expected and make sure good KPIs are in place and understood. Ensure suppliers are compliant with regulations.
  • Try some new stuff. Finally, and only if you have made sure you are doing all the above!  Budget for R&D with no income expected. And please – on behalf of the whole sector – let us know how you get on!

If you want to be part of Pareto Benchmarking next year please email Jesse Zarb.

* 5,000 direct mail donors, average age 73, average bequest in Australia $59,273.  Benchmarking shows 0.4% of all such donors have become bequestors, with more advanced bequest programs achieving 2%. $1.2m-$5.9m.

Some quick tips on fundraising landing pages

There are lots of good tips on landing pages when you search the web but it seems not enough. Lots of people are wanting specific tips on fundraising landing pages.

So here is a six minute short video for you…

The landing page is not the end of the journey for a potential supporter, it is part of the journey.  And it needs to work really hard to ‘close the deal’.

In the end, the most important thing is the brilliant proposition or offer.

After that, you can improve conversion rates with some simple techniques featured in the video.

If you want to know more, and are based in Europe, Africa, the Americas or New Zealand I hope you are coming to one of the webinars below.

People in Australia and Asia are welcome, but it is an early morning or late night for you!


Upcoming Webinars: 

I will be presenting a webinar (actually three, for different timezones) in early September about how to acquire donors on Facebook.  I hope you can come! 

These ones are aimed at people in Europe and Americas (don’t worry, people in Asian, Australia, I’ll repeat the webinar later – though nighthawks are welcome!). You can register here by clicking on the date that suits you: 7th Sept –  6am Sydney, 4pm New York, 9pm London. 10th Sept – 9am New York, 2pm London, 11pm Sydney. 17th Sept – 7am Sydney, 9am Auckland, 2pm LA, 6pm Rio, 5pm New York, 10pm London.


Writing Your Call To Action

So I read a pretty good call to action written by one of my favourite clients the other day. It said:

“If we act now, we can save them.” 

The strengths of the line include its brevity, the use of short powerful words, the urgency and the fact that it is a call to action. (There is still a lot of direct response writing where calls to action are apologetically buried so deep it’s hard to find them – despite the clear evidence this has a negative impact on response.)

BUT, for mine there are three points of weakness in that line:

“If”, “we” and “can”.

“If” suggests that not acting is a reasonable option.

“We” is impersonal. It’s not specifically and uniquely about the reader. It also presumes that others might be doing the acting, so therefore the reader doesn’t have to. This approach weakens the responsibility and power of the individual.

“Can” is a monumental pain in the collective neck of fundraisers and there are times we just have to use it. In this instance there is no (real life) guarantee of saving, so it’s misleading to say “will save”. However, in a line like this, you can dispense with the “can/will” problem altogether.

A stronger line would be:  Take action now to save them.   

Personal and direct. And active. If your not-for-profit direct response writing doesn’t have these vital characteristics, you’re probably missing out on opportunities to fix the world.

It’s so easy to fall into the trap of weakening language. Scan your copy for these OK-but-not-that-powerful examples:

“Let’s all act now …”

“But if we do …”

“Why not donate today and …”

Use these softer asks occasionally in some circumstances. But most of the time – I’ll take a stab and say at least 75% – go for personal, direct and active.

Especially in short form copy on facebook posts or banner ads or reminder emails.

Especially in activism work. When I read half-hearted copy, it makes me think the organization is half-hearted about the work it does. “We really wouldn’t mind if you could take the time to consider fixing the planet a little bit” doesn’t exactly flag passion and drive.

And especially in emergencies. Think about it. In real life you don’t say “Oh! The child is on fire. Shall we get together and do something to help?”

So how do you fix impersonal, wishy-washy and/or flaccid writing? You find ways to make it more personal, direct and active. Or at least two of those three things.

Instead of saying “But if we act now…”

Write “Please act now…”


Will you act now… Personalised?


“Take action now to …”


“The child/planet/animals will continue to suffer/die/be slaughtered by narcissistic dentists if you don’t act now.”

