HOW HAS FUNDRAISING EVOLVED IN 10 YEARS?

Jeremy Bradshaw asks Australia’s leading fundraisers and consultants their insights and observations on changes in the fundraising landscape during the past decade.

Nicci Dent National Fundraising Director Heart Foundation

Ten years ago Janet Jackson’s breast was exposed during the Super Bowl’s half-time show. Shannon Noll was singing “What about me?” And I was fundraising director at Médecins Sans Frontières (MSF) when the 2004 Asian tsunami hit over Christmas. It was all-hands-on-deck to get emergency fundraising out… before closing fundraising down 72 hours later because sufficient funds had been raised.

It was also a period when income from face-to-face fundraising was growing substantially, helping increase MSF’s annual income from $500,000 to $42 million by the time I left the organisation in 2008.

Today is different. We have endured the global economic crisis, and many more charities are doing face-to-face. Costs have risen, and lifetime values of face-to-face donors are declining. It is critical that organisations are on top of face-to-face analysis and reporting to effectively navigate these challenges.

Premium packs are now standard direct mail banker packs for many organisations, and whilst still successful, even these are costing more and seeing reduced response rates.

Although I see income from bequests and major gifts increasing from ten years ago, most fundraising methods have not changed in that time. What has changed is the need for fundraisers to work harder across all channels: whether it be analysis, creative, trialling new methods of acquisition, or trying harder to improve retention rates. This looks set to continue, and with less government assistance for our sector as a whole, competition for the fundraising dollar is likely to increase further.

John De Rango Director Redstone Marketing

More so now, donors want to feel engaged with the causes and the organisations they support – rather than just give and forget. Charities are now more accountable than ever with regards to how and where they’ve used funds, particularly back to their financial contributors.

In turn, the last decade has seen greater investment by charities in stewardship and retention programs – which are becoming more sophisticated through offline, online and new media – as understanding increases of donor attrition danger-points.

In regards to acquisition, more traditional “service delivery” charities are incorporating advocacy messages into their communications. This is enabling them to cut-through message clutter and also offer donors regular giving products on an ongoing basis, rather than just offering a gift transaction method.

Direct mail and face-to-face are still the major methodologies for acquiring new single-gift and regular giving donors respectively. But more investment and resources are being put towards digital and new media. Although digital analytics and learnings have come along in leaps and bounds, utilisation of these tools is more to support traditional fundraising methods. However, peer-to-peer fundraising has seen massive growth.

Due to Australian natural disasters (bushfires, floods) and economic uncertainty, face-to-face agencies are reporting that many prospective donors are looking to support home-grown causes, issues and state-based or Australian local service delivery charities.

Donor development has become a great source of increased income – including conversion programs (from single-gift to regular gift) and more sophisticated warm-appeal programs (increasing average gifts and response rates). Auto-upgrades for regular giving donors are being successfully implemented by many organisations via direct mail, rather than voluntary upgrades via telemarketing.

Supplementary regular giving products have enabled many Redstone clients to cross-sell their donors into additional fundraising products. This donor development activity experiences high response rates, providing for a greater share of the wallet and building a donor’s engagement with the cause when compared to the traditional upgrade of their existing gift.

One thing that hasn’t changed in ten years is the need for meaningful stories and experiences that connect with people. But the mediums used to tell the story are constantly changing; and the speed of interaction to and from your supporters and the public is almost immediate.

Sean Triner Co-Founder Pareto Fundraising

This has been one of the best decades in fundraising for many organisations. Huge charities like Médecins Sans Frontières and Australian Red Cross have seen massive growth – more than doubling their income – while small charities like The Lost Dogs’ Home and Indigenous Community Volunteers increased donations more than tenfold. Aussie donors have been amazingly generous when asked properly.

The Pareto Fundraising benchmarking sample of 70 charities has shown that since 2004 the number of new donors has expanded from less than 300,000 ‘one-offs’ to over 600,000, and new regular givers increased from less than 100,000 to over 300,000 per year.

Face-to-face has got younger people (under 60) to give in meaningful volumes for the first time ever, and a renaissance in direct mail has drafted in many more older people, increasing the bequest pool dramatically. And more recently, online lead generation and more analytical approaches to online donor acquisition are beginning to add to the younger donor pool.

Whilst we face tough challenges in maintaining this growth, we are heading to a true golden age in 15 to 20 years when those 40-50 year old regular givers will actually get to traditional donor age and be part of an ever-expanding, affluent, retiree population.

