The 21st Century Donor
Joe Saxton, Michele Madden, Chris Greenwood & Brian Garvey
September 2007 The 21st Century Donor
To raise money from the 21st Century donor effectively the successful 21st Century Charity will need to…
1. Become as distinct, competitive and appealing as the best commercial brands. Charities compete with an individual’s personal and leisure spending as much as with other charities. 2. Demonstrate and communicate value-for-money and impact, so that donors can see how their contribution makes a difference to clients and beneficiaries. 3. Engage donors by motivation and giving ‘products’, as much as on the basis of demography and wealth. Donors like and respond to opportunities to give where the price, the rewards, the package and the relationship are all clearly set out. 4. Offer a wider choice of giving products which match donors’ motivation. For example, some donors want giving centred around social interaction such as challenge events and others around the impact of their donation. 5. Blur the boundaries between giving and living – create more active and rewarding lifestyle events, from fun runs to peak challenges, from dinner parties to midnight walks. The best social fundraising makes it unclear whether people are primarily fundraising or primarily having a great time. 6. Make donors stakeholders, with a real say in how they give and how their money gets spent. While this does not mean that donors have the final say in how the money gets spent (unless they are government!) it does mean that their views are really important. Therefore dialogue between donors and service deliverers becomes more important. 7. Stress what a donor can expect out of the giving experience: this might be about the emotional return of giving, the recognition process or the involvement. The more money people give, the more they want to be involved. 8. Appeal intensely to specific, defined target audiences. A lukewarm appeal to the general public is worth far less than a burning passion amongst a key demographic or attitudinal group. 9. Woo more big givers, corporate and individual, via the offer of recognition and the opportunity to change both their own lives and the lives of beneficiaries. 10. Integrate the experience of giving time, money or activism so as to retain loyal supporters able to give different things at different life stages, from nursery to nursing home. Giving and volunteering are better seen as one activity which focuses on giving time or money, depending on life-stage, circumstances and wealth.
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Section 1: Introduction
Welcome to the 21st Century Donor. This report on donors was inspired by the success of the 21st Century Volunteer which we published in 2005. That report, commissioned by the Scout Association, looked at trends in volunteering and how organisations can market and develop their volunteering.
That report set us thinking. Not only do we at nfpSynergy have a lot of experience in researching giving as well as volunteering, but we could also see that there was a gap in the literature on giving and donors. So we set to work on this report. It is the culmination of several years of work by nfpSynergy researching and understanding donors in a whole variety of guises. We have been tracking the public’s attitudes to giving through our Charity Awareness Monitor (CAM) since 1998 (though the research included in this report represents a mere 5% of the total). We have also been carrying out focus groups for clients and for ourselves on donors and giving.
On top of what we already had in the bank, we decided we should investigate what a range of experts in fundraising thought was going to happen to donors and giving. This was hard not only because we could have interviewed twice as many people as we did (and still not have exhausted the supply of smart, sassy fundraising and philanthropy experts), but we did not even touch the field of consultants (where again we would have been spoilt for choice).
The purpose of this report is to enable charities of all sizes to think about the future and the fundraising strategies they will need to maximise income so as to meet the challenges ahead. If you want to cut to the chase just read the final section starting on page 46 where we summarise, synthesise, and enter into polemic.
If you cannot read that much then here is the single idea we would like you to go away with. The 21st Century Donor is richer, more engaged, more discerning, and more in control than her 20th Century predecessor. Giving to a cause that they care about passionately will increasingly be as much part of many (rich) people’s lifestyles as mortgages, second homes and holidays. To make this a reality fundraisers and those who ask for donations will need to understand what their donors want, their lifestyles, their worries, their wealth, and their needs. In the world of the 21st Century Donor there is no such thing as donor fatigue, only fundraising fatigue. How much can be raised is not limited by how much people will give but to what extent we can make the giving experience as rewarding as the foreign holiday, the evening out or the extra indulgence at the supermarket. We have hardly even begun to scratch the surface.
This report would have gone unwritten if it were not for our interviewees whose ideas we have used liberally. They are: Paul Amadi of RNIB, Mark Astarita of British Red Cross, Anthony Baumann of RSPCA, David Brann of RNLI, Martin Brookes of New Philanthropy Capital, Bridget Cluley of Honeysuckle Cottage, Jeremy Cooper of Plan International, Paul Farthing of Cancer Research UK, Alan Gosschalk of Shelter, Tim Hunter of NSPCC, Kerry Moscogiuri of Amnesty UK, James Kliffen of MSF-UK, Sal LaSpada of the Institute of Philanthropy, Iain McAndrew of Guide Dogs, Susan Mackenzie of Philanthropy UK, Gwen Pearson of Scope and Karen Rothwell of RSPB. We would also like to thank all of our colleagues at nfpSynergy who helped with various aspects of this report. The report was financed by nfpSynergy profits. nfpSynergy 3 The 21st Century Donor
Section 2: The world that donors live in
Donors are also customers and consumers. They live complex, rapidly changing lives. For most donors 95%, if not 99%, of their money does not go to charities. So it is impossible to understand people’s giving without understanding something about the rest of their lives. This section attempts to do just that.
The changing future: Socio-economic, technology and charity sector trends and their impact on donors.
Trend 1: An ageing population People are living longer and having fewer children. As a result, the population of the UK is getting older. In fact, it is predicted that by 2024 there will be a greater proportion of people over 50 years old than under. Put another way: by 2024 there will be an additional 6 million people aged over 50. There are also problems ahead for state pensions: if we look into the future (2024), the ratio of those of working age (16+) to those over retirement age (65+) is predicted to shift from 4 people working to every 1 retired person, to 2.9 working to every retired person. This means fewer people working, paying taxes and funding the state pension.1
Trend 2: Society is getting richer (on average) Society as a whole is getting richer. This trend in economic growth and increasing levels of money in people’s pockets has continued virtually unhindered for the last 25 years and apart from a few blips, such as the oil crisis of the 70s, can be traced back to the Second World War. This is not to say that all portions of society are getting richer at the same rate. An analysis of the highest and lowest quintiles (20% bands) of wealth show that wealth is distributed very differently depending on the nature of the household. For example, childless couples are much more likely to be in the highest band of wealth, while single people and single parent families are much more likely to be in the lowest band of wealth.2 However, the poorest are getting poorer, and staying poor. Social mobility is at its lowest for decades for those in the lowest band.3
Trend 3: The ‘any-way-up’ family Half a century ago a child was typically part of a broad family unit made up of their grandparents and parents as well as a number of uncles, aunts, cousins and siblings. As people began to live longer and have fewer children, the family has become ‘taller’ (with children increasingly likely to know their great grandparents) but ‘narrower’ as fewer children means fewer uncles, aunts, cousins and siblings.4 It does not stop there. This more ‘vertical’ family structure has become increasingly complicated due to the decrease in marriage and increase in divorce and remarriage. In 2005 the divorce rate was a staggering 62%, up from 6.5% in 1960.5 This widespread fracturing and reforming of the family unit has resulted in some very complex families. Small numbers of siblings and cousins have been supplemented by
1 UK age groups and predictions Government Actuaries Department/nfpSynergy /nVision 2 Family Expenditure Survey/nfpSynergy 2006 3 LSE/Sutton Trust June 2007 4 Demographic change Future Foundation/nVision 2006 5 Population Trends, ONS/nVision nfpSynergy 4 The 21st Century Donor
large numbers of step-siblings and step-cousins (and step-parents, and step- grandparents and so on). In fact, if both parents enter into new relationships, there may be two sets of step-families to live with (or without).
Trend 4: Diverse households The nature of the household has been changing for at least 30 years. Most notably: • Married couple households are decreasing in number (from 70% of all households in 1971 to less than 40% as forecasted for 2021). • Single-person households are increasing in number (from fewer than 20% of households in 1971 to over 30% as forecasted for 2021) and many single householders are older people. • Cohabiting couple households are also increasing in number from virtually none in 1971 to a forecasted 10% by 2021.6
The ageing population, international migration and the growth in single-person households are all driving the need for more homes. In England, it is estimated that the annual number of new homes needed each year is around 200,000. The number of new homes being built has stabilised at around 150,000, giving an annual shortfall of about 50,000. The situation in London appears to be particularly acute. The shortage of houses is reflected in, and compounded by, steadily rising house prices (the average house in London currently costs more than £300,000) with the average UK house price now over eight times average incomes.
Trend 5: The escalation of education In just 26 years annual enrolments in tertiary education in the UK have shot up by over 2 million places (between 1976 and 2002). This means that in 2002 alone there were nearly 3 million people beginning their tertiary studies. This is greater than the number of people by which the UK population increased in the same time frame (1976-2002)! In 2001 only 5.4% of 15-24 year olds were without qualifications compared to 56% of those aged over 65.
Trend 6: The decline in financial independence Despite the government’s increased education spending, which in 2000 was £40.9 billion, household expenditure on education is still predicted to rise another 46% in the next 5 years – from £11.2 to £16.4 billion. A recent NatWest survey showed that the average debt of a student graduating in 2006 was over £13,000 and concluded that it would take most students 4-10 years to pay this back. This figure is expected to rise to £15,000 in 2007.7 The trend for young people to stay in the parental home for a longer period of time is a likely response to this increasing demand on their finances.
Cultural and attitudinal changes and their impact on donors
Trend 7: Choice is mushrooming Choice is growing in every area of people’s lives. This growth in choice is driven in some cases by market competition, but also by deregulation and the new
6 Demographic change 2006, Dept Communities and Local Government/nVision 7 Student debt averages £13,252, BBC online, 15 August 2006 nfpSynergy 5 The 21st Century Donor
technologies of TV, telephones and the internet. Examples of how choice is growing can be found in virtually every aspect of life, but include: • Choice driven by competition. Over 8,500 mortgages, 1,600 models of new car on sale, 200,000 titles in high street bookshops and 40,000 products in the average out-of-town Tesco (up from 5,000 in the early 1980s) • Choice driven by technology. 120 mobile phone tariffs in Carphone Warehouse alone (not to mention choices of ringtones), 600 Internet service providers and 900 choices of TV channels (up from 4 a decade ago) • Choice driven by deregulation. 16 choices of electricity supplier, 22 choices of gas supplier, 11 choices of telephone supplier, and all from a base of no choice of utility supplier as recently as 1990
UK technology trends – the public and charities
Trend 8: New technology take-up dependent on familiarity of existing products Technology take-up is largely due to four things – familiarity, relevance, accessibility and cost. The evidence is that technologies with the most rapid take-up: digital TV, colour TV and the Video Cassette Recorder (VCR), were all in some way related to an already common activity – watching television. Furthermore, consumers were able to readily access these technologies through familiar outlets and at competitive prices. But for new technologies, such as the internet and mobile telephones, it often takes a number of years before pricing and accessibility levels are such that usage reaches a ‘critical mass’, after which uptake increases exponentially.
Trend 9: Use of the internet is changing many of the ways that people do things In the last two years internet access has shown a real convergence in terms of demographic access, with gaps that previously existed between age groups and genders beginning to close. For example, 16-44 year olds are now indicating high rates of access (89%) with 55-64 year olds lagging further behind at 69%. It is only within the 65+ age group that less than half are online (34%). Men and women are now registering equal access and overall access sits at 54%. On the other hand, social grade continues to be a barrier. Not surprisingly ABs have the highest rate of access at 87%, C1s and C2s come in close behind at 80% and 75% respectively, Ds sit at 71% with Es access to the internet incredibly low at 35%, although this still means a third of those in the lowest wage bracket have access to the internet.8
Trend 10: Digital TV is the remote control revolution As we have already mentioned, digital TV has had the most rapid uptake of all the discussed technologies, with 70% of all households accessing it by July 2006. The other issue to consider is the sheer quantity of stations that are available through digital TV. In 2001 there were a staggering 420 TV channels as compared to 120 in 1998 and 4 in 1994 (and this has since more than doubled again to 900). This diffusion of viewership will mean that charities moving into digital TV will have to be strategic, either targeting niche markets with their own TV shows or targeting channels with high access rates. It is worth noting that much of the growth in digital TV penetration over the next four years is predicted to be via Freeview.9
8 Charity Awareness Monitor, nfpSynergy 9 nVision, The Future Foundation nfpSynergy 6 The 21st Century Donor
Trend 11: Intimacy, safety and interactivity - mobile telephones are the new best friend One thing UK inhabitants are not short of is telephones. 87% of people own at least one mobile. Men and the higher social grades are still the most likely to own a mobile phone but, with the exception of social grade E at 67%, gender and social grade are becoming insignificant. Consider, for example, that 92% of ABs have a mobile compared to 86% of C2s. Breaking ownership down by age reveals a greater degree of differentiation with 16-34 year olds being most likely to own mobiles (98% penetration), 35-44 year olds are not far behind at 89% but examination of the older age groups shows that ownership starts to drop off. Having said this, an astonishing 63% of those aged 65+ have a mobile phone meaning that a text message campaign (for example) would still be a very good way to target older people - assuming of course that most owners can use basic features on their phone!10
Trend 12: Charities are slow to make the most of the internet – and now they have digital TV and mobile phones to think about too
Charities’ use of the internet In nfpSynergy’s report ‘Virtual Promise’ (2006) charities show they are slowly increasing and diversifying their use of the internet. Over half of organisations now also use the net for their intranet, for the purchase of travel tickets, supplies, goods and services and for market research. 43% have email for key volunteers, 35% purchase stationery online, 19% have an extranet for volunteers, 22% have e- learning for staff, and 13% offer internet training to client groups.
Charity websites – basic facts Over a third (36%) of organisations responding to the Virtual Promise study now have 3 or more websites, as compared to 24% in 2002. A phenomenal 75% indicated that they update their websites daily or even hourly and a further 16% update them weekly. The majority of charities we surveyed (69%) stated that they allow users to leave an email address for follow-up contact. Although it is disappointing that only 67% of these ever follow-up these contacts, this figure is quite high given voluntary sector resources. 56% of charities have no profile of their web users and 23% do not measure usage at all.
