Shock! Horror! BBC2′s Newsnight has uncovered a shocking fact about charities: apparently it can cost quite a bit to attract new donors. I know – whodhavethunk?
Here’s the story which headlined the show last night:
Last year, 750,000 people signed on the dotted line, giving an average contribution of £90 a year. But a Newsnight investigation has found the charities are often paying the companies, in effect, £100 or more for each signature they collect, meaning in many cases the company is paid more than the charity will raise from that donor in the first year.
It is surely not a shock to anyone that the upfront costs of attracting new donors to give to charity are proportionately higher than retaining the loyalty of existing donors? After all, it’s exactly the same for those marketing to attract new customers in business.
But the reasons charities place such a premium on attracting new donors are clear enough:
1. Many of those new donors will turn into loyal donors who give year after year at a much lower marginal cost;
2. Many of those new donors, if properly engaged, will increase their contributions over the years;
3. And some of those most loyal donors will leave a gift to their chosen charity in their will – and legacies are the most cost-effective form of fundraising.
Of course all charities should keep a close eye on their return on investment, and constantly evaluate if they’re getting good value for money for their cause by forking out to private companies to recruit new donors.
Doubtless there are some charities who get it wrong (just as there are some businesses who spend to little effect on their marketing) – and maybe there’s a role for Newsnight in identifying those charities which are failing. Unfortunately last night, Newsnight simply bundled all charities – including the most successful – into one lumpen mass, and accused all of them of squandering the public’s donations.
Thankfully, Betty McBride of the British Heart Foundation put across the charitable argument very well on the programme, helping to expose what a hue and cry about nothing Newsnight had indulged in. Fingers crossed that Newsnight’s sensationalist and ignorant reporting won’t put folk off giving to charity.
New post: Newsnight indulges in sensationalist ignorance on charitable giving http://bit.ly/cYvrjK
RT @stephentall: New post: Newsnight indulges in sensationalist ignorance on charitable giving http://bit.ly/cYvrjK
They fail to realise that people don’t generally sit at home thinking “I feel like giving to a charity, maybe I’ll look some up on the internet.” I too find street chuggers really annoying and look down upon them from my role as a door-to-door soft-sell recruiter (here’s hoping not many middle-class Glaswegians watch newsnight), but stories like this are only going to increase hostility towards recruiters, make the practice even less cost-effective, and decrease the money available to charities to do their good work.
Hmm, perhaps someone should start a #stupidnewsnight hashtag on Twitter?
More generally on charities and business acumen, here’s an interesting column from the Economist arguing that businesses have things to learn from charities, not just the other way round: http://www.economist.com/node/16588412
There’s an especially nice quote from someone who dislikes the tag “non-profit”: “Non-profits include loss-making companies like General Motors,” she explains. “We’re a not-for-profit, as we’re not even trying to make a profit.”
Personally, I get annoyed by the chuggers, their fake caring, their pretence at being so impassionaed for their charity, and the fact that they will try varying tactics which just beggar belief. In Norwich yesterday they were offering to hold an umbrella over you to your destination if they could talk to us about Oxfam. NO YOU CAN’T ! And again, and again, and again, as we dashed too and fro to do our shopping.
They chuggers do care, but only about getting their money.
The RSPCA are employing door to door chuggers in my ward at the moment, and it is really winding people up.
I understand the need of charities, especially as someone who gives by Direct Debit WITHOUT DOING IT VIA A CHUGGER ! The lesson for all of us is to to as I did, go direct via a website and make your Direct Debit count and make sure 100% of the money goes to the charity.
RT @stephentall: New post: Newsnight indulges in sensationalist ignorance on charitable giving http://bit.ly/cYvrjK