Finally, a quick word on collective action. There is undoubtedly something powerful in the idea of joining a group of other people who care about the same stuff as you, and have a good chance of forcing change through collective action. It’s a good thing to remind donors/supporters/prospects of this fact.

But again, write it so it is personal and direct and active. Let’s have another crack at “But if we act now” “We can do it” etc. etc.

Try these more personal, direct, active options instead:

Add your name now, Personalised, and become part of a powerful lobbying force.”


By taking action now, you will build an influential …”


Sign the petition today to join other outraged activists from around the world and put an end to this …”

Sometimes weak writing comes from a place of squeamishness about asking others to do something.

It shouldn’t.

The work our sector does is positive and powerful. If you’re writing to get support so you can do more of it, you’re giving your readers a magnificent opportunity to make a personal, direct and active impact on their world.


Mary Anne Plummer Creative Director Pareto Fundraising

From Bangalore to Birmingham?

By Bruce Cotton

With the Australian dollar at an all-time high, fundraisers may be tempted to consider off shoring their telemarketing programmes on the promise of savings on calling costs.

Does this represent an opportunity to stretch budgets a little further or merely open up a whole new area of risk for your fundraising department?

Offshore outsourcing of telemarketing comes in many different guises and the current financial competitiveness of experienced North American and UK players will be sustainable only as long as the Aussie dollar remains high. More sustainably cheap options like the Philippines and India continue to be rejected by almost all Australian fundraisers due to the quality and fundraising experience of potential partners.

So if there’s a short term opportunity, should I be taking it? The answer to this lies in a combination of your appetite for risk and the diligence that you can put in to ensure that you are getting a quality product for your money. First and foremost in most people’s mind will be whether the financial returns can be achieved. While the cost elements of telemarketing are predictable and mostly-comparable, the income is always less certain. Different agencies provide differing levels of rigour in understanding your data and the predictability of your results, and hence accuracy of income projections is a function of the analysis of your data and the agency’s experience of running the type of campaign or programme. Whether offshoring or not, satisfying yourself that the agency has a good grasp of the likely behaviour of your supporters is critical in giving you confidence that income goals are achievable and this may be more difficult if the benchmarks being used are how similar campaigns perform in the UK or North America.

Naturally, most aspects of client satisfaction are going to stem from whether income goals are met or not and it’s when things haven’t gone right that it’s important to be clear on with whom your contractual arrangement lies and what recourse you have if there are problems. Is your agreement with the actual agency that is calling your supporters, a partner company or their commissioned local sales agent. None of these things matter when things go well but if there is a problem with fulfilling the agreement, or a serious data breach, then what recourse do you have and are you able to exercise your commercial rights over an overseas organisation? A bit extreme? Under the old adage of hope for the best but plan for the worst, and with serious legislation around data privacy and PCI, these are things that we would recommend any client to be clear on.

This is not the most exciting aspect of fundraising, but it’s equally important to be satisfied that your offshore partner is fully compliant with Australian fundraising legislation and is staying on top of the emerging changes. Only last week we saw the introduction of new legislation in South Australia, and different states have different licence requirements for charities and their telefundraising agencies that requires compliance.  In Victoria and SA the agencies themselves are required to hold their own fundraising licence and we’re not aware of any of these being issued to any offshore agencies at this time. In our experience, none of these areas are insurmountable but we would always recommend checking compliance with your own legal team or legal advisers to make sure any risks are understood, and covered in your contract.

With low-cost telephony, and the availability of teams of Australian back-packers in far-flung places of the world it is always going to be attractive for call centres to sell their dead hours and sweat their capital assets throughout the night. This helps to drive price advantages that appear enticing but it’s worth considering whether the agency has its full support teams managing your campaign in the early hours of the morning or whether you simply have a few callers with a night-shift supervisor ploughing through your valuable supporter data.

 Our experience is that the initial campaign brief is always best delivered by the client, in person, as it is this interaction which sparks the passion in the fundraiser and inspires team leaders and callers alike. With the demanding nature of outbound calling, we find that the availability of coaching, training and regular buzz sessions help to keep the calling team fired-up and supporters consequently engaged. Constant monitoring of performance is essential in identifying where callers are struggling to connect with supporters and it’s unusual to find that this support is in place 24/7 in all but the largest call centre operations.

We’ve also found that the level of operational support is essential for the client when dealing with an emergency situation like a high-level complaint or an urgent need to put a campaign on hold. It’s easy to make arrangements with your offshore partner about how WIPs and scheduled meetings can be planned at the beginning or end of days to keep client and supplier happy but it makes sense to check-out how, and who, can make things happen in the middle of the calling shift.

The key here is to be absolutely clear on what you’re getting, what you’re not getting, who are you contracting with, what’s your recourse if things go wrong, and am I compliant. Ask all the questions, check with your own legal team, check out who you’re partnering with and if you’ve got all the right answers then it might just be that the strong Aussie dollar is moving the offshore debate from Bangalore to Birmingham.

I should declare that as CEO of an Australian based specialist fundraising call centre, my natural position is not an impartial one. However, in the ongoing search to provide better services for our clients, we have recently invested effort in assessing whether Pareto should take advantage of overseas opportunities. This article is written largely as a means to share the findings of that assessment.

If you would like to discuss how Pareto Phone can help your charity achieve the best telephone fundraising possible, please contact Keith Elliott on 07 3015 4017 or

Better Story Telling

By Sean Triner

Many charities have proven that telling individual stories is more motivating for potential donors than throwing statistics and numbers at them.

Telling people that there are 10,000 people diagnosed with x disease per annum is not as effective as telling a story about one person with that disease, and what you can do to help.

Story telling hammers fact sharing when it comes to soliciting donations.

Assuming that you have already been convinced that this is the case, then the next stage is to write those stories in a really engaging way.

I often get involved in writing copy and a trick that I have found is that stories flow better, and are more engaging if they are personal, involving, directly thank the donor, and are witnessed.

By witnessed, I mean kind of like what preachers do. Don’t just tell someone a story, make it personal. Since good direct mail letters should be written in first person singular, to a donor, the writer should be telling the story from their perspective,

In a story about someone with x disease, the writer should have met that person or their family. It is more compelling to say ‘when I met Bill, I was shocked when he told me that…’ ‘it brought me close to tears…’ than just saying something like ‘let me tell you about Bill. He was diagnosed with ….’

Take a leaf from preachers – witness change.

How to convince your board it’s raining on a bright sunny day

By Sean Triner First published by Fundraising and Philanthropy Magazine in July 2011

According to Givewell of those charities that declare their assets, 65 have more than $500,000 in their bank account, with a total of $3,722,530,136 between them.

Why do charities have these assets? $3.75bn is a lot of money. Much of it is tied up in property.

There is no doubt that owning a building outright is going to save money on an annual basis. Basically, no mortgage or rent.

Several reasons are given for why charities have large assets other than property. According to a recent article in the Age, the McGrath Foundation banks all three years salary for each nurse it takes on, ensuring that the service will be provided independent of the charities’ performance.

But often the reason many charities keep large reserves are for a ‘rainy day’. Reserves give a charity security.

What many boards don’t understand is that good fundraising can also offer stability. Of the top 50 charities by fundraised income, 26 have assets less than one year’s worth of fundraising income. These low asset charities are unsurprisingly dominated by INGOs (international non government organisations) – charities like Oxfam and World Vision whose work is carried out predominantly abroad.

Boards are usually populated by great volunteers with diverse backgrounds, but very rarely are they from a strategic fundraising background. Some may have been involved in fundraisers – balls, events or making donations themselves – but they are rarely acquainted with fundraising mathematics.

The bottom line is that the most stable, ongoing growth driver that outstrips property values, rent savings and classic investment strategies is a well managed individual fundraising strategy with classic direct mail and phone donors, regular givers (recruited by face to face and other means – don’t rely just on face to face donors) and bequest management.

Your classic donors, as well as providing income, are more important to you as a pool for bequests, major donations and regular givers. Your regular givers should be recruited using multiple techniques – at least face to face and mail/ phone conversion of classic donors.

Here is an index based on benchmarking data plus estimated returns over the past five years. It is easy for you to adjust the returns to reflect your own investments.

Your job as a fundraiser is not just to fundraise, it is also to give your bosses the tools they need to help your do your job. That main tool is data.

Seven steps to convince your board that releasing assets for fundraising investment – before a rainy day – is usually a good idea

1. Make sure that you know and understand what you want funds for – do you really want to have an income two or three times your current income in five years. What would you spend it on?

2. Think long term. More non-emergency money has been donated to charities in Australia through bequests than regular giving or appeals in the past. But the best bequest prospects come from your giving database.

3. Make a choice. Either fundraise, or don’t. But don’t meddle in the middle it is pointless.

4. Get the data. Look at Pareto benchmarking and research on asset bases and fundraising income from Givewell. Every time they have a query or barrier, answer it with data, not opinion. Demonstrate that solid, stable income growth comes from solid, stable investment in fundraising.

5. Show that during times of stress such as an economic crisis, corporate and events fundraising are very vulnerable, normal donor approaches are stable but regular giving keeps on growing.

6. Model your potential. Build proper models, based on real data and factored by how ‘sexy’ your organisation is; what is it’s appeal to the public?

7. Get someone from outside to speak with your board, someone from a charity that has taken the leap and gone for big investment or someone with access to the data – or both. I have spent a serious part of my life this year presenting alongside CEOs, CFOs and fundraising bosses to boards and finance committees. They really need to be informed with the truth.

Keep plugging away. It could take a year or two to convince them.

If you do want me to have a chat with your board, CEO or finance committee then of course I would love to, though it does need arranging well in advance – I am doing a lot of it at the moment.

Sean Triner

How many times to mail?

By Sean Triner

Last week the UK Fundraising Group on LinkedIn began a thread about how often to mail people.

So how often should you mail?

At Pareto we look at data and try to work out what the optimum communications program should be to maximize lifetime value from donors. Donors are very expensive to get on board, and it is imperative that you look at your data to maximize return on that initial investment.

The most important factor for whether someone will give to you is whether they gave to you previously. Then, the most important variables are how recently and how many times. The more recent someone gave, the more likely they are to give again.So, mailing, emailing or phoning more often means that you are constantly communicating with donors more recently, and therefore more likely to get gifts from them.

Also, the biggest cause of attrition is not giving for a while (!). Fewer communications mean that the gap between giving is greater. If you don’t communicate very often your attrition goes up, not down. Unless your communications are not very good.When it comes to asking donors for a monthly gift we also note that there is an optimum time. It does vary slightly, depending on cause, channel of solicitation etc but it is always going to be within a couple of months of a gift.

Four to six weeks is the right place to start. We are not alone with this approach, anyone else who measures life time value and optimum ‘conversion’ timings finds the same answer.

And this does not appear to vary between countries. We took that learning from data in the UK and applied it in Australia to find the same. Analysing data across other countries gives us the same result.This approach is not aggressive, and is not subjective or an opinion. It is maths. Across any given data set, increasing communications tends to increase the lifetime value of that data set. Not just short term income, but overall giving.

Managed well it should also increase your number of bequestors.Jeff Brooks of the best fundraising blog, Future Fundraising Now advocates at least thirty asks per annum. That seems a lot, but he says that he has never seen increasing the number of asks decrease the total value given.The limit on the number of communications is likely to be forced on you for internal reasons – your capacity to produce multiple communications.

Also, increasing the number of asks is likely to increase total given, and increase retention but each time it also increases costs and reduces the amount given on that occasion. Consequently an initial increase in ROI as you go from say four to eight communications will reverse and you will probably begin to see a decline as you go from say eight to sixteen.

Even so, net income is the best measure – not ROI – from warm mailings to your own donors. It is better to raise $700k at a cost of $300k than $500k at a cost of $100k. More donors, more security, more room for error, more legacy potentials etc = more money in the end.

