Vitriolic
attacks on the ethics of ‘chugging’ continue to
plague tabloid headlines and charity fundraising techniques
are under greater scrutiny than ever before. The tsunami and
Asian earthquake early last year raised the profile of fundraising,
and left charities scratching their heads over how they could
sustain public giving levels, vastly increased by the two
tragedies, into the future.
How to get the balance right between recruiting new donors
and maintaining the support of existing ones is the debate
of the moment between fundraisers. And in the current climate,
the clamour for new donors seems to be taking the lead.
Alan Clayton, managing director of third sector fundraising
and communications consultancy Cascaid Group, said the rising
cost of recruiting a new donor was leading to concerns that
the marketplace for attracting new givers was saturated. Not
true, he told delegates at the Institute of Fundraising’s
national convention last month. Such concerns are unfounded
as the number of donors being recruited is actually increasing.
So what is sparking such fears? With the voluntary sector
a growing force in British society, competition between charities
for limited resources is becoming stiffer. Not only are charities
competing against one another, but a new group of organisations
are entering into the mix. “We’re seeing a huge
number of people who are traditionally grant funded trying
to get into donor fundraising,” says Clayton. This new
school of fundraisers has also expanded to embrace healthcare
providers and, aptly, universities.
The way people give is also changing. “The old market
appears to be saturated but new markets are appearing,”
Clayton says. Traditional giving methods such as cash donations
are phasing out, but new opportunities such as online fundraising
are offering charities a chance to capture fresh blood, and
take advantage of the renewed enthusiasm for charity work
following the two major natural disasters.
The marketplace is now more fragmented, with committed giving
the driving force in fundraising but other methods remaining
popular. Until now, the perception has been that new donors,
such as those signed up to internet giving, are not as important
as the traditional donor. But now this can change. “The
new markets are significant enough to be taken seriously and
strategically,” Clayton says.
Charities’ focus on recruitment, ensuring fundraising
campaigns are new and innovative and ensuring committed giving
is always on the increase, may be a result of these changes.
But Clayton warns it is not enough just to boost supporter
numbers – longer term donors must be maintained.
“I have seen people whose cash income flows are collapsing
faster than their committed giving flows are growing,”
he cautions. “I don’t think anyone can afford
a strategy that’s purely cash or committed giving. Recruiting
into silos is more cost effective, but integrated donors have
a higher lifetime value.”
Using the web to recruit a new generation of donors could
also be the key to ensuring that those donors stay the course
and continue giving over many years.
“Retention should be a focus in every donor recruitment
campaign,” says Rob Daly, fundraising manager at the
NCVO. “It can cost up to 10 times as much to recruit
someone than it does to retain them, and over the long term
a retained donor who has had loyalty to the organisation tends
to increase the amount they give.”
Using IT can provide the flexibility that donors want, encouraging
their sense of commitment to a charity. Donors can give online
to supplement committed giving, and learn about other opportunities
for them to support the charity’s cause, such as volunteering.
This approach importantly makes better use of resources allocated
for recruitment while having a positive impact on attrition
rates. “We have a responsibility to minimise cost. I
think we have to look at the ways in which we can reduce it,”
Daly says. “We have to ensure that we’re not wasting
money.”
He says charities should also remember that while spending
money on recruitment is vital, it is not a “quick fix”.
It can take between three and five years for a big spend to
pay dividends. The calculation of a donor’s lifetime
value can often justify a large spend on recruitment and bolster
support for a focus on retention. As these new donors are
usually committed givers, their funding is of a higher value
to charities than other project-related cash gifts because
they are unrestricted.
Richard Brooks, head of fundraising at WSPA, says the charity’s
drive for new donors over the last few years had led it to
neglect its cash givers. It had also failed to keep in contact
with long term donors, and had previously not attempted to
ascertain why donors were taking their money elsewhere.
“We need to be able to control the number of people
that cancel,” Brooks says, acknowledging there is more
that charities can do to maintain a longstanding and profitable
relationship with supporters. “We know that 25 per cent
of charities don’t acknowledge the donor’s first
gift, and very few of us try to learn about donors’
motivation for giving and do something about it,” he
says. These both present considerable opportunities.
Brooks says WSPA has now shifted its focus from recruitment
to an “investment in the future”, allowing fundraisers
to concentrate on retention and encouraging its existing donor
base to shift over to committed giving methods where appropriate.
Maintaining relationships
A strong relationship between donor and charity can be maintained
through very simple measures. Stewart Crocker, director
of development at the Soil Association, says “an increasing
emphasis on personal communication” is the key.
Permission based communication, where donors are able to
choose how they would prefer to be contacted and at what
time, is one way to ensure regular contact that is not unwelcome.
Top and tailing all correspondence personally with a genuine
signature can also help the donor to feel a valued part
of an organisation.
Smaller charities with less populist agendas are more likely
to have successful retention strategies in place, careful
to hang on to the donors they have spent much of their time
and money on recruiting.
“There are some charities that have vast armies of
donors that are very sympathetic to their cause. The retention
element of their strategy is not as good as it could be
because it’s easy to recruit them in the first place,”
says Megan Pacey, director of policy and campaigns at the
Institute of Fundraising.
Larger charities with loyal supporters should approach their
donors and ask why they have committed to the organisation,
Pacey says. The answers will help to improve both recruitment
and retention strategy.
“Donors are far more sophisticated than they used
to be,” Pacey says, echoing the fears of the majority
of the sector’s fundraisers. “They expect to
see bang for their buck.” Unsurprisingly, they also
expect to be cared for once they sign up, especially for
regular donations which they realise are critical to an
organisation’s sustainability and continuity.
“The whole issue is about striking the right balance
and that’s different for every single charity,”
Pacey concludes. Miscalculate the delicate balance between
donor recruitment and donor retention and both will suffer.
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