Which
do you want first, the good news or the bad news? It’s
a question I’ve been asking myself almost daily since
deciding to review World Emergency Relief’s (WER) approach
to fundraising and, in particular, to direct mail.
Over the past decade we, like many other charitable organisations,
have adorned our fundraising material with hard-hitting images
of those we hope to help, often at their lowest ebb. The type
of images are now familiar to everyone – big eyes in
gaunt, desperate faces looking accusingly into the camera
lens, their hopelessness and bewilderment etched into their
very beings.
Images like these are staple fundraising fare in the international
development sector in which WER is rooted, but the ‘guilt
ask’ trend is equally prevalent across the charity board,
from animal welfare to health organisations – it has
become common currency. But when choosing a ‘story’
for a fundraising appeal, is it now the case that anything’s
OK as long as it brings in the money?
When I first came into the charity sector after many years
in business I was staggered when a leading direct mail marketeer
told me that you have to keep it ‘down and dirty’
if you want success. I was also told not to give too much
good news to donors otherwise they would assume their money
was not needed urgently and so wouldn’t respond.
You can see how easily our ‘bad news’ culture
has evolved. It’s long been considered that this approach
was the most effective route to provoking donors – in
particular first time donors – into an immediate response.
In the short- term it’s possible to generate a good
income. However, times have changed, and in my experience
consumers have become much more sophisticated in their responses.
They are aware that charities’ bad news stories are
being used to manipulate them and so are becoming increasingly
immune to images of pleading faces and visible ribcages.
And when they do respond to an appeal, they have high expectations
of the receiving charity.
The psychology of giving
According to Dr Tom Farsides of the University of Sussex,
in his report on Charitable Giving and Donor Motivation
for the Economic and Social Research Council (ESRC), donors
today are aware that it is a buyers market and can walk
away from a relationship with a charity at any time. Even
when they stay, donors are likely to remain suspicious and
constantly on the alert for evidence that charities are
taking advantage or ‘neglecting’ their needs.
Farsides goes on to say that unless relationships with donors
improve and ways can be found to open new markets, recruiting
and holding on to donors is likely to be a zero-sum game
– in that one charity will increase support only by
another losing an equivalent amount.
Needless to say this isn’t good news for small and
medium-sized charities. We haven’t got the resources
for massive marketing campaigns and are left to fight for
the ‘widow’s mite’. In fact, there seems
to be increasing efforts by some larger charities to squeeze
out smaller organisations altogether in order to capture
their market share. I believe it was Ian Duncan Smith who
warned about the ‘Tesco-isation’ of the non-profit
sector.
The search for donor loyalty
But even the big charities have donor retention issues,
and not just in the UK. According to research undertaken
in the United States by the Target Analysis Group, the majority
of people who give once or twice to a non-profit group never
go on to become loyal donors. In fact in 2005, 30 of the
60 big national charities won repeat gifts from less than
a third of the donors they had recruited during the previous
12 months. This highlights a sharp decline over the past
three decades – in 1980 donor retention was around
55 per cent.
These findings mirror another North American study undertaken
by fundraising consultant Penelope Burk. She argues that
consumers are now ‘oversolicited’ and feel they’re
being asked for money too often while provided with only
token acknowledgements and little meaningful information
about how their money is used.
The result is what experts call ‘churn and burn’
– an endless cycle of seeking new donors to replace
the ones that have been alienated. But the result makes
no economic sense, whether you’re a big charity or
a small one. Because only around one per cent of DM recipients
typically respond to mass appeals for a first gift, recruiting
donors generally costs far more than it earns for charities.
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Finders keepers
The solution, surely, is to find out what it is that will
inspire loyalty and convert a one-off donor into a regular
giver. If consumers are increasingly immune to desperate
images and cynical about bad news stories then we need to
find another approach – in fact a number of approaches.
In the last 18 months we’ve been evaluating WER’s
fundraising strategy and asking ourselves some hard questions
in order to find a route forwards. We know the old style
‘American’ guilt ask works with older donors,
but income dies off as they do. Mid-life donors are cynical
about being manipulated by bad news, but respond well to
feedback about how their donation is making a real difference.
Donors at the younger end of the market are really tough
to pin down, and we have to question whether it’s
worth the time and cost when statistically we know that
consistent giving comes later in life.
So, what is our new approach? A combination of all types
of mailing. Bad news stories will still feature, but only
to highlight immediate need. To tell the full story mailings
may need to be graphic in detail, but it will be done with
honesty rather than hype. Our donors are going to be thanked
much more regularly and kept updated about how their donations
are being used.
Overall, moving away from the ‘down and dirty’
approach has helped us identify some key values that I think
all modern charities, large or small, would do well to consider
on their path to giving guilt a rest:
- keep to the facts and tell the truth
- be direct and don’t generalise about the realities
of those you are trying
to help
- do what you promise and show donors that it has been
done
- thank donors for their support and provide progress
reports regularly
- maintain a good database to help you target your donors
more effectively according to their appeal preferences
- communicate hope and progress as well as (or instead
of) disaster and despair
A vital core value which is central to successful fundraising
is respect. When looking over draft appeal material which
always features the people we’re trying to help, I
now ask myself ‘how would this person feel about the
way we’re depicting them here?’ Access to the
internet is becoming much easier even in the world’s
most desolate places.
Many of the people we aim to help could well be logging
on to our website right now to read what we are saying about
them and see how they are being portrayed. As a charity
whose core goals include the empowerment of disadvantaged
people to help themselves, our fundraising material must
be in line with this. I believe that misrepresentation and
manipulation of their stories would totally undermine our
work going forward.
Likewise, we must demonstrate respect for those we ask to
support our work. Moving away from guilt-fuelled, one-off
donations towards a more sustainable and motivated donor
base is, for us, the way forward. However, it is not an
easy or risk-free transition. It will take time and we must
hold our nerve in order to ride what can be a difficult
transition period.
Alex Haxton is director of operations at World
Emergency Relief
Straight to the recycling bin
A recent research survey commissioned by Marketing magazine
uncovered some surprising facts about the kinds of direct
mail consumers are most likely to open and those they discard
without even opening the envelope.
The financial services industry has long been accused of
swamping home owners with hundreds of millions of unwanted
credit card and loan offers. Yet the study found that consumers
are more likely to open these mailing than those sent out
by mail-order companies or charities (the second and third
biggest users of direct mail after financial services companies).
The research shows that, on average, 22 per cent of all
direct mail is never opened, with the un-open rate for charities
even higher at 30 per cent. This equates to 150 million
mailings at a cost to the sector of £64 million. Of
the ‘big three’ users of direct mail, charities
also have the highest rate of unopened mail sent to potential
supporters – a whopping 76 per cent.
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