Thursday, October 30, 2008
Harpal Kumar says "The fall in the property market is having a direct impact on our legacy income stream and people may also need to consider their level of personal giving. " He says they are planning on a decline of perhaps 4 or 5 per cent this year. With such huge amounts of money that comes into CRUK from legacies this seems perfectly reasonable.
There is no comment there as to what they will be doing to fundraising expenditure.
See Tania's article here.
Totally non-scientific and completely weird I know, but once convinced that I wasn't a nutter (the fools!) they all told me they wouldn't give any less.
How useful is this? Not really. What people do and what they say they will do are very different - lots of focus groups telling you that donors prefer short appeal letters when donors are likely to respond to longer ones - is testament to that. But heh, it was fun and I am always learning. I want to know what they say they will do. Any proper polling, please bring to my attention and I will blog it.
So much for my hearsay - I am just telling you what they said. Pure vox-popping without the video.
But what if someone was organised enough to have a video and some editing gear? A quick chat with my pals at London based agency Open and we get a cool video on their blog.
Not that scientific, but a nice opener for any presentation to the board posing the question: 'But what will really happen?' (before concluding 'I don't actually know, and nor does any expert but here are some scenarios, Ms Chair, and here is my strategy...')
Just make sure that you credit the chaps at Open for their effort!
Wednesday, October 29, 2008
Damian O'Broin from Ask Direct tells me like for like acquisition for one of his clients has been in decline:
2008: 0.65% - 0.80%
But he also adds that "Admittedly the reasons for the drop may not simply be the economic downturn. Ireland has a relatively small amount of commercially available cold lists, so list fatigue is a possible contributory factor. And as we're dealing with just one charity here, the strength of the pack used for each mailing could also have had an impact." Hmmn, not sure if it actually tells us much about the Irish market, and no clues about cause and effect yet.
Fundraising in New Zealand
Our colleagues in New Zealand are not debating about official definitions of recession, they are all agreed they are in one. But one of our charity friends there are still doing well, "...we have made target in a country officially in recession with an RG conversion." (they actually got 50% more than they expected).
Fundraising in Australia
A major charity direct marketing event in Australia has just let me know that their mass partipatory event raised $250,714 - it had been in decline, grew in 2007 (it raised $249,008) and seems to have stabilised.
Australian 'tax appeal' results I am looking at still show no big effect. The variances are all 'normal'. However, impact of recession has not hit Australia as much as North America and Europe. Please email European and North American data.
Fundraising in Hong Kong
Brilliant results too date, new strategies are hammering last years, so it is hard to tell what effect if any, the recession is having. The new strategies started one year ago 2007 lifted net charity income by 250% on previous year - so the new approach is doing well, but this years are hard to compare because there is not enough history.
Tuesday, October 28, 2008
Internal data, also referred to as your analytical data, needs to be monitored carefully too.
How are your donors behaving? What is actually happening to your campaigns?
Of course – this data can tell you if donations are up or down compared to last year, but it is impossible to do a controlled test. (Unless you can find a way of mailing donors that don't know anything is happening to the economy!)
So, if income is down, it could be because your campaign is not as good just as much as it could be the recession.
Historical data provides useful guides, and whilst what happened last time is a useful reference point it is no guarantee about what will happen this time. There could be multiple variables at play, things could be very different to last time, so plan accordingly.
Your early decisions should all be about ensuring that you are doing everything you should be doing. E.g. You know you should be calling your top donors to thank them, but haven’t been because you were too busy, or you know you should be hyper-personalising your copy in your appeals but the return on investment (ROI) was lower. In times of crisis aversion it is even more important to concentrate on net – not ROI).
But keep on top of the data. You should measure these key indicators:
Cash appeal response rates: year on year comparisons for equivalent appeals (the same one last year) and equivalent segments not just overall response rate.
Cash appeal average gift: year on year comparison for equivalent appeals (the same one last year) and equivalent segments as above.
Look at those donors who respond to this year and last year equivalent appeals and see if there is any difference/movement in their average gift.
Also have a look at response compared to what you asked (are you asking for a fixed amount, the same each year? did you make an upgrade ask each time etc?).
