Joe SaxtonOctober 2010

Tel: 020 7426 8888Email: joe.saxton@nfpsynergy.netWeb: www.nfpsynergy.net

J

How can we increase the size of the fundraising cake for individual charities and the sector as a whole?

Three perspectives on increasing the size of the fundraising cake

• What each charity must do

• What the sector must do

• What the government must do

Three perspectives on increasing the size of the fundraising cake

• What each charity must do

• What the sector must do

• What the government must do

1. Creating multiple dance partners between audience and motivation

• Traditional ‘one size fits all’ fundraising offer and segmentation on demographics alone are no longer sufficient

• More sophisticated segmentation is required in order to satisfy the modern, demanding consumer/supporter

• The relationship between audience and motivation will need to become more tightly bound

1. Creating multiple dance partners between audience and motivation

• The best fundraisers will:

• See the world through their donors’ eyes and allow the donor to make decisions for themselves

• Create a mix and match of offers/products for different audience groups

• Provide a smorgasbord of choice and motivation

Do just one thing

Agree with your colleagues which

are the most important audiences

for you.

One for service delivery and one

for income generation

2. Intertwining giving and living

• Donating money to charity often feels separate from everyday life

• Future success will make supporting a charity a greater part of everyday life

• Cancer Research UK’s Race for Life = 800,000

• Flora London Marathon = 35,000

• Part of these successes lies in making the gap between giving and living wafer thin… they tap into peoples’ desires for new experiences

• Events, social activities etc. are critical in capturing the hearts of modern supporters, particularly young people

• Giving and volunteering: part of the portfolio of activities that should be offered to supporters at different life stages

Do just one thing

What event or activity could you

hold that is part of the social fabric

of your target audience’s lives

3. Demonstrating impact

• More demanding donors but potentially bigger gifts on offer

• To help overcome learned helplessness and to encourage donors to support your organisation demonstrating impact is a critical challenge…

• But do donors already have too much say?

• It’s a trend that’s here to stay and it’s up to charities to educate and persuade donors of the merits of their approaches

Do just one thing

Come up with three pub facts

that demonstrate what a great

job your organisation does

4. Bite-size fundraising niches

• A product takes the choices, the variability, the price and the content and bundles them together in one easy formulation e.g. McDonald’s happy meal, package holiday, set menu

• Strong fundraising products can have the same appeal e.g. child sponsorship, Macmillan World’s Biggest Coffee Morning, Christian Aid Week, RSPB and National Trust membership

• £2/month appeals are often decried – but donors understand them and they offer a low-cost entry to this market

• Great products and a distinct brand are key ingredients through which donors can engage with their favourite causes

• The best fundraisers will make sure that their organisation has both

Do just one thing

Puzzle out how you can make

The best of your work into a

fundraising package

Do just one thing back

at the ranch

Complete the following sentence in

less than 12 words.

What makes my organisation

special is…………

Three perspectives on increasing the size of the fundraising cake

• What each charity must do

• What the sector must do

• What the government must do

What can the sector do?

• Work out where collective research would make the biggest difference

• Focus on the new demographics

Financial flows and lifestage

£0

£500

£1,000

£1,500

£2,000

£2,500

£3,000

£3,500

£4,000

16-19 20-23 24-26 27-30 30-32 33-35 36-42 43-37 48-52 53-56 57-60 61-65 66-75 75+

Net household income

All expenditure

Essential expenditure

Source: BHPS / The Future Foundation

age 16-19 with parents, no job

age 20-23 first job, living with parents

age 24-26 working, living alone

age 27-30 living with partner, first mortgage

age 30-32 first child, women exits work

age 33-35 second child

age 36-42 woman in p/t work, moves to larger house

age 43-47 woman in full time work

age 48-52 children reach adulthood

age 53-56 children leave home

age 57-60 early retirement for many, home owned outright

age 61-65 all women retired, most men retired

age 66-75 both partners retired

age 75+ widowed, single person household

Social structure of the wealthiest and least wealthy households

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

2+ Unrelated adults

Other Households

Lone par: dep childr

Lone par: non-dep ch

Single Non-Elderly

Couple: non-dep chil

Single Elderly

Couple: dep children

Couple No Children

Top 20%

Bottom 20%

What can the sector do?

