British Fundraising Is in a Crisis – of Courage

As a fundraiser from the UK it  has been really upsetting for  me to watch how many UK fundraisers have been reacting to the negative press that is focused on charity fundraising.

Fundraising consultant Mark Lawson told me the charities’ reactions were mainly  “…lots of people saying ‘I told you so’ rather than a concerted effort to respond.”

I haven’t seen a lot of emphasis on the data. And furthermore, I’m worried that data quoted is often misinterpreted.

The charity sector has seen huge growth

The sector grew at a huge rate over the past twenty years, and this pace is slowing.  Some claim it has stopped.  Although a few charities are enjoying great growth, it certainly isn’t like the olden days any more.

Some of the more established charities have struggled for growth, for example NSPCC. Their reason was ‘because of the difficult economic climate and no legacy growth’.

My old employer, Cancer Research UK has also struggled to continue growth.

These two biggies had grown so much, it is hard to imagine who hasn’t been asked to give to them.  This is not a crisis – but a symptom of success.

The real data about donor loyalty

I’m passionate about using data to drive strategic fundraising decisions. So I had a look at About Loyalty – research by Professor Adrian Sergeant, data company Wood for Trees and long time fundraiser Roger Lawson.

Their research showed that British donors are actually a pretty satisfied bunch.  But that’s not what you’re reading in the UK press.  Well it’s not really much of a story is it?

They looked at commitment, satisfaction and trust and in all categories more than 85% of donors scored four or five (and around 65% scored five).  Imagine any other industry with that much loyalty!

 

Donors are committed. About Loyalty Research.

It is not all good news, for example the research showed that ‘average donor lifetime’ was shrinking.  Now 4 years and 10 months.

New fundraising methods

Mark Phillips of bluefrog told me “The leap in to face to face and text to give prospecting has created a generation of donors who don’t really care. Who switch from one organisation to another (or cancel direct debits as and when they choose).”

This would indeed contribute to reducing average life time value. But face to face and text prospecting have brought in a lot of new donors.

Age and donating

We know from data that age is the most important variable in retention.  Channel is also important, but drilling down we see the big influencer within channel is age.  For more on age, see the SOFII featured 101 article You just gotta love older people?

UK fundraising is pretty saturated at the older age brackets. Channel development (like face to face and SMS) is bringing in many new, younger donors.

I haven’t the UK data on this, but I believe it will be similar to ours in Australia (though we are smaller).

We also see rising attrition in Australia. For example, attrition of donors acquired by face to donors increases as the volumes increase. And the attrition is always worse for younger donors.

Increasing volumes and attrition of Australian monthly donors acquired by face to face, by year and age bracket.

 

From our Australian benchmarking study of 70 charities,  the value of the 2013 acquired F2F donors was about $44m in year 2014.  But the value of 2008 donors in 2009, despite lower attrition, was about $23m.

Second and third year attrition is relatively stable, so the ongoing value of the 2013 donors is much greater than the 2008 donors too – because more lasted more than a year.

What’s next?

The Commission on the Donor Experience should be a great initiative, and I hope they have access to, and understanding of data such as the examples above.

The Commission on the Donor Experience. Well meaning, with aspirational mathematics!

I hope they also defend charities and techniques unfairly dragged through the press – the way the Charity Defense Council is doing in the USA.

I’m worried about good fundraisers and good fundraising organisation sacrificing the right things to do because of the negative press reports.

Here are just a few things that I think will help.

Every good fundraiser knows they should invest more in building relationships with key donors.  Invest in mid value donors and legacies.  Write donor centric copy. Look at what your data says about your donors and use it to make decisions. Talk to the donors that want to talk to you.

But don’t stop doing successful fundraising because some people don’t like it and are blaming good fundraising for the bad press.

PS

I don’t think I’ve mentioned mid-value donors and legacies enough. I think it is really important to work closely with donors on this level. That’s why I am working on a load of online learning sessions with Tom Ahern and Roger Craver over the coming months.  Details here.