The end of Fundraising Recession Watch...

Well, not quite. But I am not getting enough new stuff from other sources, and have lots of other blogs / newsletters and things to keep up to date so will only occasionally add things here. It will remain as a resource, a lot of useful articles and links here worth searching through.

Any new information will go up on my blog. Please subscribe to its feeds!

In the mean time, check out this recession busting story here all about Starlight and how they reacted to the crisis in Australia - including a pack they put out telling people how they had been affected. They raised over 100% more than last year!

You can download the entire pack and follow up letter here.

Mal Warwick liked it so much he featured it in his most recent newsletter.

You can also follow me on Twitter where I will highlight useful stuff occasionally. @seantriner.

Sean

Recession increasing demand on two-thirds of Australian charities

According to their recent survey, Aussie charity research agency Givewell tells us that "almost two-thirds of charities have experienced a material increase in the demand for their services for the 2009 financial year, with a near 5% increase in demand for the important services the charity sector provides."

Of the Humanitarian charities, and astonishing 100% said they had an increased demand, but only 63% blame the recession. Ninety-one per cent of welfare organsations said they had an increased demand and 78% blamed the recession. Of community support organisations, 76% said they had experienced increased demand and the same number blamed the recession.

You can get hold of the report summary here, and I thoroughly recommend subscribing - especially if you are an Australian charity or agency.

UK Trusts show commitment - or do they?

Two apparently contradictory stories in the current Charity Times Enewsalert:

"Falls in grant-making and asset value for top charities
New analysis of the impact of the recession on charity fundraising shows 41 percent of the top 300 charitable trusts saw a fall in the value of their grant-making in 2008..."

Says one intro but another report in the same Enewsalert says...

"Charitable trusts show commitment to supporting charities, reveals report
Charitable trusts and foundations realise now is not the time to turn off the tap of support for Britain’s charities, according to new research published today by the Charity Commission"

Reading on I hoped that maybe they weren't contradictory, with maybe just eye-catching headlines, and talking about different things - but no, they are totally at odds with each other.

The first, by ESRC Centre for Charitable Giving and Philanthropy at Cass Business School, London looked at the biggest charities and trusts. Charity Times tells us "Her results indicate grant-making by the major charitable trusts has been maintained as a result of gifts and endowments received over the last decade, but this is a hidden ‘time bomb’."

And then, the research by the Charity Commission says "There was a clear indication from these trusts that levels of grant-making are, despite the recession, being sustained.The report also found that trusts and foundations had adopted a sustainable approach which would allow them to offer this vital support not just now, but into the future."

Hmmn. Well, if you have a report to the board coming up, you can use either story to back up whatever case you are plumming for - just hope your board members don't subscribe to Charity Times!'

The good news story is here, and the bad one here. Take your pick.

Australian Tax Time Appeal Analysis

For most Australian charities who mail DM appeals, our winter appeals (May-June) are often the most important, often more so than Christmas. These are known as 'tax appeals' because the end of the tax year is 30 June.

Fiona Paterson, data expert and senior consultant at Pareto Fundraising analysed a load of charities actual results - and it makes for good reading.

Has the recession hit Australian individual giving yet?

Check out the article here.

Sean

Donor attitudes to giving in the credit crunch

Jonathan Waddingham, Charity Champion* at JustGiving sent me some research on donor attitudes in the UK, so an update. Data is from April.

Charities have raised over AUD$1bn through JustGiving so you'd hope he has good transactional data too... (I much prefer transactional data to opinion, but that's just my opinion).

Bottom line:

1. Slightly more people say they have been affected financially by the recent economic downturn (now 58%, 52% in Jan/Feb)
2. Slightly more say they are thinking harder about how much to give - now 57%, up from 47% in Jan/Feb.
3. The majority - 61% - are not reconsidering their gifts but 31% say they may consider giving a little less.