• Work out where collective research would make the biggest difference

• Focus on the new demographics

• Work out where collective action would increase fundraising incomeLegacies Text donations Financial services Community challenge events

Financial services and income generation

• People struggle to choose between financial services

• So imagine a pension/mortgage/ISA/life assurance policy that gives money to their favourite charity

• Or imagine a product where the growth in income or capital could be split between individual or charity

• So almost every payment by an individual could involve a donation to a charity

Depends on interest in category

Brands as choice

managers

Relax search criteria

Independent advisors

Profit-making Not-for-profit

PriceValues/ ethical

concerns

Source: 'Citizen Brands', Michael Willmott/nVision

Faced with too much choiceWhat strategies do consumers adopt?

Community challenge events

• Challenge events match lifestyle developments e.g. MAMILS

• Challenge events allow one event to raise money for many organisations

• Challenge events are scalable and replicable e.g. Race for Life

• The challenge can be tailored to geography, the audience, etc.

• But one set of energy, capital and development can increase the size of the cake for many organisations

Three perspectives on increasing the size of the fundraising cake

• What each charity must do

• What the sector must do

• What the government must do

What should the government do?

• Remove regulatory barriers The regulation on raffles are absurd: dual registration,

limits on size, unfair levies, limits on prize money and so on

• Sort out Gift Aid Clunky, bureaucratic, and particularly onerous for small

charities and we have had 5 years of hot air about change

• Agree whose job it is to promote innovation in giving: the sector or government

But beware of the revenge of the changing socio-economic climate

We’re getting older…and we’re living longer

Number of people in each one year age band

0

100

200

300

400

500

600

700

800

900

1,000

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85

2007

2027

Age

Thousands

Source: Government Actuary’s Department/nVisionBase: UK

Age structure of the UK population

1. Rise of the baby boomer – not just a spike in the population

• Born between 1947 and 1960 after WW2 hardship and austerity

• Baby boomers are more independent, more liberal

• But also more demanding and have higher expectations (and perhaps less of an ingrained sense of duty compared to their parents)

• As baby boomers creep towards retirement they will have more disposable income, be healthier and want to engage with charities in a way that impacts their lives

We’re getting richer

Total increase from 1980 in real terms - nVision forecast

Source: ONS/nVisionBase: UK

Household disposable income growth

0%

5%

10%

15%

20%

25%

30%

35%

A B C1 C2 D E

1975 2004

Source: National Readership Survey/nVisionBase: GB, 3799: Demographic Change

Social grades as a proportion of the total population aged 15+

Household types as a percent of all households - forecast

0%

10%

20%

30%

40%

50%

60%

70%

80%

Married couple Cohabitingcouple

Lone parent Othermultiperson

One person

1971 1981 1991 2001 2011 2021

Type of household in England

0%

10%

20%

30%

40%

50%

60%

70%

16-24 25-44 45-64 65-74 75+

Men Women

Source: Social Trends, National Statistics/nVisionBase: Great Britain, 2005

Percent of single-person households by age within gender

Choice is mushrooming

6138: Key Consumer Trends for Retailers

Number of different tariffs available at the Carphone Warehouse

0

20

40

60

80

100

120

140

1992 1993 1996 1999 2001 2004 2007

Source: Carphone Warehouse/nVisionBase: UK

Mobile phone tariffs

4397: Graphics from nVision for joe saxton

0

100

200

300

400

500

600

700

800

900

1000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

No. of channels

Sky multichannel package

CH 5 Digital TV

Source: nVisionBase: UK

Number of television channels available

Number of different kinds of products in the homeBase: All aged 18+

0%

5%

10%

15%

20%

25%

30%

35%

0 1 2 3 4 5 6 7 8 9 10 11+

Breakfast cereals

Shampoos

Household cleaning products

Source: Complicated Lives /The Future Foundation 2000

© the f u t u r e foundation

Number of products at two top multiple retailers

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

Sainsbury's (average lines per store)

