News & Articles

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!)

The cost of attrition

Fiona McPhee says it’s time to question yourself about your approach to supporter loyalty – because attrition is costing us.

This is my favourite time of year! Pareto’s 2017 Industry Trends Benchmarking Report has been released. You and I now have the opportunity to see, at the macro level, what’s happening in individual giving.

We’ve already reviewed the report with our Australian member base and the truth is what’s happening can be summed up in one word: challenging. And I love a challenge. As I know many of you do.

There is no emerging silver bullet on the horizon, there is no dramatic upswing in anything. Overall income has maintained from last year, driven by regular giving, and for some the opportunities are clear. But for those of you with developed programs in a pressured acquisition market that is facing declining retention rates, how do you pursue sustainable fundraising?

“It’s cheaper to retain a supporter than find a new one” is common law in fundraising. And it’s true. Replacing a lost, loyal supporter is even more expensive then acquiring a new supporter as for many the equation will be up around four or more new supporters to simply replace the lost income in one year of a previously retained, loyal supporter.There are two statistics in this round of Pareto Benchmarking that drive this home:
• retained cash supporters contribute, on average, over 60% of total cash income (and if you’ve not done any supporter acquisition recently it will be even higher)
• overall cash supporter retention is at an alltime low (although many charities are 25% to 40% better at retaining their supporters than the average so we know we can do better).

Supporter service is critical

The supporters you already have are your best asset but they are not staying around as long as they used to or could. I can’t go into the details of all the research here (I’m always up for a chat about this though so do please get in touch) but so many things point to how we treat our supporters how satisfied they are with this treatment, and how engaged they are as being critical to supporter loyalty.

Your approach supporter service (or customer care or donor care) is critical to managing supporter loyalty. Our investment in this is low compared to the commercial world. Pareto mystery shops a lot and while things have improved year on year, overall our experiences are not as good as they could be. So how can you ensure you are excelling? Here are two ways to get started:

1 Better understand your audience

Do you ask supporters what interests them? Do you know why they care, what their story is and how engaged they are? Being taken for granted was highlighted by some excellent UK research as a specific reason why supporters chose to discontinue support, including not being thanked appropriately, being asked for money too often, receiving communications they did not want and not being recognised for their commitment.

Do you have an approach to understanding how these issues could be affecting your supporters? Do you ask for and capture the reason supporters cease their support? Do you exit interview selections of supporters?

We are not paying enough attention to our supporters, often driven by the fact that they have no avenues or opportunities to be heard. The rise of mass direct response fundraising has seen process prioritised over service. And while the use of data to segment and target continues to improve it’s what we do with the knowledge from that data that’s lagging. The first steps to take are:
• ensure the information that you have on supporters and how it is captured is audited
• identify the gaps in your knowledge about your supporters – what should you and could you know about your supporters?
• audit the ways you listen to supporters (this can be done as part of an a wider mystery shopping project).

2 Better service your audience

This is the customer service chat many of you need to have. To quote UK fundraising expert Adrian Sargeant: Whether they are consciously aware of it or not, how they are treated by other charities will certainly drive what they expect when they start giving to yours.

Now if you’ve ever manned the phones at your organisation you may well have had a difficult interaction with a supporter who is upset about how much mail they receive or was dismayed to see you ‘out in the street cajoling people into donating’. And the untrained inclination is to get out as fast as possible. I have also seen these situations lead to organisations effectively hiding from supporters – having no clear way to be contacted and no people available to care for supporters with feedback.

These are simple examples of golden opportunities to deliver a great supporter experience. But if you are unprepared and ill equipped, your supporter experience will be poor and their loyalty will be affected.

Do you provide high quality service to your supporters? How do you know? Have you measured it? Do you monitor it all the time? Do you benchmark yourselves? Do you have a complaints procedure? Do you have a customer/supporter service vision? The first steps to take are:
• Get yourself mystery shopped. I recommend outsourcing this and running it over a threemonth minimum, if not a rolling program.
• Benchmark your service levels.
• Develop a service vision and implement KPIs to track and monitor donor responses.
• Audit your team’s roles and skills, and look at ongoing training to upskill them.
• Audit your supporter care communications, both proactive and reactive. Having a fresh set of eyes reviewing for experience, tone consistency, warmth and personalisation will help identify process gaps and execution gaps. An external audit will also help identify how accessible you are to your supporters and how much two-way interaction really exists (research shows us that each time you have a two-way interaction with a supporter it builds their loyalty some more).

Seeing your supporter service as a critical component of managing supporter loyalty with objectives to better understand your supporters and better service them will impact your supporter loyalty.


Fiona McPhee and the Pareto team work to review, analyse, benchmark and implement insight led approaches to improve donor journeys, care and service. If you are looking for some support to better understand your donors, drive better donor experiences and improve loyalty email

This article was first published in Fundraising and Philanthropy Magazine 2017

Meeting the needs of middle donors

It is only in the past three years that middle donors have really been targeted in Australasia. Here Fiona McPhee and Ruthann Richardson explore the benefits of, and what’s involved in, building this significant group.

Middle donors should be viewed as a central part of an organisation’s lifetime value efforts. Middle donors will be retained and upgraded far more than smaller donors and far more than major donors. They represent the most significant block of money, commitment and loyalty. US fundraising consultant/ industry commentator Roger Craver.

