Charity growth has been stagnant for eight years in the UK.
Ireland's largest 25 charities have been shrinking since 2013.
Heads of Fundraising are dealing with a conflict of expectations. Their organisations and the public no longer expect the same things.
The reconciliation, which must take place, is between the moral pressure to spend donor’s money efficiently and the need to experiment with new ways of giving.
Unfortunately, the only way to experiment is to apply the scientific method and carry out tests that don’t work until you find something that does.
This means wasting donors money and spending ineffectively on the way to finding new fundraising channels.
That’s an easy concept to grasp, but in practice in takes a ballsy fundraiser and a reasonable CEO/Head of Finance to keep this in mind when staring into the depths of an income and expenditure spreadsheet.
A harder concept to grasp is that, on digital platforms, it takes somewhere between a dozen and two dozen impressions to persuade a person that your cause is worthy of their bankcard.
Which is why hitting smartphone users with a Donate Now button doesn't work.
It's too much, too soon for a cold audience.A few words with a picture and a button. on a 2.5 inch wide screen, just doesn’t generate enough emotion.
Think of it in terms of word count. How many words into a direct mail piece is the first ask... 200 words?
How many words does a face-to-face fundraiser use to engage, educate and emotionally involve a person, before they make an ask... 1500 words?
You have to run digital tests for a longer time period, delivering multiple impressions, before you evaluate their success.
For example, say you get 2,000 people to sign a petition via Facebook Lead Ads / Care2 / Change.org and hook these people up to an automated email journey, before adding them to your on-going email list.
You have to let these 2,000 people receive emails for quite a while before you even check the cost-per-acquisition.
Like, six months. Ideally a year.
Care2 published a graph which demonstrates this beautifully. It's shows the conversion rate via email for a charity who ran 10 petition campaigns with Care2. They took all the campaign data and put it on one timeline (genius), to see how long it took prospects to convert to donors.
After 3 months, 1.5% of the petition leads had become donors.
After 23 month, 8% were donors.
After 53 months, 10% were donors.
If you analysed this approach after 3 months, you’d say the test it was a meek failure. If you analysed it after 53 months you’d say the test it was a roaring success.
The cost-per-acquisition comes down, over time.
This is an alien concept to fundraisers who are schooled in the ways of direct mail. But the major difference between email and direct mail is that email costs virtually nothing to send.
Most of the costs are up front, in the acquisition of the email addresses.
So the cool bit is... once you run your test and learn something like E.G. for every 1000 email addresses we get, we acquire 15 new donors per year (and you’re confident that your email programme is effective) then the whole focus of you fundraising activity shifts from the cost-per-donor to the cost-per-lead.
Instead of trying wacky/expensive once-off digital campaigns, you can empower your digital person or agency by saying,
“I’m willing to pay €X for an email address. Go find channels where we can get email prospects for that.”
What I’m getting at here is Lead Generation.
It’s well established in most industries. It’s the digital way of doing things and, based on the results I’m seeing, it’s also the way charities can start growing again.
Fundraising teams need to be more patient. They need to take a long-term view of digital acquisition and start obsessing about cost-per-lead instead of cost-per-donor.
Then, go out into the digital wilderness, find prospects who empathise with your cause and gradually win their support.
When you start doing this, it won’t blow anybody away. Nobody in your office will think this is the way to grow your database of donors.
But because the sending costs are so low, if you continue to bring in new leads, the cost-per-email-sent will also get lower. And though your investment won’t change much, your return-on-investment will improve every year.
Your growth will be gradual but consistent. But this is how you achieve scale on digital.
And this is how to get your charity growing again.
If you found this interesting and want a broader, more comprehensive view of digital fundraising, then download this eBook: