Are charities killing their own brands?

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I fear for the third sector. Charities are among the organisations hardest hit by government cuts, and now the industry’s own watchdog has delivered some cautionary figures on how they target their marketing communications.

According to the annual report of the Fundraising Standards Board (FRSB), complaints have increased significantly in the past year. One-sixth of them are now related to data management issues, such as contacting dead people or failing to recognise that consumers have opted out of communications.

Worse still, direct mail accounts for more than half of all complaints. Perhaps the most salutary warning is that these complaints increased by 86% year on year in 2010, despite a 27% decrease in the volume of messages sent.

As a proportion of people approached, the level of complaints is not in itself too worrying for these organisations. But at a time when regular donors – and therefore good data – are becoming more important to charities’ financial health, it is a cause for concern that their data management is getting worse, not better.

A good database of supporters and prospective supporters is now a charity’s bread and butter, as Marketing Week wrote in January. Research by fast.MAP underlined the phenomenal loyalty of regular donors, with nearly half of those surveyed saying that they have supported their chosen charity for at least ten years.

This is undoubtedly why so many voluntary organisations are employing so-called ’chuggers’ (or ’charity muggers’) to solicit the personal details of passers-by on the street. Charities must believe it is effective in signing up donors, but it is also losing them a lot of goodwill from the general public.

This method of fundraising received the highest number of complaints as a proportion of the donors acquired. These are not included in the aforementioned figure for data management complaints, but they are surely relevant in dictating charities’ data strategies.

A bad one will seriously damage a charity’s brand in the eyes of those most important to the organisation – the consumers who have cared enough to show an interest and hand over their data. Charities can ill afford this at a time when funding from local and national government is disappearing.

Of course, charities deserve sympathy. Maintaining a clean database and working out how to use it effectively is a costly and time-consuming business – probably one that seems like a luxury when budgets are tightening.

Maybe some charities believe the costs they avoid by cutting back on data management and the donors they do attract by less popular methods make up for anything lost in the perception of their brands.

But the cost of acquiring supporters is rising, and payback on that investment can take years. If bad data loses you a donor, or someone who might otherwise have donated, it could be a long time before you can recover that lost income.

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