Charity websites – functionality A high proportion of charities which took part in the research said their websites have basic ICT functions such as information materials (96%), news and regular features (95%), downloadable files and fact sheets (94%), links to other websites (93%) and information about job vacancies (85%). Our research would suggest that these have been core functions since 2001.
Although the proportion of organisations that offer an email enquiry service is quite high (85%), there is little reason why it should not be 100%. Potential supporters looking for information online are going to expect to be able to make contact online
10 Charity Awareness Monitor, nfpSynergy nfpSynergy 7 The 21st Century Donor
and an inability to do so will only lead to frustration and loss of interest. It is good to see the apparent growth in more sophisticated functions over the past year. Just over one third of charities have a searchable online database and 58% have email newsletters, 30% have campaigning and online activism and 33% allow the purchase of goods/services via credit or debit cards.
22% of charities plan to have podcasting available in the next six months and 19% to set up blogs.
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Section 3: Donors – the basic facts
This section lays out what we know about donors from our research on giving and the public. It starts out fairly predictably with some of the basic demographics about donors, but builds gradually towards a crescendo of information about social capital, wealth deciles, and voting intentions. This section along with the two that follow it are designed to build up a picture of who gives, why they give and what they think about giving. Enjoy.
Chart 1: Levels of donating “Have you donated to any charities in the last three months? …Yes”
100%
90% 83% 79% 76% 80% 75% 74% 74% 73% 75% 75%74% 74% 75% 72%71%72% 72% 72% 71% 72% 72% 69% 70% 65% 61% 58% 60%
50%
40% Annual averages 2002 67% 30% 2003 74% 2004 73% 20% 2005 77% 10% 2006 74%
0% 0 1 2 3 4 5 6 1 2 3 4 5 6 7 0 1 2 3 4 5 6 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 01 02 03 04 05 06 07 ------l l l l l l l t t t t t t t r r r r r r r n n n n n n n Ju Ju Ju Ju Ju Ju Ju Ja Ja Ja Ja Ja Ja Ja Oc Ap Oc Ap Oc Ap Oc Ap Oc Ap Oc Ap Oc Ap
Source: Charity Awareness Monitor, nfpSynergy Base: 1,000 adults 16+, Britain Telephone waves only
Nearly three quarters of respondents claim they have donated to charity in the previous three months. The level of those donating has remained fairly static in the past 4 years. The rise in early 2005 is as a result of the increase in giving that accompanied the South East Asian tsunami. It does not appear that this higher level of giving has been maintained.
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Chart 2: Women and higher social grades more likely to donate “Have you donated to any charities in the last three months? …Yes”
100% 2002 2006 90% 79% 80% 80% 76% 74% 72% 70% 71% 71% 72% 70% 70% 67% 67% 63% 61% 60%
50%
40%
30%
20%
10%
0% Total Male Female AB C1 C2 DE
Source: Charity Awareness Monitor, nfpSynergy Base: 3,000 respondents 2006
There has been an increase in giving across the board since 2002. Women are more likely to be donors than men and this reflects the composition of most charities’ donor base. Those in social classes AB and C1 are more likely to donate than those in other social groups. The likelihood of donating is lowest for social class DE, possibly as a function of having less disposable income. However, this group showed the largest increase in donating between 2002 and 2006.
Chart 3: Younger age groups still not on board “Have you donated to any charities in the last three months? …Yes”
100% 2002 2006
90% 80% 78% 79% 78% 80% 74% 76% 75% 71% 72% 70% 68% 70% 67% 68% 67% 58% 60% 53% 50%
40%
30%
20%
10%
0% Total 16-24 25-34 35-44 45-54 55-64 65-74 75+
Source: Charity Awareness Monitor, nfpSynergy Base: 3,000 respondents 2006
The least likely to donate are the youngest age group, which is not surprising given that they are likely the group with the least disposable income. Those most likely to
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donate are those in the 45-54 age group. As people get older the propensity to give drops off. This is again most likely as a result of their economic situation.
Chart 4: Impact of marital status changing “Have you donated to any charities in the last three months? …Yes”
100% 2002 2006 90% 78% 77% 79% 80% 74% 72% 72% 72% 67% 70% 65% 65% 67% 58% 60%
50%
40%
30%
20%
10%
0% Total Single Married Living as Widowed Divorced/ married Separated
Source: Charity Awareness Monitor, nfpSynergy Base: 3,000 respondents 2006
Those who are divorced/separated are the most likely to donate. Indeed, it is amongst this demographic group that we have observed the largest increase in giving to charity between 2002 and 2006. Not only that, but they have removed married people from the top spot. Single people are the least likely to donate.
Chart 5: Donations by parenthood
100% 2004 2006 90% 84% 80% 79% 78% 78% 77% 80% 73% 74% 70% 67% 67% 60% 50% 40% 30% 20% 10% 0% Total No Children Children at Children at Children not living home home over at home under 18 18
Source: Charity Awareness Monitor, nfpSynergy Base: 3,000 respondents 2006
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There is a marked difference between those who have children and those who do not. It is not a case of how old the children are, it is simply that being a parent appears to increase the likelihood of being a donor. When we look at whether respondents have children and the age of those children we see that in most areas there is very little difference. Perhaps unsurprisingly fewer people with no children give to children’s welfare charities than those who have children of any age. More of this group also give to animal welfare organisations.
Chart 6: Worshippers more likely to donate
100% 2002 2006 90% 82% 80% 74% 76% 71% 72% 70% 67%
60%
50%
40%
30%
20%
10%
0% Total Regular worshipper Non-worshipper
Source: Charity Awareness Monitor, nfpSynergy Base: 3,000 respondents 2006
Those who describe themselves as regular worshippers are more likely to donate to charity than those who do not. And this appears to be part of a growing trend.
People who describe themselves as worshippers are more likely to donate to charities in the international aid/development sector than non-worshippers. This may be because of the number of international charities that have a religious base e.g. CAFOD, Christian Aid, Tearfund and WorldVision. Worshippers are less like to support animal welfare charities than those who are not worshippers.
Volunteers are also more likely to donate than those who have not volunteered. When we look at other sub-groups and the causes they donate to, it appears that whatever the type of engagement, where people are involved with charities they tend to donate more (whether this is to the charity they volunteer with or others is not known).
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Chart 7: Higher income households are more likely to give to charity
100%
90%
80%
70%
60% 50% 50% 41% 40% 30% 30% 30% 32% 32% 32% 30% 22% 18% 20% 15%
10%
0% Total Lowest 23456789Highest income income decile decile
Source: The Family Expenditure Survey/nfpSynergy Base: 3,000 respondents 2006
The percentage of those donating to charity rises with income level, probably for the obvious reason that you cannot give money away if you do not have any to give. As can be seen in Chart 7, there is a plateau in the middle of the table where just under a third of households with incomes between £17,115 and £41,143 (deciles 4-8) donate before the proportion rises for the top two deciles. Please note that the data refers to numbers of households not individuals.
Chart 8: Income level vs. donation level
£80 All households Donors only £70 £60 £60
£50 £43 £40 £32 £31 £30 £30 £27 £26 £25 £21 £20 £19 £18 £20 £14 £10 £8 £8 £10 £10 £6 £8 £2 £4 £4 £0 Total Lowest 23456789Highest income income decile decile
Source: The Family Expenditure Survey/nfpSynergy Base: 3,000 respondents 2006
Donation size rises significantly for the top percentile and this is probably because in Britain today the rich are very rich. However, for the relatively wealthy deciles
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beneath them (7 and 8) the level of donations compared to income does not rise as would be expected. The figures show the average gift to charity per month.
Chart 9: Lower income households give away a higher proportion of their income than higher income households
10%
9% Donors only 8% All households 7%
6%
5%
4% 3.2% 2.9% 3% 1.8% 1.9% 2% 1.2% 1.1% 1.1% 0.9% 0.9% 1.0% 0.8% 0.6% 1% 0.4% 0.5% 0.5% 0.4% 0.3% 0.4% 0.3% 0.3% 0.4% 0.4% 0% Total Lowest 23456789Highest income income decile decile
Source: The Family Expenditure Survey/nfpSynergy Base: 3,000 respondents 2006
The proportion of income to donation value fluctuates across the bands with those who do give in the lowest income deciles giving the highest proportion of their income. However, as we know only 15% of those in the lowest income decile donate compared to 50% of those in the highest income decile. And they are higher earners so value of donations in absolute terms is greater.
Let us now go on to look at the differences between givers and non-givers in terms of their social and community interactions.
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Chart 10: Involvement in social capital activities
Invited friends round to your place to socialise twice 58% or more in the last 3 months. This could be for a 51% meal, a drink, a barbecue or for a party.
Involved with any local clubs, societies or 46% associations 30%
Any kind of regular sports or fitness activity, once a 44% week or more often 41%
Activities with your local school such as helping with 20% events 13%
Givers Regular worshipper or churchgoer, of any faith or 25% Non-givers religion 7%
0% 20% 40% 60% 80% 100%
Source: Charity Awareness Monitor, nfpSynergy Base: 1,000 adults 18+, Britain, November 2006
Donors appear to be more involved in their local communities than those who do not give. They are more likely to open their houses to their friends and neighbours and significantly more likely to be involved with clubs and associations. As we highlighted earlier this group is also more likely to worship regularly.
Chart 11: Knowing the neighbours “How many of your neighbours would you say you know by their first names?”
100% Nov 03 Nov 04 Nov 05 Nov 06 90%
80% Those who said “most of them” 70%
59% 59% 59% Givers vs Non Givers: 58% vs 60% 55% 45% 50%
40% 32% 32% 30% 29% 30%
20% 11% 13% 10% 9% 10%
0% Most of them Some of them Few/none of them
Source: Charity Awareness Monitor, nfpSynergy Base: 1,000 adults 18+, Britain, November 2006
Givers are more likely to say that they know most of their neighbours by name. Those who say they know few or none of their neighbours are more likely to be non- givers.
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Chart 12: Voting intention “If there was a general election tomorrow how likely would you to be to vote”
100% Those who said “very likely” Quite likely Givers vs Non Givers: 71% vs 46% 90% Very likely
80% 17% 16% 17% 70% 20%
60%
50%
40% 68% 69% 65% 30% 61%
20%
10%
0% Nov 03 Nov 04 Nov 05 Nov 06
Source: Charity Awareness Monitor, nfpSynergy Base: 1,000 adults 18+, Britain, November 2006
When asked how likely they were to vote, those who give to charity were much more likely to state that they would than those who do not give.
And finally…the number of respondents stating that they have access to the internet has been steadily climbing since April 2002. When internet users are asked if they have visited a charity website 26% state that they have. This number has been on the rise since April 2002.
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Section 4: Why do people give?
This section looks at what causes people give to and what motivates them. Unsurprisingly a personal connection with the cause is a dominant theme. This comes across strongly in nfpSynergy’s quantitative and qualitative research with donors. Donors have often either experienced a service the charity provides, had the illness, or known someone who has. This cuts across all age groups. Particular mention was made of cancer as an issue which had touched the lives of participants and their families.
Chart 13: Reasons for supporting favourite charities or causes “When you think about your favourite charities and causes, please indicate which statements represent how you came to support them.” Prompted
Events in my life led me to decide certain causes were 44% 48% important to me 44%
34% I currently don't have any favourite charities or causes 32% 30%
I feel strongly about a number of issues so I looked for 25% 31% charities that address these 32%
I chose to support them because I’m confident they follow 22% high standards when fundraising
Personal experience of particular charities led me to 19% 22% admire them 20% Jan 07 19% My favourite charities have built up over a life time 21% 18% Feb 06
I supported certain charities simply because they asked 5% March 05 6% me to 6%
Being persuaded by their fundraising and communications 4% 7% work 6%
2% Not Stated 1% 1%
0% 10% 20% 30% 40% 50%
Source: Charity Awareness Monitor, nfpSynergy Base: 1,000 adults 18+, Britain, September 2006
nfpSynergy has asked the general public about their approach to giving across the last 2 years. A third of respondents state that they do not currently have a favourite charity and this represents an opportunity for the right organisations. A quarter of respondents were the opposite, they feel strongly about certain issues and actively source charities that help them act on these.
Participants in our focus groups talked of having a personal connection with the causes they support. This was either in terms of a strong fundraising connection through a school for example, or through volunteering and directly experiencing the work of the charity:
“Through our school exchange, I really got a sense of what was involved.” 16-18 year old
“Working in South East Asia I saw some of their projects and the problems people face first hand which is why I support them.” 55-64 year old
nfpSynergy 17 The 21st Century Donor
The recent focus group attendees also stated that they gave because of the brand or name of the charity. They had heard of them or had been asked by them to give, and were confident because they had heard of them.
However, one respondent did point out that charities:
“need to keep reminding people you are out there so at the point you feel like being generous and supporting a charity – you are the first to come to mind” 18-24 year old.
Chart 14: Giving to charity “When thinking about giving to charity which of the following statements best describes your approach? “
I have certain charities or causes I prefer to 50% 51% give to I prefer to make one off donations when it 44% 47% suits me I am committed to giving to one or more 26% 25% charities on a regular basis
12% I plan my giving 13%
10% I can’t afford to give to charity at the moment 9% Jan-07 Feb-06 8% Mar-05 I only give when asked to 11%
1% Not Stated 1%
0% 20% 40% 60% 80% 100%
Source: Charity Awareness Monitor, nfpSynergy Base: 1,000 adults 18+, Britain, January 2007
As we saw earlier, half of the respondents have charities/causes they prefer to give to. Nearly half still prefer to make one off donations and a quarter say they give on a committed basis. It seems that the hard work done to convert single givers into regular givers has still some way to go.
nfpSynergy 18 The 21st Century Donor
Chart 15: Favourite charity category “When you think about your favourite charities, which categories do they fall into?” Prompted Cancer 70%
Children 58%
Animal welfare 43%
Health & medical (excluding cancer) 30% 28% Disaster & emergency relief
Disability 27%
Environment & conservation 23% Jan 07 Poverty & social welfare 16% Feb 06 Overseas aid & development 12% Mar 05 Housing & Homelessness 12%
Women's issues 10%
Water supply in developing countries 9%
Sanitation in developing countries 4%
Not Stated 2%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Source: Charity Awareness Monitor, nfpSynergy Base: 1,000 adults 18+, Britain, January 2007
The favourite categories remain fairly consistent across time. Cancer is overwhelmingly the favourite cause. There are only a few other notable areas. The first of these is the marked increase in support for disaster and emergency relief charities in March 2005: this probably reflects the upsurge in support after the South East Asian tsunami. Similarly interesting is the increase in support for animal welfare and environment & conservation organisations over the last two years. Given the high levels of media coverage of environment issues and concerns surrounding climate change, we might expect the support of environmental causes to increase still further
Chart 16: Factors influencing donation “How important were the following in making your decision to make a significant donation?”