Nigel Harris Chief Executive Officer Mater Foundation

It’s hard to ignore the significant growth of organisations that have invested in continuity (regular giving) programs. This major shift in the market is significant in what it enables organisations to do in meeting their missions. It also emphasises the importance of investment and long-term planning.

Peer-to-peer fundraising – done well – has also been a revelation. It has opened a new dimension of supporter engagement and changed many community-based programs. Integral to this success, digital and social media have become a conduit for real results rather than being an aspirational channel for fundraising.

In the past couple of years, donor retention has been a big discussion. There are more and better ways to do this well, but we are not quite there yet.

We are still talking about major gifts, corporates, trusts and foundations, and especially bequests, but are we paying enough attention to relationships? And has fundraising practice improved in these areas? The answer is probably yes and no, as we have made some big steps in some areas but also far too few in others.

Governance expectations have changed, and while some nonprofit organisations have risen to those expectations, others don’t appear to have done so. In fundraising terms, that is material.

Resourcing fundraising is another area of change and the gap between organisations that seriously invest in fundraising, and organisations that don’t, is becoming more apparent.

Professionalism in fundraising practice has advanced more slowly than it might have. Sector association, professional education, qualifications and credentialing are still questions when they should be answers – especially given that research highlights the disconnect between fundraisers, management and boards. This factor seriously limits fundraising effectiveness and challenges identity. It is also a problem impacting recruitment and the development of fundraising staff, especially at senior levels. Ever the optimist, I’m confident we can change that over the next ten years!

Martin Paul Director More Strategic

The most consistent and noticeable transformation of our sector has been the power of data. Better data has enabled us to make more informed decisions, measure and mitigate risks and apply our limited resources in the most cost-effective way. Yet even ten years ago, pivot tables were a mystery to all but the most dedicated Excel users.

Good analysis has allowed us to gain the confidence of boards, as we can predict our return on investment (ROI) and understand what drives value. But there is a cost to this. Most nonprofits are now too aware of the challenges of multiple data sources, of overwhelming complexity and the difficulty of joining the dots between transactional, behavioural and social media data.

We often talk about the art and science of fundraising. Over the decade, science has been winning! The big fundraising operations are led by highly numerate, analytically minded thinkers and every fundraiser must be comfortable with calculating ROI and attrition levels, and understanding the 80:20 rule.

But sometimes I worry that we have swung too far, become too analytical and economically rational, forgetting that every message goes to a real person, with real concerns and real feelings. We are not running statistically valid test cells – we are stirring human emotions and making values-based connections. Yes, we must look at data. But we must also listen to the donor. As Albert Einstein said: “Not everything that matters can be measured, and not everything that can be measured matters.”

David Armstrong Head of Fundraising Australian Red Cross

Fundraising has changed dramatically, not just in Australia but the world. The astonishing growth of regular giving has injected hundreds of millions of new dollars into the not-for-profit sector.

This swelling army of supporters that now uses monthly credit card donations to commit tens of millions of dollars to their chosen charities, has at last given the sector a sustainable and assured income stream.

Not every charity has invested in regular giving, and the recruitment of regular givers through face-to-face marketing does need careful management. However, charities with no active regular giving program are standing still.

Fundraising through online and social media is another new concept. Back in 2002, one of my achievements was running the famous Paris Marathon. My 42 kilometres of blood, sweat and tears raised $4,500, but the real marathon was spending the next few weeks chasing friends and family with a sheet of paper and a cash tin.

Digital platforms like Facebook, Everyday Hero and Pozible now allow us to fundraise across social networks, and receive our donations with ease. Who would have thought that growing moustaches would become a global fundraising phenomena?

As the baby boomer generation approaches retirement, with increasingly high levels of prosperity there has also been substantial growth in the value and volume of donations through wills and bequests. Include A Charity, which represents more than 100 Australian charities, has achieved what no single charity has been able to do – change the way Australians think about including charities in their will.

Proactive investment in fundraising by the not-for-profit sector itself is another fast-emerging engine-room for revenue growth. A number of boards are now investing their assets and reserves into fundraising – rather than traditional low-return investment portfolios, subject to the vagaries of the stock market. This can produce ten times better returns and fast-track an organisation’s growth.

What hasn’t changed for me, however, in my more than 15 years in fundraising and philanthropy is the amazing capacity of everyday people to constantly surprise me with their most extraordinary acts of generosity and compassion.

Jeremy Bradshaw is publisher of Fundraising & Philanthropy Magazine and Generosity for donors and their advisors.

ARTICLE BY F&P MAG : http://www.fpmagazine.com.au/how-has-fundraising-evolved-in-10-years-340156/