Over the past few years, there has been an increase in interest in mid-value fundraising. Blogs, conferences and webinars are focusing on it. And rightly so as there is much to be gained from putting a focused strategy in place to increase the engagement, retention and value of this targeted group of donors.

Together, Ruthann Richardson and I have spent the past two years researching, analysing and working on the development and execution of mid-value programs with charities in Australia and New Zealand.

(We argued about how long we have been working on these programs as many of the high-value donor programs we have run or assisted with over the past 10 years bear It is only in the past three years that middle donors have really been targeted in Australasia. Here Fiona McPhee and Ruthann Richardson explore the benefits of, and what’s involved in, building this significant group. some resemblance to the more recently branded mid-value donor programs. However, formal strategies around mid-value donors have only come to the fore in the past three years in Australia and New Zealand.)

The purpose of developing a mid-value donor program? To raise more income by cultivating and nurturing strong ties and deeper relationships. These programs should bridge the gap between our high-touch major donor programs (one-to-one) and our mass fundraising programs (one-to-many). By adjusting strategies and investment priorities to bridge the gap you can create a one-tosome program that drives these stronger relationships and better longer-term value.

The first step in developing a mid-value donor program is in identifying who your mid-value donors are. This will be different for every organisation – both in volume and value. Your chosen strategy, capacity and budget may well dictate the volume of donors you can service via your mid-value program initially, so the criteria you select may need to be tightened, but we hope success would allow you to expand over time.


When looking to identify who could fall into this group for you, there are a number of things to consider:

• Look at the largest gifts made; not those cumulative over a time period The behaviours of those who give larger single gifts versus those who give multiple gifts to reach the same value are different and for a mid-value program we recommend focusing first on those with larger single gifts. Once your program is established and working, if capacity allows for research (and here we mean speaking with/listening to your donors and analysing their behaviours) and/ or testing into specifically targeted segments of donors whose cumulative giving is higher than the norm, this can be part of your plan. (Ruthann suggests looking at donors whose cumulative giving in a year is high and talking to them to assess the difference in their behaviours from the beginning.)

• Focus initially on individuals You may selectively include organisations/businesses over time but, realistically, these programs are designed to develop relationships with individuals and are more easily managed, in the first instance, without making a raft of adjustments to meet te different needs of businesses and organisations. (Ruthann recommends exploring organisation records when you know the decisions are being made by individuals who are simply choosing to give through their businesses.)

• What about regular givers who are giving large amounts every month? This is where analysis and judgement needs to come in. Regular givers who also make larger cash donations are worth considering. The needs and behaviours of higher value regular givers are often different to those of a ‘classic’ mid-value donor. Again, research and testing are critical with this audience. Consider developing a mid-value regular giving program that addresses the specific needs and opportunities presented by people who are already regular givers.

• What feels right in terms of value for your organisation? In Australia and New Zealand we tend to start our exploration with donors who give $1,000 or more (in a single gift) up to where an organisation’s major gift program starts (for those without major gift programs a mid-value program is a nice way to get started towards this). If you don’t have any or many donors up at $1,000 then start at $500 or $250.

• Like any other giving program, recency is critical If you have a selection of donors who haven’t given in the last 24 months there would need to be strong case-bycase reasons to include them in your midvalue program. (I think you should go back 36 months but Ruthann recommends 24 months. We disagree because of the differences in programs we have worked on, so critical analysis and judgement will help make this call.)

• Are you going to consider longevity of giving in your criteria for this group? Donors who have been giving to you for longer are likely to be more engaged. Do they have different perceptions of your work? Are you able to use analysis to understand their potential giving motivations better than new donors? Giving longevity will be likely to affect how you segment your mid-value donors.

Cultivating the group

Once you have determined the criteria for your program, the biggest challenge is in understanding how to cultivate this group – those exceptional donors who are giving at the very top end of your mass fundraising channels but who don’t quite make it into your major donor program.

(Often we encounter some crossover between the major donor prospecting criteria and the newly developed mid-value donor criteria. Savvy major donor fundraisers have seen the benefit of the nurturing and cultivation mid-value programs offer but be prepared to engage your major donor colleagues and plan together.)

It is important in your mid-value program to focus on the donor. The more their motivations and needs are used to tailor the experience the more successful the program. Getting the right balance between cultivation and solicitation is key, as is finding the balance between high touch human interaction and mass fundraising.

Anyone hoping you can simply ‘program in’ a mid-value donor program should probably stop reading here. Human interaction is important. Not all mid-value donors will ask for it and many will say they don’t need it, but without it you will simply be applying more tactics to a mass program, which will only get you so far.

Aim to create a sense of exclusivity, access and special status. Mid-value donor content should be richer – even more sophisticated than that developed for the broader base. Letters and emails (if they are an appropriate channel for your audience) should be meaty and substantive – think more cultivation than solicitation. Spend at least as much time stewarding your mid-value donors as you do asking them.

We have seen and helped build a variety of models that work for great mid-value programs, and each has been a unique outcome of the motivations of the midvalue donors, the tangible and specific proposition(s) developed, the organisations’ available human capital and expertise, the elevation of elements of the mass fundraising program, and special cultivation and solicitation activity designed for the mid-value donors.

Tactics for this group are different from a standard donor program – lots can be learned from testing as well as the experiences from other mid-value and major gift programs. There is no one-size-fits-all approach here.

Your objectives will drive your strategy. A slow burn approach might focus on increasing retention and therefore value over time, a more focused push will look to dramatically increase the short-term value of giving with a keen eye on retention. Often capacity and budget dictate which of these two routes are selected.