It would be easy to declare 'My average donation is down!' but look at what most people were asked for. For example, last year, you may have asked for 1.5x previous gift, but this year - in fear of recession - you asked for just 1.0x previous gift.
Number/value of large gifts to appeals: although this is hard to compare if you are only getting a handful, say up to 20 $1000+ gifts per appeal.
Keep in mind high value givers tend to give less frequently than lower value givers so ensure that you are not directly comparing the performance of your top givers with your mid – low value multi givers as their behaviour is different anyway.
Regular/Monthly giver attrition: Ensure you are looking at Face-to-Face (Direct Dialogue) recruits separate to those recruited via other methods Mail, Phone, Online etc (which you can group together).
Look at the attrition by month since recruitment.
Cash donor lapsing rate (% change in comparison to last year): This is a useful top line measure but keep in mind its not going to be until well into next year when we are going to be able to see if there is an impact.
The majority of cash charity donors give either once or twice per year – higher for those organisations that make more than 6 appeal asks per year.
The response rates of Regular/Monthly givers who have never made a cash gift and Regular/Monthly givers who have made previous cash gifts to cash appeals (yes you should be asking all recruited via methods other than Face-to-Face for donations in some of your appeals). Compare to previous years.
We know they are still supporting but they may stop the “extra support”.
Recruitment response rate: should be monitored though variables such as audience (compare proven or unproven lists), creative (new or proven pack) and timings are all determining factors – you need to compare like with like.
If you are running ongoing and/or large scale acquisition via mail, phone or online try for evidence across several campaigns as opposed to looking at a campaign only level.
For Face-to-Face, attrition and recruitment volumes are your best measures.
If you can’t get in a benchmarking type program, chat to those who are in them and find out what is going on with them, and also chat with agencies, experts and most importantly other charities – but always ask ‘What is the data saying?’
Make sure you understand the difference between opinion - eg “Charity Commission says 1 in 4 fundraising directors say that their income has been harmed by the economy slowdown” and fact “23 Australian charities compiled their data which shows no decline in individual (cash and regular) giving for 2008 compared to 2007”. Both convey valid information, you just need to know the evidence behind what you are reading before making a decision.
Head of Global Data Services
Monday, October 27, 2008
According to this article, originally from the Daily Mail, leading UK charity Cancer Research UK says that fundraising has been hit.
"A leading cancer charity is preparing to slash its budget by up to £643m over the next five years as the credit crunch hits fundraising. Cancer Research UK needs to make the drastic cuts following 'the dramatic decline in the economy' over the past year, according to an internal report.
"The economic slowdown has hit fundraising in two ways - a reduction in regular donations as householders tighten their belts, and a fall in legacy donations as falling property prices slash the value of bequeathed estates. Cancer Research UK said the final budget figures were still being considered, but it acknowledged that the economic gloom presents real challenges for the future."
Oh dear. Not good. Except it is not true either.
"Reports in today's newspapers claiming the charity will make budget cuts totalling £643m are both incorrect and grossly misleading." says Harpal Kumar, CRUK's Chief Executive on their website.
"Almost all Cancer Research UK's funding comes from the efforts and generosity of the public and we are extremely grateful to them for their continuing support of our work to beat cancer. At this time, more than ever, we need people to support our work."
It is easy to believe the papers, but just a little bit of extra research got me closer to the truth. I am trying to find out more from CRUK.
Lots of pieces about US election fundraising over the weekend. This Independent article is a good summary.
Presidential election fundraising hit by recession! Nah. Not at all. Funny how Obama raises more than Bush and Kerry did added together in these 'difficult fundraising times'. Obama's team proves for me that strategy and marketing tactics outweigh the effects of a recession.
Sure, maybe he would have raised $200m in September instead of $150m if there was no recession, but the very fact that he just got got on and fundraised resulted in $150m more than if he hadn't. In these tough times, cutting back on fundraising is the best way to reduce your income...
No messing, practical stuff with a great big kick in the arse for us all. My highlight is her pleasant telling off of us all:
“...Just need to do the stuff you’ve known you should be doing" she urges. "We all know we should be doing good stewardship, good donor care, providing a sense of belonging and building relationships with people.
"We all know we should be tracking our data, staying on top of our data and analysing what is going on – we didn’t need a recession to remind us of that.