100%
90%
80%
70% Very Important Quite Important 60%
50%
40% 34%
30% 11% 20% 8% 9% 24% 4% 10% 22% 18% 13% 12% 0% Finding a cause I Being able to Raising money Endorsement of Recommendation can relate to from specify how the collectively with a the charity by a from a friend or personal money is used group of friends or recognised colleague experience colleagues authority/ public figure
Source: Charity Awareness Monitor, nfpSynergy Base: 1,000 adults 18+, Britain, June 2006
nfpSynergy 19 The 21st Century Donor
When asked to think about how the decision to donate was made the personal connection is again the most important factor. A third of respondents state that being able to specify how their money is used is important to them.
nfpSynergy 20 The 21st Century Donor
Section 5: How do people give?
This section looks at the different ways in which people give, giving methods that they are aware of and how they feel about them.
When asked to spontaneously talk about how to give to charity our focus groups were aware that there are a number of ways: sponsorship; events (overseas and in the UK); donating gifts in kind; work in a charity shop; buying charity Christmas cards; payroll giving; buying raffle tickets; street collections; volunteering and campaigning (from actively doing something to wearing a sticker).
Some respondents stated that they would like to get involved in different ways beyond donating but were not always sure how to go about it or that they had had difficulty trying to get involved in the past (e.g. trying to volunteer). Some charities appear to be turning people’s offers of help away!
Bequests were rarely spontaneously mentioned and when they were it was unsurprisingly by the oldest group (55-64 year olds).
There was a real difference in the way that different age groups would like to engage with charities:
“I like reciprocal things or experience based fundraising e.g. gigs where bands play for free” 16-18 year old
This fits into a trend we discuss later in the report about younger donors wanting their fundraising to fit in with their lives and social situations.
Chart 17: Ways in which donors have given “And in which ways have you given to charity in the past three months?”
Collection box 42% Standing order/ direct debit 34% Donated clothes/ food/ gifts 13% Feb 2007 Bought raffle tickets 9% Oct 2006 Charity shop purchase 6% Envelope through the door 6% May 2006 Volunteered/ given my time 6% Purchased a product because company making a 5% donation to charity Sponsoring someone in an event 5% Feb 07 Given support by 2% Regular gift 3% Response to TV apppeal 2% Credit card which gives 2% Attended local event 3% Response to telethon 1% Response to phone call 1% 3% Visited a site e.g. 1% Response to a letter Response to advertising 1% Buy Big Issue/ charity 3% Payroll giving 1% Via the internet 1% 3% Joined as a member
0% 10% 20% 30% 40% 50%
Source: Charity Awareness Monitor, nfpSynergy Base: All who made donations in past 3 months (725 in Feb 07) among 1,000 adults 18+, Britain
nfpSynergy 21 The 21st Century Donor
The collection box was the most popular method of giving probably because of ease of access and flexibility of donating. Surprisingly, when we asked people in the focus groups to talk about how they donate, collection boxes were hardly mentioned. It may be that this is a less engaged form of giving that happens in a passive context and therefore is not at the front of people’s minds. Giving through standing orders or direct debits was the next most popular method with between 25-30% of donors claiming they give in that way.
Chart 18: Street fundraising “Have you been approached in the last three months on the street by somebody from a charity looking to sign people up to give a monthly donation by standing order or direct debit”
50%
45%
40% 36% 36% 34% 34% 35% 31% 31% 29% 29% 29% 30% 30% 26% 26% 26% 26% 24% 25% 23% 23% 22% 20%
15%
10%
5%
0% Oct- De Feb Ap J Au Oct- De Feb Ap J Au Oct- De Feb Ap J Au Oct- De Feb Ap J Au Oct- De Feb Ap J Au Oct- De Feb Ap un- un- un- un- un- c c c c c c r r r r r r g g g g g ------0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 2 3 4 5 6 2 3 4 5 6 7 2 3 4 5 6 7 2 3 4 5 6 1 2 3 4 5 6 2 3 4 5 6
Source: Charity Awareness Monitor, nfpSynergy Base: 1,000 adults 18+, Britain
A relatively high proportion of respondents state that they have been approached to make a donation in the street. This method also appears to fluctuate across time. Relatively small numbers of participants talked about street fundraisers but when the subject did come up the views were universally negative and sometimes quite extreme: “there’s whole gangs of them, too many of them, they’re not trustworthy, they are paid, aggressive, don’t want to give out my bank details on the street.”
These comments all come from a particular age group: the 35-44 year olds. However, there is not any effective form of fundraising that is popular with the general public. It may be that the positive feelings associated with giving (feeling generous, paternalistic, helpful, making a difference) are reversed when confronted by someone asking for money in the street: actively saying ‘no’ might promote the opposite feelings of being ungenerous, or failing a moral test.
Our donors were unsure if fundraising is effective but there was some recognition that many fundraisers are volunteers (apart from street fundraisers). Volunteer fundraising was viewed in different lights by participants, from being seen as a very rewarding experience to an acknowledgement that it was hard work and could be embarrassing. “It made me feel sorry for the people who have to do it a lot.” 16-18 year old
nfpSynergy 22 The 21st Century Donor
Chart 19: Giving by standing order/direct debit vs. envelope or tin “If yes, have you given to a collection tin/envelope through the door or by standing order/direct debit”
100% Envelope/tin 90% SO/DD
80%
70%
60% 54% 51% 51% 51% 47%48% 49% 48% 50% 46% 45% 44% 44% 41% 41% 38% 38% 39% 39%37% 40%
30% 34% 32% 31% 31% 28% 29% 29% 30% 44% 28%28% 20% 26%26% 27% 24% 23% 23% 19% 19% 10%
0% 7 6 5 4 3 6 5 4 3 6 5 7 4 6 3 5 4 6 5 4 3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 07 06 05 04 03 0 0 0 0 ------l l l l r r r r r y y y y y v v p v p v p p n n n n Ju Ju Ju Ju Ja Ja Ja Ja Ma Ma Se Ma Se Ma Se Ma Se No No No No Ma Ma Ma Ma Ma
Source: Charity Awareness Monitor, nfpSynergy Base: 1,000 adults 18+, Britain
Giving by envelope or tin appears to be in decline. It is unclear whether this is a function of being asked less or if people are responding less. Other data shows us that the majority of respondents say that they receive 1-3 envelopes in a six month period. On the other hand, giving by standing order or direct debit has increased since 2003 reflecting a concerted effort by charities to get people to sign up.
Chart 20: Visits to charity shops “How many times in the last 12 months would you say you have visited a charity shop?”
100% Not at all Once Twice 3 - 5 times 90% 6 - 10 times 11 - 20 times 21+ times 80% 72% have visited at a charity shop in the last year 26% have not 70% 13% 12% 60% 11% 14% 10% 10% 7% 8% 50% 10% 8% 7% 10% 12% 40% 6% 10% 15% 10% 8% 30% 16% 18% 16% 12% 18% 46% 11% 20% 42% 32% 13% 30% 31% 11% 11% 11% 12% 26% 10% 12% 8% 8% 9% 7% 7% 4% 0% July July July Sept Sept Jan 07 01 Tel 02 Tel 03 04 05 Paper Paper Paper Paper
Source: Charity Awareness Monitor, nfpSynergy Base: 1,000 adults 18+, Britain
The number of people visiting charity shops has increased since 2001. In addition, the number of visits has increased by eighteen percentage points in the same period. It is interesting to speculate about what is driving this growth when looked at against
nfpSynergy 23 The 21st Century Donor
a backdrop of historically cheap clothes and a de-regulated book market. Is part of this in response to the trend for vintage clothes, or are there still a group of people who need these competitively priced products?
While this report is principally about donors, in our focus groups respondents talked about both campaigning and volunteering as ways of supporting charities. We have included this information here to broaden the picture of donors and their other relationships with charities. There is more detail on each of these topics in other reports produced by nfpSynergy, please go online to: www.nfpsynergy.net/freereports/ . If one thing is clear from our research: those who engage with charities do not compartmentalise their lives into giving, volunteering and campaigning in the same way that charities often do.
Campaigning There was a mixed response on the issue of campaigning. Many participants talked about campaigning for money rather than for a change in behaviour or legislation. People talked about the personal benefits of campaigning, of feeling part of a group, acting on something one feels passionately about, “you personally give to the cause”.
Some doubt as to the effectiveness of campaigning was expressed by the youngest group who cited the anti-war campaign as an example. Campaigning was seen as an activity that takes up time. Others talked about the impact of hard hitting campaigns on themselves – for example how the anti-fur campaign makes you stop and think.
Signing petitions was mentioned by most groups. People stated that these could be targeted at a variety of people: the local council, MPs, MEPs and the Government were all discussed. While going on a march was mentioned by very few, the emotions associated with this type of activity came through strongly.
The specific campaigns mentioned were: Live Aid, NSPCC, Breast Cancer t-shirts and pink ribbon, anti-fur, Children in Need, Red Nose Day, Asda and breast cancer, Boots and breast cancer.
Volunteering Volunteering was mentioned by all participants in the focus groups. It was felt to lead to a level of personal achievement, whether that was through learning new skills or simply ‘feeling good’ from seeing the direct impact of their input. However, it was also felt to be both time-consuming and potentially hard work (either physically or emotionally) and therefore a difficult experience. In fact the number one reason given for not volunteering was lack of time, with people unwilling to give up spare time or family time. For a more in-depth discussion of the future of volunteering please refer to ‘The 21st Century Volunteer’ report by nfpSynergy and The Scout Association available from www.nfpsynergy.net/freereports/
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Section 6: How does it feel to give?
Chart 21: Overall donor satisfaction “Thinking about the last time you made a donation to charity that was significant to you, how satisfied were you with the different aspects of the experience…And how satisfied were you with the experience overall”
50%
40% 35% 32% 30%
20%
10% 10% 8% 5%
1% 0% Very satisfied Moderately Slightly Very dissatisfied Not important Don’t know/ satisfied dissatisfied Not sure
Source: Charity Awareness Monitor, nfpSynergy Base: 1,000 adults 18+, Britain, June 2006
When people were asked how satisfied they were overall the last time they made a donation, two thirds said they were very or moderately satisfied. A small percentage said that they were dissatisfied. When we look at satisfaction by age, the youngest age group are the most dissatisfied: are they more demanding or are they receiving a poorer service?
Chart 22: Actual vs. Acceptable percentage that goes on administration “What would you estimate would be an acceptable percentage of the average charity’s income to be spent on administration costs”/”What would you estimate is the actual percentage of an average charity’s income that goes on administration costs?”
1% 0% (nothing) 13% 6% 1-10% 60% 12% 11-20% 18% 20% 21-30% 6% 19% 31-40% 1% 17% 41-50% 1% 11% 51-60% 0% Admin - estimated actual amount (mean = 38%) 7% Admin - acceptable amount (Mean = 9%) 61-70% 0% 5% 71-80% 0% 3% 81-90% 0% 1% 91-100% 1%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Source: Charity Awareness Monitor, nfpSynergy Base: 1,000 adults 18+, Britain, September 2006
nfpSynergy 25 The 21st Century Donor
The actual and acceptable amounts for administration costs vary for the general public. The vast majority (91%) think that 20% or less is an acceptable amount for charities to spend on administration. However, when asked how much they think charities actually spend the figure is much higher with over a quarter of respondents thinking that charities spend 51% or more of their income on administration. This was also an issue of concern in our donor focus groups. Participants talked about big charities wasting money, particularly in terms of how much money goes to the cause and how much on administration. The other issue was related to salaries, especially how much the “big cheese” and “fat cats” were being paid.
Chart 23: Actual vs. Acceptable percentage that goes on fundraising “What would you estimate would be an acceptable percentage of the average charity’s income to be spent on fundraising costs”/”What would you estimate is the actual percentage of an average charity’s income that goes on fundraising costs?”
1% 0% (nothing) 11%
9% 1-10% 44%
18% 11-20% 21%
23% 21-30% 8%
18% 31-40% 2%
12% 41-50% 1%
10% 51-60% 1% Fundraising - estimated actual amount (mean = 38%) 5% Fundraising - acceptable amount (mean = 20%) 61-70% 1%
3% 71-80% 3%
2% 81-90% 6%
1% 91-100% 4%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Source: Charity Awareness Monitor, nfpSynergy Base: 1,000 adults 18+, Britain, September 2006
The general public’s perception is that the acceptable amount for charities to spend on fundraising is 20% of total income. However, they believe that charities are actually spending 38% on fundraising. This did not emerge as such a serious area of concern during our focus groups when participants showed a general acceptance that charities had to spend money to make it.
nfpSynergy 26 The 21st Century Donor
Chart 24: Perceived spending on fundraising and admin Mean summary “What would you estimate would be an acceptable percentage of the average charity’s income to be spent on fundraising and administration costs”/”What would you estimate is the actual percentage of an average charity’s income that goes on fundraising and administration costs?”
