The UK and online fundraising, a response to the recent Henley Centre, ‘Nonprofit use of internet communications’ report
Jason Potts
Director, Think Consulting Solutions
I read the recent Henley Centre survey of the top 500 UK not for profits use of internet communications with great interest. The survey is insightful in numerous ways and like all surveys can be interpreted in just as many.
The article announcing the launch of this survey (Tuesday June 11 2002, Nicola Hill, The Guardian http://www.societyguardian.co.uk, Charity websites cost more than they raise) was, as all good journalism, provocative. The main thrust of this article was that of the top 500 charities in the UK, annual expenditure on a website was £4,000 and £1,250 had been raised on average in online fundraising. Hmmmm, I have to say, if I was a UK Fundraising Director figures like this wouldn’t get me running to the nearest print shop to get a ‘ I’m part of the e-revolution’ tee-shirt.
One interpretation here lies in the detail of the survey, it states that the median average has been used to arrive at these figures because the range of the costs and income raised amongst the respondents to the survey (154 from 500 questionnaires sent) was so great. The mean figure, in my opinion the more common way of arriving at an average, would be £16,542 costs to develop a website and an average of £31,045 raised. What this seems to indicate to me, above all else, (rather than writing off the medium as a fundraising channel just yet) is perhaps this is more indicative of the great divergence of where UK charities are at with their online fundraising at this moment
in time.
Surely, what this also indicates is that if you make some effort in online fundraising the rewards are there for the taking.
This interpretation does also pose a few other questions. For example:
- Is the internet a fundraising vehicle for every charity, regardless of the cause?
- Will the revenue come easier to some than others?
- What are the best ways to ensure success, or at least to match investment with revenue generated to achieve a positive ROI (return on investment) in an acceptable time frame?
Whilst I don’t have all the answers, here are some thoughts that the survey and these questions prompted.
The first real issue is around ownership of the website, one of the initial questions in the survey was, which department is responsible for the website, a total of eight different departments were recorded as having responsibility in the respective organisations of the respondents. This may offer our first clue! I’m guessing that fundraisers reading this don’t often have to consult the; Communications, Information Systems, Marketing, Administration, External Relations, Programmes and Finance Departments before sending out an acquisition mail pack! I know I’m being slightly sensationalist myself here, and that some of these departments would be consulted or are indeed the same department based on how organisations are structured, but hey, I think you get the point.
Direct Marketers know that the more you compromise the mail pack from a single-minded request for a donation, the worse the results. Maybe a bit of this is going on in the findings of the Henley Centre Survey. With an organisational need for the website to satisfy a number of different audiences, perhaps revenue generation isn’t prioritised at the moment. And, perhaps this is the right thing to do for many organisations, but let’s compare apples with apples here. We wouldn’t usually conduct a survey to determine the fundraising success of the top 500 UK charities press releases, purely and simply because they are not meant to be a fundraising communication. If, numerous of the organisations surveyed do not have fundraising as a priority of their online communications why would we be surprised that the medium is not performing in this area for them?
The bigger question this then prompts is, should revenue generation be prioritised in all cases? Again, I’m not sure I have a definitive answer but the clues must be in the business model. For some organisations, internet investment is a ‘no brainer’, regardless of the revenue generation opportunities. Organisations like;
- Greenpeace and Amnesty, where the medium can be used to enlist support in campaigns,
- The Samaritans and Teacher Support Network, where services, which are delivering the charities mission can be offered online
- Disaster relief charities seem to be having little difficulty generating a positive ROI (return on investment) online, (certainly September 11th saw a change in giving culture in North America, with President Bush giving out a URL rather than a postal address or phone number in his first speech to Congress after the disaster, my experiences of disaster relief organisations in Europe and the UK have been similarly positive)
- Cancer Research UK, who have a reason for individuals to seek them out to get information they alone possess, i.e. detailed information on cancer types and the latest research
- Universities, who have large numbers of alumni, interested in hearing about there old school
For others it’s a question of looking at your mission, your current and projected online audiences, thinking through where the medium can deliver for your organisation and taking it from there.
We shouldn’t be surprised that the not for profit sector in the UK is just coming to terms with this. Many commercial organisations still haven’t figured it out. For some the business benefits are clear, Easyjet for example, get people to buy airline tickets online, this gets rid of an expensive ticketing operation and reduces the requirement for a call centre. Add to this the fact that you then have great marketing data about the individuals who buy your flights and a really cost-effective way of promoting more of your product to them, i.e. email - and I predict a relative short meeting with the investors to approve the necessary spend. That is also why they incentivise online purchase, its cheaper online to buy the tickets and whenever you do manage to get a piece of post out of them (which isn’t easy believe me) it has a big ‘hang up - log on’ logo on the front of the outer envelope.
