The End of A Few Tough Years
Sean Triner ponders what we have actually leaned from our experiences in the worst recession in living memory.
So the recession happened and if we believe what the pundits tell us, it’s been and gone. Of developed world countries, Australia suffered less than Europe and North America.
And some countries, like Australia are breathing a sigh of relief, feeling like the recession is over. But if you are reading this in Greece, Portugal, the UK or many other countries you probably don’t have the relief of that sigh just yet. But the lessons still apply.
What did we learn? Back in October 2008 over 100 fundraisers gathered in a hastily convened session at the IFC in Holland. Shortly afterwards, books, papers, blogs, seminars and reports looked at and offered advice on fundraising in a recession.
While the specific advice varied slightly, all pretty much said that good, strategic fundraising practice was the only solution. Amanda Seller (then at WSPA) said at the IFC that we should carry on doing things we already knew we should be doing.
Things like proper data analysis, donor care, investing in systems, bequest (legacy) programmes, setting up regular (sustainer) giving, accepting that it might get more expensive to get and retain donors.
Economy v strategy
There seems to be little doubt that the GFC (global financial crisis) had a negative impact on charity finances from many areas – major donors, trusts and foundations, individual giving, bequest (legacy) values etc. Yet despite this many charities managed to grow enormously. In the USA Charity: water is one great example. Maybe it would have grown faster in a better economy, but that is a moot point since the charity can’t control the economy.
Here in Australia, many charities had a great year on acquisition. For some it was the first time they’d got direct mail acquisition working again, and face-to-face recruitment has proved very effective. A poor economy has a dampening effect, but clearly not enough to stop great strategy. Charities doing things right probably grew at a slower rate than they had done, but they didn’t go down.
Bequests kind of sum this up. Charities that had run successful bequest programmes over the past decade saw a fall in the value of bequests left to them. But charities that did not have bequests saw no decrease. I for one would rather have lower value bequests than none at all.
As Australian based fundraiser Martin Carolan put it: “If we had been doing bequest and major giving fundraising years ago our income may not have dropped.”
But did charities learn? Did they do ‘what they already knew they should be doing’? Sadly, according to a selection of gurus from around the world and many conversations with colleagues the majority didn’t. “As usual, some charities learned a lot, others next to nothing,” says Damian O’Broin of Ask Direct in Ireland.
Everywhere a few did learn, but too many seem to bumble along with the same level of cognitive dissonance – putting feelings and emotional responses above stats and facts. At the Australian fundraising conference in February (run by the Fundraising Institute of Australia) far too many fundraisers (and their bosses) were anti-phone, anti-face-to-face, anti-spending, anti-increasing numbers of communications and anti-asking, despite evidence that all these techniques continue to work well for those who use them. Eradicating acquisition and cutting back on fundraising costs because of a fear that the recession would damage income was the greatest self-fulfilling act and ‘recession suicide’ took many victims.
Maria Ros Jernberg of the Swedish fundraising council was one fundraiser who avoided such a fate. “Some of us have talked about the preliminary fundraising results for 2009 and it looks really good for many of our organisations. Our ‘Refuse the recession’ mantra must have had some impact,” she says.
Many cut back on training expenditure and donor care. Pareto Fundraising’s mystery shopping a couple of years ago found a shocking level of customer care in Hong Kong, Australia, New Zealand, Malaysia and Canada. Pell & Bales’ annual customer care research in the UK constantly finds the same. Surely it would be better post recession?
Not according to US based Kivi Leroux Miller. She conducted a mini mystery shop in December 2009 and donated US$20 to each of 10 charities. Only three bothered to say thank you. “How can non-profits expect to thrive off the kindness of others, when the kindness of a simple thank-you note to an unsolicited donation is too much to ask? Of course, it’s great news to those of you who are doing thank-you notes, because it means you are head-and-shoulders above your peers!” says Kivi. (Thanks to Jeff Brooks’ Future Fundraising Now for putting me on to Kivi’s blog).
On a micro level, some organizations got so internally focused they stopped free teabags for staff, or stopped accepting American Express. AMEX is a great ‘rich person identifier’, and these donors tend to give much more than Visa donors – this is penny pinching that has the potential to really cheese off some of your richest and potentially best donors. All of these measures are internally focused at a time when we really need to be donor focused.
Damian O’Broin reckons that some Irish charities discovered a new “appreciation of the importance of really looking after donors properly. Charities are investing more in donor care, data analysis and trying to get a better handle on who their donors are, and how they can meet donor needs.”
I hope he isn’t being unduly optimistic. France based fundraiser Jon Duschinsky certainly wasn’t optimistic when he told me he reckons charities learned “the art of indecisiveness, because any decision might cost money, despite how much of a good idea it is and the art of cutting budgets to compensate for poor strategy and planning.”
Cutting budget, or refusing to fund new ideas would be OK if the reasons were based on logic or evidence, but the reasons are so often ‘the CEO doesn’t like it’ or ‘our donors are different, they wouldn’t like it’, ‘it is bad for brand’ and the worst one ‘…we don’t want to look greedy’!
So, a mixed bag really. Some charities used the recession, and grew. But most charities are still not doing what they should have been doing all along. All the evidence is there, the essence of what all the fundraising ‘gurus’ say is the same yet so many charities’ staff – fundraisers, boards and CEOs alike – won’t take the advice, or believe in their gut instincts over all the data because their donors are different.
Really the recession didn’t change much. Maybe it nudged a few of us, but what we needed was a massive shake-up. The fundraising world operates in an extreme Pareto environment – ie much, much more than 80% of all money is raised by less than 20% of charities. Statistically speaking, nearly all charities raise less than $1m, have no trained fundraisers on staff and make stuff up as they go along.
We really need to work together to reach these guys and gals properly. We are good at getting information out there – there are thousands of tons of books, courses, data, reports, papers, presentations and more – but somehow the message is still not getting through.
Many fundraisers and their bosses are still reluctant to communicate frequently with their donors, use the phone, use longer letters, ask and thank properly – despite the richness of information proving these techniques work for oh so many organizations. They are tempted by corporate fundraising, events and ‘raising awareness’ – despite the richness of information demonstrating how hard these techniques are to get working.
But maybe the message is getting through in some places.
From Ireland, Damian O’Broin says: “There has been a realisation (finally) that the notion that there’s a pot of gold at the end of the corporate fundraising rainbow, is, in many cases, simply a mirage.”
Perhaps at the end of 2010 we’ll be able to report a different story.
Sean Triner is co-founder and director of Pareto Fundraising and ParetoPhone.