In summary:

"Throughout the first quarter of 2009, a number of trends have started to emerge. As time has gone on, more people have been affected by the credit crunch and, presumably as a consequence, reflected on their charitable giving as part of their personal finances. Encouragingly, more people have indicated that they will be giving more than those cutting back a lot, or stopping giving. However, in the last month, there has only been one large shift in the monitor – with more saying that they will be giving slightly less compared to March.

"We have seen over the first 3-4 months that more people are willing to cut down on household expenses than charitable giving, as well as the heartening statistic that 8% of those who have been affected by the economic downturn and thought harder are actually giving more. So whilst the downturn is certainly having an effect, the majority are still planning to give the same over the next three months, and the outlook is not as gloomy as many have predicted."

JustGiving are being a bit slack in publishing the latest info (I know, they are busy!) but email them to get the latest updates.

(*Imagine explaining to your mum that your job title is 'Charity Champion'. She'd be so chuffed.)

FIA release their 'Managing in a Downturn' report

The Fundraising Institute Australia (FIA), PricewaterhouseCoopers and the Centre for Social Impact collaborated in this comprehensive survey, conducted in April and May 2009.

Focusing on the impact that the last six months has had on the sector and the anticipated future impact, the survey was completed by 263 organisations.

Click here to download a PDF of the report.

Funding strategically during a recession

Fascinating report from The Institute for Philanthropy talking to donors and funders and offering them ten tips to maintain their giving in recession.

Download the report here.

Jan

Tranquility or turmoil

http://www.fundraisingtraining.co.uk

Interesting summary from Bill Bruty and his team here in the UK of research they've conducted with charitable trusts to look at whether their giving will decrease in the short term as a result of the recession.

Dowload the summary report from the link above (currently in the newsflash section), but the two things that really grabbed me were (1) the fact that while Trust balance sheets have decreased somewhat in the past year or two, many of them had unimaginably good years in 2006 when the market was strong so the pool of potential income increased dramatically back then. We'd all forgotten that... or at least I had as I was out of the country then.

(2) The report also points out that most large trusts make their grants from their dividend income which is actually remaining pretty stable.

Smaller trusts undoubtedly are more likely to be buffeted by the economic climate as they are much more reliant on exceptional income and donations for their ability to give.

So, as with all fundraising, know your donor. Check their specific circumstances and don't assume they haven't got any money. Anecdotally I'm hearing about trust application numbers falling as fundraisers assume the money is going to be tight. Maybe it is and maybe it isn't - but our charities' needs are still as important, so hang on in there, do your research and don't forget to ask.

Reserves and recession

Lots of charities keep reserves for a rainy day. Is it raining now? And what should charities use reserves for?

I think it is obvious that the returns from effective fundraising outstrip property and investments so a balanced portfolio should include elements of all.

For more detail and info...check out my blarticle here..

Recession Marketing

At the ADMA Forum, I attended a fascinating and useful presentation by Steven Noble, a senior analyst from Forrester Research. His presentation is available here. They want your details in return (which is why I'm not posting it here) which is kind of fair enough - they are research after all.

Steven had us going all the way back to basics, looking at needs and 'providing' comfort. Brilliantly illustrated with real examples, including how Ivory Soap advertising in the USA evolved through the Great Depression.

Bottom line: Marketers need to give consumers more 'comfort'. He didn't talk about NGOs and charities, but I reckon we may well have the easiest opportunities to do that.

ADMA Forum was great, and I am posting non-recession learnings on http://seantriner.blogspot.com. Worth following my blog I reckon.

Very useful tool for looking at how 'fit' you are

The rather excellent website of the Nonprofits Assistance Fund has some very useful tools for charities. Here is one that I recomend you download from their website here and complete.

Even outside of a recession, this tool is really useful. And it shouldn't take you long to use.

Below is a preview...

Recession Preparedness Assessment 09

View more documents from Sean Triner.

Survey of emerging fundraising nations

The Management Centre and the Resource Alliance pulled together a survey of charities in Africa and Asia, purely about confidence in fundraising.