New Donor Diagnostics

By Andy Tidy

Wouldn’t it be nice if when you recruited a new donor, you knew how much they would be worth in the long term? All donors are not equal, and they don’t behave as if they are, so identifying their differences and adjusting the program they receive accordingly, is the key to maximising net income and achieving the best long term return on investment.

The question that needs to be addressed is ‘what are the metrics that need to be monitored that will allow you to see as early as possible how valuable a donor, or a group of donors, will be and how they should be treated?’ Depending on your recruitment mix, these will vary.

Regular Giving Recruitment

For regular giving recruitment, the key performance indicator that needs to be monitored is attrition. Three month, six month and twelve month attrition will identify any issues there may be in the short and medium term. For a long term view, it needs to be measured over two, three or four or more years. Attrition is usually represented as a percentage of recruited donors but there are other ways of looking at the impact attrition has.

The average number of payments made by donors who stop giving is a useful comparator. For example, if the attrition of your regular giving recruits is heavily skewed to the first few months, then you will get fewer payments per lapsed donor than if the attrition is more evenly spread out over the year. This will have the effect of increasing the amount of “lost income” – defined as the difference between the expected income from a regular giving recruit (12 times the monthly value) and the actual amount received. The lost income amount provides a tangible financial value to the attrition.

Upgrade likelihood is another metric that will contribute to long term value, monitoring the proportion of active donors that have upgraded, and the value of the upgrade allows you to monitor the contribution your upgrade program makes.

The last element you need to consider for RG recruits is their propensity to make additional contributions. This is usually in the form of a response to a cash appeal. The recruitment channel is usually the main determinant of whether a regular giving recruit will also make cash gifts, but there can also be variation by list source, payment type, age and other variables.

Once these metrics have been calculated, the next step is to look into any underlying variables that influence them. These will include channel, age, payment method, agency (if Face to Face), DM list and gender. Monitoring and slicing by these factors will allow you to pick up any sub groups that are over or under performing, and adjust your strategy accordingly.

Cash Recruitment

When we look at a cash recruitment program, the metrics that need to consider are different.

Second gift rate is usually the first that is measured. As per attrition for regular givers, this can be looked at after three, six and twelve months. What needs to be measured, along with the second gift rate, is the value of the second gift as this will be a key factor in the long term value of the new recruits. Donors that upgrade on their second gift are flagging to you that they have the potential to donate more – looking at the asks these donors receive will help maximise their long term value.

Along with second gift rates and value, the number of subsequent gifts per year will be a driver of long term income. Those recruits that respond to multiple appeals in the year following acquisition will go on to be some of you best donors. The proportion of new cash donors that convert to regular giving will vary depending on your strategy – testing of the best approach is ideal if you have enough recruits.

Ongoing Costs

The final element in any assessment of the long term return from acquisition is costs. The recruitment cost is fixed at the time of acquisition, but the ongoing costs can be controlled. By looking at the performance of the new recruits using some of the metrics outlined above, it is possible to quickly ascertain which donors justify the extra expenditure – such as donor care – and which groups of donors need to be cost managed.

Cost management of donors is particularly important if the recruitment contains large volumes of low value one off recruits. These donors need to be given the opportunity to make additional gifts, but by keeping an eye on their net contribution we can make sure that the program as a whole is not compromised by their poor return. In the same way, monitoring the return from upgrade, additional cash asks and reactivations to regular givers will ensure the net return is maximised.

Creating reports to look at the performance indicators above, when combined with campaign analysis of the initial acquisition, will allow decisions about acquisition and donor development strategies to be made promptly and therefore profitably.

If you need assistance with recruitment analysis and planning, we’d love to help you out. Give us a bell on 02 8823 5800 or email us at

What does 2011 tax time hold in store for Australian charities?

By Fiona McPhee

In Australia any charity that conducts cash appeals (and predominantly the data shows us these are run by direct mail) will be conducting an annual tax appeal sometime between April and June this year (ref. 1). This has been the peak period for cash appealing to our current donors for at least the past 10 years. The next peak is at Christmas time.