"But I do think the one impact this recession is going to have ... is that it is going to make us pull our finger out. You don’t have any choice, you have got to sort out your supporter care, got to stay on top of your data.”
Good on ya Amanda!
(Thanks Howard Lake of http://www.fundraising.co.uk/ for the video).
Saturday, October 25, 2008
Here is YouGov's July research into UK public attitudes to giving. Bottom line, 21% of UK adults reckon charities are on their list for cutting expenditure. Weird bit is that the methods for giving to charity are all stuff like using charity credit card, sponsoring an event - nothing about regular giving and donations.
So what empirical data is crucial to your planning? Let’s concentrate on the financial data available within the environmental and internal data available.
Environmental data is the big picture stuff. What is happening beyond your charity. This can be broken into two, historical and contemporary. Both of those can be broken into three bits:
1) The economy. Beyond charities – how much do people have?
2) The fundraising business. How much are people giving? (And how much did they give last time something like this happened).
3) Product or activity data. Breaking down types of fundraising; eg how is corporate fundraising doing? What about regular (monthly) giving? (And again, what about last time?)
The key measures you should keep an eye on are below. How much attention you need to spend on them will depend on your fundraising mix.
Unemployment - influences corporate giving and individual giving
Surely increased unemployment will effect giving? People without jobs will have to re-prioritise.
Property prices - influences legacies
Look at your legacies (bequests) in detail and you will see that much of the value is realised from sale of property. So, if property values decrease so will your legacy values.
Share indexes - influences high net worth individuals (major donors), trusts, foundations, and legacies
Understanding where your big donors' wealth comes from will be handy when talking to them, but for many their money will be invested in stocks and shares. Most trusts and foundations' portfolios will also be hit. And of course, the second biggest contributor to deceased estates is usually stocks and shares.
Actual giving trends (not giving intentions but actual giving) – the best source is from compiling your data in a charity benchmarking program like Pareto Fundraising Benchmarking* or Blackbaud’s Donor Analytics. These programs provide direct comparisions, standardising data sets giving us like for like comparisions.
Looking at historical data here is useful, but not definitive. For example, a paper claims that during the 90s recession, giving declined - but how much of that decline was caused by 'recession suicide'? Looking at individual charities (such as real world case study, NSPCC) we see that
In Part II, to be published on this blog on the 28th November, I will be looking at internal - or analytical data.
Head of Global Data Services, Pareto Fundraising
* For more information on Pareto Benchmarking in any country/region please email our insights team.
Friday, October 24, 2008
A couple of differences or greater elaboration and emphasis on different areas makes his paper an essential read. Just some of those are highlighted below...
Tony reckons "Any switched on marketer or fundraiser knows that the current climate WILL impact on their fundraising and their portfolio of techniques." I believe he is right, and it already is (for example, with corporates), but as you read his paper (and most of the other opinion pieces out there) the measures he and others recommend will be good for your charity even if it turns out things aren't effected as bad as we expect.
Within his paper, Tony also brings attention to the fact that fundraisers "...must take account of the pressures on [our] own unique portfolio of funders..." very relevant, for example in the difference responses needed from those with diverse portfolios against those relying on one or two corporates and events.
Although there are tons of papers out there about what happened last time - most saying 'not a lot happened, but things were a bit worse', and one actually saying we will be fine, one thing I can assure you is that no one actually knows what will happen.
It is different; life is full of new things and unique circumstances. Tony says "...No charity can simply look at its numbers today or trust the previous macro trends and say that it is holding up against the recession." Great point - there are far too many unknown unknowns out there.
Don't be afraid to tell your boss or board you don't know what will happen (you wouldn't want to tell a lie) but make sure you tell them what you are doing in preparation for the known unknowns. Most of these preparations will, of course, be good practice.Tony reckons "Customers learn to spend differently and, as a result, their values change with higher expectations of experience, service and value." So good customer care will help! Yaay! you know you should be doing that anyway.
Some other knowns include "Corporate fundraising: possibly the first area to show signs of moving to a static position and then decline. Already we have seen deals falling through
that have taken many months of planning and negotiations." (Dear reader, please send me any examples like this, I believe Tony, but some anecdotes would be good).
