Professional Fundraising magazine UK

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.

Should Australian fundraisers be worried about UK style meltdown?

The UK is reeling from regulations and rules hammering charities’ ability to raise funds. Some are fearing revenue losses of over thirty per cent. The reason, according to long standing donor care expert Ken Burnett, is that charity fundraisers have been complacent about their relationship (or lack of relationship) with donors.

Pareto Benchmarking shows that the two decades of great growth in fundraising income and numbers of new donors has come to an end. So, we asked Ken whether Australian fundraisers should be worried about a UK style meltdown.

Thanks Ken! (And yes, he knows he mixed his Ps and Fs up – watch the video to see what we mean!)

Digital fundraising means multi-channel fundraising

By Jonathon Grapsas This article was first published in Professional Fundraising in December 2010

As a colleague once said to me, having an amazing website with all the bells and whistles on offer is like building the world’s best department store in the desert. Useless if no one visits.

And that’s what online fundraising often looks like to me. A lot of pizazz, little substance.

It’s easy to get caught up in the hysteria of the latest tools available to digital fundraisers, but they are just that, tools. And in fact they distract from what recruiting donors via any channel is all about: telling someone something remarkable about what you do. So incredible they’re compelled to stop there and then to act.

So what’s working right now?

Finding hand raisers

It’s far easier to get someone to commit to something small, followed by something a little bit bigger. We’ve seen it on the street when asking individuals to commit to an action first before any financial request. Same logic applies to online prospects.

Think about an action, or actions that you can ask people to agree to do prior to asking for a gift. Online surveys work in garnering interest; because they provide a way for prosects to tell us what they really think, rather than simply complete an action that feels like one way traffic (charity to prospect).

Channels complimenting, and not competing, with each other

You need to look at acquiring donors in a channel neutral manner. Think about the best way to converse with someone, and then depict which medium you’ll use to have that conversation.

Digital acquisition is in reality multi-channel acquisition. It’s tough to convince someone through paid search, a banner advertisement or an email that they should become a regular giver. Much easier to have this dialogue on the phone. Easier to build a case and close the transaction. The point is that channels should converge, not compete.

The ‘what’s in it for me’ factor?

In a recent pilot project with a Canadian client, we were conscious that we needed to provide something real and meaningful to prospects. We knew it wasn’t enough to offer our thanks and the opportunity to share their voice.

Mindful that those we were targeting have a strong sense of ‘what’s in it for me’, we offered incentives, linked to the organisations mission, for prospects to become participants. It worked. 6,000 prospects (5% of those we approached, and twice more than we expected) gave their precious time to share their views. No doubt driven by the chance to get something back, as well as the opportunity to strengthen their voice.

Honeymoon periods

Once you’ve committed someone to come on board as a regular giver, do everything in your power, especially early on in the relationship, to reaffirm the decision they made.

The honeymoon period covers the first 30 days post sign up. The time when both parties should be madly in love with each other, in each other’s pockets. Or inboxes. Sharing the love, sharing stories. Reminding your new supporter what a wonderful choice they made, before that dreaded buyer’s remorse kicks in, and divorce ensues. Don’t let it get to that stage.

Spreading the load

Online recruitment isn’t about one vehicle. The most effective programs test and tweak several initiatives. Paid and unpaid search like Google AdWords, banner advertising, e-blasts to tepid sources. The point is about not focusing on just one, yet testing the water across different vehicles to see what works.

The non negotiables, things you must get right

Follow up and timing

If your digital recruitment efforts include following up those who have raised their hand, or those that have made a single gift, then commit to it. And do it.

I’ve seen the best laid plans fall over because so much effort has been spent on the initial push to acquire, forgetting the need to follow up and convert to a regular gift. Multi staged approaches hinge entirely on getting the follow up right, and alongside that getting the timing spot on. It’s all about testing what works for you, but my experience is the quicker the better.

Not getting sucked into conventional wisdom

Who was it that said online fundraising should be different? That copy should be shorter, punchier and written by someone different?

The fundamentals of good direct response fundraising apply. Get someone’s attention, tell them something remarkable, provide a clear action and solution, and make it so easy you have no option but to respond.

Of all the fundraising myths to be debunked, top of them is that online fundraising must be different (read ‘shorter’) than offline fundraising. There is little empirical evidence to support this. Get the basics above right and the results will follow. Don’t get sucked into ‘conventional’ wisdom.

The way forward

Digital targeting

What excites me right now is the potential of online intent data. In short, this is where you’re able to connect with people based on their purchase or browsing behaviour on other sites. Intent data helps you find online those people who are already exploring the territory in which you operate.

Imagine you’re on your favourite travel website, looking for flights to Munich in April. The information is captured by a cookie, and the travel website can then sell that cookie through a data exchange company. Other companies selling flights to Germany or Europe may use this as an opportunity to reach out and offer you a similar flight or holiday.

So powerful is this information that it is now considered by US direct marketers as the second most effective tool for digital marketers in driving sales. Only transactional data has more impact.

Surely we can see the parallels for us charity folks.

Someone online is searching for an eco-holiday, offsetting carbon or looking at hybrid cars. These are the people environmental organisations want to find, prospects to whom they can show off their programs. The key, then, is to find the right vehicle and get these people excited about it. The connection may not lead straight to a financial gift, but it does introduce you to prospects that have already put their hands up.

The other aspect of digital savvy that has me thinking is the concept of re-targeting. That’s a means whereby you can identify people who have visited your site previously, and locate them in other spots once they’ve left your site. I see it as a form of online prospect reactivation. Par for the course for direct marketers at credit card companies and tel-comms, yet to be tried by most charities.

Is it all worth it?

Should we bother? We’ve seen the numbers and frankly online giving is still a tiny chunk of the pie. Other avenues like face to face are still streets ahead when it comes to volume of new supporters.

That’s true. And attracting digital donors, particularly regular ones, is really hard. But if we can find the hooks to get them through the door, the data we’ve captured in different countries shows they can be worth on average around £600-£800 net after five years. Simply because they stay on board.

Frankly, we’re not paying enough attention to all this in the charity world, even though it’s available right now. It might feel a little like Big Brother, but let’s be honest – it’s like siphoning from a funnel. When you get to the narrow end, you want to be talking to individuals who are in the right spot and frame of mind to hear what you have to say.

Targeting in the digital space is getting a lot more interesting. And so too is finding donors online.