Young donors: generational giving deficit or engagement deficit?

The recent University of Bristol/CAF report ‘Mind the Gap’ raises interesting questions on whether current 18-30 year olds are significantly less likely to give to charity than previous generations. At first sight, the figures are compelling: in 2010 32% of over 60s had given in the last fortnight, but only 16% of under 30s had. This compared to 29% and 23% for the two age groups in 1980. More than half of all donations to charity now come from the over 60s, compared to 35% thirty years ago.

So we’re it appears facing a fundamental generational shift in giving behaviour. Or are we?

Whilst the research provides some fascinating data on giving patterns by age, I think it’s too early to draw conclusions that current 18-30 year olds are less philanthropic than their predecessors. What we could be seeing is the impact of socio-economic factors on young people, and a need for us as fundraisers to learn to engage them more effectively.

If you’re 18-30 today you’re facing probably the grimmest outlook of any generation since the 1930s. This recession is disproportionately impacting on young people – they have higher student debt, less chance of getting a job, higher housing costs and more restricted access to credit than any recent generation. And unlike the recessions of the 70s and 80s this one is impacting on all social classes, including the classic ABC1 young charity donors. Ask any Fundraising Director about the volume and quality of applicants they’re seeing for Fundraising intern or entry level jobs. There are a lot of unemployed young graduates out there.

And 18-30 year olds are different in other ways. Their attention span is short. Very short. They have been brought up as individuals, suspicious of institutions. They live their lives publicly online through social media. But this doesn’t mean they don’t care about issues. It doesn’t mean they don’t want to get involved.  They can be a hugely powerful force if Fundraisers understand how to engage them.

My own charity, Anthony Nolan, is seeing this at first hand. 21-30 year olds’ response rate to our regular giving telemarketing campaign to people on the bone marrow register is significantly higher than that of the 60+ age group, and well above benchmark response rates.  Our volunteer student arm, Marrow, recruited over 9,000 potential bone marrow donors last year and raised over £90,000.

So are we facing a donation deficit? I’m not sure we are, but I do think as Fundraisers we need to think differently about how we communicate with and engage younger donors.

That means giving them easy initial ways to get involved like raising awareness or campaigning via social media, and building the relationship from there. Making it easier to give via the technology that drives their lives: text giving and potentially regular giving via mobile. And developing and delivering content that works for them: mobile/tablet optimized websites are essential for engaging younger donors, as is clear, impactful and emotive video content.

Generation Y are as different to the Baby Boomers as the post-War generation were to Dorothy Donor. As ever, our role as Fundraisers is to adjust to their needs and give them to opportunity to use their time, money and influence to make a difference to the issues they care about.

What can UK Fundraisers learn from Charity: Water?

This year’s Institute of Fundraising Convention buzzed with energetic and enthusiastic Fundraisers sharing brilliant ideas on audiences, products and channels. Throughout the three days, across numerous sessions and on the #iofnc Twitter feed, one name came up over and over again: charity: water.

Charity: water is a US charity which brings clean water to people in developing nations. Founded 5 years ago in New York by Scott Harrison, their clear fundraising proposition, backed by superb use of digital media, has grabbed UK fundraisers’ attention. I heard Scott Harrison give a plenary session talk at the Association of Fundraising Professionals’ Convention in Vancouver in April this year.  He ruffled a few feathers when he said he didn’t see them as a charity; didn’t hang out with fundraisers; and saw his peers as social media and online giants like Facebook, Twitter, Google.

Charity: water offers donors a simple, tangible and emotive fundraising proposition: raise a set amount and fund the drilling of a specific well in a developing country chosen by you. You can bring clean water to that community. Donors give directly, do an event or raise money through an in celebration product, giving up their birthday and asking friends and family to donate to charity: water in lieu of gifts.

What can we learn from charity: water?

For me, there’s 3 things stand out:

1.   They are brilliant at giving donors choice over what their money is used for, and then showing them and their sponsors the tangible impact of their gifts.  Every donor who sets up a fundraising page can check on progress of ‘their’ well at any time, shown via GPS, photo and video content uploaded by the project. They update sponsors as well as fundraisers on the project’s progress, thereby widening their pool of advocates. We’ve known for 15 years that donors want more choice over how their support is used, and to see clear and tangible impact. Charity: water is amongst the best I’ve seen at doing this.

