Top level information from NZ / Australia benchmarking

The very top level information from benchmarking

In a unique show of camaraderie and mutual support seventy charities across NZ (16) and Australia (54) agreed to pool all their transactional data* and analyse it.  This means that they compared actual donor behaviour – including mutual donors.

With around 2.8million donors giving $836 million in 2012 to these charities there is a huge wealth of information and learning.

The charities that pooled their data

Over the next few months I will share some fascinating insights, ideas and tips based on the data but in the meantime here are some top line facts:

Largest fundraising charities in Australia

Looking beyond the benchmarked charities we looked at the annual reports of top fundraising charities (Australia only).  We found that the largest, World Vision, really dominates the market.  World Vision are also a member of the benchmarking program, having an enormous influence over the giving patterns of the average Australian.

Just short of all fundraising income to the top 50 charities goes to overseas aid.  Australians love helping people less fortunate than themselves in other nations.  Good on ya Aussies!

How Australians and New Zealanders give their gifts

Australians and New Zealanders gave more money to these charities in 2012 than ever before.    From around $365m in 2003 to $836m in 2012 ($637m in 2003 dollar equivalent).

The chart above clearly demonstrates the strength of child sponsorship as a great fundraising ‘product’ However, other regular giving programs and bequests also contribute huge amounts.

Questions

If you have any questions you want to know about Australian and NZ fundraising data - ask away!  Attrition, face to face, average donations etc...

I will post lots but your request will move that subject up the priority list.

*Please note – the charities were collaborating by analysing giving patterns and behaviour.  None of them have breached any privacy rules by allowing any other member to identify donors as individuals; ie donors’ personal information is never shared between partners in this exercise.

Pareto Benchmarking report released

Seventy charities came together to share information to improve their fundraising. Many attended presentations of the data in Melbourne and Sydney this week and more will attend in Wellington on Monday and Auckland on Tuesday.

The photo was taken in Sydney with over 120 fundraisers gathered to find out what is happening to giving in Australia and New Zealand.

Most of what we learned was good news. More money from more people than ever before was donated to the 70 charities, and the majority of charities have enjoyed decent growth over the past two years.

Some top level notes from the session:

- online solicited donations still not significant source of donors or income

- swapping is fantastic, with no indicators of donor fatigue etc BUT
let's look at the long term impact

- direct mail acquired donors - the biggest growth area and we know it increased yet again in 2013. Band wagon is being jumped on!

- face to face still rules the roost for new automatics regular donors growing more than 10% from 2011-2012

- the five year value of non-face to face acquired regular givers is much, much more than face to face so charities should be prepared to accept much higher acquisition cost. A direct mail acquired donor will give an average of 51 times their initial monthly donation, where as an average face to face acquired donor would give 29 times their initial monthly donation.

- we knew credit card donors are better prospects for regular giving than cheque donors, but it turns out they are better bequest prospects too!

- nearly all contributions from a person who comes in as a regular giver will be their regular gifts

- nearly all contributions from a cash donor source will be cash, though over five years bequests and regular gifts add a significant portion

- for the first time we are seeing income directly related to the bequest 'pledge rates' - could be enough to start benchmarking that next year. Charities with higher pledge rates of bequests will make more bequest income

- biggest key to success in bequest pledges seems to be being Victorian! Top four were Australian charities based in that state. But really it is having a certain type of program - the 'one page legacy program' which relies on direct mail and phone to drive pledges. Type of charity is not necessarily key.

- second gift rates, payment type, average donations and more are useful - but ratios are really really useful

- older donors are better. Get the best response rates, retention and total giving. Except for face to face, forget younger donors; there are easier ways to help your beneficiaries

- your donors are almost certainly going to be giving to other charities. For example, 60% of all Australian donors who gave a gift in 2012 and were acquired by direct mail, gave to one of the other 53 charities! The figure was about 15% from face to face acquired regular givers.

Charts and more information to come after the New Zealand presentations next week.

Sean

Australians gave more to charity in 2011 than ever before

The latest Pareto Benchmarking figures - derived from looking at actual transactions across 45 charities in Australia and New Zealand - revealed that Australians gave more money to charity in 2011 than ever before. Double checking annual reports of the largest fundraising organisations not in benchmarking confirms it was a good year.

Regular giving (automatic debits) has grown enormously over the past ten years. In fact, for professional fundraising organisations such as Cancer Council NSW and WWF regular giving accounts for more income than 'one-off' donations.

As you can see from the chart above, across the group, around a third of individual gifts came from bequests, a third from regular giving and a third from occasional donations such as those sent in response to direct mail.