Whilst the generation of cash income in the industry has flattened over the past three years (ref. 2) we have become more successful during the tax period. This is being driven by income generated from retained donors, as well tax time being the peak period for Australian charities to recruit new cash donors. Chart 1 shows us when Australian charities are recruiting their cash donors – and tax time (May / June) is the peak, followed by Christmas (November / December).

Chart 1

Chart 2 from our recent 2011 Pareto Fundraising Benchmarking program depicts the growth in cash income by quarter from Australian charities.

Chart 2

Tax time continues to generate the most high value ($1,000+) gifts by volume and value. Chart 3 depicts by value and volume when these high value cash gifts are generated in Australia. It’s worth noting that more value and volume is generated outside of tax time throughout the year, yet tax is where the focus is for both donors and charities.

Chart 3

As reported in Pareto Talk, last year many tax appeals struggled with a suppression in response and value, in particular value from high value segments. Chart 2 shows the impact of this with limited growth between 2009 and 2010 (Q2).

Christmas appeals (Q4) show (Chart 2) a similar trend with flat income between 2009 and 2010 (the slight decline presented is the outcome of one charity, and when removed shows flat growth).

What does this all mean for the upcoming Australian tax appeal season? Will we see returns stablise?

We conducted a review of 13 Australian charities’ 2010 Christmas cash appeals and saw some ground recovered in response rates with 12 posting higher response rates than 2009. A positive outcome reflecting the current market place.

Is the Christmas rebound in response rates an indicator we are aiming for improved response rates this tax time? I would expect that outcomes in this area should rebound from last year, though the level of recruitment you have done, how well you have treated your donors and how recently you recruited will have an impact.

Whilst response appears to be rebounding, average gifts did not fare as well for Christmas 2010 appeals, with all but three charities posting decreased or the same average gift as 2009. This is not surprising:

  • with average gifts showing some decline through 2010; and
  • charities either using ask strategies that rely on asking for a donors last gift, or using value bands that in many cases see a donor asked for below last gift; and
  • recruitment usually diluting overall average gifts due to entry price points

The decline in value generated from high value ($1,000+ gifts) donors seen at tax time in 2010 has also continued with fewer high value gifts received at Christmas 2010 than in the previous year (though many of these higher value donors continued to give, just not at previous gift levels).

Can we expect high value donors to continue responding? I believe so. Will the value of their giving rebound? I think factors such as how you ask and what you ask for will be critical, but there is much ground to be made up in this area.

In situations of declining returns, acquisition can play a critical role in stablising current and future income. Whilst around 20% of cash donors who did not give last year (2010) but the year before (2009) can be expected to give again (ref. 3), the value these and other more deeply lapsed donors returns to our appeals is not enough to replace lost value from active (gave last year) donors who do not give again.

Clearly an ongoing tactic has been to recruit new donors at tax time (and Christmas) to help sustain (or grow) our appeal pools. And I expect this approach to continue this year, and this will help tax appeals in terms of gross income. But its worth considering how much you weight your recruitment to tax time.

Benchmarking has shown us that less than 50% (it’s down to 40%) of new cash donors will give again. Of those who do 70% will do so in the first 12 months. If you recruit a donor at tax time when will they get their next ask?

How quickly you make the second ask impacts on your second gift rates – wait 6 months and you are unlikely to convert these donors to a second gift, wait 12 months and they are lost. So if you are recruiting this tax time when will these donors be asked again?

What if you undertook recruitment in February or March? These donors will now be asked, with likely your strongest appeal for the year, at tax time. And they are being asked within 4 to 8 weeks of their recruitment – an optimum time for a second gift ask and a strong strategy for managing cash donor attrition.

Tax is clearly the most competitive time for cash appealing and cash recruitment in Australia. With many appeals about to hit the letter box July will only tell if we are seeing a recovery from what has been a tough 2 years in cash giving programs.

(Ref. 1) – In some cases Phone Cash activity may run to a different cycle making renewal calls every, say, 80 days but even in these instances it is unusual for a call cycle not to be run around tax time. (Ref. 2) – Pareto Fundraising Benchmarking 2011 (Ref. 3) – Pareto Fundraising Benchmarking 2011