Heads control heartstrings in appeal stakes

Research seen exclusively by Marketing Week reveals that charities must demonstrate a return on investment if their fundraising campaigns are to persuade the public to give generously.

The traditional guilt-inducing appeals for help that dominate charity advertising are no longer engaging the public. New research reveals that donors now want to see how the organisation’s work has an impact.

Two reports from marketing consultancy DMS – “Fundraising in A Recession” and “Fundraising In The Age of Accountability” – claim that people are more likely to donate if the charity can convey the difference its work makes, rather than making demands on people’s consciences.

Charitable giving in 2008/09 fell by a record 11% – a £700m drop since the previous year, according to figures released by the Charities Aid Foundation and National Council for Voluntary Organisations in September.

But the economic dip has affected different demographics in a variety of ways. For example, men are less likely to reduce their spend on charity donations than women; and givers of larger amounts are less likely to reduce the level of donations spend than those who give smaller amount

DMS has tracked 1,600 people in monthly intervals since November 2008 to see how they plan to increase or decrease their charity spend.
The results confirm that consumers are more discerning than ever before about what they spend their money on. By September 2009, 35% claimed not to be interested in giving money to charities they didn’t already support – up from 25% in November 2008.

Around 12% also said they would no longer be interested in donating to charities they already support, up from around 7% in November 2008

DMS senior planner Steven Dodds says people have become less emotionally driven to support a charity and have come to treat a donation more like a basic financial transaction. “The overall message – as in commercial markets – is that the notion of value for money needs to be brought to the fore in propositions to potential donors,” he says.

“People want a greater sense of belief that their money really will make a difference. Giving to charities should be a highly inspirational, positive thing to do, but it falls well below that experience on many levels.”

Dodds says this is largely because the progress made by charities on dealing with issues isn’t communicated efficiently to the public and existing supporters, who might receive newsletters but still have a limited view of what their donation can achieve. The top two reasons people give to charity, according to DMS, are because a high proportion of funds donated are spent directly on the organisation’s work and that it is clear the donation makes a difference.

While charities typically use 80% of their funds to carry out their actual work, Dodds says the public thinks good causes only spend 50-60% of the funds they receive from the public on achieving their objectives.

“This is a barrier to giving because people are concerned what they give is not working hard towards what they want it to,” says Dodds. “Donors want to buy into the things that charities achieve but they need some help being taken on that journey.”

Dodds says charities should use more creative visuals in their advertising and solid figures to demonstrate exactly how much certain help costs. He gives the example of Smile Train, a charity that conducts cleft palate correctional surgery in developing countries, which tells donors that a single operation costs $250 (£156).

DMS also recommends using video as a marketing tool to show people how real-life recipients of the charity’s money are gaining from the support, rather than simply pleas for donations. Dodds points to a project that DMS worked on for the Association for International Cancer Research, where mailing out a video to selected donors inspired sufficient donations to more than cover the costs of its production and distribution.

Such videos can also be distributed effectively online where they can gain a viral following, along with the use of social media to build engagement with supporters.

In October last year, the Thai Children’s Trust launched an online-only campaign that featured videos of two Burmese refugees who were able to rebuild their lives in Thailand with the help of the charity. Voluntary Service Overseas also uses “virtual volunteer sponsorship” schemes that allow donors to sponsor a volunteer and follow their progress via regular blogs.

The research also shows that certain types of charity marketing have stood up better to the recession than others. The method of giving least affected across last year was the prize draw; with around 16% of people now saying they would not be interested in supporting a charity this way, compared with around 11% back in November 2008.

Dodds suggests this is a promotional tool that will become even more popular this year as charities seek to re-engage with demographics that might have less disposable income than before and are less emotionally motivated.

“It’s a break from the needy approach that we are so used to seeing from charities, so it stands out,” he says. “The segment it appeals to doesn’t necessarily want to connect with big issues.”

Despite this finding, Dodds says more needs to be done to understand what other marketing tactics will appeal to potential donors. Will there be opportunities in 2010 to lift levels of giving among men, who are less likely to reduce their charity spend than women?

Dodds says this gender bias needs to be considered and charities should also consider tailoring a significant portion of their marketing to higher value donors, who have been shown to be likely to increase their contributions. He says/ “High value donors want to be asked for greater support as they may have a sense that the recession is a difficult time for charities.”

After 18 months of cutbacks on their personal spending, it appears consumers need more than tears and sad faces in charity advertising to part with their money. In a parallel with marketing itself, demonstrating return on investment is ultimately the key to achieving prosperity and success.

TheFrontline

WE ASK MARKETERS ON THE FRONTLINE WHETHER OUR ’TRENDS’ RESEARCH MATCHES THEIR EXPERIENCE ON THE GROUND

Jonathan Cook

Product development and innovation manager, Action for Children

We have made a strategic decision to aim our fundraising marketing at a different group of people. We have done street recruitment, which typically attracts people in their 20s and 30s who haven’t got that much money. To counter that, we have been targeting their parents, who are in their 50s and 60s and respond quite well to direct mail appeals. They make significantly higher donations than those 30 years their junior.
When it comes to donating to charity, people are becoming more like consumers buying white goods. They have become pickier and want to see the impact of their gift. The sector is moving this way and organisations that don’t move with this shift are going to struggle in the next ten years.
It’s a simple business proposition, with people going to choose the charity with the higher proportion of their funds going directly to the cause. Those who can find ways of cutting costs so that as much money goes to the cause as possible will have the best sales pitches.

Mike Flynn

Head of direct donor marketing, NSPCC

We have always tried to show our donors where their money is going and use enewsletters and a monthly magazine featuring case studies to highlight our work to donors. We look to balance the number of awareness appeals with those that ask for money. We are also looking more into digital means of interaction, such as sending a text message to a donor to inform them that their support has helped a certain amount of children.

Emma Gilbert

Head of direct marketing, Cancer Research UK

In the last 18 months, we have changed our messaging to highlight that we can’t fund all the cancer research projects we want to because there are now more quality research projects out there and our income needs to grow to support that.

We have tried, with varying levels of success, to explain our impact better. For example, we tell people that we have contributed to 19 out of the 20 drugs now available to treat cancer patients. And we fund 50% of the cancer research that takes place in the UK. We are becoming more sophisticated at delivering this message and it’s part of our longer term strategy.

But cancer research costs a lot of money so it’s not as easy for us to say what someone’s £40 will do. We can tell people about more specific projects, such as what research a group fundraiser of £20,000 would fund.

We are also being more vocal about delivering the message that 80p in £1 goes direct to research. But we don’t want to over-claim what we do and be too bullish.

Jane Bond

Individual giving manager, Cats Protection

We’ve witnessed negative changes to our income [during the recession], but we have always tried to be extremely reactive by analysing and monitoring our income generation.

We have started using clear cases of support in our marketing messages, which has been extremely effective so far. You always need to have a good reason for asking someone to support the organisation.

I can understand why people want to know the difference their donation makes, so we are looking at a number of different tools, such as digital products to acknowledge donor support. In 2009, we introduced a prize draw programme, which we will integrate into our overall fundraising.

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