CRUK clarify reports of budget slashes

Tania Mason of Professional Fundraising reports that CRUK, one of the top UK fundraising charities, is expecting a decline due to the economic climate.

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.

The Word on the Street

I am back in Australia now, but when still in UK I took a train to meet an old pal. The train was delayed so I went up to strangers and asked them if they gave to charity, and if they did if it would change now that the recession was 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!

Sean

A few 'data' anecdotes

Fundraising in Ireland
Damian O'Broin from Ask Direct tells me like for like acquisition for one of his clients has been in decline:

2006: 1.11%
2007: 1.22%
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.

Sean Triner

It's all about data. But what data? Part II - analytical data

In Part II, I am exploring data closer to home.

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.

Benchmarking
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.

Fiona Paterson

Head of Global Data Services

Pareto Fundraising

News round up: CRUK, Obama

Articles and news from over the last few days
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Leaked report
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.
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Opinion

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...

Sean Triner

Amanda Seller of WSPA says "Pull Your Finger Out"

Watch and listen to Amanda Seller from WSPA reporting back from her meeting with lots of other International INGOs at the IFC Conference in Holland.

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).

Sean Triner

Public market research from YouGov!

MARKET RESEARCH
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.

Sean Triner