Tesco (total lines across all stores)

Source: IGD Account Management Series/Future FoundationBase: UK

Expectation of choice and the need for instant gratification

• Choice driven by competition o More than 8,500 mortgages, 1,600 models of new car

• Choice driven by technology o 120 mobile phone tariffs in Carphone Warehouse alone o 900+ TV channels (up from 4 only 10 – 15 years ago)

• Choice driven by deregulation o 16 choices of electricity supplier o 22 choices of gas supplier… from a base of no choice of utility

supplier as recently as 1990

Even a bigger wardrobe can add complications

“In my wardrobe, I had (in the fifties)

my everyday clothes, skirts, sweaters and

blouses, and my Sunday clothes, one

coat, two pairs of shoes and a best

dress”

“I have so many clothes, I’ve got nowhere to put them …but I’ve still got nothing

to wear!” (Woman, AB, 70s)

(Woman AB, 20)

The importance of irrationality

• Charities deal with complex social issues and need a rational focus .… this can translate into the belief that appeals must be completely rational

• Facts in some studies have been shown to be a turn-off for donors

o Experiment: people asked to talk about babies (emotions) or to do math calculations (rational) – the latter donated less

o Experiment: where people in one group could donate to a fund for medical treatment to save the life of 1 child or the lives of 8 children – people donated twice as much money to help save that one child

Source: Nicholas Kristof, New York Times, “Save The Darfur Puppy”, 9th May 2007

The importance of irrationality

• Often an irrational world where brands, celebrities, fashions, emotions rule

• Disproportionate concern e.g whale in Thames

• The solution – a ‘Darfur Puppy’?

Source: Nicholas Kristof, New York Times, “Save The Darfur Puppy”, 9th May 2007

We’re all techies now – even the older generation are getting wired

Proportion who have internet access By age, gender and social grade

“Personally, do you have internet access…At home; At work; At school/college, none of these?”

Base: 1,200 respondents aged 15+, GBSource: nVision

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%T

ota

l

Ma

le

Fe

ma

le

15

-24

25

-34

35

-44

45

-54

55

-64

65

+

AB

C1

C2

DE

Spring 01 Spring 03 Spring 06 Spring 09

Proportion of adults who own a mobile phone - nVision forecast

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

16-24 actual 25-34 actual35-44 actual 45-54 actual55-64 actual 65+ actual16-24 25-3435-44 45-5455-64 65+

Source: ‘Changing Lives’, nVisionBase: 1000 adults 16+, UK

Mobile phone penetration by age

Continuous Partial Attention

• CPA is described as a new phenomenon of juggling tasks that require a reasonable amount of cognitive engagemento Listening to this talk, scanning your Blackberry for work

emails and emails from friends about social arrangements o More complex tasks than multi-tasking

• Linda Stone of Microsoft and Apple describes CPA as a behaviour we have learned to help us cope with an information rich environment:o “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.”

• How can you communicate with supporters in a way that doesn’t increase sensory overload?

Learned helplessness

• Perceived lack of control can result in feelings of paralysis or in conceding defeat

• People today have access to more information about the world than at any other point in history. News of disasters, wars and terrorist activities flood in everyday

• All of this can leave donors feeling that their actions are futile and that nothing they do will make a difference… o Feelings about climate change move from disbelief to

paralysis

In summary – five principles

1. Help fundraisers ask better, not foster a climate of giving

2. Give and forget, not give, give, give

3. Government gets out the way and reduces regulation

4. Sector steps up to the plate and co-ordinates more joint activity

5. All the time keeping up with the changing lives of consumers and how they want to give

Lewis Carroll

Through the Looking-Glass

It takes all the running you can do to keep in the same place. If

you want to get somewhere else, you must run at least

twice as fast