50% Mean
45% Mar-03 Nov-04 Nov-05 Sep-06
40% 38% 37%38% 37% 34% 35% 33% 33% 31% 30% 25% 25% 23% 21% 20% 20%
15% 9% 9% 10% 9% 9%
5%
0% Admin - estimated Admin - Acceptable Fundraising - Fundraising - estimated actual amount amount Acceptable amount actual amount
Source: Charity Awareness Monitor, nfpSynergy Base: 1,000 adults 18+, Britain, September 2006
These figures have not changed significantly over time. They are however, highly skewed figures: when we add the fundraising and administration costs together we get a figure of 60-70% that the general public believe charities spend on fundraising and administration! With perceptions like this it is astonishing that anyone donates to charity at all. 30% is the figure that is deemed acceptable and is probably closer to the actual figure for most charity’s fundraising and administration costs.
Chart 25: How charities are off-putting “When you think about charities and the work that they do, is there anything that you find off- putting, worrying or irritating?” Prompted
Amount that actually goes to the charity 59% Amount that actually goes to the cause 54% The amount spent on administration 47% Direct Mail/Appeals 47% Telephone call at home 41% The amount spent on staff salaries 33% Collectors persistence 30% Door to door collections 27% Too many charities / duplication 20% Collection envelopes/thro' the door 19% Fundraising on the street face to face 15% Sep-06 12% Tin rattling Nov-04 No, nothing 5% Charities campaigning for change 3% Other 2%
0% 20% 40% 60% 80% 100%
Source: Charity Awareness Monitor, nfpSynergy Base: 1,000 adults 18+, Britain, September 2006
We can see that where the money goes and what it is spent on are overriding concerns. Talking in depth to donors reveals some similar themes as emerged from
nfpSynergy 27 The 21st Century Donor
the quantitative work. When asked about their concerns around charities, respondents were worried mainly about where their money goes. This is a function of their powerlessness in a relationship based on trust. Stories of corruption and financial mismanagement have hit home with these donors. Furthermore, reduced levels of trust in all institutions in the UK (including charities) means donors are less likely to have blind faith.
Does the money go to the right people, is it being spent on the right things?
“I might be inclined to donate more if I knew where it was going” 16-18 year old
When asked about where they got this kind of feedback most respondents felt that their charities sent it to them. There was a perception that charities used powerful stories about causes, highlighting the serious problems faced, so as to get people to donate but that they did not always hear how things had gone or how projects had progressed. However, with the exception of one participant, donors did not talk about whether they themselves played a part in finding out this information: “you could call the organisation and ask them”.
The next area of concern was types of fundraising, with direct mailings and telephone calls at home the biggest issues for donors. Though some participants in the focus group talked about street fundraising or ‘chuggers’ it was not a theme that was raised in all the groups. This is reflected in the list of concerns from the quantitative research: street fundraising comes fairly low down the list.
Chart 26: How charities are off-putting “When you think about charities and the work that they do, is there anything that you find off- putting, worrying or irritating?” Prompted
100% Nov-03 Nov-04 Nov-05 Sep-06
80% 68% 64% 62% 59% 60% 57% 53% 54% 54% 48% 46% 47% 47% 41% 40% 33% 32%
20%
0% Amount that actually Amount that actually The amount spent on Direct Mail/Appeals goes to the charity goes to the cause administration
Source: Charity Awareness Monitor, nfpSynergy Base: 1,000 adults 18+, Britain, September 2006
Chart 26 above illustrates the top four irritations named by respondents. If we look at them over time we can see that the number of respondents stating that the “amount that actually goes to the charity” is a concern has decreased across the three years of the research. This may mean that work done generally in the sector on these issues is having an impact, or that there have been fewer charity scandals nfpSynergy 28 The 21st Century Donor
in the last few years. The other irritations have remained relatively constant apart from a concern with direct mailings/appeals which increased in the last wave of the research.
In our focus groups there was some scepticism about the claims charities make about what they will be able to achieve with the donations they receive.
“How is two pounds a month going to help the child who is getting beaten every night?”
However, this was not a widely voiced concern.
Donors were also concerned about fraudulent fundraising in the UK:
“anyone can get their hands on a collecting tin.”
The other main concern was that there were too many charities. Participants felt that charities’ remits sometimes overlapped, or even worse that they were working on the same issues but each had their own agendas. Charity mergers were talked about as a sensible solution to this.
In other quantitative research, half of respondents tell us that they have their charitable giving sorted out, with certain charities or causes they prefer to give to. Just under half state that they prefer to make one off donations rather than plan their giving. A quarter of respondents combine these methods and give in a committed way to one or more charities on a regular basis.
A minority of participants said they trusted their charities to spend their money wisely:
“I do feel confident that they are effective, it doesn’t worry me that they don’t cure everything….for me the issue is, has the money that’s been given so far and the time that’s been given so far been properly used for its purpose?”
Another minority wanted to see a more independent, external approach:
“I’d like to see an independent audit of the charities Charity awards and rating systems.”
Government watchdogs were also mentioned. It is not clear whether participants are unaware of the role of the Charity Commission and other umbrella organisations in the sector, or whether they want more regulation than currently exists. However, for some donors it is all a bit too much:
“Too many conflicting demands on my time and money, it’s knowing where to choose.”
There is a danger that people might give up and not engage with charities as deciding to whom to donate becomes too complex.
nfpSynergy 29 The 21st Century Donor
Section 7: Our experts speak
As mentioned in the introduction while researching this report we talked to a breadth of fundraising and philanthropy experts to understand their views on the future of giving, philanthropy and the lives of donors. Whilst their views contributed massively to the final section we realised we had a wealth of insights to which we could not do justice simply by incorporating their main ideas into our overall analysis. For this reason we created this section. It is best seen as an art gallery of fundraising intellect, insights and ideas. While there are recurrent themes and thoughts, many of the quotes stand on their own.
Major Donors
Major donors emerged as a key theme in our interviews. And in many ways the issues identified for this group are reflected in the wider population.
Who are they? Major donors are wealthy, many want to give their money away while they’re alive and many are concerned about results… It can be someone who sat within an investment bank, or another big institution, and made a great deal of money. It may be someone who literally built their own business from scratch. Martin Brookes
I think with major donors .... the area of the greatest and most notable change [is] the growth in wealth in the financial services and, particularly new areas of financial services, like private equity and hedge funds and they absolutely bring that attitude of due diligence and accountability to their financial appeals in the same way that they do to the rest of their life. Tim Hunter
There seems to be a growing segment of younger people and it’s demonstrated through our kind of major donor strategy and activity plan. Younger high net worth individuals who are socially aware and concerned. Jeremy Cooper
There currently is much focus on the newly wealthy philanthropists, but youth is also a factor. For instance, we are also seeing a number of young inheritors who want to give their time as well as their money. The ‘traditional’ donors out there are still a very significant part of the landscape. Susan Mackenzie
I think we are going to see a rise in the mass affluent who have got quite chunky bits of money potentially to give away and so we might be seeing more people giving thousands as well as those people giving hundreds of thousands or millions as well. Tim Hunter
What do they want? These ‘new’ philanthropists have worked hard for their wealth, and because they may not have been advantaged themselves, they are more likely to have seen real disadvantage, and to feel a closer connection to their community, and so they want to give back. Susan Mackenzie
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If we do see a major donor culture shift and a lot of money coming in there will be very interesting forces coming to bear on traditional ways of working. Major donors want it fast, they want it big, they want a lot of impact, they want a lot of measurement, they want it now. Mark Astarita
They want to be involved. Not just transactional, that’s not fulfilling. A lot of these people have a lot to offer, not just their money. Sal LaSpada
The new philanthropists, who are choosing to give during their lifetime, want to be engaged in their giving. They don’t want to just write a cheque and, especially if it’s a significant cheque, they want to also give their expertise, to be involved. This doesn’t necessarily mean that they want full control, but they want influence. Susan Mackenzie
It’s going to come more from wealth where it’s made as opposed to inherited. I think they’re going to want more engagement as well in terms of volunteering, getting closer to the core, networking…and they’re going to want to see us demonstrating change through our services. Alan Gosschalk
What are major donors concerned about? And what can charities do? When you explain charity to donors, they find the issues to do with risks and problems and challenges really fascinating. Frequently we’ll put something in front of the donor and say this is a risky thing to fund and they’ll say “that’s why I want to fund it” and I think there’s been a traditional hesitance on the part of charities to talk about risks and problems. Martin Brookes
Some wealthy people who can afford to write a cheque for a six figure sum are still giving in the four figures – partly because they’re not confident enough yet in their philanthropy, but also because they don’t appreciate the impact that they could have with that six-figure gift. It is important for charities to tell their stories well – both to inspire donors and to demonstrate the impact they are having. Susan Mackenzie
It is being involved, seeing themselves as partners in some way – it should be a two-way relationship. Of course sometimes education is needed to help donors appreciate the burdens they may be placing on a charity, but, ultimately, the right relationship with a major donor can be a fantastic benefit to a charity. Susan Mackenzie
It’s about being responsive in terms of providing information quickly. Charities can be too slow, far too slow, and are going to have to be much clearer in the information that they provide, much more concise in the way that they do it and put much greater emphasis on results. And they shouldn’t emphasise complexity or problems, even if that’s the reality on the ground – ways have got to be found to articulate and present results better and to measure results better too. Martin Brookes
Major donors are very concerned about whether their money will have an impact, and this lack of confidence can prove to be a barrier to giving. One barrier to giving publicly is perceived negative media coverage of giving by the wealthy. Susan Mackenzie
One potential barrier to giving by the wealthy is some recent legislation in the 2006 Finance Act which aims to inhibit tax anti-avoidance by substantial donors. The provisions are
nfpSynergy 31 The 21st Century Donor
potentially very onerous, and how much of a barrier they become will depend on how they are implemented by Government. Susan Mackenzie
Baby Boomers Baby Boomers emerged from our interviews as another key group for fundraising, with different needs and expectations than current ‘traditional’ donors.
The baby boomers are the most important segment that fundraising has ever had. David Brann
You’ve got your hard working family of the future those people, if they’re in work, will gradually feel better off over time and, as people continue to get better off over time, they will give a proportion of that away. Tim Hunter
Baby Boomers. I think you have got to start looking at the world from their end of the telescope, not from the charities end because you are actually going to get the wrong picture. In order to look at this generation I think you need to listen in a way that charities simply don't. David Brann
Boomers are much more fickle, they’ll try someone out for a couple of years and move on. We’re going to have to work very hard to retain loyalty, and I think there’s been confusion between retention and loyalty, covered up by direct debits that is a ticking bomb essentially. Karen Rothwell
I think the evidence seems to be that the 45 age group, the sort of baby boomer generation if you like seem to be wanting more experiential sort of interaction with organisations. They are perhaps much more affluent. They would have had more professional jobs. They have been exposed to a wider range of experiences, the media, they want things in a more immediate way than perhaps the donor of today who would have saved to get something. Iain McAndrew
What does the ideal relationship look like? We asked our experts what they thought an ideal donor relationship was like and what it should offer.
I think sometimes we give donors what we think they want and we sometimes forget to ask them what they would like. Iain McAndrew
Increasingly treat donors as stakeholders in the organisation and understand that people give you money because they're interested in solving an issue. Jeremy Cooper
We respect the donors wishes in terms of how they want to be communicated with and we also let donors know that they’ve made a difference and specifically how, so it’s about not taking our donors for granted basically. Paul Amadi
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Individual, close, informed and satisfied. Anthony Baumann
Our ideal relationship is one in which a donor or a supporter feels very engaged and committed to the cause...and…they’ve got a multi-dimensional relationship with the organisation which develops over time. It’s a two way relationship as well so it’s not just us sending them a mail shot and them responding with a cash [donation] or even us making sure that they are keeping up-to-date with their direct debit but there is dialogue on an ongoing basis. Paul Amadi
We find charities that basically can’t absorb or can’t effectively absorb a lot of money. They’re stunted from poor quality funding and poor quality support. [Mr and Mrs Major Donor] have been through a really big journey, which is about learning how tough it really is to give money away effectively. Martin Brookes
[Complex information for] some people is an object of fascination once they get absorbed in it. For others it’s just a distraction, because all they’re interested in is giving some money. They’re not particularly concerned about giving it well - they just want to give and then get on with their lives. Martin Brookes
A relationship that offers choice I think we’ll become more customer-led, giving a real choice, possibly guaranteeing money’s going to go to a specific project or area and, I think, have to be more accountable and let people know real impact. Alan Gosschalk
I think they’re going to want a relationship which is more than just about giving money. So, how does it fit in with my lifestyle and also how does it fit in with the fact that I’ve got a family or how does it fit in with the fact that I see my myself as an ethical consumer. Tim Hunter
They will give more but to a wider range of causes and therefore diminish the potential returns for those organisations that have done well out of them in the past. Iain McAndrew
Have sites where you could organise all of your charity involvement from and so it was kind of My Charity Space where I could look at all the things that I was doing and it was absolutely in my control. And that’s probably something which is not very far off. Tim Hunter
I think more and more people are getting under the skin of the issues. And will continue to do so. Which will make it more interesting for us and provide us with more opportunities but also means that we must provide people with a better service. Jeremy Cooper
Problems in the future I am not sure how many people don't really give now but I am increasingly worried that it might soon become a majority. Mark Astarita
When you talk to people in their 20's, they are very worried about their financial future. And they are not feeling particularly philanthropic and as they were growing up they weren't really brought up to be particularly philanthropic either. I think that they are going to be a poor
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generation for charities unless charities can really change their attitudes. I mean it is really that basic. David Brann
They are not as caring about other people. They are much more hedonistic in their lifestyle and they are much more concerned about how they look. They spend a lot of money on, far more money than my generation on going out, on clothes, makeup and all of that kind of lifestyle stuff. David Brann
[As the] UK becomes a more culturally and ethnically diverse population then I think reaching out to those audiences is going to be a challenge for many charities and I think different cultures may have different views on what they would wish to support or different attitudes when compared to what the quite Anglo-Saxon Protestant supporters of today probably would feel. Iain McAndrew
I am of the opinion that maybe charities are not doing that well in terms of relative wealth or GDP and it seems to be as a nation as we might be getting wealthier we get stingier. And I think that's a worrying trend. Mark Astarita
I think we see increasingly the fragmentation and single issue being prevalent. You can do malaria, you can do HIV but you can't do poverty with any great resilience over a period of time. So I think it's hard with so many placid messages to get cut through on the general and I think what is happening is everyone is getting more and more specific. Mark Astarita
Demonstrating need If charities can be convincing and compelling about the need for support and treating their donors with respect, donors will come through, because whether you give to a charity is just a matter of prioritising your spend. Karen Rothwell
It means demonstrating your need and a way of demonstrating your need may be saying well actually the Government doesn’t help with the particular thing I am asking for at all, it helps there but it certainly doesn’t help here and its here where I need money. Anthony Baumann
I think the press has driven the public to desire to know more about charities, know where the money’s going, know how much is being paid in administration. They want charities to be accountable. Gwen Pearson
Charities have to be able to present a very solid case for support that doesn't leave the donor feeling ambiguous about what that charity does. Iain McAndrew
Meeting individual needs I think it is that deeply personal marketing that to me is the future. David Brann
I think that’s become much more complex and much more about how we integrate ourselves with people’s lives, which is where the engagement thing becomes more interesting because its about adding another dimension to people’s experiences. nfpSynergy 34 The 21st Century Donor
Paul Farthing
People will want to be more engaged with the charities that they give to. They will want more information, they will want more contact. I think people will want to be more informed and so more involved people will come and get involved in the charity sector. Gwen Pearson
I like this idea of creating millions and millions of conversations around the country … and it is conversation and dialogue that I think is my shorthand for how we’re moving forward, as opposed to telling, show and tell. So direct mail, it’s telling, however well it’s written, how much it’s involving and engaging and asking, it’s a one way communication. Telephone can be better but tends to be used in the same way. Karen Rothwell
It’s adding value to their life as well, which will be a mix of the social interaction they got when they were at work, a sense of achievement that they got when they were at work, and direct involvement in a charity rather than just being a distant donor. Karen Rothwell
I think there’s an opportunity to create social spaces for people within your activities. You allow people to raise money while they are creating activities that they struggle to find time to do. Paul Farthing
Targeting and donating in the future Responsiveness, donor education and better communication will all be needed to satisfy the donor of the future.