You will need a budget. It’s the classic ‘spend more to make more’ but it works. You might be spending more on specialist staff or more on your appeal execution or on special cultivation activities for the audience. Can you do this with no additional budget? If you can divert resources and juggle budgets to spend less in other areas then, yes, but plan to be successful and spend more as you expand and develop the program. Plan to stick with it – this is not a one-shot campaign or throwing in a couple of thank you calls.

At the most basic level, look to complement your mailings with phone calls, custom cultivation and solicitation activity, and stretch campaigns. Ensure you keep a consistent narrative across all channels. Pay attention to how donors respond and what they say to you. Good cultivation means paying attention to the donors’ preferred channels, level of interaction and interest areas and, importantly, capturing and using the insights as they are gained. The best programs have a vision, test and refine, and use human beings as a critical resource.


Fiona McPhee and Ruthann Richardson work with fundraisers in Australia and New Zealand to explore, develop and implement mid-value donor programs.

This article was first published in Fundraising and Philanthropy Magazine 2017

Can you name this critter?

The Bush Heritage two-step Australian wildlife campaign has garnered great results – both in terms of lead acquisition and donor conversion. James Herlihy explains how it was achieved.

Before Al Gore even invented the internet (he didn’t really, it’s just a meme), fundraisers knew that, if done well, meaningful non-financial engagement can lead to richer supporter relationships and greater response. But translating that principle into new digital media – and ensuring the viability of this digital activity as an acquisition channel – is where fresh fundraising ground is being broken in 2016.

Bush Heritage’s wildlife survey campaign, which was produced with Pareto Fundraising, is one example of that ground being broken successfully – and I would like to share some key results and findings with you.

The centrepiece: a wildlife survey microsite

The survey microsite is the centrepiece of a two-step campaign involving primarily Facebook content (still the best digital acquisition channel for return on investment and volume) driving prospects to an enticing survey landing page featuring the little critter featured here (take the survey at wildlife-survey to see if you can name it!).

Once a participant completes the survey, they are entered into a phone conversion program, while also being fed into an email journey aiming to promote social sharing and deepen supporter engagement before being served financial asks.

The results for the three-month trial early in 2016 were easily convincing enough to roll out for a further five months, as Audrey Hii, Direct Marketing Team Leader at Bush Heritage, explains: “The wildlife survey is very engaging and therefore delivers highly qualified leads. We understand from our phone agency that the phone fundraisers enjoy calling survey participants as the conversations are really positive – evidenced by a strong contact rate of close to 50% with a healthy conversion rate of 8% and average gift of $23.

“The cost per acquisition is the lowest across all of our regular giving acquisition campaigns and the projected 12-month return on investment looks to be on par with the best performing campaigns within our face-to-face program.”

The keys to success

What makes this campaign successful? Based on this and other two-step campaigns we’ve run, the top three elements are: A topic of relevance and interest to wellaligned donor audiences Unique Australian wildlife is interesting, especially to thoughtful middle-agers to retirees (who benchmarking tells us are our most reliable donors).

Self-interest factors We hit this attribute on a couple of counts. First is the personal challenge implicit in the campaign’s ‘What do you know?’ proposition. We all love finding out more about ourselves, and the fact that the survey scores you and responds interactively to your answers creates a nice instant feedback loop – and makes it more of a conversation than a one-way response process. The other self-interest factor is, of course, the incentivisation in the form of a low value, high street shopping voucher.

Compelling execution With Bush Heritage’s brilliant photos and the weird and wonderful world of Australian wildlife, our creatives had some fun with this one. The tone of the exercise hit just the right balance of fun and intrigue, while positioning Bush Heritage’s conservation programs in the mind of the participant and starting to build supporter interest. The tone of the quiz also makes it amenable to social sharing and competition – and no-one minds getting a few more supporter leads for free!

Campaign challenges

Six months into any digital campaign, the limited size of the Australian population (which breaks down to far smaller qualified target audiences) makes itself felt. We have to constantly optimise both audiences and creative, trialling and incorporating fresh ideas to keep lead cost per acquisition from rising and maintain volumes through to the phone room.

Happily, the campaign is still delivering strongly, which means more supporters helping Bush Heritage keep its awesome conservation work running. And if we reach that point where audiences need a rest from this survey, we’re a step ahead with plans to refresh this activity – and ensure online engagement remains a strong ongoing acquisition stream for Bush Heritage into the future.


James Herlihy is the Digital Strategist at Pareto Fundraising. He has spent more than a decade campaigning with nonprofits and is the brains behind groundbreaking digital campaigns for dogs, dolphins, humans, rights, reefs and more.

This article was first published in Fundraising and Philanthropy Magazine 2017

Dearne Cameron Appointed Chief Executive Officer of Pareto Fundraising

Media Release

9 February 2017

Pareto Fundraising, a division of ASX listed IVE Group Ltd, has today announced the appointment of Dearne Cameron to the role of Chief Executive Officer.

Dearne will succeed one of Pareto’s co-founders, Paul Roberts, who will transition to the role of Senior Consultant, continuing to play a key role within the Pareto team as a mentor in the areas of data insights and fundraising strategy. Dearne will join us on 20th February.