2.   Their use of video as a media, both to demonstrate their need for funds and show the impact of donations is fantastic. They use bold, confident language directly addressing the donor. They also use video content wherever they can – in PR, supporter acquisition, retention and development. They say they find video communicates best, followed by photos, with text last. Their Twitter feed shares a photo of the day rather than text content.

3.   They are not afraid to be honest with their donors when things go wrong.  Every September they webcast the live drilling of a well which has been funded by supporters. It’s one of the centerpieces of their birthday fundraising campaign. One year, the drilling went wrong – they failed to find water, live online in front of thousands of their supporters. Charity: water immediately emailed their entire warm database. They explained what had gone wrong with the drilling, and that they would be going to back to the village with a new piece of equipment to try to find clean water. They webcast the further drilling attempts – which were successful. They had a hugely positive response to the email; a wave of unsolicited gifts; and built their credibility with their donor base. Their openness turned what could have been a PR disaster into stronger relationships with their supporters.

But there’s a couple of other things we should bear in mind. Charity: water make strong play of the fact that 100% of public donor funds go direct to the projects. They ask major donors to fund their organizational overheads (which are fairly low as they don’t directly employ project staff but work through local partners). While getting the maximum proportion of funds to the beneficiary is every charity’s goal, in my opinion the 100% model doesn’t develop donors’ understanding that it does take money to raise money, and money to run organizations professionally.

At APF Scott said Charity: water had raised $62m gross over 5 years. They have around 300,000 individual donors who give or raise an average of $1,000 each. However, their ability to turn these donors into regular supporters to drive future expansion is currently unclear. Will they be able to inspire donors to do in aid of celebration fundraising year on year? Will the fantastic (and staff time intensive) communication path they take donors’ sponsors on reap dividends by sponsors becoming fundraisers? Will major donors continue to pick up the tab for overhead costs, particularly as the database grows?

So what’s the conclusion? I think charity: water’s clarity of messaging, demonstration of impact, openness and use of video are brilliant.  Many UK fundraisers could use elements of these in their work. I think their decision to communicate with fundraisers’ sponsors almost as closely as they do with the fundraisers themselves is fascinating. But I think part of having a mature relationship with our supporters is explaining that charities do need to spend money on IT systems, finance departments and all the other elements of ‘overheads’. Without these functions we can’t be as effective as we need to be to deliver our goals.  And our charities can’t grow and we can’t help our beneficiaries without investing in fundraising.

See what you think: http://bit.ly/Nzkzvh and www.charitywater.org

Talent-spotting: What do Fundraising Directors look for when promoting staff?

Two Heads of Fundraising hover in the kitchen, making the first coffee of the day. A junior Fundraiser, at the start of their career, bounces past heading for their desk.

The Head of Events nods towards them “They’re good, aren’t they?”

The Head of Individual stirs their coffee and grins “Yeah, they’ve got it. They’re going to go far. But who nicked the last biscuit?”

But what is IT? How do you define fundraising potential? What do Fundraising Directors look for when they’re promoting staff?

For me, it’s not about whether Fundraisers have worked in large or small charities or have moved over from another sector; or what income stream they work on. It’s about junior Fundraisers’ attitudes. Three things mark out Fundraisers with potential:

• They focus on the donor – and want to put them first. Good fundraisers understand that we’re brokers between the donors and the people they want to help or cause they want to have an impact on. Fundraisers with potential want to learn about their donors: who they are, what they want, how they want to engage with our charities, how they want to understand how their money and/or time has made a difference. Promising fundraisers set aside their ego – they don’t push to attend meetings with donors when they’re not the best person to be there or push an idea for a campaign because they love it.

