New survey highlights the importance of donor loyalty

Every charity wants loyal donors; people who are passionate enough about a cause to give and continue giving.

However, many charities are so focused on acquiring new donors, they forget to nurture the ones they already have.

The findings of a three-year study by research-based consultancy About Loyalty highlight the importance of a solid donor retention strategy. They suggest that investing in donor loyalty could add thousands, if not millions of pounds to fundraising income.

Intrigued? Let’s take a deep dive to find out more.

The case for growing supporter loyalty

The report, titled ‘the definitive case for growing supporter loyalty’ summarises the findings of the largest ever research study into supporter loyalty and its impact on giving. It involved 30+ charities; 50,000 donors, and took place over a period of three years.

How it worked

Participants were presented with a series of statements relating to ten emotional drivers of loyalty to understand the role each plays in influencing loyalty and future support.

• Commitment to the cause and charity

• Engagement with the charity’s activities

• Knowledge of the issue the charity is working to address

• Perceived performance of the charity

• Personal connection to the charity or the issue it is addressing

• Perceived risk if the donor were to stop supporting

• Satisfaction with the charity’s communications and fundraising (and the wider supporter experience)

• Social capital gained by supporting the charity

• Trust that the charity does what it promises, in an ethical way

• Belief that the charity shares the donors’ values                                            

Three drivers were identified as being key to building behavioural loyalty across all causes and forms of charitable giving: Commitment, satisfaction, and trust.

Researchers used the data on the three drivers, along with financial data (gathered through tracking participants’ giving behaviour) to calculate an overall measure of loyalty (a Loyalty Score) for each donor in the study. The score ranged from one (lowest) to seven (highest).

They used the scores to quantify the impact of the three drivers on future giving and found that an increase of just one point in supporter loyalty can lead to:

• 15% more retained donors over three years

• 20% more income over three years

• 9% more people pledging to leave a legacy

To put this in context, the results of the study suggest that, for every 100 donors, a one-point increase in loyalty could lead to an additional £1,417 over the next three years. Extrapolate that out to 1000 donors and that’s an extra £14,173.40. For 70,000 donors, that equates to a cool £1 million.

That’s not a bad return on donor loyalty investment.

Loyalty in action

The analysis highlights the critical role supporter loyalty plays in driving retention and long-term giving. It’s led some of the participating charities to review their existing donor retention strategies and embed new practices to make supporter loyalty a priority.

For example:

• Children’s charity Barnardo’s wanted to improve loyalty among new supporters and face-to-face recruited donors. They did this by overhauling their welcome programme. Rebranding it as ‘Take my Hand,’ it focuses on the benefits that donations bring to young people’s lives.

• The Woodland Trust is using loyalty to improve its organisation by breaking down silos across charity departments. The charity has put loyalty at the “front and centre” of its work, by creating shared targets and key performance indicators that focus on strengthening supporter satisfaction, commitment, and trust. “We should always start with loyalty,” says Woodland Trust Supporter Journey Manager David Reeves. “Before contacting supporters, the team need to understand what drives loyalty and act towards the single common goal of building and growing it.”

• Cancer Research UK has created a ‘centre of expertise’ to monitor loyalty levels among its supporters. It measures what supporters want from their relationship with the charity to better tailor communications with each donor. “Being able to measure loyalty has helped us understand which areas and messages we needed to focus on within the myriad of journeys we’ve been pulling together,” says CRUK’s Loyalty and Cultivation Senior Marketing Manager Sarah Maltby. “It’s helped our decisions in what to prioritise when it comes to technology developments around channels and personalization. It’s helped us to demonstrate the value of loyalty to our income generation as well as to our supporters.”

Looking for a fabulous fundraiser to focus on donor loyalty? We can help. Give us a call on 0203 750 3111 or email info@bamboofundraising.co.uk to get the ball rolling.

The value of fundraising lotteries

As we all know, the UK is experiencing the worst cost of living crisis in a generation. We’ve all had to tighten the purse strings and cut back on non-essentials.

However, it seems the public is not willing to forego one non-essential item: the weekly lottery ticket.