Dearne brings with her 18 years’ experience from the not-for-profit sector complemented with extensive experience in the commercial sector where she also held a variety of Director and Advisory Board positions. Most recently Dearne joins us from CompliSpace Pty Ltd, where she was the Chief Operating Officer. Her not-for-profit experience includes General Manager and Director of Anglicare and Anglican Aid, a board member of House-With-No-Steps since 2011 and a Non-Executive Director for Make-A-Wish Australia for six years.

Warwick Hay, Managing Director IVE Group, said “Dearne’s diverse range of experience across both the not-for-profit sector and the commercial sector will be an asset to the Pareto Fundraising business. Her passion for building strong relationships and helping charities achieve their fundraising goals will be invaluable to supporting our customers and helping them thrive.” Dearne commented, “I remember when Pareto started, I was amongst their first clients. During the last 15 years, Pareto has continued to deliver a growing and unprecedented expertise to the sector. I feel privileged to be part of the Pareto team, and I am looking forward to working with their many clients who are making an important difference through the services they provide.” Dearne studied at Macquarie University, Curtin University and Swinburne University and achieved an MBA, Master of Management, PGC Human Rights, BA Anthropology and Studies in Behavioral Studies and Psychology. She is a Fellow of the Australian Institute of Company Directors, a Fellow of the Australian Institute of Management, a Fellow and Certified Practicing Marketer of the Australian Marketing Institute and a member of the Australian Anthropological Society.

For any enquiries please contact:
Paul Roberts
CEO and co-founder
Pareto Fundraising
M: +61 408 277 642.

About Pareto Group The Pareto Group of Companies is Australia and New Zealand’s largest fundraising strategy and data driven solutions company serving the not-for-profit sector. It has proven market-leading capability across analytics, direct mail, telemarketing and online channels. It is also internationally recognised and well-respected for its Benchmarking program, which provides whole of sector analytics, strategic consultancy and industry thought leadership.

About IVE Group Ltd IVE Group Ltd is an ASX listed vertically integrated marketing and print communications provider. IVE enables its customers to communicate more effectively with their customers by creating, managing, producing and distributing content across multiple channels. IVE has an unparalleled product and service offering in Australia and holds leading positions across multiple sectors. IVE approaches the market with a solution-focused strategy and consists of four operating divisions – Kalido (creative and marketing services), Blue Star Group, Pareto Group (fundraising specialists-NFP sector) and IVEO (managed solutions). IVE employs 1,300 talented and committed people across its operations in Sydney, Melbourne, Brisbane, China, Singapore and New Zealand. The Group services all major industry sectors including financial services, publishing, retail, healthcare, communications, property, clubs and associations, not-for- profit, utilities, manufacturing, education and government.

End of release

Forecasting the Future

Accurate budgeting and forecasting is becoming a must do for nonprofits, especially as their individual giving programs grow say Andy Tidy and Clarke Vincent…


Some of the most commonly asked budgeting questions in fundraising are, “If I do no acquisition, where will my income and donor base be in one, two or five years?” or “What do I need to invest in order to reach an income or donor volume of ‘x’ amount?”

Alongside these questions, accurate budgeting and forecasting is becoming more important as charities build large individual giving programs. Why? Because if a forecast is out by a relatively small percentage it can have a big impact on service delivery.

The key to accurate predictions is knowing the probability that a donor will or won’t do something. It’s nearly impossible to accurately predict what a single donor will do, but across a large enough group, it is possible to predict with relative accuracy.


Regular giving forecasting

For existing regular giving donors this is fairly straightforward. The main thing we need to know is the probability that the donor will not stop their direct debit (either intentionally or by failed payment). There is also a need to predict the propensity to upgrade and by how much, as well as the likelihood of skipping payments, but these have a relatively small influence compared to overall retention.

For regular giving programs with an acquisition strategy, where early donor attrition can often be as high as 50% over the first year of a donor giving, we typically also want to know expected recruitment volumes (including non-starter rates and first payment phasing), along with their subsequent retention, upgrade propensity and decline probability. These variables are essential for us to confidently manage the large budgets invested in regular giving acquisition and donor development.

It is imperative therefore to identify and understand the factors/variables that influence or correlate with retention of both new and existing donors. It is then possible to split the donors into segments defined by those variables and go on to forecast expected income based on the retention characteristics of each segment.

Typically, depending on the size of the file, existing donors will be split into 50 to 100 segments, with acquisition channel (for example, face-to-face, online lead conversion, DRTV etc) and tenure (months of giving) being the most significant. For new donors a smaller number of segments is used, with channel and age being the main drivers.

Each segment’s likely future behaviour can then be calculated by extrapolating the behaviours of previously observed similar segments. Applying an accurate prediction can also rely on an ability (somewhat an art) to forecast changes in the behaviour of a segment caused by anticipated future changes in external influencing factors such as market dynamics, charity fundraising and strategy development.

The segments are then ‘rolled’ back up into a whole group and their overall predicted behaviour can be used for accurate forecasting. For easy visual trend insight, they are often charted too. The two regular giving forecast charts show a no acquisition scenario where a charity is expected to see income shrink and an active acquisition scenario where the charity is recruiting enough donors to grow.


Regular giving forecast: five year (No acquisition)


Regular giving forecast: five year (Active acquisition)


Cash donor forecasting

Forecasting cash donor (single, one-time gift to an appeal) behaviour and fundraised income is inherently more difficult than for regular givers as cash donors have to make the decision to give each time. And depending on the outcome of each of these decisions, the expectation of their future behaviour changes.