Some organisations in the States now [operate] so someone would pass over all their assets, live on the investment income from those assets which then are passed to the particular organisation on their death. So there is maybe more astute financial instruments that charities might have to develop in the longer term as a way of people giving. Iain McAndrew
Mind-set and beliefs and values, I think are going to be the key targeting mechanisms rather than the clunkier demography type stuff. Karen Rothwell
I think we do need to start challenging both our donors and non-donors into acting and thinking like stakeholders, to start thinking about their own relative wealth, the amount of their disposable income and the money they chuck away on frivolous stuff and the difference they could make by being a bit more generous to institutions of their choosing. Mark Astarita
I think instant gratification is going to be increasingly the norm. People are going to want stuff quick. They are going to want tremendously high service. They are going to expect us to be much better at everything we do for the simple reason we are all going to be much more used to high quality services of one kind or another, every day of our lives and giving will be no different. Mark Astarita
I think if this world’s going to work better and more of the vast amount of money available now, is going to find its way to charities, the charities and people like NPC have got to find ways of articulating complex ideas in a straightforward way. Martin Brookes
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I think it is going to be about how flexible you are, about the fact that charity is likely to do things in certain ways, and matching that against expectation is always difficult in any service environment. So if we’re feeling a bit skint one month, we don’t really have very good systems of just saying I’m not going to pay my direct debit that month. Paul Farthing
It will be incredibly difficult to attract support on a transactional basis from people because people will have decided, what are the brands I’m going to interact with? What are the causes I’m going to interact with? How am I going to manage in what is an increasingly busy lifestyle? So there are some that they’re going to let in, and say, okay, I’ve decided to support you or have a relationship with that cause or whatever it might be. And others, I think, are going to find it very, very difficult to break into that. Tim Hunter
I think everything is going to have to be far quicker, easily accessible and, getting back to the fact that we’re living in an increasingly fast society where people expect things immediately, if they don’t get them immediately they’ll go off elsewhere. I think people’s attention span is somewhat shortening. Gwen Pearson
What stops people donating? A wide variety of reasons were given for why people stop donating, from poor communication, to a lack of trust and confidence, through to donors feeling bombarded with information and turning away.
People's expectations about what money should be spent on and how much they should spend on themselves has completely changed and so I think that the perceived affordability has got to be one of the top things. David Brann
Some people don’t like a particular fundraising methodology and use that as an opportunity to kind of tar the whole sector, [for example F2F] is a very polarising technique and its alienates some people and gives people a reason not to engage in charity. Paul Amadi
Charities have enormous opportunity to increase their communications capacity, to be out there telling the story of the great work they do. That’s one of the gaps in the market place right now. Sal LaSpada
Purpose and relevance I think the other thing is relevance. And although people might intellectually think that it's bad that people are starving in the Sudan or something, it is not that relevant really [to their lives]. I think that's going to be a real struggle and particularly when you look at some needs, health care and things like that. I think people are going to say what is around me and my environment is going to be more important than that. So I think for the third world that is very bad news indeed. David Brann
People don’t understand enough about what charities do and how they make a difference. Alan Gosschalk
Slightly confused position of charities in the public’s eye. I believe that probably now, as opposed to say ten or fifteen years ago, there is greater confusion and observing of ethics
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about what charities are there for, are they agents of the state, are they conjugates or delivery of kind of services that normally or traditionally have been provided by the state or are they independent entities who are ploughing their own furrow and challenging the status quo? Paul Amadi
Trust and confidence Trust and confidence in charities in general. You know it could be bad practice among a few charities. You just need two or three bad charity stories and people go 'I don't trust charities anymore.' And that will give them a reason not to give and that is such a shame but it's a possibility. David Brann
I think a lot of people don't have a lot of trust and confidence in a charity being able to deliver. And they feel that perhaps charities are necessarily perhaps wasteful and then the fact that the administration costs are high or perhaps more that charities don't explain, charities can be more transparent I think and explain to people. Iain McAndrew
Too much, too often All the noise that we receive throughout our daily life there is so much there that it is quite easy to kind of immediately reject stuff. Jeremy Cooper
Climate change accelerates, then the number of displaced people around the world, the number of problems here, will increase, so the number of charity asks will go up as people are feeling less and less inclined to actually do anything about it. Karen Rothwell
Time, and people feeling a little bit bombarded, people wondering where the money goes, all those normal barriers that exist that everybody has. Kerry Moscogiuri
I think the barriers are the range of charities available. I think it can be quite overpowering to the general public. Gwen Pearson
Changes in donors’ lives We asked our experts what the big changes were going to be in donors’ lives that might affect their attitudes towards charities and therefore their propensity to give.
Where’s the evidence… I hear all the time: “We’re a good thing because we’re a charity.” I want to see some evidence of this. I don’t think that because people are in a charity, or because something is a charity, that it’s better or deserves better treatment than any other thing. Martin Brookes
Those charities that receive an increasing or significant proportion of their income even in the shape of fees or grants are increasingly going to be challenged in their fundraising efforts because there is an increasing demand for clarity about funding from the sector and I believe that what that’s going [to mean is, people say] I don’t think I’m going to give my hard earned cash because I’m already paying my taxes. Paul Amadi
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Ageing society More people living on their own, ageing population, I guess question marks about wealth and whether people are going to hold onto it more as government can’t afford to subsidise care homes and things like that. Alan Gosschalk
As the baby boomers start to get older and unhealthy, health services won’t be able to cope, health funding by the government will go down, so more and more will fall on the charity sector, which again will drive up demands on people. So I can only see an increase in the need for the third sector to be asking for more money. Karen Rothwell
I think that there’s an increase in awareness that people are living longer, they are retiring earlier and they need to prepare for a long retirement and so therefore giving to charities and that environment become increasingly more of a luxury than it is at the moment. Paul Amadi
Lifestyle/networking changes People are going into their houses and closing the doors and yet still wanting social networks. I think charities have a way to offer networks – possibly electronically – that people might want socially. Alan Gosschalk
In some ways as society has become more unequal, charities might well get [more income] because you get a greater concentration on the disposable income amongst the people who actually have got plenty already. Tim Hunter
It will come down to how charities compete, seeking to utilise their money in order to create experiences rather than buy things. Paul Farthing
The evidence points to the fact that people who give, people who volunteer, people who participate in civil society are happier. And actually one of the problems government have is it's not been so hard for them to get people richer but it hasn't made anyone any happier. So maybe there is a point at which politicians and the rest of us need to start measuring the happy factor. And I think we are part of the happy factor.
Mark Astarita
There seems to be a kind of polarisation of attitudes, either you are really interested in what Paris Hilton is doing and celebrity Big Brother or you just completely reject it as being a terrible part of our modern world. And of course there is some kind of mix over in the kind of middle but which direction will our society go? Will it become more like America or more like Scandinavia? I don't know the answer to that but I think it is an interesting thing to watch. Jeremy Cooper
It's in a whole bunch of people's interest that we have lively vibrant voluntary organisations supported by individuals giving of themselves and that is an inherently good thing that maybe we should nurture, preserve, add to, persuade and make sure civil society is healthy. Mark Astarita
I think younger generations want more from what they’re giving. ….I think the fact that they will want to be more engaged with their charity also means that they’ll want to get involved more in terms of actually actively doing so. I think particularly younger people will engage in campaigning and active work. Gwen Pearson
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Environment There will be an environmental challenge to charities. In the debate about what companies are doing or what individuals are doing, at the moment no one has really said to charities: what’s your carbon footprint, what’s your CO2 emission policy? Paul Farthing
I think all the big, all the significant charities will need to start to think about what they are doing from the environmental perspective as well. And that assumes that it doesn’t become a legislative requirement which it might happily do in a few years time. Tim Hunter
People are going to be more concerned about the planet in just sustaining life as opposed to sustaining certain charitable giving. Iain McAndrew
Clearly the environment is going to become a massive issue and what we have at the moment is probably mostly campaigning organisations in and around the environment. Will we begin to see organisations that are much more about doing stuff with a big environmental element. Mark Astarita
I think environmental issues are going to come very much to the forefront and all charities are going to be expected to demonstrate how they have an impact or not, as the case may be, on the environment. Gwen Pearson
Growth Areas When asking the specialists about growth areas in fundraising, what emerged was that this growth will be centred around the ways in which charities communicate with their audiences, rather than the specific types of fundraising.
Running events will grow perhaps. We’ve already had a huge increase over the past five years. Gwen Pearson
I think here we’re getting more and more people who have acquired enough things to make their life very comfortable and, indeed, make their family’s life very comfortable and actually want to do something which is different with their money. Tim Hunter
I think, probably, people are going to want more in terms of products and experiences, more affinity products and events. Alan Gosschalk
I am not yet convinced that the future of legacies is all doom and gloom. I do think there is going to be a massive future in final disposable wealth after death in the west. Even though we may all spend most of it on cruises and everything I think there will still be quite a lot left when we go and left to charities but they may not be the same ones getting most of the legacies today. Mark Astarita
I think some of the traditional stuff will remain. I feel very strongly that act of charity giving is founded on relationships with different people. So I think some of the more traditional stuff of community and major donors and direct face to face work. I think that will probably increase.
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Iain McAndrew
Face to face - I think that actually talking to people as opposed to communicating with them would be a nice way to go because I think people miss it. Paul Farthing
The organisations that know how to actively engage in a respectful way are the ones that are going to grow. Sal LaSpada
Fundraising areas in decline Respondents were clearer about the types of fundraising that are failing:
I would have thought some of the traditional community based activity is going to continue to struggle gradually it’ll get harder and harder and harder over the years because there will be less people doing that kind of thing or wandering around with loose change in their pockets. Tim Hunter
I think cash collections probably will not exist in 15 to 20 years time. And that means that the level of potential participation could go down dramatically because most people think that is how they give now. What will replace cash? Mark Astarita
Their pensions are under threat. The residential kick offs from old age are potentially significantly going to significantly reduce. Legacy income, we have got people prepared to spend money on themselves and the family and enjoy life…you know we have got the economics of the climate where we have got a large section of the community with huge mortgages and significant amounts of consumer debt. Iain McAndrew
I think that the straight, face-to-face, ‘ask for a direct debit’ is going to become less and less and charities are going to look at a two-stage approach. So, whether that’s getting people to sign up for events or for campaigning and then convert them at a later date. Alan Gosschalk
I suspect traditional challenge events income are going to struggle. Alan Gosschalk
Direct Mail I think direct mail will probably decline although I think that people can still,..there will be an opportunity to be clever about it. To stand out from the crowd. Jeremy Cooper
Cold direct mail has just fallen off the cliff completely Karen Rothwell
The ones which are less personal will become less effective. Things like direct mail. I think it will become less, inserts in particular and door drops. I think they will become less effective. Because people have been bombarded with them and they have just become the wallpaper of life. David Brann
I’m not convinced that there’s a future, that doesn’t mean its about to die, for direct mail, I think it’s a cash cow which means it’s entered the final part of its life. Paul Farthing nfpSynergy 40 The 21st Century Donor
I think it turns people off. I think people just get fed up and also it just becomes familiarity breeds contempt. They see it, it comes through their letterbox again and again and again from whichever charity it is and they just put it in the bin unopened because they just can’t cope with it. David Brann
But it is all cyclical…. It’s just keeping a toe in every failing water until everyone else has got out of it. Anthony Baumann
You can keep reinventing or using them in different ways, and sometimes if less people do it, those who are doing it works better. Kerry Moscogiuri
Impact and accountability Impact and accountability are key to maintaining trust and confidence and building a long term relationship with a donor.