According to Mintel’s latest Lotteries Market Report, consumer spending on raffles and lotteries reached a record-breaking £4.2bn in 2022/23. And it’s estimated to rise to £9.4bn by 2029.

The numbers say it all. Lotteries are weathering the economic downturn, making them a valuable fundraising opportunity for charities.

Before we delve into the reasons why, let’s look at a quick definition.

What is a lottery?

According to The Fundraising Regulator, ‘lottery’ is a broad term that encompasses events such as raffles, tombolas, and sweepstakes. “As a rule, a lottery is a game where you pay to enter, there is at least one prize, and winning is dependent only on chance.”

Why are lotteries so popular?

Lotteries stand out from other fundraising methods as they incentivise giving.

Where else can you "invest" £1 or £2 for the opportunity to win thousands? The risk-to-reward ratio is appealing, even if the odds of winning are small.

Take Age UK’s weekly lottery, for example.

It costs £1 a week to enter. Each week, the charity awards 1,000 cash prizes, ranging from £10 - £2,000.

Although the odds of winning £2,000 are 1 in 185,000, thousands of people play.

As an added incentive, Age UK automatically enters players into their Quarterly Superdraws, where 5,000 players can win anything from £5 to £25,000.

Low risk, high reward.

The benefits for charities

There are 500+ society lotteries in the UK. But the number is on the rise.

A growing number of charities are tapping into their universal appeal and reaping the rewards.

But what’s in it for charities? Here are three key benefits.

1.   Predictable income source

Because you know how many players you have, how often they play and how much they pay each time, lotteries are a predictable and sustainable way of generating income.

And that income can be substantial. Since 2005, Age UK’s weekly lottery has raised over £72m.

2.   Effective engagement tool

Research shows that four out of five people are more likely to contribute to a charity lottery than make a donation.

The great thing about prize-led fundraising is it combines the intrinsic reward of supporting a cause, and the extrinsic reward of winning a prize.

This can be a great way to convert potential supporters who might not get there on cause-appeal alone.

3.   Endless marketing value

Everyone loves a good ‘rags to riches’ story.

Every time a winner is drawn, you have an opportunity to share their stories, while promoting your cause and attracting new players.

Winners’ stories make great fodder for website, social media, and blog content.

St Cuthbert’s Hospice makes good use of winner’s stories on their website.

Easy to manage

Don’t have the resources to manage a lottery in-house? You can outsource it to a third party.

There are a number of reputable lottery managers who can manage the lottery on your behalf. A list is available on the Lotteries Council website.

All bets are on

If you’re looking for a sustainable income stream with universal appeal, a lottery is a good bet.

Just be sure to check out the rules and regs before taking the plunge.

Need an extra fundraiser to get your lottery up and running? We can help. Give us a call on 0203 750 3111 to get the ball rolling.

New guidance helps charities tackle misconceptions

Myths and misconceptions have long plagued the charity sector. In an attempt to set the record straight, the Institute of Chartered Accountants in England and Wales (ICAEW) has published a new guide, Dispelling Common Myths About Charities.

The comprehensive document explores ten myths relating to how charities are run, how they carry out their work, how they’re funded and staffed, and whether they’re liable for tax (among other issues) and offers practical advice to help charities tackle them and educate donors.

Here’s a rundown of the myths and the ICAWE’s recommendations:

1.     Charities spend too much money on fundraising

Recommendation: “Developing and explaining a fundraising strategy to justify expenditure will show how the charity expects to fund its work. Trustees and senior managers should think clearly about what level of investment will be needed and where it will come from.”

2.     Charities should not make a surplus or build up cash reserves

Recommendation: “Charities should ensure their reserves policy is easy to understand and linked to their strategic plan and risk management strategy. Far too frequently, more focus is placed on budgeted income, future income streams and the surplus or deficit for a single year. Reserves end up being considered only once a year when the reserves policy is reviewed as part of preparing the statutory financial statements. In addition, liquidity and treasury management needs to go hand in hand with the reserves policy.”

3.     Charities spend too much on high paid executives

Recommendation: “Charities can ensure executive pay is proportionate by benchmarking remuneration against similar roles in organisations that are comparable in size, sector, and location.