• They take responsibility for their own development. The Fundraisers who go far in their career are the ones who make the effort to build their knowledge, skills and experience. This is more than attending conferences and training courses, useful though these are. It’s about volunteering to help other areas of fundraising to help build their knowledge. Helping steward a major donor cultivation event. Running a cheer point at the Marathon. Doing a street collection shift. It’s about monitoring fundraising trends and activities – mystery shopping other charities to see how they communicate with potential supporters. It’s about following the wealth of great fundraising bloggers and tweeters who share interesting content and views.

• They’re driven. They don’t want to meet their targets – they want to smash them. They understand most charities’ need for funding is infinite. They don’t get a big win or run a really successful campaign and sit back, pleased with themselves. It’s all about the next win, the next campaign, how to push themselves and their charity to do more and more.

But why is the impression Fundraisers make on their bosses so important? Don’t they just gain skills and experience in a charity then look to progress their career elsewhere?

Climbing the career ladder by moving charity is of course perfectly valid, and at times essential to get the breadth or depth of experience needed to reach the top. But with recruitment always risky (for both sides) and costly, and given the importance of continuity in fundraising teams, most Fundraising Directors are keen to promote internally where appropriate.

This means if you show the right attributes you should have a decent chance of accelerating your career within each charity you work for. This can be great for both sides: the Fundraiser gets the opportunity to progress in a familiar and hopefully supportive environment; and the charity gets the continuity and stability which is so important for effective fundraising. Most importantly of all, the donors get a better service from a stable Fundraising team which recognizes talent and gets it into positions where it can have most impact.

I’m part of a panel that will be discussing these issues and more at the IoF Convention in July http://t.co/1fRvSPwH . Come along and fire any questions you like at us, or post or comments questions below.

Social Media and the rise of the new philanthropists

By 9^th May 2012, 80,058 people had donated £1,112,988 to the Justgiving page of Claire Squires, the tragic London Marathon runner. The outpouring of sympathy and gifts made to the Samaritans in her memory demonstrates how differently young donors engage with charities compared to previous generations, and the critical role social media plays in this.

In the 80s and 90s Fundraisers adapted pretty well to the Baby Boomers’ desire to have greater choice over how their gifts were spent. Tangible fundraising products linking gifts to clear impact were offered. The Boomers sponsored children in the Third World, sent goats to Africa, adopted Meerkats in wildlife parks.

But donors currently in their 20s and early 30s (the so-called Millennials or Generation Y) are different again. This is a generation that has been brought up to expect to have their views asked for and listened to. They too want to choose how their charitable donations are spent and see a tangible impact. But they are the ultimate individualists, suspicious of institutions (including charities), preferring to trust information received directly from their peer group or social media. They process information swiftly and in small pieces. 140 characters or less, in fact.

The social media the Millennials have created and so enthusiastically adopted defines them. Facebook facilitates and drives their love of living their lives in public online. This is what I’m doing, these are my Friends, this is what I’m interested in. Twitter enables instant sharing of thoughts, jokes, interests, but also gives these great individualists the chance to briefly create communities when they find a cause they believe in.

Surfing the Millennial wave

And it’s precisely these sudden, unpredicatable and uncontrollable cyber-causes which can be so powerful for charities.  Claire Squires’ Justgiving page started trending on Twitter just a few hours after her death. The vast majority of the 80,000 people who have donated won’t have known Claire or have previously supported the Samaritans. They were touched by her story, and perhaps were motivated by feeling part of a cause or group, however briefly. Come on guys, let’s get Claire’s page to over £1m was a common tweet. Social media brought the story to the Millennials, and gave a simple way of engaging with it – a few clicks on a laptop or text to donate.

My own charity,  Anthony Nolan, experienced this in June 2011. A 15 year old with terminal cancer, Alice Pyne, wrote a blog with a bucket list of things she wanted to do before she died. One of her wishes was for people to join stem cell registers around the world to provide potentially lifesaving transplant matches. Someone mis-read her blog, and tweeted that one of her wishes was to trend on Twitter. We noticed #alicebucketlist starting to trend globally on a Tuesday evening. Anthony Nolan’s Digital team began to tweet the online link for people to join the Anthony Nolan stem cell register to help Alice achieve one of her wishes.