Charities may have to get much better, I think, at articulating the social impact that they’re having. Tim Hunter
So the charities have got to be able to demonstrate that they’re doing the best possible job…they can and then have got to get better at articulating what is a reasonable expectation and what is an unreasonable expectation and demonstrating why that’s so. Tim Hunter
Do it by example and so you say to people this is what we are going to use your money for and then prove to them that you have done it. Show them the difference that it has made. David Brann
The need for accountability and clear communication of impact of results as a consequence of them giving money. It is going to get greater. I think there is going to be greater scrutiny on the efficiency of organisations and that would include opinions on whether people should merge together. Jeremy Cooper
People who are interested in giving their hard earned cash to an organisation want to see with their own eyes how it is spent or to talk to some people who have been involved in spending that money then they have every right. Jeremy Cooper
Reporting back to donors and members on what they’ve helped achieve is for us just absolutely routine. I think the added value is going to be achieving a sense of involvement and participation in decisions, which is going to be incredibly difficult for charities to take on board. Karen Rothwell
Some people want to see hard evidence, to talk to us about what has been done and what we’re going to do next. Other people prefer to be given the big picture, vision for the future. This just reflects human nature. Paul Farthing
Impact measurement traditionally has been driven by institutional funders, such as grant- making foundations and Government, all of whom are asking for different information, over nfpSynergy 41 The 21st Century Donor
different time periods, placing a significant burden on charities without necessarily capturing the true impact they are having. Because of the personal relationships charities can have with individual donors, there is opportunity to define benchmarks that are most appropriate to them, and actually in the end the measurement burden could be much lighter. Susan Mackenzie
I don’t understand why there isn’t an umbilical link between fundraising and the strategic performance unit. I bet there’s absolutely no link at all between the fundraising arm of [charity x] and their evaluation team. Martin Brookes
Increasingly people want to have the sense that what they are supporting is working, or if it’s not working, why not, people don’t expect things to be successful 100% all the time. Charities need to grapple with this and then communicate it. It promotes confidence in donors. Sal LaSpada
If government is serious about using charities to deliver services, I can’t believe it isn’t going to have an impact at some point, and I can’t believe that it’s not a big deal. I haven’t worked out a clear position in my head as to what it is, but I think you’ve got to do something, Martin Brookes
It is all doom and gloom We asked our experts to paint the gloomiest picture of fundraising in ten years time.
Charities are constantly being criticised in the media for their fundraising techniques and for their lack of accountability. They continue to use outdated means of seeking to attract sponsors because it’s the only thing that, in inverted comas, ‘works’. But potential donors don’t really understand what that means in terms of why there are people receiving all these requests for money in whatever form they come. “I don’t really understand what it is your organisation does or how it is making a difference with the money that you’re asking me to give.” Tim Hunter
Worst case scenario is that everyone becomes really fed up and they see charities as being a business and fundraising as trying to raise funds for their targets rather than to solve an issue. People lose faith in what charitable organisations do. They are being perceived as not passionate about their work. Not having much of an impact. Not being efficient, not being open. Not being real. Not giving people who want to engage in the issue the opportunity to engage in the issue and so as a consequence the number of people who are prepared to give money to charitable organisations declines or dwindles to a tiny amount. Jeremy Cooper
Alienate existing donors, the people, and it will completely fail to attract any new ones, so the charities will see declining returns, will be less inclined to be transparent and report back on the effectiveness of their overall programme because more and more of it is being swallowed in declining returns. Fundraisers become defensive. Donors become disenchanted, there’s less delivery, and the number of supporters would fall away. Which would have a knock on effect on the advocacy effectiveness of the charity at a time when all the greater demands, greater need, because of climate change, because of no government health funding etc., so less visible difference. So that would be a vicious circle – a self feeding downward spiral. Karen Rothwell
We are still giving 2 or 3 pounds a month and thinking we are generous. Mark Astarita
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I think that the substantial donor rules [for tax anti-avoidance] in the 2006 Finance Act pose a real danger to charitable giving in Britain. In addition to imposing undue burdens on both donors and charities, there is a risk that the legislation will be implemented more aggressively over time, decreasing the number of givers as well as the overall level of giving. Susan Mackenzie
It’s all focused on what the charity wants. It would be gloomy if we’re viewed as bombarding people, increasing fatigue and if people don’t know where their money’s going. If charities see supporters as people who need to be persuaded to give rather than somebody looking for trust, transparency, simplicity and some sort of feel-good factor. Alan Gosschalk
Increasingly cynical cohort, or generation of donors who you know don’t believe in charity not because they don’t recognise that they have causes out there but because they believe that government should be doing more and they don’t like the communications that they’re receiving from charities and they’re cynical because they think we’re just trying to get the money and they’re not giving me anything back or doing anything to address the situation. Paul Amadi
I think the danger is that the sector stagnates as lots of other areas become far more transparent. Information is shared about so many things - there’s so much more about our lives, about companies, about our schools, our hospitals and so on. Yet we carry on and knowing very little about charities and therefore we switch off. Martin Brookes
Government funding dries up, EU funding dries up, charities do not ramp up in terms of fundraising, communications and evaluation capacity and many go out of existence as a result and important community needs are not met. Sal LaSpada
Walking into the sunset… We then asked our experts to paint us the rosiest picture of fundraising in ten years time.
I think the rosiest picture is one where, as part of a busy family organising their life by doing their Internet shopping and organising their holidays on line, they will also log onto their personal space within their one or two charities that they support and look at what their family has achieved over the last year. Look at the kind of fundraising that they’ve been involved in and the money that they’ve given, the difference that that’s made. Maybe ask a question of the Chief Executive on their message board. Something which they feel is a reason to go back, there’s a reason to continue to interact but they’re doing it on their terms and they’re in control of it. Tim Hunter
I look forward to a time where every household is engaged in a variety of different levels on a variety of different issues and that includes financial engagement and other types of engagement. So you know, ultimately families and individuals or communities or whatever kind of group understand that the world is a big and complex place that they have a role and a responsibility to engage with it and that change happens as a consequence of your actions as an individual. Jeremy Cooper
People’s level of giving was in some sense meaningful in respect to their other disposable income/spend and giving was normal, not to give was odd. Mark Astarita
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I think we’ll have a series of large and small charities that have really integrated what they do with their fundraising, so actually we’re changing behaviour and we’re meeting purpose while raising money to do the next bit. I think that would be very exciting. And that corporates would play a role in that without wanting to take it over, and that governments would be supporting it without offloading what they don’t want to do. Paul Farthing
The number of newly wealthy givers continues to grow, they give more and more as they become more confident in their giving, and more of them become role models for other new givers – and it grows exponentially. Susan Mackenzie
We’ll have a donor base that are engaged in their responses so that they donate regularly but they also respond to additional appeals or acts of support whether that’s monetary or through action. They will be able to be engaged to a level where they can link us into other people, into organisations. We can move them through to other areas of fundraising such as leaving legacies, ideally legacies would grow considerably through greater engagement and, generally, they’d just be really switched on by the charities that they support. Gwen Pearson
Acquisition costs have plummeted, I’m not looking at attrition rates of 40% and I’m able to reach all my donors on a regular basis and they’re able to reach me and we’ve got that dialogue [going] on so there’s that two way dialogue and I can honestly say to you that there’s engagement in the cause, engagement and understanding… Paul Amadi
That the sector grasps the nettle and says ‘look we’re doing major work, we’re doing it sometimes in impossible circumstances and against seemingly insurmountable odds. We’re not curing world poverty, we’re not single handedly saving every AIDS orphan in Africa, and we’re not stopping child abuse but we are doing a hell of a good job towards those visions and we’re going to celebrate what we can do. We’re also going to demonstrate what we can do. And we’re going to be open about who we are and how we’re doing it and what we’re achieving. We’re also going to be open about the challenges of doing it. People can take as much or as little information as they want about us but we’ll be so open, transparent and clear and communicate things so well, that we’ll persuade a lot of people to invest in us. And not just invest money in us, but also to invest themselves in us, as staff and as trustees. Basically my rosy scenario involves breaking down the barrier that I see between the sector and the rest of society. Martin Brookes
Continued strong interest in philanthropy, charities and giving, growing corporate support, organisations the sector strengthens its self, really its communications capacity, telling the great story of the work it does, it inspires more people to give which in turn strengthens the second, more money comes into the sector and then we’re in this wonderful virtuous cycle. Sal LaSpada
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Section 8: The key trends for fundraising in the 21st Century
Six cultural attitudes that impact on how people give
Culture shift 1: The growth of irrationality and the cult of the individual
The world is not as rational as we would like to believe. We do not live in a world where facts and importance set the agenda for our media consumption. We live in an irrational world where brands, fashion, celebrities, emotions, nosiness and huge choice drive our daily lives and viewing habits. We are governed by our hearts, not by our heads.
A generation ago what we consumed in news terms was limited to a handful of TV stations and a small number of newspapers. Since then we have witnessed a news explosion. In 1981 it would have taken just 24 hours to consume all the TV and radio news output for a single day. By 2001 it would have taken 2 and a half weeks.11
Furthermore, the growth has not been in hard-edged foreign reporting or sharp political insights, but in soft news: celebrities, sport, fashion and entertainment. Witness how the tabloids feast on the instant celebrities created by ‘Big Brother’, ‘X- Factor’ or ‘Britain’s Got Talent’. Witness how Pete Doherty is far more famous for being a drug-addict and alcoholic than he is for his music. Alongside the conversion of tabloids to soft news come entire magazines centred on celebrity interviews, celebrity fashion and celebrity sex lives along with a smattering of real-life stories.
Even mainstream media can become intoxicated with a sportsman’s broken bone (Wayne Rooney’s toe in the run-up to the World Cup) or the fate of one missing child (the terrible story of Madeleine McCann).
This style of media has implications for the world of donors and fundraising. Charities tend to believe that their requests for donations must be rational, with the more people helped the greater the appeal to donors. However, this is far from the truth. In some studies facts have been shown to be a turn-off for donors – a single compelling case study is often far more powerful.12 The way society produces and consumes media has a profound impact on the way that donors will consume information about charities. If charity information is too boring, too dry, too factual and too passionless many consumers are likely to be disinterested and therefore disconnect.
Worse still, in the real world of consumers and customers people increasingly indulge in ‘continuous partial attention’ (CPA). They are shopping while talking on their mobiles, reading their mail while scanning websites, texting while watching telly. In short, they are doing multiple things at once. First highlighted by Linda Stone of Microsoft and Apple, she describes CPA as a behaviour we have learned to help us cope with an information rich environment.
11 Future of News-Ananova, The Future Foundation, October 2001 12 The Darfur Puppy, New York Times, 9 May 2007 nfpSynergy 45 The 21st Century Donor
“In this sleep-deprived, interruption-driven, always-on world, our ability to focus is compromised. In trying to process a never-ending and ever-widening stream of incoming data, we can put off decisions indefinitely or even burn out.”
This has implications for fundraisers: how do you get to donors effectively without increasing their sensory overload? One thing is clear: never make dull appeals.
Myth of decline and ‘learned helplessness’ We live in a period of uniquely attractive economic and social conditions from which the majority of people are unquestionably benefiting. However, that is not how people feel. Instead, they see an increasingly violent and threatening world, where there is no time, no community and a breakdown of the family. Real incomes have quadrupled since the 1950s, low inflation has delivered an increased sense of stability to people’s lives, and there are life-enhancing, drudgery-reducing durables in almost every home. Parents spend more time with their children now than in the 1970s.
Learned helplessness theory is the view that depression results from a perceived lack of control over the events in one's life, which may result from prior exposure to (actually or apparently) uncontrollable negative events. This may occur in everyday situations or environments in which people perceive (rightly or wrongly) that they have no control over what happens to them. This perceived lack of control can result in feelings of paralysis or in conceding defeat.
In addition, we now have access to more information about the world than at any point in history. News of disasters, wars and terrorist activities floods into our homes every night. These events combine to make us feel that we cannot impact the world around us, that events are too huge, too complex or too entrenched to change. We may be concerned by climate change, poverty, or child abuse but feel helpless in the face of such immense problems and question whether we are actually making any difference.
In short, while the world in many ways gets better, people have the luxury of feeling worse about it.
Culture shift 2: The rise of mass affluence, free time and the importance of feeling good
There are more and more people who are mass affluent – as defined by liquid (non- property) assets of more than £50k. Not only are the mass affluent on the increase, but so is the wealth of the population as a whole. Disposable income has doubled since the early 1980s, and the cost of housing, groceries, transport and leisure has fallen in real terms.13
Alongside this increase in wealth (and decrease in costs) is a freeing up of people’s time. The amount of time spent (particularly by women) on domestic chores has fallen dramatically over the last 40 years (farewell twin tub, hello ready meals).14
13 A Life of Leisure, ONS/nVision 14 Time spent on housework by gender, British Household Panel Study/nVision nfpSynergy 46 The 21st Century Donor
The net result of all this is a significant portion of the population has more money and more time than ever before. And much of this time and money is spent on leisure and experiences: people are enjoying more foreign holidays, taking more weekends away, buying video game consoles, computers, home cinema systems…the list goes on.15
This rise of mass affluence presents both challenges and opportunities. The opportunity is to persuade people with surplus money to spend it on a cause they care deeply about. The challenge is that competition between charities is negligible compared to the competition with the myriad other ways that people can spend their money. When even the richest households spend 99.5% of their wealth on anything but charities, the 0.5% for giving is a tiny portion of the whole.
But there is good news. Evidence shows that people who have extra money are increasingly interested in spending it in a way that makes them feel good about themselves and realises their dreams about who they are, and the world in which they live.
This leaves a simple challenge for fundraisers. Giving money needs to be as rewarding and satisfying as the overseas holiday, the home cinema system or the new car. Giving money to a charity needs to be as rewarding for tomorrow’s generation as leaving wealth to grandchildren. Giving money needs to say something as powerful about the type of person we are or want to be, as buying a BMW or wearing a Rolex watch or a Gucci handbag. Charity brands will need to become ever more powerful and more distinctive – because the commercial brands they compete with are just that.