It doesn’t mean a cash income forecast can’t be done, it is just that the forecast will not typically be able to be predicted with as much confidence at a granular level. The principles are the same as for regular giving – we need to identify the factors/variables that predict an appeal response and how much they will give – typically these will be based on recency, frequency and value.

Each time a donor makes a donation it potentially changes these characteristics, so the process becomes an iterative one, therefore each year of the forecast is dependent on what we expected the donors to do the previous year.



Forecast cash direct mail income by year (No acquisition)



Forecast cash direct mail income by year (Active acquisition)


These charts show the difference in forecast income for a direct mail program from doing no acquisition vs acquiring donors consistently over the next five years. It becomes a fairly simple process to manipulate the donor recruitment volumes to achieve steady income or hit growth targets.

An income forecast model can then be enhanced with inputs such as budgets and costings to help model different scenarios for the long-term return of your integrated fundraising program.

Predicting the future can be fun, enlightening and very useful but all forecasts should carry caveats about their limitations and accuracy. The key to improved accuracy is to compare predictions and actuals over time, try to understand the key factors and causes of variations, and make corrections.

Most experienced stakeholders will understand that forecasts should be treated as a useful indication rather than a promise of results. If stakeholders wish to lock-in or guarantee minimum results (for example, to be able to make commitments about future service provision) then it is wise to provide different scenarios that represent different combinations of variables (for example, based on last year’s retention rates, based on retention rates 1% lower than the previous year etc).


What about unknown unknowns?

Some fundraising programs become harder to forecast as they mature, or ‘max’ out, as it becomes harder to find and engage new supporters. While it is possible to more accurately predict the income to be received from retained/existing donors, predictions about the long-term future behaviour of donors yet to be acquired is fraught with more variables and risk. There is, however, a considered approach that can be applied to building longer term models of multi-year donor acquisition programs and I will outline an approach to do this successfully in a future article.


Clarke loves talking about data and has made a career out of doing so for more than fifteen years in the direct marketing industry. He has been our Head of Marketing and Business Development since February 2009.  Andy  started his career in the UK in 1993 working as an analyst for two large charities. In 2003 Andy began working for Pareto Fundraising where he has been the driving force behind Pareto Fundraising’s international reputation for data-driven fundraising excellence.


This article was first written by Clarke and Andy and was first published in the October/ November edition of F&P Magazine.



Establishing a regular giving program is a big challenge for any charity. F&P asked Fiona McPhee how she recommends getting donors over the line and keeping them on board for the long term.

According to fundraising expert and blogger Jeff Brooks, about a third of individual income to professional fundraising charities in Australia comes from regular giving. Pareto’s Fundraising Benchmarking 2016 report, which studied the data from 48 different charities, supports his argument – confirming how an ongoing commitment from donors is crucial for a charity’s longevity and stability.

In your opinion, what defines a high-performing regular giving program?

This is one that has well managed customer service and attrition. The biggest challenge in regular giving is the fact that donors stop. They sign up to a monthly donation then at some point in that journey their giving stops, with most new donors bowing out within the first year.

So organisations with low attrition tend to have high-performing programs. The average first-year attrition for starters (those who make at least one gift) is 40% across all channels.

How can a charity reduce the loss of donors within the first year?

Declines management is number one for me in terms of managing attrition, and that basically means if I process your monthly donation and you don’t have enough money in your account or the account is closed, the charity gets a decline back.

Declines management is crucial – you can recover a very large percentage of those declines throughout the year if the right administration and customer service processes are in place.

Many organsations have been able to bring their attrition down by 5% or 10%, simply by assessing and addressing these processes, which makes a huge impact on their income and their retention.

Another way is to have a strong donor save program in place. Charities have to put the effort into training, into developing KPIs and into monitoring their donor save programs so they give themselves the best chance of keeping their regular givers on board. Whether it’s offering them the chance to reduce the monthly amount or even put it on hold for a while, having a strategy in place and a trained team ready to address donor savings is critical.

What’s one of the biggest challenges charities are facing with regular giving?

Supplier capacity and retention for faceto- face recruitment – you might have the budget to invest, but engaging and retaining a suitable supplier and getting the recruitment volume you are after is a real challenge in today’s market.

Marketing automation is another challenge for a lot of charities, but some of them are really trying to crack it. The very good ones are targeting a variety of demographics through a combination of email, SMS, phone and printed material – they’re covering all bases. This is a well-planned strategy but, of course, cost comes into it too.

I think the cost of marketing automation versus the benefit of it is a real barrier at the moment too. However, we can certainly see lower attrition rates in that first period for those who put the effort in.

What kinds of strategies should charities have in place for ongoing retention?

One strategy is upgrade programs, which includes contacting donors and asking them to increase the value of their giving. Again, the high-performing charities have a multifaceted program. It’s not just a one-shot, single-phone campaign at one point in the year. They’re looking at what the different channel opportunities are and the different ways that they can offer upgrades.

Channel diversification for upgrade programs is another good idea. This involves moving beyond just calling or mailing donors. Some charities are looking at how they can use SMS and email to supplement – it’s about getting coverage, so actually trying to get through to every single donor and give them the opportunity to increase their giving as opposed to just touching base on the phone once a year.

How can a charity hope to establish a successful regular giving program?

The first thing it needs to look at is its product or its proposition for regular giving. You’ve got to have a reason for someone to commit to you on an ongoing basis.

