Monday, July 22, 2013
The last ten years have been pretty darn good for the charity sectors in New Zealand and Australia. External factors such as domestic disasters, (earthquakes, fires, droughts and floods) economy and government policy have all done their best to break the resolve of the sector but overall we have seen great growth amongst professional fundraising charities.
Much of this growth has come from ‘individual fundraising’. This would include regular giving (automatic debits), direct mail, and other appeals.
But despite a good decade, some organizations have bucked the trend and have slipped backwards in their fundraising.
I wanted to get to the bottom of this and been looking at the fundraising transactions of individuals who have supported 70 Australian and NZ charities.
Using this data, and what I knew about these charities, the first thing I noted was that it was internalities (decisions made by employees and boards) not externalities (economy, government change etc) that caused their problems.
Those internalities seemed to only come from two decisions that various charities have made which ended up pushing income from individuals backwards.
This blog covers the first. Another blog is coming about the second.
The first way to destroy your fundraising income seems to be 'Investing in brand'. Putting money into brand awareness, advertising, events, launches; often, but not exclusively, associated with a re-brand.
‘Brand' is incredibly important for the long term survival of a fundraising charity. Having a great brand helps keep loyal donors, win corporate donations and means you are more likely to be front of mind when people write their wills.
But branding is not about big ads, prescriptive fonts and cool logos - it is about how the charity behaves; what it feels like to be helped by them, to help them and to be thanked by them.
Brand is not about how a charity ‘looks’ it is about how people experience that charity.
The best branded charities tell fantastic stories brilliantly and use fundraising advertising activities (like online, direct mail, phone calls, direct response TV and events) to position themselves. Good fundraising is good branding.
There is never a need for a charity to spend money on 'awareness' for fundraising purposes. Awareness definitely helps fundraising, but the cost of achieving increased awareness is simply not worth it compared to investing that money in good fundraising, that in turn, increases awareness.
The other benefit is that good fundraising will increase awareness in the right target audience.
If a charity struggles with fundraising, then brand and brand awareness may well play a part, but spending money on building that awareness is not an effective solution. There are plenty of case studies of charities with no, or little brand awareness, succeeding in fundraising.
Jeff Brooks, author of Future fundraising now (the best fundraising blog) says that a re-brand is a sure fire way to cripple your charity, and he is mostly right. But some, such as Cerebral Palsy Association have proven that a re-brand is not what hurts; it is what you do with your money that is key.
CPA have enjoyed great growth since their rebrand from Spastics Centre, but it wasn't their rebrand that did this, it was their considerable and careful investment in planned fundraising that worked. They invested in donor acquisition and retention from key target audiences.
From benchmarking I can clearly see how some of the charities who stopped growth and went backwards achieved this by switching money from fundraising into ‘branding’.
After a while, the bosses came to their senses and the charities are now heading for growth again after record acquisition years in 2012 and 2013 - despite a very obvious dip in fortunes, these organisations managed to survive.
For these charities the 'brand suicide' attempt failed - but not without victims. Some of these case studies also went through massive change of staff, collectively missed out on tens of millions of dollars and lost the confidence in their marketing and fundraising teams by their boards.
Build, protect and nurture your brand fiercely. Make sure the way you handle complaints reflects your brand. Make sure your communications all tell the story of your beneficiaries. And make sure you don’t waste precious money on building brand awareness.
That won’t guarantee success – but getting it wrong is a great way to guarantee failure.
In an upcoming blog I am going to look at the other decision a few organisations have made to try and reduce their fundraising income.