Our research of actual income data on 23 Australia charities shows that the Australian market is indeed experiencing this already, and although you can't prove it is because of the recession...it feels as though it must be a factor. (OK, I work in a data obsessed agency, but I still have feelings).
On individual donors, Tony claims "Already visible in markets such as the USA, UK, Netherlands, Ireland is the effect on the key area of recruitment of new donors." (Tony - or anyone else - please send me some references / evidence, anonymised if need be). he continues "This has been getting harder year on year over the last three years or more and the recession will really put further pressure on this area."
This contradicts Steve Thomas' view from Canada - he agrees acquisition and appeals income has been in decline for years, but tells me his data shows the decline has not got any worse this year.
But regardless of whether it is getting worse, Steve wouldn't disagree with tony that "Charities cannot give up on recruitment but we are going to have to work much harder and be much smarter in this area..."
Although Tony thinks "...my money would be on the next significant surge in digital recruitment for the charities that continue to invest in this area and effectively to integrate it with the rest of their marketing" I reckon people should be careful about switching budgets from tried and tested fundraising methods like face-to-face, which - according to the F2F agencies I spoke with - is not in decline. Yet.
Of course, another advantage with products like F2F (and to some extent phoning) is that you would quickly notice a decline and can afford to watch and see there. As Amanda Seller from WSPA says "We all know we should be tracking our data, staying on top of our data and analysing what is going on..."
Still on individuals, Tony points out that "UK charities are already seeing reductions of up to thirty percent in the value of estates, so reforecasting may be necessary." Along with other legacy experts telling us estates will take longer to be realised I think this essential advice - don't bank on your legacy income holding up. Better to plan for decline, and be pleasantly surprised if it does hold up than the other way around.
Tony finishes with some sound management advice "And finally here’s the practical advice some organisations will really struggle to face up to – recession is the perfect time to ensure that your staff, your board, and your organisational structure is right to meet your future needs and bring success.
"Whilst you may have to fight cuts in the donor recruitment budget and other vital fundraising areas, you can use the recession to tackle any unproductive staff and structures, ideas and programmes that didn’t work. Your donors won’t tolerate anything else, so think of it as starting a healthy diet to give your organisation the energy and resources to face the future."
Let's face it, whatever happens you should be doing that anyway.
As well as this article, ThinkCS publish tons of useful stuff on their website.
Thursday, October 23, 2008
Please send me any data you have, or if an agency, from across your clients - anonymised or if you can get permission, better still. Good anecdotes too, and any other research / papers you see or produce please tell me about them and I will blog them.
Agencies, I will put links up to your site, because you exist to help charities make more money and some may be interested in finding out about you. Not quite free advertising, because I want something useful to share - but pretty good value.
Please note, I will queue stuff on the blog, first come basis, so that everything doesn't get published at the same time and therefore unread.
"...In particular, there are some surprising findings:
- Changes in total philanthropy are not directly correlated to changes in the stock market. Total philanthropy appears to weather storms in the stock market with great resiliency and less dramatic fluctuation.
- There has been only one year in the past 27 in which philanthropy has dropped from one year to the next (1987), and it was only a modest drop. Otherwise, philanthropy has increased from one year to the next, even during years in which the market has dropped (see Table 2).
- Even during the worst decline in the stock market (in 2002, when the Dow Jones Average decreased 17 percent and the S&P 500 Index dropped 23 percent), philanthropy increased by 1 percent
What does this all mean? Philanthropy remains strong and resilient during declining economic periods. While it is clear that a strong stock market provides donors with a greater ease and sense of confidence in making gifts to nonprofit organizations, the opposite is not true. Down markets do not always foretell decreased philanthropy.
We owe a big thank you to those wise heads who asked for this work to begin after the 9-11 catastrophe."
Also, I got an email from a fundraising director who wants to remain anonymous about what he is experiencing in Australia:
- Monthly regular giving income has increased by over 10% in five months
- Upgrade by telephone uptake currently over 50% (up from 40-43%)
- 3rd Quarter 2008 one of our best ever for face to face.
I want to add a disclaimer: Australia is not hit as bad as North America and Europe (yet?) but it is all on the news there as well, and our Government is doing a $10bn bailout too; people are worried!