Direct mail had been pretty flat over the last few years, but has begun a new resurgence in growth as new creative approaches lift response rates from around 1% to over 4% for many charities. This is from sending letters to people who had not previously donated to the charity.

We expect this growth to accelerate as more and more charities have recently succeeded with their early tests. However, it can take a long time for them to accelerate their programs so the growth will most likely be reflected in 2013 data (to be presented in 2014).

Face to face (people on the street and knocking door to door and asking for monthly pledges) goes from strength to strength, with these 45 charities acquiring more donors through face to face last year than any previous. The only thing holding back further growth in this area is capacity from the face to face providers - they are mostly full up.

But it is not all rosy on the face to face front - one charity in the group lost 60% of its new face to face donors within one year. The average is around 45% but the best manages to keep most of its donors, with only 36% attrition.

Australian and New Zealand charities can join Pareto Benchmarking for free - email bm@paretofundraising.com.

Sean

When will face to face reach saturation point?

Face to face, or direct dialogue*, which is used to acquire monthly donors has added millions onto charity disposable income in New Zealand Australia in just one decade.  In 2001 it hardly existed in Australia.

Every year my company, Pareto, coordinates a data comparison project on behalf of a few dozen charities.  Last year 41 charities compared their data and found that around a third of their income from individuals now came from regular giving (automatic debits from their bank accounts or credit cards)... RG is the light blue on the chart below...

...and of that 30% or so of their income F2F has been the biggest driver...(F2F is the orange-ish bit).

You can see that F2F was still driving the growth, and had actually grown by more in 2009-2010 than 2008-2009.  But I still keep hearing people worried about 'saturation'  - sometimes to the extent that it puts them off investing in this area.

Clearly it is not saturated yet across the market.  However, some charities have done so well that the number they acquire each year is about the same as the number they lose to attrition so they have no net increase.  For them, they need to look at alternatives if they want to continue to grow.

The latest benchmarking round of comparative data is due April/May this year and seeing if F2Fs rate of growth grew again in 2010-2011 will be fascinating.  I will let you know.

Sean
* By face to face I mean the process of stopping people in the streets, shopping malls, door to door and at events and asking them to sign up for an ongoing debit from the credit card or bank account.  It is huge in Europe, having taken off big time in the mid 90s in the UK and accounts for the majority of new donors acquired in emerging fundraising markets like Hong Kong, Jakarta and Kuala Lumpur.  Canada is into it too, but the US is a late entrant, with proportionally less F2F activity.  Almost certainly the biggest growth potential in the world is in the USA.  If you are US fundraiser and don't know about it - find out more!

How good are you, really?

We are hearing lots of horror stories about the fundraising markets of Europe and in the USA, but drilling down we see that there are lots of organisations that did grow through those economic woes.

Here in Australia, things appear to be going well still. So well that a few foreign charities are looking more seriously at fundraising over here. But are appearances deceiving?

There is only one way to find out - look at the data.

Over the past few years a group of Australian and New Zealand charities have been pooling transactional data to see how donors actually behave - what their average donations are, their attrition rates and more, including what percentage of donors put the charity in their will.

Of course, all the private data of individuals is kept confidential and not shared, but the wealth of information in the report is phenomenal.

A free report is available for all participating charities, and more in depth individualised reports can be purchased.

Charities interested only have a couple of weeks to register though.

More information:

http://www.paretofundraising.com/benchmarking/ or call me.

Sean

Australian Tax Appeals and the GFC recovery

Get a free copy of our Tax 2010 benchmarking special report*

Whilst many charities in the UK, USA, Canada and other countries had a really tough time over the global financial crisis, Australia seemed to come off pretty lightly.

Our in depth data analysis of millions of donations across 33 charities showed a reduction in the rate of growth of income over the past two years, but it still grew.  However, our analysis of mail appeals sent last Christmas showed a lot of charities performing worse than the year before.

So how did we Australians do in the last tax / winter appeals?

We don't yet, but if you are an Australian fundraiser, please help us find out by completing a cool little Survey Monkey here.  You'll need top level information on the performance of tax 2010 and tax 2009 so that we have a context.

We will then compile the results and produce a report.  Those participating will receive a very useful, full report allowing you to benchmark yourself against all the others.  You can use the report as a great context tool in your report on performance to your boss, use it to help plan and budget, and also see if your growth or decline was due to GFC, or maybe your pack was just brilliant or, um, not so brilliant.

Thanks!

Click here for the Survey.

* Full report available to all charities who complete the survey.  Sent as a PDF to the email address provided.


Sean