Bottom line; no charities were very worried, but most were slightly worried.

Worth having a click flick through, but please note it is a useful confidence survey, not one based on their actual results.

Global Fundraising Confidence Survey Asia And Africa

View more documents from Sean Triner.

Recession busting resources from NCVO

Charles Bosher from NCVO (a UK charity industry body) brought to my attention their resources specifically for charities dealing with the recession. Although British, the lessons in lots of the articles are useful wherever you are.

The article on ensuring Future financial sustainability is in itself a great resource - with links to step-by-step type documents, how to assess your fundraising mix etc.

Plenty of other stuff, mostly from a very strategic point of view, not so much tactical fundraising - but tactics are nothing with strategy.

Sean

Charitable Donations Fell by Nearly 6% in 2008, the Sharpest Drop in 53 Years

According to the new edition of Giving USA, donations were down in the US in 2008. Some evidence to back up a pile of anecdotes.

I am getting my copy soon, so will blog in more detail, but in the meantime check out what Paula Wasley has to say in The Chronicle of Philanthropy.

The (nearly) true value of regular giving

We have just finished presenting a benchmarking report to 21 Australian and New Zealand charities. All the charities hand over their entire transactional databases, pool them and run a full analysis on donor behaviour.

This round we had a special section looking at recession impact over here. We found no big impacts (to December 2008) on individual giving - some appeals were up, some down, some averages up, some response rates down, nothing really out of the ordinary. Recruitment numbers were steady - when they were down, it was for tactical reasons rather than recession.

Australia was not hurting much then; we are still not hurting anywhere near as much as developing world countries, and the likes of UK and USA but we are worried so maybe things won't be so rosy next round.

But one of the things we looked at was the value of regular givers. Looking at all regular giving (automatic debits) we noted that the average face to face was giving about $25 a month, and the average non face to face about $15 a month. By face to face, I mean donors recruited by people on the streets, at events and door to door asking strangers to give a monthly gift.

We know the attrition rate of face to face is much higher, on average than non face to face, but decided to look at the three year value. We were bowled over.

We included upgrades, but not additional gifts (non face to face regular donors are much more likely to respond to additional appeals than face to face reruited regular donors) in the analysis. We found that a $15 per month donor recruited by direct mail gave more than a $25 per month donor within three years.


Extrapolated over eight years, a $15 a month non face to face donor will have given 50% more, not including additional gifts, and the average monthly amount will be twice that of the $25 face to face donors. Also, on average, face to face donors are not likely to be good bequest / legacy prospects within the next two decades - mainly because of their age.

So, why would you ever recruit face to face over non face to face?

Well - face to face offers volume, predictability and low risk (you usually only pay for donors you get, whereas with other methods you normally have to pay for the media regardless of success or failure). Also, face to face can be outsourced giving the organisaiton a smaller liability in terms of internal costs.

Also, the fact is that recruiting non face to face regular givers is usually more expensive, even over eight years you would only be willing to pay 30% more for a non face to face donor and need to wait longer for the payback.

The answer? A balanced portfolio.

Invest in face to face, but balance with R&D into other acquisition methods until you get one working and then, to quote Gregor Drugowitsch who owns a face to face agency, '...If your organisation can obtain significant and sufficient numbers of regular donors through conversion, DM or proven DRTV, then you may want to exhaust those channels first.'

He is right, but those other channels are bloody hard to make work. Face to face still rules the roost on volume and net income in Australia.

Innovate or Die

Tribe Chief Marcello Inniara is obsessed with innovation. And he is good at it, having led Greenpeace Argentina's now famous campaign to save crucial forest a few years back - all from an online approach.

And not surprisingly, he wants us all to innovate in times of stress.

Being with him for half an hour is inspiring - and makes you start to push your own boundaries. I am really chuffed that he is coming to Australia to the F&P run Australasian Fundraising Forum this winter (August for us) to inspire Aussies.