Charlie Brooker tweeted about Alice that night. Next day, we emailed Charlie to ask if he’d do something else to help. In a couple of hours, he’d recorded an online appeal for young men (the priority group) to join the Register. It’s now had 45,000 views [warning – he does swear in it].

As a result of Alice trending on Twitter and Charlie’s appeal, 3,000 people joined the Anthony Nolan register in 36 hours, 1,767 of them young men aged 18-30. This is more then we usually recruit in a month. At least 1 of them has already been a match for a patient and donated potentially lifesaving stem cells.

So how do Fundraisers respond to the Millennials?

Fundraising and Digital Marketing teams need to work seamlessly together, Fundraisers understanding what content and calls to action work on social media, and Digital teams the need to harness interest to drive donations. We need to monitor social media pretty much 24/7 – Twitter trends don’t conveniently kick off during working hours. When an issue grabs the Millennials’ attention we have to be ready to respond immediately. This means making rapid, almost instant policy decisions about whether to get involved with a debate or development. Then sharing accessible, direct, engaging content – predominately video. They prefer pictures to words and content must be authentic. They’ll trust real life case studies; spokespeople talking, less so. Calls to action have to clearly show how they can make a difference and must be quick and easy for them to action online or via their phones.

Perhaps most interesting of all, we need to give them opportunities to be conspicuous philanthropists. They live their lives (or the online version of it) in an extraordinarily public way. They want to share with their networks that they’ve backed a cause, liked content, donated to a charity. This isn’t an ego trip – by publicly affiliating with or promoting a charity they’re enjoying being part of a cause or group. A critical part of that enjoyment is sharing it with their online networks. They can be enormously effective social media campaigners for charities, if we give them the right content to engage with, tweet and post about. Their catchphrase is, after all, Get Involved.

All of this poses a big challenge to Fundraising teams. Although small charities struggle with resource and brand awareness, they can benefit from having quick decision-making processes. The big charities, whilst having the resource, may find the instant and flexible response needed to harness the power of social media more challenging. The Millennials are in a hurry. They don’t have time for us to get three layers of sign-off or to form a working group to discuss how to respond to an issue.

But if charities can show younger donors how they can have a direct impact on an issue, they can be incredibly effective. The opportunity is out there – it’s up to us as Fundraisers to adapt it.  Get involved.

Maximising online donations

I recently took part in an interesting roundtable discussion on maximising online and text donations, hosted by The Guardian. Reps around the table included some of the very big charities, some medium sized ones, and some online giving developers/suppliers.

The discussion reflected the primary role of online and social media in engaging with and developing supporters, as well as the practical importance of accessible and reliable online and text giving platforms.

We also chatted about the challenges for charities and Fundraisers in responding quickly and effectively to sudden surges of interest driven by Facebook, and in particular by Twitter. Social media has fundamentally changed how we as Fundraisers engage with supporters and potential supporters, particularly those under 30. The Roundtable felt larger charities, whilst having bigger resources, might find the instant reactions and quick decisions demanded to maximise opportunities from social media more difficult than smaller charities.

I’ll be blogging more on the fundraising challenges and opportunities presented by social media in the next couple of weeks, but in the meantime the feedback from The Guardian Roundtable is available to read here http://gu.com/p/37kxa/tw

How to stifle Philanthropy

People giving to charity is a good thing, right? So why reduce incentives to do it?

This week’s Budget announced a cap on the tax relief an individual can claim in any year. From April 2013 tax relief will be capped at £50,000 pa or 25% of income (whichever is higher). This could act as a significant disincentive to people making larger personal gifts, who are vital to charitable causes.