“Disclosures relating to remuneration and other benefits including expenses paid to trustees are required by charity accounting and reporting rules. Charities should therefore aim to explain their remuneration policies and senior management pay in the context of the executives’ responsibilities to maintain public confidence in their work.”

4.     Charities should not undertake commercial activities

Recommendation: “Charities often introduce commercial activities to diversify their income streams and avoid becoming too reliant on grants and donations. When charities decide to trade, trustees and management should consider whether a trading sbsidiary is required and how they will use it. The charity should develop a business plan and assess the demand for their proposed goods and services. Trustees must consider the viability and sustainability of the subsidiary’s business model and the set-up costs before they decide on the investment.”

5.     Charities should run and be staffed by volunteers

Recommendation: While volunteers are the backbone of charities such as the RNLI, and the Samaritans, even these charities are not able to operate without full-time staff.

“Charities should have a clear strategy where resources should be spent – how many staff to employ, the number of volunteers that will need to be recruited and trained, or a combination of both.”

6.     Charities spend too much on overheads

Recommendation: Charities should have a clear grasp of their administration and other related costs, and the impact they’re having on efficiency, impact, transparency, governance, and leadership. This can help trustees identify where savings can be made/further investment is required.

7.     Charities don’t have to pay taxes so need less money

Recommendation: Charities should understand (and be able to explain) their tax situation in terms of the contributions they make, and the tax reliefs and exemptions they’ve been granted.

“They should regularly review their tax strategy to ensure they’re claiming the relevant tax reliefs so they can maximise the funds available for their work.”

8.     You need professional qualifications to become a charity trustee

Recommendation: While professional qualifications aren’t essential to trustee boards, diversity is.

Trustees should identify imbalances or gaps in trustees’ backgrounds and perspectives and think creatively to fill the gaps, for example by inviting service users and people with relevant lived experience to become trustees. 

9.     Charities are less vulnerable to fraud than other organisations

Recommendation: “Trustees need to recognise their charities can be vulnerable to fraud and develop an effective culture of prevention. Every dimension of fighting fraud – deterrence, detection, and response – requires an effective anti-fraud culture at its foundation.

Trustees should ensure proper internal financial and data controls are in place and that both their design and operation are regularly reviewed, and new controls implemented where necessary.”

10.  Charities should not engage in campaigning and political activity

Recommendation: Charities have a long history of campaigning and political activity.

The issues tackled by charities, such as poverty, often require legal or structural changes that can best be influenced by campaigning activities.

“When charities decide to engage in political activity, they should ensure that they act within the charity’s governing document and in the charity’s best interest, weighing up the potential risks or benefits of speaking up – or not speaking up - on political issues relating to their cause.”

Need an extra fundraising bod to implement some of these recommendations?  We can help. Give us a call on 0203 750 3111 or email info@bamboofundraising.co.uk to find out how.

Meta and PayPal Giving Fund partnership puts an end to fee-free fundraising

Earlier this month, Meta announced a new partnership with PayPal Giving Fund (PPGF).

As of 1 November 2023, all donations made through Facebook and Instagram will be processed by PayPal Giving rather than Meta Payments Inc. 

What does the change mean for charities?

For the most part, the change won’t affect the way you raise money through Facebook and Instagram. You’ll still be able to raise money through fundraisers or donation buttons and access Facebook’s fundraising tools.

However, the change, which Meta says is part of a drive to ‘streamline operations’, will put an end to fee-free donations.

Historically, Meta has absorbed third-party payment processing fees, but when the switch comes into effect, charities will need to cover PPGF’s fee of 1.4% + GBP 0.30p per donation (donors will be given the option to increase their donations to cover the fees).

Deadline for action - 1 November 2023

Facebook Admins and Finance Contacts for UK charities should have received a communication detailing the upcoming changes. Anyone who has made a donation via Facebook and Instagram should also have been notified.

In case you missed the memo, there are a couple of things you need to do ahead of November 1, to avoid disruption.

1.    If you’re enrolled with Facebook Payments International Limited, you need to accept Meta’s updated Charitable Donation Terms by 1 November 2023

2.    If you haven’t done so already, you need to enrol with PPGF to receive donation payouts. If you already receive payouts from PPGF, you just need to accept the updated donation terms).