Charities - please send stuff like this to me, and agencies - send me your data too, hundreds of people are visiting this blog every day and I will make sure you get a link and credit! Anonymous data is welcome, just get it to me. (Please note I queue up blogs so they don't all come out at the same time!)
- Almost 40% of respondents believe that the best response is to fight for
market share now- expansion to secure market share is the only option.
- Almost as many favoured another strong proactive action though the specific
responses varied- from downsizing to using reserves to weather the storm
- European and North American fundraisers are more optimistic than their
African or Asian counterparts
- Globally respondents believe that the three areas most likely to lose out are
arts and culture, international development and animal welfare.
- Respondents also agreed that children’s’ causes, emergency relief, medical
and faith-based causes would be least affected.
- North America disagrees most strongly on the effect of the funding crisis on
Disability, Education, the Environment, and Faith based causes.
- Europeans are more concerned than others about the impact on Disability,
Human Rights, and Elders.
For the full report, download from here, link will work until November 15.
Wednesday, October 22, 2008
Of them, 28 people reckon now is the time to spend more money on fundraising, 7 say business as usual, none said to cut back. Oh, and six said they wished they had invested in regular (monthly) giving before now...
Congratulations on your recession-watch blog. Very timely, useful and much needed.
Tough times, of course, can also produce the best ideas. Many currently established methods of donor acquisition can be seen to have arisen as innovations when the need was greatest. See ActionAid’s insert story on SOFII, and Greenpeace’s development of face-to-face.
Plus an array of legacy marketing and other initiatives that arose directly out of fundraising uncertainty.
The whole idea of SOFII itself becomes even more appropriate in tough times. Why trouble to think of your own great idea if you can borrow someone else’s? Why take a risk testing the unknown when you can see how well or otherwise similar initiatives fared, when used by others?
To quote (very reluctantly) Donald Rumsfeld, fundraisers suffer from too many ‘unknown unknowns’, particularly in hard times.
So I hope you’ll direct your followers to SOFII, where as many of the ‘known knowns’ as we can uncover are being gathered and displayed to help fundraisers to shed light on the best ways of doing things, however hard times get. And all for free, too.
Ken Burnett, SOFII– The Showcase of Fundraising Innovation and Inspiration
What they are saying
- So much opinion, but generally feeling is that donations will be hit, especially corporates, trusts & foundations later on and probably legacies
- Charities who invested in regular giving (monthly donations) and legacies are the safest
- Don't cut fundraising expenditure
- General feeling donor acquisition will be more expensive
- Be calm, don't panic
- I have two examples of charities who are cutting their fundraising expenditure budgets Please send me more examples. If you want to remain anonymous, just tell me.
- All the agencies and consultancies are rushing to do surveys about what people think. Please send me the summaries / links.
- Key thought leaders are pulling together 'emergency' sessions, like the one organised by Pareto Fundraising in Australia (details to come) and John Sauvee-Rodd on 4 November in London (sorry, it is full). Please send me details of any other such sessions.
And what is lacking
- Charity thought leadership - apart from Amanda Sellar and the INGOs at IFC I struggle to find stuff from non-agencies. Fair enough, it is our job as agencies, it is in the interests of our businesses, and we usually have access to the thoughts of multiple charities - but Please, charity people send me details / results / data. Again, I am happy to anonymise.
- Data, data, data. Tons of anecdotes. Steve says Canadian donations not down, Paula says USA donations down, UK Charity Commission says fundraising directors say income down - but no data. Please send data!
Tuesday, October 21, 2008
Third Sector Magazine, Valerio (Italian blog, who has driven tons of Italians - I am guessing Valerio's blog must be good to get so much traffic, so if you read Italian, add it to your feeds), Conor's Fundraising blog, Fundraising Research, and Ask Direct. Thanks guys.
Please, everyone else - tell people to visit, and please send me data.
AFP (Association of Fundraising Professionals) have pulled together a good 'toolkit', basically links to opinion and advice from consultants.
My favorite is when Paul Lagasse reminds Americans that 83.4% of fundraised income is given by individuals and he shares more environmental data, in his 'How the Economy Effects Giving' article.