Culture shift 3: The expectation of choice and the need for instant gratification
Choice is increasing in every area of our lives. We are faced with a massive range of options every time we go to the supermarket, browse the internet, buy a mobile phone, pick a holiday and select a book. Indeed, there is a wealth of choice in just about every aspect of our lives. Most of us are comfortable with the level of choice we have, though older people are more likely to want a more limited selection.
We all have our own strategies for dealing with choice: we buy the brands we know and love; we shop according to price; we listen to friends’ recommendations; we use advisers to help mediate our choice (Which? Magazine, best buy lists in the Sunday papers); we pick at random or according to superficial criteria like colour or style; or we stick with the choices we made before. In short, as a result of the mushrooming of choice over the last ten years we, as a society, are not just used to its presence in our lives, we expect it.
Along with choice comes the expectation of instant gratification. We expect phone lines to be open round the clock and want internet purchases dispatched within 24 hours, not the 28 days that was the norm a generation ago.16 There are two insidious effects of this proliferation of choice for charities.
15 A Life of Leisure, ONS/nVision 16 Ibid. nfpSynergy 47 The 21st Century Donor
The first is that, along with the public sector, charities are not good at delivering choices. A negligible number of charities allow supporters to select what communications they receive. Charities tend to structure all they do around what they want to say as an organisation, rather than around what the supporter wants to hear or is interested in.
The irony is that while charities tend to fret about the 180,000 charities they compete with, this rarely leads to increased choice for the giving public. We survive the choice in our commercial buying because we understand how to differentiate between those choices. In the charity world, the relatively weak and undifferentiated brands of even household name charities make it difficult for the public to know how to decide who to give to. For some people, mergers between charities are the answer. We at nfpSynergy find this to be a peculiar response: nobody says ‘there is too much choice at the supermarket so Tesco and Sainsbury should merge’; and we do not believe it to be the appropriate response for charities either. Better differentiation is the right response to a multitude of charities, not mergers. If the public cannot tell the difference between, for example, the big children’s charities the solution is to make them more different, not more similar.
The second insidious effect that the rise of choice brings is its impact on what punters expect their money will do. Go shopping on the internet or in a supermarket and there are decisions about the best value return £20 will deliver, and whether the purchase is worth it. However, if someone is searching for a charity to donate to, not only is there a lack of the instant gratification provided by seeing a job well done, but charities will often attach many caveats to the effectiveness of their work: it takes time, it is very complicated, we will spend it in a variety of ways and so on.
Nowhere is the disparity more keenly felt than on some of the biggest issues that face the planet. If you want to tackle climate change, HIV/AIDS, trade inequalities or third world debt there are numerous agencies which would love to take your money. However, the question of whether your donation will be effective is left unanswered – the issues are so huge, so complicated, so long-term and so hard to tackle.
It is no wonder that many people feel a sense of learned helplessness when confronted with donating money to tackle these issues. £20 spent on a couple of DVDs may not stop climate change – but at least it will definitely provide a couple of evenings of entertainment.
Cultural shift 4: The rise of the baby boomer
Following years of Second World War hardship and post-war austerity, between 1947 and 1960 the birth rate increased significantly resulting in the so-called baby boomer generation. But baby boomers are not just about a spike in population numbers. They are also about a change in attitudes compared to the generation that came before them.
Baby boomers are more independent, and more liberal in their social attitudes, having come of age in the swinging sixties. They had access to health and education and opportunities in a way that were unimaginable for previous generations. Women burned their bras, went out to work and took control of their lives in ways that were inconceivable for their mothers. The ‘teenager’ was born and with that the beginnings of the ubiquitous youth culture that we see today.
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But the baby boomers are also more demanding. Baby boomers tend not to accept authority in the way their parents did. They tend to expect the world to be the way they want it to be. They have less of a sense of duty compared to their parents.
Of course it is not a completely homogenous group. There are differences between those at the older end and the younger end, and economic variation. Richard Titmuss’s view of “two nations in retirement” is even more salient today than when he first wrote about it. Those without adequate pension provision and who are in poor health are going to struggle as those with secure pensions have longer to enjoy their retirement in a better state of health and in greater comfort. There is also an ethnic minority population among this group that have grown up in this country having arrived in the UK in the 1960s and 1970s.
Some of the key trends identified in this generation include:
• Much higher home ownership than previous generations, together with the benefits from the house price rise in the UK. • Access to secure and generous pensions • Confident consumers, happy to complain and pay for services to make their lives easier • Life expectancy has increased. The number of Britons aged over 65 has exceeded the number of those aged under 16 for the first time in history • This group makes up 29% of the population in the UK • With an annual income in excess of £160bn, over 50s spend £145bn a year, yet only 5% of marketing campaigns pay attention to this group17 • In research by Demos in 2004, many respondents said they feared loss of independence in old age, and some said they would like to control their own death
In general, as the baby boomers creep towards retirement they will have more disposable income (they may indeed be the last generation for a while to have full pensions), be healthier and want to engage with charities in a way that impacts their lives.
Culture shift 5: Gazinta – the cost/benefit equation that drives busy professionals
All of the cultural shifts we have examined so far point towards a more demanding, more reward driven and less dutiful generation of donors. The notion of Gazinta only adds fuel to that fire. Gazinta is a Californian concept based on the notion of how much ‘goes into’ every minute of every hour of every day. Busy high-affluence professionals will be used to making every minute count.
We can extend the notion of Gazinta to include the rewards that an investment of time or money brings. So whilst neither baby boomers nor the mass affluent are afraid to spend money, the key concept is what they get back compared to what they put in. An investment of time and money in a foreign holiday or a night out can be judged. A financial donation to a charity has a cost that is easy to measure – but
17 Weber Shandwick nfpSynergy 49 The 21st Century Donor
delivers a benefit that is hard to quantify. This is one of the reasons we believe that communicating the tangible or not so tangible impact of a donation is so important. The next section looks at this concept further.
Culture shift 6: The important role of the internet (although it is not yet the star of the show)
The commercial world has been revolutionised by the internet. The world of contacting and finding out about charities has also been massively changed. And yet the world of fundraising and donors has not moved on. There are a few charities that benefit hugely from the internet: those who deal with disasters and emergencies overseas or those with substantial numbers of runners in events like the London Marathon.
But since the internet was created we have heard talk of a revolution in giving. We do not believe that revolution has yet come and we do not believe it ever will. There are several reasons for this.
Firstly, giving is not a rational activity. People do not decide who to give on the basis of facts and ratios. They decide who to give based on the causes they care about or the charity brands that they have heard of and trust. Indeed some people give not because of any affiliation with the cause, but because they were asked by the right person at the right time. Face to face fundraising on the street works partly because of personal chemistry and attraction. As one fundraising director told us – ‘with an all male recruitment team, the number of young women donors we have recruited has gone up’.
The corollary of this is that there are few people who go off and dig out all the financial details of a charity before deciding whether or not to donate to them. Giving is not like choosing a pension or buying a car or a washing machine. Not only is it much harder to compare the features of different charities than it is to compare different washing machines, but most people do not want to work that hard. As somebody said in one of our focus groups: ‘If they are a big name charity, they are a brand. I just trust them to do a good job’. Of course, the opposite also holds true.
Secondly, giving is all about asking. Few people wake up in the morning and think ‘I must give today’. So they do not go and seek out the perfect charity to meet their needs. Indeed most people give because somebody asked them. That does not mean they were cajoled against their will into giving, merely that asking for a donation, like going on a first date, is a vital part of beginning a relationship – and somebody has to do the asking.
Where does this leave the internet? Well the internet cannot flirt, it rarely stops people in their tracks and it is poor on personal chemistry. But it is great at reassurance and support and it can provide plenty of useful information to doubting donors. For fundraisers the internet is a reactive support tool, not a proactive asking tool.
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Life at the cutting edge – what will the best fundraisers be doing in the future?
The future has already arrived. It's just not evenly distributed yet. William Gibson
Trend 1: Creating multiple partnerships between audience and motivation
Engagement by attitude and product as much as by demography and wealth Charities traditionally define their audience by demography: ABC1 women over the age of 55, C1 & C2 Men aged 25-34 and so on. These demographics are easy to calibrate: a person can easily be asked their age, their profession, or their gender. However people’s wealth and net income is constantly changing depending on their stage in life. The use of demography, class and gender has become a proxy for complicated changes in people’s lives, changes which have resulted in people becoming more or less likely to give.
We believe that those at the cutting edge will increasingly use more sophisticated segmentation, and indeed many probably already do. These kinds of segmentations may not be proxies for life stage changes, but the real thing. We can no longer assume that a 55 year old woman married to a doctor is an empty nester, ready to take on a life of voluntary work and civic duties. We have to ask.
More importantly, segmentations may take no notice of demography but be entirely about attitude. These attitudes may be about the cause itself, the nature of society, or the price of organic eggs. Their importance is that certain attitudes demonstrate a relationship with giving, to charities in general or to a cause in particular, while cutting across gender, class and age.
In short, charities will need to have a much more fine-grained approach to audience targeting together with a more fine-grained approach to motivating them.
Creating a smorgasbord of motivation It is almost certainly pointless to have a range of fantastically defined and targeted audiences and then ask them all to give in the same way. This means that, together with better targeting of donors, fundraising products or mechanisms will emerge that match the interests of the groups at which they are aimed. This array of motivations will include many of the current range of fundraising methods: legacies, events, direct mail, raffles and the like. But alongside them will be new products and new ways to engage (more about this in Trend 5).
All the external trends in donors’ lives are pointing towards more choice and greater control. Donors are used to, and can handle choice in their everyday lives. They know how to discriminate between multiple mobile phone tariffs, holiday choices or makes of cars. We should assume that when the products and positioning are right that donors can discriminate between choices about how to give to charity: particularly when the products or ways to give are designed for particular target audiences.
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Even small charities can have a single fundraising offer targeted at a particular group. Alas, too many small charities have a broad-brush approach to fundraising which gives them only a limited appeal albeit to a huge range of people.
All this matters because, as audiences get more sophisticated and fundraising more competitive, the relationship between audience and motivation will need to become more tightly bound. Too many charities blanket mail, literally and metaphorically, their target audiences with a range of one size fits all fundraising offers. The best fundraisers will carefully mix and match the right audience with the perfect product in a smorgasbord of choice and motivation
Trend 2: Intertwining giving and living
Once in a while somebody proposes that the population be encouraged to give a set percentage of their income to charity. We think this is a bad idea for a raft of reasons amongst the most important of which is that reminding people how much they give and how often they give is almost certainly counter-productive for many individuals. Those who are most likely to take notice are probably those already giving more than the suggested amount – and some may reduce their giving as a consequence.
We want people to give without realising they are doing so, so that their donations form part of their everyday life, moving unnoticed from them to the charity. And much of the evidence is that the most successful fundraising takes place when giving and living are melded seamlessly together. This section explores that trend.
Creation of social spaces, where giving becomes living Cancer Research UK’s Race For Life now has over 700,000 people taking part each year. The Flora London Marathon has 35,000 runners and is at least five times over- subscribed. The MoonWalk persuades thousands of people each year to walk through the night to raise money for breast cancer care. Twenty five people take two weeks off work to walk to Machu Picchu in Peru to raise money for a disability charity. These are but a few of the highly successful fundraising events where the difference between giving and living is wafer-thin.
Do people do these activities purely out of an altruistic desire to raise money for charities? No. They do them because they are a great social activity. Runners describe the incredible sense of camaraderie before and during a running event. People meet and make friends for life at challenge events. The best fundraising events allow people to do things which hover between giving and living. They would not do them if they were just social activities and they would not do them if they were just fundraising activities.
We believe there is great potential for growth in these kinds of fundraising activities. It is one of the reasons that nfpSynergy has been pushing for a national framework of more running and marathon events around the UK – the demand is there both from fundraisers and runners.
One group for whom social (fundraising) spaces are particularly important are young people. The evidence from our focus groups is that young people not only do not engage with traditional types of fundraising, but are particularly engaged in social activities. So any organisation which wants to engage young people in fundraising
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and volunteering will need to create social activities which allow young people to give in a way that fits with their lifestyle, with all its constraints and opportunities.
The secret to the development of new giving/living events is not to be trapped by what already exists. The best fundraisers will be looking at fundraising dinner parties, fundraising mortgages, and fundraising pensions: anything and everything where the appeal of raising money can be blended with the activities of everyday, and not so everyday, life. Moreover the best fundraisers will blend volunteering and fundraising into one greater whole – a theme to which we will return later.
Making house to house collections a factory for community social capital18 How does society create cohesive communities? With great difficulty is one answer, particularly in urban areas or commuter-filled dormitory suburbs and towns. One of the difficulties in creating more social capital (broadly speaking the ways in which people come to interact in a locality) is that so few people need to get to know each other any more.
Fundraising volunteering has a role in creating those links because it is one of the ways in which people do get to know each other (another being the regular attendance at a place of worship). Door-to-door collections (such as those that take place in Christian Aid Week) are one of the best ways in which people can meet their neighbours – on whose doors they might otherwise have no reason to knock. One of the ironies is that many fundraisers may target those streets that are traditionally most lucrative. And those streets may be the most lucrative because they already have the highest level of social capital (try saying ‘no’ to an envelope collector you know as opposed to one you do not).
To get round this fundraisers could be encouraged to knock on doors in areas where the very act of fundraising volunteering helps build communities in the long-term. Fundraising volunteering brings people together and helps people get to know their neighbours and colleagues. Indeed, knocking on a neighbour’s door and asking them to donate might be one of the simplest and most powerful ways to get to know them.
Trend 3: More demanding donors, but bigger gifts
The desire of demanding donors to be in control Consumers like to be in control. Commerce is geared towards allowing consumers to have a mass personalisation of their world. We are a long way from ‘any colour you like as long as it is black’. There is very little about today’s world that consumers cannot choose to have in their own way: their mobile phone ring tone, their internet bank account, their iPod playlist, their TV channels – the list goes on and on.