One of my clients (I'll call him Al) is also obsessed - but this obsession is recruiting regular givers, cheap. Really cheap. Al currently pays about $280 per donor (giving about $25 a month) from Australian face to face providers.

He also knows than non face to face regular donors giving about $15 a month actually give more on average, over three years than face to face - mainly due to attrition. (I will put up another blog about this tomorrow).

So this means, in theory, he should be willing to pay more than $280 per donor for these but Al is not satisfied. He wants to get donors cheaper, because there is a way - we just need to find it, and online is our mutually preferred 'best bet'.

We told him he has unreasonable expectations - 'massive charities aren't achieving it' we said. At first frustrating, the Pareto team then went to the pub - and felt inspired.

All of us felt lifted by the challenge. His doggedness and determination is coming through, and we want to be part of it. He will force innovation.

I still need to remind him that there will be failures on the way, but we are really up for it. But maybe the recession has forced you to innovate? Any ridiculous ideas to share - that have worked or failed? I love the Ask Richard idea below, but other recession busting tricks welcome.

Marcelo's blog is well worth checking out, short and sweet ideas worth adding to your feed.

Sean

Charities and Recession on Radio National

Following a rather excellent 'Background Briefing' about charities in Australia, ABC Radio National hosted a pretty interesting show last night. I thought it was great, but am biased.

Some interesting thoughts from the public, and a host who started off pretty negative about face to face (direct dialogue) ended with a positive angle on it.

Check out the program here.

And last weeks Background Briefing here.

Innovation in times of stress

FBI used to be my favourite radio station when I lived in Sydney. They are a community radio station and I used to be a donor.

They are in trouble, financially, and have gone out with a great idea 'Ask Richard'. Basically asking people to suggest an idea on how to get $1m from Richard Branson.

Good luck to them! Check it out here.

You can follow @askrichard on twitter - if you are not twitter savvy, this is a good excuse to get into it. Much of it is rubbish like 'Just got up, my bed is so hard. Why am I so tired...!?' but it is easy to get away from that stuff.

There is tons of good information, such as one passed on from Mark Philips (bluefrog) about a 'secret meeting' of top philanthropists; you can read about this meeting here.

Sean

Turn media prices on their heads

Just a thought.

Charity A runs a new program to recruit new donors.
Spend is $30k on development fees and $200k on media (print, online, newspaper ads - whatever).

They recruit 1,000 new donors giving an average of $100 ie $100,000 income.

So they raise a net of -$130,000. In the results report a line will appear that the net cost of the donors was $130 each ie cost per acquisition (CPA) = $130. The projected rollout cost, which has no fees would be $100 per donor.

Now this particular charity knows that with its donor development program it needs to actually recruit donors at $50 per donor to make the exercise worthwhile. So, in this case the job is deemed to have missed target (it failed) and it is back to the drawing board.

But let's not start again.

There is a global financial crisis - media sellers are meant to be struggling. Surely a win-win here is to go back to the media seller and say "We will buy your media again - and we will buy four times as much, but at half the price." They get twice the income, and Charity A's cost per acquisition is now acceptable.

I know it seems naive, but if we all take this approach we can take real advantage of what should be a buyers market. There is no need to screw them - just get the price that works for you.

Anyone succeed at this please let me know. And if you try and fail, let me know too.

Sean

American charities can get stimulus funds...

For USA charities:

The wonderful people at The Center on Philanthropy at Indiana University are giving out a bulletin for free to help charities put their applications together.

With an incredibly snappy title, check out "The American Recovery and Reinvestment Act of 2009: Act Appropriations Beneficial to the Nonprofit Sector and Key Resources for Organizations to Approach and Access Funding Sources."

If you have someone in your organisation who can actually finish reading the title in full, get the bulletin to them and get them applying.

Thanks Daryl Upsall for bringing this to my attention. Get the bulletin here.