Rule #1 in Marketing: Know your Market
Sean Triner, MFINZ, MFIA Pareto Fundraising &
Fiona McPhee, MFINZ, MFIA Pareto Fundraising
Us fundraisers have a tough job. We have to persuade people to part with their hard earned money in return for nothing but a good feeling.
And on top of that, the majority of people charged with generating the lifeblood of our causes in New Zealand (and Australia for that matter) are new to fundraising.
Luckily, most fundraisers are nice, selfless and happy to share. So we gather together at FINZ events, in the pubs and cafes to share stories.
Historically this is all we had as fundraisers to base our decision making on.
But not now. Twenty seven New Zealand charities decided that these informal sessions were not enough. They want to base their decisions on facts, not anecdote.
They wanted to follow the first rule of marketing: Know your market.
This year, they pooled their data - every transaction of every donor who donated to them. This included donors acquired through digital, mail, press, TV, radio, face to face and phone.
It didn't include events and lottery donors. We also exclude first gifts made in response to disasters. This is because they are extraordinary gifts that don't make sense to benchmark.
THE BIG PICTURE
It is a buoyant market and a . A good time to be a fundraiser. The charities in the study (partners) grew from $70m to $100m in the last five years, excluding bequests, with an increase of over 45%.
Whilst that growth has been impressive, it has varied. Twenty of the twenty seven charities are still growing well, but a few have flattened out or are in decline.
The ones with the greatest growth shared one thing in common - they have been investing in donor acquisition. Having a face to face program is a major success factor, as is direct mail acquisition.
That is because these channels provide the largest volume of new donors.
Direct mail dominates one one-off donations. And this is good news because the average age of these donors is a surprising 72 years old. Perfect for those with good legacy marketing programs.
International NGOs are doing especially well. Three have done brilliantly, growing individual income over 100% in just two years!
Face to face still dominates regular giving acquisition. So much so that it is shocking surprising that more charities don't embrace this channel.
One charity in the study recruited 14,000 new regular givers through face to face in just one year.
But what about the rumoured high attrition of face to face donors? Well, it is high. The study showed attrition in year one of about 45% - compared to just 28% for non face to face regular givers.
But with 55,000 new face to face donors acquired in 2012, the charities had 30,250 of them still giving in 2013. This compares to 7,000 or so non face to face acquired in 2012 leaving just 5,000 retained donors in 2013.
Why don't charities do face to face? If they don't have any money then the can't! But if they have, why do they still hold back?
Cognitive dissonance and prejudice. Despite all the evidence, they don’t believe it would work for them, or could damage their brand.
The other beauty of face to face is that it is the first channel to ever get young people giving in strategic volumes. The average age of a face to face donor is about 45.
A MIXED PORTFOLIO IS ESSENTIAL
One danger of putting all your money in one channel is due to the holistic nature of fundraising. Face to face is great -but with 34% of income coming from bequests, a cash direct mail program is essential.
As well as the extra income, direct mail is also the best source of bequests.
Don't settle for excuses from senior management and boards trying to cut your budget if you are a fundraiser. And don't settle for fundraisers blaming the economy or some external influence on their fundraising results.
As long as you have a sound strategy, long term view and some cash to invest individual fundraising is buoyant right now in New Zealand.
Fiona McPhee is the Strategy Director for Pareto Fundraising, based in Wanaka. She is a frequent traveller to fundraisers nationwide.
Sean Triner is co founder and director of Pareto Fundraising and Pareto Phone.
The Pareto Fundraising Benchmarking program has been running for eight years. Thanks to the members for making this article possible.
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