Note: If you miss the November 1 deadline, you’ll lose access to Facebook’s fundraising tools, with no guarantee that services will be restored in time for the Christmas fundraising push. So, the sooner you act, the better.

Things to note

Receipts: As of November 1, PPGF, rather than Meta, will provide donors with donation receipts.

Payouts: PPFG will make payouts to enrolled charities 15-45 days after donations have been received. Charities that aren’t enrolled with PayPal Giving Tools will receive a cheque within 90 days. 

Fundraiser end dates: Any Fundraisers that are created prior to September 15, 2023 (and before you take the required actions to switch to PPFG) will automatically end on October 31, 2023. If you want to set up Fundraisers with an end date past October 31, you need to switch to PayPal Giving Fund prior to September 15, and set up new Fundraisers after September 15.

Third sector response

Understandably, the news hasn’t landed well with charities.

Charity sector consultant Zoe Amar told Civil Society she was disappointed by Meta’s decision.

“It’s disappointing that Meta has chosen to do this now when so many charities are having a tough year due to the cost-of-living crisis. Meta’s decision is another reminder that charities need to review their dependency on social media platforms for fundraising, and plan how they can diversify their income-generating opportunities, for example through growing their mailing lists. 

I would urge Meta to reconsider this decision so that they can show support for the sector during the difficult winter ahead.”

Find out more about how Meta’s partnership with PayPal Giving Fund will affect you here. 

Charity coins a new term to describe giving to charity in your will

Familiar with the term ‘Willanthropy?’ If not, you soon will be if a new campaign from Remember A Charity is successful.

The legacy consortium, which is part of the Chartered Institute of Fundraising, coined the term to celebrate the generous acts of everyday people writing charitable gifts into their wills.

Defined as ‘the act of giving to charity in your Will, the group’s #Willanthropy campaign aims to challenge the misconception that you need to be wealthy to leave a gift.

As per the campaign’s webpage, “Willanthropy comes in all shapes and sizes. From small but no less meaningful donations to sizeable gifts, anyone can be a Willanthropist.”

To showcase the diversity of the UK’s growing community of Willanthropists, Remember A Charity is inviting charities and members of the public to share their stories of Willanthropy on social media, using the hashtag #Willanthropy.

The consortium is also attempting to bring the term into common usage by calling on dictionaries to include it as an official term.

Comment

Lucinda Frostick, Director of Remember A Charity said of the campaign, “our focus is on opening up conversation about legacy giving and inspiring people to share their own stories. We want to highlight gifts in Wills of all sizes and are seeking to dispel the misconception that you need to be wealthy to leave a legacy. Leaving even a small gift in a Will can have a huge impact for charities. We hope to get people talking and acting to make a difference.”  

Remember A Charity Week

The #Willanthropy campaign comes a month before Remember A Charity Week, which takes place from 11th-17th September.

The annual campaign creates an opportunity for charities to raise awareness of legacy giving, by bringing together Remember A Charity member charities and their network of over 800 solicitors and Will-writers, to encourage people to consider leaving a gift in their Will.

Customisable legacy marketing assets  

To support their marketing efforts, Remember A Charity is releasing a new suite of customisable digital legacy marketing assets, including social posts, banner website banners, GIFs, bookmarks, posters, and coat hanger cards, which member charities can personalise with their own messaging, imagery and branding.  

Linda Frostick said of the suite of tools, “in the current economic environment, with even more pressure on budgets, prioritising legacy fundraising and securing sufficient resource isn’t easy. So, this year, we’re providing new resources for charities to use internally, as well as customisable legacy materials that charities can use to start their own legacy conversations with supporters – and build on throughout the year.” 

Final Word

Want to join the consortium and get involved in Remember A Charity Week?

You can get the lowdown on the cost, benefits of becoming a member, and the application process here.

In the meantime, if you’re looking for a legacy fundraiser to implement a Willanthropy campaign, you’ve clicked on the right website. Give us a call on 0203 750 3111 to get the conversation started.