So what does the average consumer experience when they become a donor? Not only have they entered a world which has the same level of customer service and flexibility as a 1950s seaside B&B, but unbeknownst to them they have entered into a whole set of unspoken assumptions. The consumer thinks they are making a one- off donation while the charity thinks they have entered into a life-long contract and
18 Some of the ideas here are taken from our report ‘The 21st Century Volunteer’ nfpSynergy 53 The 21st Century Donor
will call them a lapser if they do not make another donation. And in all too many charities you get the same level of service however much you pay.
The consumer may be used to making their consumption experience their own, while the charity expects to send them what it wants, when its wants and how it wants. So the 21st Century Donor and the 20th Century Charity are heading for a clash in this battle over who is in control.
The best fundraisers already see the world through their donors’ eyes. They will give them the choice in how they hear, how often they hear, what they hear about and where their money goes. The problem for unresponsive charities is that donors who want more control may not complain or make a fuss, but simply fade away. At best they will find another charity that is responsive; at worst they will spend their donation on another foreign holiday instead.
But in the larger battle between donor and charity, how many mailings a donor gets and who decides is small fry. The really big issue is the desire of donors to have a say in how their money is spent and knowing whether it makes a difference.
Demonstrating an impact and allowing donors to say how their money gets spent Fundraisers are still uncertain about the importance of demonstrating impact to donors. There is no doubt that many big charities have fundraised very successfully with only a minimal demonstration of impact. So why change the habits of a lifetime? Many donors have trusted charities in general, and the big brand charities in particular, to do a good job, so demonstration of impact has not been necessary.
However, those charity sector interviewees who dealt with wealthier donors highlighted a trend towards greater interest in two overlapping areas: firstly how charities measure and demonstrate impact, and secondly a desire to specify how their donations are spent. These two trends are linked because a desire to specify how donations are spent is, at least in part, an indication that the donor does not entirely trust the claims of impact. (It is also of course an indication that many donors have specific areas of personal interest).
Individual donors’ increased interest in impact and directing the spending of their money is really just a catch-up with the rest of the funding world. Indeed, all the major funders of the sector: central government, local government, lottery bodies and charitable trusts attach great importance both to prescribing their areas of interest and to measuring the impact of their funds. One of the ironies of this trend is that many service-delivery people are appalled at the idea of being donor-led in their response to individual donors, but are already heavily funder-led when the funders are central or local government.
So how do fundraisers respond to the desire for measuring impact?
First of all, fundraisers should respond by welcoming it. Charities need to become better at measuring impact, not just for fundraisers, but so that they know they are doing the best possible job for clients and beneficiaries. Secondly, by understanding the role that demonstration of impact plays in giving. The prime motivation for choice of charity is not impact, but cause. People give to causes they care about, whether this is for personal, family or life stage reasons. So unlike, for example,
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pension choice where fund growth may be the primary driver of fund choice, for donors, the benefit of demonstrating impact is to give comfort and reassurance that their choice of cause is the right one.19
There has been considerable debate within the fundraising community and the wider sector about how charities should respond to the desire by donors to have a greater say in how their money is spent. Our response is simple. It is a trend that is here to stay and any charity which rejects the notion of donors having any kind of say in how their money is spent is swimming against the tide in modern philanthropy.
Fundraisers should by all means tell donors why they think the way that the charity spends money on clients and activities makes total sense. They should show donors that they have thought through the issues of impact and effectiveness, but if in the end the donor has other ideas then each organisation has to make it own choices about whether to accept or reject donations to be spent in new or different ways. Fundraisers and charities may not like this trend but they reject it and the money that comes with it at their peril.
Big donations are set to rise Across just about all our interviewees there was agreement on one issue: big donations are on the rise. The rise of mass affluence and the growing desire for the mass affluent to scramble up Maslow’s hierarchy and reach the self-actualisation summit means that ‘changing the world’ is now high on many rich people’s agenda.
This is great news. The US is quite some way ahead of us in this respect. Not only have two of the world’s richest men, Bill Gates and Warren Buffet, shown an extraordinary lead in this respect, but American fundraisers have much more experience in rewarding their major donors. In the US, it is much more acceptable to overtly reward substantial donations with public praise, with overt symbols of recognition such as the naming of buildings, projects or professorships.
In the UK many in charities, even some fundraisers, find this kind of recognition distasteful. Indeed, while reading this report, why not try to think of something that a UK charity has done to name and praise a donor for their generosity. We are sure there are more examples than the renaming of NSPCC’s HQ – we just cannot think of them.
So if big donors and big donations are on the rise, fundraisers (or more likely their CEO and trustees) need to wake up and smell the coffee. If you want big donations, you need to make donors feel good about what they do. You need to indulge their desire for a lasting testament to their generosity. You need to swallow your overwhelmingly negative (and British) response to overt displays of wealth, success and generosity. Because the best fundraisers will be those that do recognise and praise generous donors – and they will reap the rewards.
Giving: dead or alive? If giving while alive is set to increase so, almost certainly, are legacies. House prices are increasing remorselessly. Children no longer need their parents’ capital to buy a home. With the only fly in the ointment being residential care fees we believe that
19 See our report ‘Getting the Message Across’ for more on the topic of communicating impact nfpSynergy 55 The 21st Century Donor
legacies are almost certain to increase – for those organisations who market them to the right people at the right time in the right way. All the trends point towards an increase in people giving larger amounts of money through legacies. But is life really that simple?
Just imagine that giving does become ‘financially planned’ like the rest of people’s lives. If everything is taken care of and the amount that can be given to charity is carefully calculated would a donor really wait until they are dead before they hand over their donations? While alive a donor can see their donation in action, engage with the organisation, bask in fawning gratitude (though probably not from the CEO), and generally appreciate the importance of their donation. Dead, a donor cannot do any of these things. The tax benefits of giving dead or alive are little different.
So if we are right, some people who might have given a legacy will have the confidence to make their donations while still alive. This remains the great unknown for legacy giving – many of the trends we predict are good for giving, but possibly, just possibly, not quite so good for legacy managers.
Trend 4: Integrating the experience of giving time, money or activism
Take supporters from nursery to nursing home Charities have taken the giving process and cleaved it in half like an enormous fruit. One half, the one called ‘giving time’ has been left virtually untended for the last quarter-century. The other half, the one called ‘giving money’, has been nurtured, loved, tendered and generally given all the attention.
The time has now come to re-integrate these two parts of the giving experience, for the simple reason that at most times in our 21st Century lives, people are rich in either time or money – but rarely both simultaneously. So if we want to keep supporters through all of their lives – from the nursery to the nursing home – we need to be able to respond to whatever the needs are in their lives at that point in time. As teenagers and students, people have time but not money. As 20-something couples, people have money but not time. As families with young children, people often have neither money nor time, but when the children leave home to spend money on university, the time floods back but the money goes on flowing out for a while longer.
So if charities want to keep supporters through all these socio-economic twists and turns, opportunities are needed for people to progress from one way of giving to another. To the commercial world this kind of match between product and life stage is nothing new. Just look at how certain kinds of car are geared towards certain kinds of people. Successful charities will make sure that they integrate their ‘giving’ products so that their supporters can move seamlessly from one type of engagement to another and back again.
This means that the notion of fundraising which focuses on ‘one donor’ is often progress for the organisation concerned, but merely on the nursery slopes compared to where supporters are at in their own lives. In other words supporters don’t want to be treated as a donor or a volunteer, but as an individual whose needs are seamlessly met by the organisations they support, whether that is as a giver of time, of money, of activism, all of them or none of them.
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Cross-fertilising the rewards of giving and volunteering Life stage is not the only reason to integrate the experiences of living and giving. Giving and volunteering provide different experiences. Volunteers are far more likely to use words such as ‘enjoyment’, ‘satisfaction’ and ‘achievement’ to describe their experience, while donors are more likely to emphasise ‘commitment’, ‘satisfaction’ and ‘loyalty’.
So the greater variety of things that a supporter does with an organisation the greater the breadth of emotions and motivations that she will experience, and therefore the richer and more satisfying her experience will be, and the more loyal she will become.
The implications of this trend go beyond just the fundraising team. In order to integrate the supporter experience the whole organisation needs to take part. The volunteer and fundraising teams need to work together. The IT department needs to provide solutions to the data silos that exist in all too many organisations. The communications team needs to make sure that the organisation, in all its parts, is on brand. The CEO needs to bang heads together when the directors start to bicker. The best fundraisers will increasingly not even be in the fundraising team, but will be those who demonstrate the passion, the energy and the commitment to make supporters have a rewarding, energising, giving experience.
Trend 5: The most important idea of all: oven-ready, bite-size, fundraising niches
We all like a simple life. In a world full of choices and complexity we need simple ways to navigate our route across the tempestuous sea of change. The commercial world has identified the route map for those in the charity world: a complex world is made simpler by the creation of products and positioning.
A product takes the choices, the variability, the price and the content and bundles them together in one easy formulation. The commercial world is full of these products: the package holiday, the restaurant set-menu, the monthly mobile phone package, the McDonald’s happy meal, the gym club membership and so on. Behind every great product lies an organisation which can give consumers confidence that they deliver the product. These two twin pillars, a great product and a great brand, lie behind much commercial success.
These two pillars are no less important for the 21st Century Donor, because every donor wants to know both what she is giving to and the organisation through which she is giving. The strong fundraising product helps people engage with an organisation. They know what is expected of them – the amount of their donation and what they get in return. Child sponsorship, Macmillan’s World’s Biggest Coffee Morning, challenge events, Christian Aid Week are a few examples of great fundraising products.
It has become fashionable to decry the £2 a month fundraising offer that so many charities now use. It works because the public know what is being asked of them, and they are offered engagement in a low-cost, easy access way. It has all the makings of a great product. It is no surprise that the National Trust and the RSPB have such large membership bases. They have a fantastic membership product and a brand that makes people believe that they can deliver.
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Alongside the importance of products is the importance of a brand. For some of the biggest household name charities it is not necessary to get specific about exactly what an organisation is or does. However for all but those largest charities, an organisational pigeon hole is a key ingredient to success, at least in terms of fundraising success. In many sub-sectors of the charity world, such as overseas charities, the main players are differentiated: Oxfam does everything, WaterAid does water and sanitation, CAFOD appeals to Catholics, Red Cross responds to emergencies, UNICEF focuses on children. Most of the well-known charities have clear and distinct niches. Sadly in other sub-sectors, such as the child welfare sector, differentiation is not so clear.
Great products and a distinct niche or brand are key ingredients through which donors can engage with their favourite causes. The best fundraisers will make sure that their organisation has both.
Conclusion
Is the future looking good for charities raising money from the 21st Century Donor? We think so. Do not get us wrong, there are potentially lots of storms and squalls that might push the boat of better fundraising off course: the need to demonstrate impact; the risk of failing trust; the failure to listen and respond to donors’ concerns as they arise. Nothing about raising money in the 21st Century is going to be easy, it will be hard work.
That said, the overall climate for fundraising has everything going for it. Wealth is growing and with growing wealth comes a growing wish by donors to make a difference. Charities deliver services that change people’s lives and politically charities have never been more important.
Will fundraisers raise more money? Undoubtedly. The limit is not donor fatigue or public wealth, but the ability of fundraisers to understand their donors and to connect them with the causes they care about. Nurtured, understood, listened to, and cared for, the 21st Century Donor will help the 21st Century Charity flourish.
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nfpSynergy is a research consultancy for the not-for-profit sector. Our goal is to provide research information and knowledge to help non profits thrive. We do tracking research, focus groups and individual projects. We measure anything from effectiveness to advertising.
We run both syndicated monitors and individual projects for dozens of different charities, using a wide variety of research techniques.
We have also published a range of reports covering a variety of issues, which you can download from our website for free, including:
The State of the Third Sector 2007
This is the first instalment of an annual survey carried out with Third Sector magazine, which will track the mood of the sector over time.
The 21st Century Volunteer
Our most downloaded report, which aims to help voluntary organisations understand the current volunteering environment and to anticipate how volunteering will change over the coming years.
Typical Young people – a study of what young people are really like today
Commissioned by the Scouts, this report is invaluable for any charities who work with young people.
Polishing the Diamond
Our popular and practical look at branding for charities. This was followed by ‘Branding: the jeweller’s story’, which has more case studies and advice.
Mission Impossible
‘Mission Impossible’ brings together over 80 vision statements from a range of organisations in the charity and not for profit sector. We have added our own analysis and ideas on the way charities present their vision, mission and values.
nfpSynergy - our stakeholder syndicates
Our syndicated monitors provide lower cost, more frequent and more detailed research than any organisation could achieve by acting on its own. The following are four of our most popular monitors:
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• Charity Awareness Monitor (CAM) Nine times a year we ask 1000 representative members of the public about their awareness and understanding of charities. Over 45 organisations have signed up.
• Charity Parliamentary Monitor (CPM) MPs and peers are a key audience for many charities and pressure groups and our research helps establish how effective politicians think specific charities are.
• Charity Media Monitor (CMM) Journalists are gate-keepers to wider coverage of charities, so their opinions are critical to communications success. CMM provides a unique insight into the views of over 200 journalists hand- picked by subscribing charities.
• Youth Engagement Monitor (YEM) Young people (11-25) are a key group for many charities. YEM gives charities a cost-effective online insight into the way that charities are seen by young people.
nfpSynergy – our project portfolio
Projects arise out of the individual needs of organisations and so our response to each is different. Here are just two examples from our wide ranging project portfolio:
• YWCA Supporter Survey. The organisation was keen to gain a greater insight into its donor base, with particular emphasis on ascertaining what would increase the loyalty of existing donors. Particular emphasis was placed on gaining a deeper understanding of what type of work supporters felt most passionate about supporting; their comprehension of the work YWCA does and attitudes towards YWCA’s communications.
• Poverty in the UK for Save the Children. In order to highlight publicly the issues facing families living in severe and persistent poverty and to enable Save the Children UK to make informed policy recommendations to the government, nfpSynergy was commissioned to conduct an original qualitative and quantitative research programme to strengthen its understanding of the lives of children and their parents living in poverty in the 4 UK countries.
For more information, visit our website at www.nfpsynergy.net
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