Why charity will always begin at home

As the government prepares to reduce funding and the nation continues to tighten its belt, charities are under increasing pressure to find ways of attracting donors.

CHARITY

Attracting long-term supporters will be crucial to charities as they suffer public funding cuts in the coming years. That is especially true in the light of new research, seen exclusively by Marketing Week, which shows that donors are becoming more loyal. Nearly half (48%) of supporters say they have been giving to their charity for at least ten years, up from 47% last year and 22% in 2005.

The study, carried out by fast.MAP, shows that remarkably few of those who give to charities allow their support to lapse quickly, with 70% having donated to their chosen cause for five or more years and 90% for two or more. More individuals (55%) donate on a regular basis than ad hoc (45%) – whether it is monthly, quarterly or annually.

The loyalty of donors is an invaluable asset to charities, says fast.MAP managing director David Cole. “I cannot imagine many other sectors that have that degree of loyalty, which is why charities are endlessly trying to find new ways of attracting donors.”

To benefit from the generosity of these individuals, however, it appears that charities have an important task of persuading them both that the causes they support are worthwhile, and that the money they donate is being used effectively. The former is by far the most popular reason donors give for continuing to support a charity, mentioned by 56% of respondents, while being unconvinced of the latter is the second most frequently cited reason for stopping. Worryingly, this answer – “It wasn’t clear to me how the money was helping” – is given by 22% of respondents as a reason for people ending their support compared with 15% in 2009.

Predictably, given economic circumstances, the top reason for ceasing donations is being unable to afford it (45%, down from 51% in 2009), highlighting that charities need to provide compelling reasons as to why individuals should carry on giving. Cole says/ “People are being very focused. They will give if they believe it is going to support a charity they care about, but if they do not believe it is going to support and add value, then they will just stop.”

He adds: “I do not think it is a lack of loyalty. They generally have less money around, so charities have a responsibility to make sure they very clearly communicate their raison d’être.”

However, the research shows it is more difficult to persuade someone without experience of a particular charity to sign up to become a donor. Friends and family members who have been helped by or have supported a charity prompt many people to give regular donations. But the most popular reasoning for giving to a particular charity is that “I have always wanted to help this particular cause” (41%).

Disaster coverage
Few people credit any one communications medium with prompting their donation. The most popular of these for encouraging support of a charity is media coverage of a disaster (12%), so charities that piggyback campaigns off such exposure could benefit by acquiring new donors.

The single best-performing marketing channel is direct mail, with 10% saying they have started to support a charity in response to a door drop, and television and radio appeals follow closely behind (8%).

Although “chuggers” – charity muggers or street workers, depending on your point of view – have become a source of annoyance for many, they do appear to elicit some positive response, with 5% of survey respondents saying that being approached on the street has motivated them to sign up to become a donor for a particular charity. Yet a BBC investigation last year revealed that the private fundraising companies employed by good causes are often paid £100 or more for every signature they receive.

Social media, however, does not show any signs of being a popular incentive to support a charity, with only 1% saying internet-based campaigns have motivated donations, perhaps indicating that charities are not using the likes of Facebook to best effect.

The study also shows that charities need to be careful about how they communicate with consumers. The only ways that significant percentages of supporters say they would be happy to be contacted are direct mail (30%) and email (23%). Mobile phone calls, text messages, home phone calls, Twitter and other social media sites each received positive responses from just 1% of respondents.

Neither are charities given any special treatment by people enrolled in the Telephone Preference Service (TPS), which allows them to opt out of unsolicited telemarketing calls. Asked if they would be happy for a charity to contact them if it were not illegal, 88% of those enrolled still answer in the negative. This indicates that there is little appetite to make charities exempt from the restrictions of the TPS, and indeed 71% of respondents say that if they could request calls only on specific subjects, they would still register to prevent charities contacting them.

Cole says the results show that telephone marketing is “to be avoided if at all possible”, unless charities know for certain that individuals are happy to be contacted that way. “Many use it as a bit of a battering ram. It is a blunt, intrusive instrument, which works occasionally, but nonetheless we see in the reactions of consumers that they are not very happy about it.”

The study’s findings indicate that charities need to take a long-term approach to the way they market themselves, suggests Cole. With the public’s willingness to give seemingly driven by a deep, lasting and personal understanding of what the organisation does, Cole argues that charities need to invest heavily now to ensure they build an emotional connection with the public to guarantee financial security as government support is withdrawn.

Marketing plan
He advises: “Try to identify where your regular givers are going to come from, and make sure that as a charity you can come up with a business model or a marketing plan that justifies significant expenditure to acquire these very long-term donors.

“If you are scraping for that budget on the basis of a one-year payback, it is bizarre when we look at donors who are giving for decades in some cases.”

He also warns, however, that charities starting to invest now in signing up regular donors will have to wait before the returns fill the gap left by state funding. “It takes a number of years before you can pay back the investment of acquiring a customer, so some charities in the short term might have problems if the [government] funding disappears.”

More effective, Cole argues, is the strategy of creating advocates who will give advice to peers. “The final decision-making process is about getting a recommendation from a friend, colleague or associate,” he says. As with public attitudes to charities in general, people seem to be most comfortable when they have information through personal connections they know they can trust.

the front line

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

cathy

Cathy Ferrier
Director of supporter marketing and fundraising
Oxfam

Loyalty is very high, and that has been the picture that we have experienced in the recession. The difficulty in this market is acquiring new donors, because clearly it is quite a big commitment if you do not know much about what the organisation does. The last thing that people want to doin this economic climate is take out a regular gift.

It is very valuable to us to have those people that give regularly, because you can forecast your income better. You can make sure that, at the point of a disaster, you know that you have got streams of income that are safe and you know that you can deploy money straight away where it is most needed.

Once we have got a long-term relationship with a donor in place, then we can start sending them greater details of where their money has gone.

We are trying to move more and more to email and digital media, firstly because it is more efficient for the charity, and secondly because it is unobtrusive for the donor. Email works, especially if you get good at it, and that is a skill now. We try and use the telephone as little as possible and make sure that people do not have a preference against it, but it does work.

paul

Paul Farthing
Director of fundraising
Age UK (formerly Age Concern and Help the Aged)

Across the sector, charities are finding it harder to recruit and retain regular givers. With the average cost of acquisition across all channels rising, further investment into sustaining and developing existing relationships is crucial.

In the current economic climate, it is clear that charity supporters are under increasing pressure to cancel a direct debit or two – and it is particularly tempting if the supporter is not particularly engaged with the cause. If organisations are to encourage supporters to donate, then allowing people to engage with the charity, its campaigns and its cause is essential. The great reach and relatively low costs of online activity opens up new opportunities to allow charities to do just that.

Charities need to demonstrate flexibility in the way they manage relationships. Providing the scope to reduce a monthly gift – hopefully temporarily – or even offering a payment holiday are effective ways of showing supporters that despite the financial difficulties they might be facing, their support is still valued.

The historical success of face-to-face fundraising is testament to the fact that, despite the range of technological tools available to marketers, it is often people who are most effective at communicating the vision and passion behind a charity.

julie

Julie Waddup
Donor marketing manager
Alzheimer’s Society

Our current average direct debit donation is £75 per annum and 85% of our regular givers give monthly. More studies are urgently needed to help charities better understand changing markets. What we do know is that people give more when they can see the clear and tangible impact of their donation. Cash appeals are certainly a great way of generating unrestricted voluntary income.

Alzheimer’s Society relies on a mix of channels to reach different people at different times and we use every opportunity to reinforce that a regular gift is the most effective way to support us. A timely thank you is very important to build loyalty and you should always remember to check how people like to be communicated with.

Charities need to make sure that people feel their donation is making a difference and that they are updated regularly on the charity’s work. We have a bi-annual supporter newsletter that keeps donors up-to-date with what is happening at the organisation and how we are leading the fight against dementia. When supporters want to cancel their regular gift there need to be mechanisms to offer them a payment break or to reduce the amount they give. This is where it is vital that high-quality supporter care and robust processes are in place.

 

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