That could differ from charity to charity. For example, an organisation that collects money in response to emergencies needs to think about why someone who’s used to giving in response to a really tangible, current emergency should commit to an ongoing monthly donation. It’s also critical that the back-end systems are in place, so that the donor’s transaction process and service experience is as smooth as possible.

Having a long-term budget and commitment in place is also critical. Regular giving tends to not break even and the acquisition of new regular givers can take more than 12 months, depending on the channel, yet a lot of charities run on a 12-month budget.

Setting expectations that regular giving has an excellent, long-term return on investment is often the first step towards ensuring the organisation is committed to investing. You’ve got to stick with it in order to reap the rewards. From that perspective, you’re better off establishing a three-to-five-year return on investment view of regular giving.

What advice would you give to a charity looking to establish a regular giving program?

Start with the expectation that you will need to diversify and evolve the program – it’s not a ‘set and forget’ activity. Based on how things have trended in recent years, expecting what’s working today to be working the same in three years’ time is risky.

From a diversification perspective, there are several different channels options, and each requires a different approach and delivers different types of donors. However, in the market right now, face-to-face accounts for more than 75% of the income for regular giving, so that’s a real focus area. But it comes with massive challenges in that there is less supply than there is demand.

For me, the organisations that are doing really well are using that as their base, but testing to diversify channels. They are looking at other opportunities. They are trying to develop other avenues into regular giving that certainly don’t have the same volumes, but are giving them some stability and sort of future proofing in the event that anything changes.

When you look at the Pareto Fundraising Benchmarking program, you certainly see that those charities that are generating the most income have multiple channels feeding their program.

Fiona McPhee is Strategy Director for Pareto Fundraising, helping charities in Australia and New Zealand like St John Ambulance Australia to develop their individual giving programs.

This article was first published in Fundraising and Philanthropy Magazine 2016

Mild-mannered Donor or Impassioned Activist?

They’re both out to help change the world. Mary Anne Plummer asks whether we’re giving them enough opportunities to do it.

Ever been advised not to call your donors ‘donors’ to their face? It’s something I’ve been told frequently over the years. I thought it was about potential confusion with organ or blood donation, or squeamishness about categorising people as a funding source.

They’re valid reasons. Another is that people supporting your organisation don’t necessarily see themselves as a ‘donor’. Or ‘event participant’ or ‘activist’. As one told me recently, “I support causes in the way it suits me at the time, and when I feel my actions are going to change something.”

This got me wondering. Are fundraisers missing opportunities to make more difference because we assume donors are only ‘donors’? And what actions could/should not-for-profits be asking for, to get the most value from people who care about our causes?

The British Labour Party (BLP) campaign team has provided this unexpected insight into the first question: “Taking an engagement action made our supporters at least 60% more likely to become donors.” What? 60% more likely to become donors?

That impressive figure, and a few more besides, came from a combined Blue State Digital/BLP presentation at IFC2015. It was called Win or Go Home: What charities can learn from political campaigns.

Specifically, BLP’s digital campaign team sent everyday Brits very easy, non-financial asks like, “Tell us if you intend to vote”, “Which of these three statements about today’s Britain do you most agree with?” and “What issues are most important to your family in this election?”

This basic profiling was used to improve the relevance of subsequent communications, which aimed to appeal to the masses after a loss in gifts from the big end of town. Slightly harder requests were then made to respondents, such as: “Give us more information/feedback”, “Make a donation”, “Help out with the campaign in practical ways.”

BLP may have ultimately been smashed in the election. But its supporter e-mail list grew by 601%, membership swelled to its highest level since 2003, and 1,100% more was raised in small online donations than in the 2010 elections.

Take outs

  • Be careful not to silo prospects into ‘most likely to act this way’ categories.
  • Collect and use data along the way.
  • If you give prospects multiple ways to make a difference and do it well, many of them will eventually give you money.

How can charities use non-financial asks to acquire donors?
Jeremy Bennett, the supporter Acquisition Program Manager at Amnesty International Australia, says a model that works well online for Amnesty is first asking people for a lowcommitment action, and in a second step, requesting a donation.

“We can acquire leads relatively cheaply that way,” he says. “It can give us a lower cost per acquisition for regular givers than some other methods, and we’ve seen lower attrition rates in the first year for donors we’ve acquired.”

Also, in the case of leads from online surveys, he adds that: “We get a bit of information on the supporter and the area of our work that’s motivated them.” Amnesty can then use this to craft a better experience for supporters.

But what if – unlike Amnesty – you don’t have an obvious activism charter, or your organisation is small, unknown or new? Of course it’s harder, however there are still plenty of non-financial actions your charity can ask prospects to take (see box for ideas).

It’s all about choosing the right first step for the person, your organisation and your cause, whether you’re saving animals or doing medical research. Not surprisingly, the richer and more rewarding and aligned you make the journey from that earliest engagement, the more likely your supporters are to become donors.

Take outs

  • Make it easy for people to connect with you at the first touch.
  • Make subsequent communications relevant to your prospect, consistent and rewarding.
  • Convert to donations when you both know each other a little better.

Can non-financial actions make people better donors?
Fundraisers try hard to retain donors and increase the value of their gifts. Could asking them to take a non-financial action help achieve these goals too?

Kerin Welford, the Fundraising Manager at Assistance Dogs Australia, says that while her organisation would never ask donors to sign petitions or write protest letters, she has seen success from a survey mail pack which asked them for their opinions and included a soft financial ask.