The cap includes tax relief on gifts of shares, land, personal donations and the endowment of personal Foundations. From experience, I know how important the current tax relief system is in helping charities secure major donations. When soliciting a potential major donor following a cultivation process, we suggest a ‘think about figure’ of the level of gift we would like them to make. The figure is arrived at by a mix of knowledge of the donor’s financial resources, past giving to our charity or other causes, the extent of their engagement with our cause and the impact they want to make. We also look to raise their sights with the figure – highlighting that they do have the capacity to make a six figure gift, for example, when they might previously have felt they were unable to. This is where tax relief is so important. A donor could make a gift of say £80,000. With gift aid at 20%, this would be worth £100,000 to the charity. The donor could then claim back tax relief on the difference between the 20% and whichever top rate of tax they were paying (40 or 50%). This meant the effective cost to a donor paying 40% tax on a £100,000 gift was £60,000. This tax relief meant many donors gave more than they would otherwise have done. Frequently I’ve had discussions with donors who were considering a £50k gift, which they upped to £80k (£60k cost to them) in order to enable the charity to receive £100k.

HMRC were quoted in Third Sector this week as saying “The government did not undertake this measure lightly, but it is necessary to take steps to ensure the very wealthy cannot simply wipe out their tax bills using charitable and other tax reliefs.”

It’s worth bearing in mind a few things in response to this:

1. Gift Aid and tax relief on charitable donations are designed to offset the tax the donor has already paid on that income
2. The charity sector is heavily reliant on larger gifts from a small number of individuals. Consequently disincentives to give at this level could be disproportionately harmful. NCVO/CAF’s 2011 UK Giving report  www.ncvo-vol.org.uk/giving found that 58% of the UK adult population gave to charity in a typical month in 10/11, donating £11bn over the year. However, only 7% of these individuals gave over £100 per month, but these supporters were responsible for 45% of the total income from individuals.
3. This won’t just impact mainstream charities. Churches, schools and a range of other organisations have charitable status.
4. The credit crunch and recession have led this Government to make arguably the deepest public spending cuts in UK history. They want the charitable sector to play a bigger role in providing much needed services and support, and individuals to increase their giving to charity. So why reduce the tax incentives for personal gifts?
5. The UK charity sector has worked hard over the last 20 years to nurture a culture of major giving from wealthy individuals. After the great Victorian philanthropists (check out your local library or civic buildings – highly likely to have been endowed by a Victorian industrialist with a magnificent moustache) UK major giving lagged behind the US. In recent years, major personal gifts have been vital in supporting our health, education, arts and social sectors. Major Donors have funded breakthroughs in cancer research, enabled students from disadvantaged backgrounds to go to university, funded projects which have got kids off the street. And much more. They play a vital role in our society, and if supported and nurtured, could play a much bigger one.

The Government says it will be discussing the impact of the tax relief cap with charity umbrella groups and the charities most affected before in comes into force in April 2013.

Let’s hope this is an opportunity for all charities to work together to campaign for a tax system which encourages personal giving, not stifles it.

Association of Fundraising Professionals Convention, 1-3 April 2012

If you’re a Fundraiser considering conferences to attend this year, I’d strongly recommend the Association of Fundraising Professionals (AFP) Convention in Vancouver from 1-3 April 2012. The AFP is the US equivalent of the Institute of Fundraising, and the Convention draws together Fundraisers from across North America and increasingly the UK and Europe.

I attended the convention in 2008 in San Diego and loved it. The Education Seminars offered a great range of sessions on trends in philanthropy, donor behaviours, online fundraising, major gifts best practice, legacy marketing and fundraising strategy. The sessions were well presented and the content was excellent.

Having attended the convention and worked with a number of US consultants and funders, I find that the strongly embedded culture of philanthropy in the US continues to drive innovation in major gifts best practice and new philanthropic models such as social investment. Equally, the convention gives UK Fundraisers the opportunity to reflect on areas where our sector is arguably stronger, such as mobilising support from mass participation events and direct marketing.

Convention costs are roughly comparable to the UK IoF convention, and I certainly felt the increased costs of travel and accommodation were well worth it for the ideas and stimulus I took from the event. The US enthusiasm for fundraising is infectious, and it was refreshing to be in an environment where our profession is respected, valued and celebrated – which is isn’t always the case in the UK.

If you’re interested in the Convention details are at http://conference.afpnet.org and when I’ve booked in the past booking the Convention organisers have viewed IoF membership as valid for the professional discount rate.  If you’d like to chat about the Convention further, do get in touch below or on C_MILES@sky.com