More tricky is the Super Market business - OK so, picture the scene your in a Board Meeting at Sainsbury’s, some 16 year old consultant dressed in black, with no tie, stands up and says, ‘we need to get rid of all our stores, turn them into warehouses and get all our customers to order online’. As various cups of tea and Bourbon biscuits fly gracefully into the air around the room I think most of us are going to need a lot more money spent on consultants and see a small rainforest worth of spreadsheets before committing to turning the company’s business model on its head or indeed back in time to small boys on bicycles making deliveries from the corner shop.
I use Sainsbury’s as an example because I got a flier promoting their online shopping service at the weekend. I was a bit surprised to see that the most imaginative incentive they could find for me to drop my cereal and go to my computer and shop was £5.00 off my first delivery charge. I guess this means that Sainsbury’s are testing the model but are not going the whole hog until the maths adds up, otherwise they would be incentivising shopping online more heavily than just offering to pay for my first delivery if I cut out and hand a form to the delivery driver.
Maybe a number of the respondents to the Henley Centre survey are of the same mind. And that for the sake of this article we can put them into either the Easyjet (strap me in, I’m on for the full e-experience) or the Sainsbury’s (hold on a second, we should be doing something, but let’s see if it works for Tesco’s before we spend the family silver) models.
Add to this the facts that;
- the audience growth is happening at a tremendous rate and therefore the imperative to do something is in direct correlation growing…and non profits aren’t always the fastest moving institutions
- e-business veterans aren’t really clogging up the receptions of the top 500 UK charities
- and, let’s face it senior managers (not to mention Trustees) in UK charities aren’t likely to be of the Lara Croft generation (though at 35, I guess, neither am I!), so who is going to make the call as to the level of significance online communications should have and what its focus should be
I guess, one answer to this is that a middle ground of sensible levels of investment regularly monitored will achieve sensible results, whilst something more bullish would be either reckless or inspired. So, that’s simple, you just have to decide if you’re a Sainsbury’s or an Easyjet.
This leads us, admittedly in a some what tortuous fashion, to the final question I posed at the beginning. So of those organisations who are going to find it harder to raise money online, (i.e. will require more investment or thought than sticking up a donation page a few banners on AOL). What are the best ways to ensure success, or at least to match investment with revenue generated to achieve a positive ROI in an acceptable time frame?
The Henley Centre Report gives us a few clues, maybe not unsurprisingly those not for profits who had invested time or money in links campaigns, securing online promotion from corporates or indeed just invested in their website were getting better fundraising results.
Whilst this is a complex area and can’t be answered in detail in this brief article an overall thought that I’ll leave you with is that I think the first place to look for fundraisers isn’t necessarily the website. This also backs onto the first point around ownership, if the website is serving a multiplicity of audiences, its up to the fundraisers out there to give the potential donor really good signposts as to how to get involved and manage online relationships with the same care and attention I'm sure your managing your offline ones. So, treating the masses (I hope) who pitch up at your home page as a big pot of potential warm leads and investing the time and effort into allowing them to pre-select themselves as potential donors, by getting involved in any way, buying a raffle ticket, signing up to an event, sending an e-postcard to a friend and then using email to warm this relationship up the giving pyramid to a committed gift and eventual legacy. (Though not a virtual one, we hope!)
Play to the strength of online media. Use email newsletters to collect details from individuals and ask them what they require from you and then personalise the communication. Again, the Henley Centre report points to better results generated from sites that attempt to personalise the communication to visitors. Again, this really shouldn’t surprise the marketers reading this piece, as it is exactly what we have been trying to achieve in postal Direct Mail for years, the segment of one. Giving the individual only the information they require from us (and more importantly the information which will stimulate action) rather than the annual report every time we communicate. Or, worst of all, long periods of silence, punctuated by a request for more money.
Tailored email allows us to give the donor only what they want and allows the organisation to track the donors preferences and play back the issues on which they support you. It further allows total flexibility and user choice in terms of the frequency of communication and instant opt out … sounds pretty much like the essence of, Relationship Fundraising, Relationship Marketing, Customer Relationship Management or whatever the latest phrase is, to me!
The Henley Centre Report can be downloaded from the Guardian website at
http://societyguardian.co.uk/voluntary/0,7886,374546,00.html