“We received higher than expected donations and achieved an ROI of 2.65,” she says. “And a small percentage of those who take non-financial actions go on to become more involved. We’ve had volunteers who have become major donors and confirmed bequestors, for example.”

So if your charity isn’t already doing surveys with a donation ask, this could be worth trying. Ditto opportunities for donors to personally connect with your mission in a way that’s not just financial, such as through invitations to special events, site visits or field trips. You could try asking high value supporters to call and discuss a specific issue with someone high up (or better still, someone interesting!) in your organisation.

Not only will getting to know your supporters provide you with valuable insights and feedback you can use to enhance your donor service. These improvements, and every occasion that donors interact with you, will help to deepen their loyalty and the likelihood they’ll keep giving.

People who give money also tend to be generous with their actions, says Amnesty’s Jeremy Bennett, who notes that “our financial supporters tend to be better activists; they take more actions, on average, than our activists … They’re looking for other things to do to help.”

Take outs

  • Test and track combinations of financial and non-financial asks. It will help shape the best way to engage supporters for a greater overall outcome.
  • ‘Like’ to ‘will leave bequest’ is a massive leap. So break it down into little steps.


Non-financial engagement ideas

There are plenty of ways to engage warm and cold audiences in ‘activism’ even if this isn’t part of your mission:

  • Survey (one of the best I’ve seen had one question)
  • Petition
  • Contact a politician (local, state, national) or other authority
  • Contact the media
  • Volunteering request/opportunity
  • Mass event participation
  • Boycott a company/event
  • Change behaviour
  • Hand raiser
  • Bounce-back/message of support
  • Open form feedback
  • Invitation to limited-numbers event
  • Competition
  • Giveaway/premium
  • Share a message with friends (e.g. Facebook or other social group)
  • Anything else people will do and ideally you can track – be creative!

Mary Anne Plummer is Creative Director at Pareto Fundraising, helping charities including Assistance Dogs Australia to create powerful fundraising communications. Before that she spent nine years writing copy for the corporate sector at some of Australia’s best known advertising agencies

This article was first published in Fundraising and Philanthropy Magazine 2017

Is face to face fundraising really worth it?

Before I start I should make two confessions:

1) I am biased – my companies analyse data, help donor retention programs, acquisition, legacies and major donors and regular giving conversions by phone, mail and online, mostly in NZ and Australia.  I don’t ‘do face to face’

2) I am not very good at face to face fundraising. The photo below is of me, as fundraising director at Mind (a mental health charity in the UK) giving it a go in London in the late 90s.  I was not very good.  The guy I am chatting to was French, and we couldn’t get foreigners to sign up.  But we had a good chat.

Having said that, I will be as unbiased as I can, just concentrating on the data.

What data? Every year, loads of charities* get together to share information so that they can understand the market and maximise efficiency.  This is an amazing collaboration.  They do not share any data that could compromise individuals privacy, but they are able to look at millions of transactions.

We look at a decade of data – and the volumes are huge.  This is truly how people behave, not how they say they behave.

First thing first – statistically speaking, with the exception of media friendly disasters (tsunamis, floods, fires, earthquakes and other tragic events), people don’t give without being asked.  They say they intend to, but they just don’t.  If fundraising charities didn’t ask, they would save an absolute fortune on salaries, post, creative fees, print, TV ads, phone calls… but would save even more as they blink out of existence.  The good they do wouldn’t be done.

One of the greatest fundraising channels in the history of fundraising is ‘face to face’.  By this I mean those dudes that knock on your door or chat to you on the street or the shopping mall and ask for a regular gift.

Face to face has achieved something that no other channel has – getting younger people to donate in strategic numbers.  By younger, I mean under 60. Most donors are over 60 – but face to face has an average age of signups less than 40.  This is remarkable, and the volumes have been huge.

Like any high impact marketing product, face to face is not without controversy.  It is, literally, in your face. Constantly reminding you of the inequities of our society.  Also, there are occasional reports of rude or pushy canvassers – though these are rare now, given that they are pretty much summarily dismissed if they get complaints. Most canvassers passionately believe in the cause, and love the idea that they are able to make a living, fund their travel or whatever – and do good at the same time.  Some canvassers may work for several charities over a period of time, exposing them to different causes.

But it is expensive – travel, salaries, materials, databases, follow up systems, SMSs, email, videos, welcome packs, welcome videos, admin processes and systems, stamps… none of these are free.

A while back we looked at ‘in house’ v ‘outsourced’; on the face of it, it looked like in house would be cheaper and have more passionate canvassers.  The study found that in some cases, that was true but on balance, over five years, there was little in the overall net result for the charity whether it was in house or out of house.  Given the challenges of setting up in house (different pay structures, space, getting and retaining direct sales management expertise etc) most charities actually out source.

Like any marketing, expensive doesn’t mean bad – the most important thing for a company is “What is our profit margin?”  Charities don’t call it that, but they need ‘profit’ because this funds their good work.

But does it work?

Firstly – what is ‘working’?  For me, it has to make a net return in a reasonable time frame and not cause damage to the  brand of the charity.  These are relatively easy to measure.

Net return is obvious.  But damage to brand is harder – in my view, looking at a charity’s impact (the work it does) and its overall income – beyond face to face, and over many years – are the best objective measures.

Also, ‘working’ would be influenced by how well it ‘works’ compared to other methodologies, such as digital, mail, phone, outdoor, TV, radio etc.

So, let’s start with volume.  Of 230,000 donors acquired in 2012 by the charities in the study a whopping 90% were through face to face. And face to face provided the largest growth too.  Gulp.  In the chart below ‘RG’ is regular givers – ie people who sign onto an automatic debit, usually monthly.

This is so great, that if you are serious about growing regular giving, you kind of have to do face to face.

But do these donors stay with you?

Looking at 2006 to 2011 recruits of new donors we see that, after one year, more than half are still giving – about 57% of new regular donors to all the charities doing face to face, were still giving 12 months later (the ‘attrition’ – number of people who stop giving – is about 43%, hence retention is 57%).

Imagine if you worked in a company where you get people to give you a monthly debit in return for, well, nothing (except a good feeling), and over half were still giving a year later.

You can see as volumes increased over these years, attrition has increased the increase is in line with what you would expect from larger volumes.

Remarkably, of the people who lasted a year, only 15-17% would drop out in year two and 5-10% per year afterwards- within the realms of ‘natural attrition’

But how does this attrition compare to other methods?  Well, because only a small proportion of the donors acquired in 2011 were from sources other than face to face, it is best to group them together to compare against face to face.

You may have noticed I have written face to face in red.  Now I am going to introduce non face to face donors.  When reading, the word ‘non’ can somehow disappear, so I am going to highlight that phrase blue.  This will help I promise.

What we see is that 79% of the non face to face donors were still giving in year two – much  more than the face to face acquired donors at 57%.  You may notice that subsequent years have little difference between face to face and non face to face.

It seems obvious – non face to face is better than face to face! Yaay!

Before you charity fundraisers drop plans for face to face and come rushing to me for help with non face to face acquisition, let’s take a breath first and explore some more.

Firstly, why does face to face have worse attrition?

Any trained direct marketer will tell you that if you increase volumes of customers, you tend to decrease average positive indicators dramatically, so that will account for much of it, but there are also other factors.

I can’t produce data about those signing up because they feel guilty, those who simply can’t say no face to face, those who fancied the canvasser or those that got in trouble when they got home and their partner kicked their arse.

But I can produce some data which explains some of this difference.

First is volume – higher volume, worse attrition.

Second is age.  I am sorry to tell you this, but generally speaking younger people don’t give,  Like I said earlier, face to face has got younger people giving in strategic numbers for the first time ever.  But when they do give, they are not as ‘loyal’ as older donors.

Breaking down face to face donors by age, we see about 130,000 of the 2011 recruits were under 44, and less than 50,000 over 44.  But those younger people were much more likely to stop giving.You can pretty much ignore the attrition of the 75+ donors, there are only a few hundred of them, so not statistically useful.

You can see half of the 90,000 under 34 year olds stopped giving after 12 months, but the truly remarkable thing is that a huge volume (45,000) Australian young people have entered into an ongoing relationship supporting a charity in 2012, after supporting it in 2011.  This had simply never happened until face to face was introduced around 2000.  How much better is the world going to be when these donors actually get to donor age!?

Ok, you believe me – face to face works in terms of number of sign ups.  But we need money, not just sign ups, and you probably still prefer those lower attrition non face to face donors.

The chart below shows the massive rise in income from 2003 to 2012.  For all you digital types who think digital can save the world – I think you are right, but not yet.  In fact, not for a very long time – look how much it has grown after tons of effort from the charities.  Online does work, but not on a large scale across many charities.  Yet.  (Happy to chat about some of our amazing online fundraising successes – but they are extraordinary, whereas face to face success is the norm).

Clearly, the big income driver is face to face.  And of the 70 charities in the study, not all engaged in face to face.

Another way of looking at the quality of a relationship with a donors is to look at the proportion of people who stick with their payments but actually increase their contributions.

The chart below shows that face to face donors are about as likely to upgrade over the years as any other method.  Phone is better, but if you consider that upgrading is best done on the phone, you can imagine the contact rate of people acquired by the phone is much better too; we know they are phone responsive.  If anything, it is remarkable the direct mail and face to face are so close to phone acquired donors upgrade rates.

Online upgrades look good, but it is just a big handful of donors comparatively speaking.

So face to face gets the volume, has good retention (but not as good as other regular giving acquisition methods), has good upgrade rates and provides lots of gross income.  But what about the net?

We know that the five year value of face to face donors varies by charity but averages around $760.  The average five year value of non face to face donors, mostly due to better retention, is over $900 –  a big difference.  Again, non face to face does better.

Average acquisition costs are estimated to be around $300 for face to face donors, and $350 non face to face, so non face to face seems to win again (yaay!) but the inconvenient truth is simply the volume – no matter how much money you throw at non face to face, you simply can’t get volumes to compete with face to face. Yet.

Either are bloody good – that is lots of extra revenue for the charity that would otherwise not exist, and that, after all, is the goal of the fundraiser.

Of course, the accomplished marketer knows they need a balanced portfolio, and this is the correct approach.

But what of brand damage?  Seriously – Greenpeace, Heart Foundation, Amnesty, World Vision, WWF, Red Cross, UNHCR, Oxfam, Cancer Council NSW…. damaged brands? Come on, get real! Most have been doing this for many years with no negative impact on brand, donor relationships or their ability to do good.

Is face to face fundraising worth it for your charity?  Yes, but only if have good, tight automated admin, a need for money, good communication systems and a great monthly proposition.