The UK's Institute of Fundraising has a few pieces up, not least a promise of some great research planned with PwC, but you will need to be a member :(
"Although the survey will be available online for a wide variety of contributors, the results of the analysis - carried out by PwC – and a copy of the final report, will only be available to Institute members and members of the CFDG." Meanies. Any members, please ask IOF to send a summary for our international viewers and we will encourage people to join.
Australia and New Zealand's Fundraising Institutes (FIA and FINZ) have got nothing up on their websites, though they may well be sending out newsletters or something. Amy (FINZ) and Sue-Anne (FIA) please send me updates.
They are the organisations I am familiar with, and can read. Members of organisations in other countries please send me links and - if not in English - a 2-3 line summary which I can post. It would be great to get stuff from non-Anglophone countries please.
"My question is whether there are concrete examples of how we can reformulate our message and take provocative and effective actions in order to achieve better results in acquisition during the crisis times on such inmature market like Russian. I will be especially interested in ideas in the area of environment - as it is not in the top priorities of existing donors in Russia at all (children and health issues are).
"My thinking at the moment is that we have to change our statement underlining that there are values that will never undergo inflation - which is GIVING - CHARITY - SOCIAL PURPOSE..."
Anyone with any examples of using changed message, please leave a comment.
Use the search function to find links and summaries.
In his 'Recession-proof your fundraising' article Marc A. Pitman says don't make the three fatal mistakes:
- spend less on fundraising
- become pessimistic
- apologize when you’re asking
NFP Synergy compare sector growth with GDP and show they are related.
OPINION WITH ENVIRONMENTAL DATA
Mal Warwick and Dan Doyle
'Even if nonprofits generally are feeling the pinch of a gloomy economic outlook, your organization might not be similarly impacted. The effects you’ll feel will depend on how you raise your money, what services you provide, and, ultimately, what you do in response to deteriorating economic conditions.'
This article includes a bit of data, some great advice and is a pretty good source to nick stuff from to present to your board.
OPINION WITH ENVIRONMENTAL DATA
This report from 2into3 is well referenced and looks at the history of how the sector has changed alongside big external events including Second World War and 1929 Crash. Bottom line - don't panic, look after your donors... sound familiar?
Great pocast, starting off with FDR speech: "This great Nation will endure as it has endured, will revive and will prosper. So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance...." Worth 15 minutes of your time listening to this on your iPod. Download Program 13, 'Fundraising in a bad economy'.
Monday, October 20, 2008
Advice that would make sure yours is the last charity that donors leave.
Below is what he reckons...
... I feel most past financial downturns have not proved to be negative for fundraisers in Europe, in fact often they’ve been relatively positive.
Some areas though – major donors and corporate donors for example, will usually be hit. But individual giving has mainly stood up well – except for those organisations who cut back activity.
They fail. This crisis though is of a different order of magnitude. It hasn’t hit most organisations yet. But it will, soon.
The lessons learned from past crises are that it is time to be bold and to reaffirm the fundamentals. But this is a new situation now. Here’s what I would recommend.
- Do not cut back investment in fundraising. This would be very foolish.
- Focus on presenting your cause positively and optimistically.
- There’s safety in focusing on individual giving. Concentrate on ‘the big three’ - regular donors, legacies and major donors. Cut all unprofitable/low return activities.
- Define your products very well. Make sure your donors see your cause as the last thing they will cut.
- Get to be very good at communication – particularly low-cost, electronic media.
- Now is the time that your efficient friendly donor service will pay off. You’ll be glad that some years back you invested in donor care/relationship building.
- Demonstrate value for money for your donors at every opportunity.
- Be genuinely transparent, open and accountable.
- Share your problems with donors. Ask them to stand by your cause through this crisis. (Don’t be negative).
- Show and demonstrate your dedication and commitment to your cause. Don’t be afraid to ask your donors to be similarly committed.
Now is the time to get back to basics.
Sunday, October 19, 2008
To mitigate against this of course, make sure you are getting more people put you in their will, and try and make suret they are leaving you legacies / bequests as 'residuary' gifts, or percentatge of estate.
Friday, October 17, 2008
I always say be wary of anecdotes, but with major donor fundraising, anecdotes are often all we have. Please send me any information - and especially data - on the impact of the economic downturn on major donors.
