Stop fundraising for one moment and think about donors. I meet them every week and I wonder whether many fundraisers really realise what the State of the Donor Market is.
Perhaps the impact we are having in donors is considered less than the impact on beneficiaries.
This blog is not proclaiming a death knell for direct marketing. This blog is not an attack on fundraisers. But I hope this article is a very very loud alarm bell to stop and listen to those who fund your work .
For over 20 years I have been listening to donors, volunteers, and service users – thousands of them.
Many fundraisers might think: “do not listen to donors they do not know what they want”. Proof quoted: free pens lift response rates when donors say they hate them.
May be they do provide a temporary uplift in the short term but what is the long term effect?
The donor journey is what fascinates me. For instance attrition rates in direct marketing and doorstep. Can you really measure outcomes without measuring the number of legacies taken out due to aggressive/over frequent asks? What is the legacy attrition rate resulting from over enthusiastic direct marketing?
So, let’s consider some of the most recent research from the Charity Commission and FRSB:
Complaints up 100% to almost 50,000 – but how many donors can actually be bothered to complain. In my view less than 2%. So how many donors are unhappy?
66% of the public are uncomfortable with fundraising methods
The number of asks has gone up from 13 billion to 20 billion in the last year. This means the “average” adult is getting over 450 asks per year. Perhaps the average donor is getting over 1000 asks per year. If you take typical donors I have listened to for decades their giving patterns are changing: they have reduced the number of charities they support by at least 50%.
Trust and confidence is dropping. And what drives trust and confidence? According to the Charity Commission Research: 49% “the amount that goes to the cause” versus 25% on “outcomes from donations”. I expected the reverse but most donors are prudent – certainly older donors care abot every penny they spend and they expect their charities to do the same.
Trust is highest with local charities and least with international charities. Surely this must be linked to knowing where/how funds have been used: the further away the beneficiaries the less certain the prudence of use of funds. Donors can touch local charities and live amongst their beneficiaries.
My specialism is legacy giving. A legacy is not a donation but an investment so trust and confidence relies on the level of pence in the pound going to the cause – which is exactly what donors are interested in.
Smee & Ford at the IoF Convention said 69% of legacy pledgers fulfilled their pledge. Great, but is this the same for all charities? NO I have known it as low as 2% (the first time death screening was carried out) and I have known 82%. It seems to depend on donor satisfaction and donor engagement. The former is led by accountability and transparency; the latter is led by personal experience.
Now let’s add some views from my focus groups and lifestyle reports:
95% of people who have put a charity in their Will will never tell their charity they have “done it”.
Over 60% of retired people are doing a legacy “hokey cokey” – legacies are in out in out and shaken all about due to:
- Aggressive legacy marketing techniques
- Financial uncertainty even though pensioners are currently better off than 20 years ago
- Future care costs (increasing tenfold in the next 30 years). According to the Daily Telegraph in January 2014 over 1 million people in the last five years have had to sell their home due to care costs
- Split/blended families in each generation cause massive inheritance issues
- Number of co-habiting couple has doubled to over 3,000,000 in 15 years (ONS), again causing massive inheritance issues if the die without a Will or even with a Will.
- Divorce amongst elderly: divorces of men ages 65+ have increased by 73% since1991 (ONS)
- There are 1.5 million grandparents under the age of 50 – there are 14 million grandparents in the UK. Unhappy families result in fragile financial futures due to funding needs of divorced sins/daughters let alone new children in second families of young grandparents
- More grandparents than ever before are paying for their grandchildren’s education.
Please now put yourself into the mind of a typical donor and ask yourself these questions:
How much will my income be this year?
How much can I safely spend this year?
How much should I save for the future – taking into account 8 million of us alive today will live to over 100 (government actuarial department)
How much can I give to charity?
Which is the best way to support charities; a direct debit? No, because I do not have clue as to how much I will need. Or, give 1% (or more) to charity in my Will because at least everyone will have something? YES
From the fundraisers point of view (or even the trustees) perhaps the answer is “I don’t care about investing in legacies because I will have moved on from this charity and I have to meet my target this year.
And yet if you look at the focus groups I have run over the last five years around 35%-52% of charity stakeholder have put charities in their Will.
The debate is whether the legacy or legacies will remain in the Will.
Is it not about time we focused on donors and trusted them to act, in their Will, as much as they (sometimes) trust their charities?
Is it not time to be more focused on the donor environment and say “we understand the impact of your changing lifestyle” – do it if you can but we do not expect you to tell us your intentions or legacy values”.
Is it not time to trust them as much as they trust us?
Legacies are VOLUNTARY income. Voluntary means “done, given, or acting of one’s own free will”. That says it all. Do not ask for legacies: give stakeholders the freedom of choice to impact on your future.