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UK Fundraisers Diversify Their Techniques

By Tom Watson on August 29, 2007No Comment

The Top Ten Trends in British Philanthropy by Fiona Hodgson

UK Fundraisers Diversify Their Techniques
By  Penny Stephens, 8/29/07

There are currently more than 160,000 registered charities in the UK, with additional organizations joining the list each month.  Even with the Charity Commission’s efforts to remove those charities that no longer comply with its criteria, the number continues to increase, and the marketplace gets more and more crowded.

Tracking studies show that the voluntary sector in the UK is still growing, but also that the largest charities (those with incomes of over 10 million GBP (US$20m)) are the only ones to see an overall increase in income. Organisations with less than 10 million GBP income- which represent the vast majority of charities in the UK- have seen average incomes drop over the last few years.

Voluntary income is giving way to earned income, with government contracts now accounting for 820 million GBP (US$1640m).

This all sounds pretty good- steady growth and a healthy input from Government- but it is actually leading to a much tighter and less predictable sector in many ways. Charities are competing in an open market with corporates for Government contracts, as well as with each other for individual support.  As a result, fundraisers in the UK are increasingly diversifying their techniques in an attempt to boost voluntary income.  

For most UK-based charities, direct mail has been the mainstay of their fundraising over the last 15 years or so, but response rates are dropping away alarmingly. Where 10 years ago, a one percent response on a cold mailing was pretty average, only a tenth of that is now a realistic expectation. Reciprocal mailings and warm mailings to lapsed donors, for example, fare better, but returns are still diminishing. 

Face-to-face (F2F) fundraising is celebrating its 10th anniversary in the UK. In that time, it has recruited hundreds of thousands of donors, many from the hard-to-reach 18-23 age group, and raised millions of pounds.  What started as a fundraising technique on the street- approaching passers-by to engage them in conversation and sign them up to giving by direct debit- has moved on to front doors, shopping malls, and big events. Telephone calls generally follow, but the telephone as a means of recruiting appears to be on the wane, with the chairman of the recently-established FundRaising Standards Board the regulatory body for fundraising in the UK- warning that cold telephone fundraising would be dead within five years.

Some charities have been hesitant to try this forward approach, perhaps due to the negative press coverage the technique has received, but those that have embraced it wholeheartedly, and have approached the media with openness and transparency- for example Shelter and British Red Cross- have found a positive media attitude in return.

Other charities have taken a leaf out of American fundraisers’ books by using techniques that have proven themselves with an American audience. Nurturing existing donors has become a large part of many donor care strategies, born from the premise that it is far more cost-effective to keep the donors you already have than to go out and recruit new ones. Donor stewardship- a technique long-championed by American consultant Karen Osborne- is the new buzz phrase.

The National Society for the Prevention of Cruelty to Children (NSPCC) in the UK has taken the philosophy so much to heart that it has contracted an agency, Cascaid to look after that side of its fundraising. MD of Cascaid Alan Clayton says that where donor care is ‘reactive’, stewardship is ‘proactive’. The charity has been working on its stewardship strategy for some time, but will now concentrate it on its higher end donors- writing to them to say what they have achieved in a period of time with donated money, for example. This is a long-term strategy that the NSPCC says it will be evaluating after 12 months. In a marketplace where many still don’t even thank their donors, it will be interesting to see how this adds to donor loyalty.

And those high net worth individuals.  The UK lags some way behind the US here, but most charities are waking up to the fact that they may well be holding valuable information on their databases about their donors. Helen McEachern, International Director, Fundraising, of international development agency ActionAid, says this is an area that NGOs are missing out on. “Most charities are still struggling to take this on,” she says. “But they will miss out on having an influence over these donors.” She feels that many charities need to learn how to approach major donors, understand their needs, and package their work so that their programs’ outcomes are clearly outlined. 

McEachern also points out problems unique to international NGOs working in developing countries.  “There is more competition,” she says “but in our experience also growth. The economic growth in most countries also contributes to people’s ability to give.” Emerging middle classes in countries such as India certainly have the resources to give, but need to be pointed in the right direction.

One of the biggest problems they face, she says, is the lack of skilled staff in developing countries. “It’s difficult to find skilled staff in terms of fundraising, and finding the resources to develop staff is a big factor as well.”  Fundraising consultant Tony Elischer of Think Consulting Solutions says this is inevitable in new markets. “Like the UK 25 years ago, the early stages of market development attract early retirement corporate execs and ex-military type people,” he explains. “Younger volunteers then move in and gradually become formal employees, thus starting a change of culture. More and more universities are offering courses for NGOs, some in partnership with the Resource Alliance, and fundraising associations offer training, conference and distance learning. So the options are there and can be cost-effective.”

Along with others, McEachern feels that technology has a lot to offer in both the developed and developing world. “But small testing and research budgets to invest in technology have meant that NGOs have really struggled to change supporter recruitment methods during the time that consumers have been changing their habits to incorporate technology,” she says.

Internet fundraising is working well for some, but not all, charities in the UK and worldwide, and SMS via cell phones is a burgeoning area. Everyone in the world, it seems, owns, or soon will own, a mobile (cell) phone, so it seems logical that this should be the ‘next big thing’ along with social networking sites to harness people’s giving ability.

There’s no doubting the competitive nature of the marketplace, but as McEachern says: “You can either say there’s no space, or you can say ‘I’m going to change the market and make space’.”

Sources

Charities Aid Foundation (http://www.caf-online.org/), National Council for Voluntary Organisations  (http://www.ncvo-vol.org.uk/)

The Resource Alliance is a UK-registered charity whose mission is to build the fundraising capabilities of the non-profit sector worldwide. It organises and runs the International Fundraising Congress, the 27th of which takes place in the Netherlands from 23-26 October this year. Details from http://www.resource-alliance.org/

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