Pareto Fundraising's whitepaper was introduced (sign up for a copy) and Marcelo Iniarra and Norma Galafassi presented their experiences of the massive econonic downturn in Argentina in 2001/2002. The presentation is on this blog.
Amanda Seller from WSPA international presented back the views of many INGOs following a planning session they had at the IFC. Their bottom line conclusions were:
* Look at this crisis as an opportunity
* Stay on top of the data, make sure you understand the facts
* Do the things you know you should be doing: Invest in supporter relationship management, data analysis, effective acquisition.
Only a couple of charities were considering cutting fundraising budgets. The INGOs included UNICEF, WSPA, Plan, UNHCR, WWF, Save the Children, Childfund, Christian Aid, Greenpeace, Action Aid, World Vision, Amnesty International.
They also acknowledged that things might be different for some national based charities, but were not sure how. So please, national charities, email me.
More to come... Please subscribe to the feeds and become a 'follower'.
Pareto Fundraising's whitepaper has tons of information and data, but it is too big for here so click here to register for a copy.
Thursday, October 16, 2008
Well, the most dangerous thing about this time is the decisions made by charities. Whatever happens, us fundraisers need to help our boards and management making the possibly fatal mistake of cutting fundraising expenditure.
I just wrote down a collection of thoughts and information from researching our data sources and what other ‘experts’ are saying about the recession. By the time I finished it was 9,000 words long, with a ton of data and proof but basically it boiled down to one thing:
Don’t commit recession suicide.
Whether donations (responses and/or average gifts) go up, down or stay the same the tactical decisions taken by charities will have more influence on the fortunes of the charity than a recession.
If things get worse, you need to spend more to make the same net and net is the key to delivering services. If things get better because of a recession (which is unlikely) it is a great time to spend more money and get great results.
If things stay the same, then keep things the same. Here is my ten point plan for coping with the recession:
The board and management need to understand the data and stop unrealistic expectations
1. Stop using cost of fundraising (COF) as a key measure and concentrate on net income
2. Work like a business, accept reduced short-term growth in service expenditure to gain increased long-term growth. Don’t commit recession suicide.
3. Stop putting off bequest (legacy) marketing every year – it won’t make any difference to your income next year, but the charities who invested in bequest marketing during or after the last recession are in a lot healthier situation than those who didn’t
4. Accept that donors are not cheap
Apply the Pareto principle internally and externally
5. Look at where your money really comes from now, and concentrate efforts on high yield activities like bequests and major donors
6. Look at where growth is coming from for successful charities, and ensure you are getting your slice Look after your donors
7. Implement proper, well thought out and planned ‘supporter relationship management’ – just think if you had implemented Relationship Fundraising back when the book was written, your donors would be much more likely to stay with you now.
8. Ensure you are using the right tactics for fundraising – number of mailings, personalisation, length of letters, actually asking for money in your appeals, telephoning to upgrade regular givers; any of these things not done right will cost you much, much more than any impact of a recession.
Get more donors
9. Regular givers are still the best bet in most countries right now; they are expensive and it may take you two years to recover costs but, guess what; that is life in fundraising
10. Understand the implied life time value of such donors – plan long term
Oh, if you are a glutton for punishment and want all the 9,000 words, charts and tables which you can nick stuff from to impress your board then just sign up here and we will get it to you this week.
I will try and get more information.
Any evidence of change, please email me links, data or information. email@example.com.
If you hear this, don't take it on face value (yet). NON-DONORs will jump on this excuse, just like any other. Check the figures carefully before making any decisions.
If / when things do get bad, phone and face-to-face will pick it up first. We will monitor this and let you know what is happening. Our Australian phone agency (Pareto Phone) will be looking at the data there carefully. We would love other phone and face-to-face agencies to post their findings too.
If you have such data, email me what you know and I will post it, or send me a link.
* No impact on regular giving
* No impact on individual donations
* Corporate income down
We can't prove that the corporate decline is because of the fear of recession, but we do know the economy had not hit these charities' donations. Yet? These are mostly large charities, with diverse income sources.
Maybe those with less diverse fundraising portfolios will be hit. Any evidence, please email firstname.lastname@example.org.
More detail in my whitepaper, available by emailing here.