#24 The cost of F2F is rising

December 2, 2017

The cost of F2F is rising, but it’s not all bad news. With this rise in costs comes a rise in social responsibility. As the CEO of a charity recently told me, “we don’t want to be forcing the people who represent us into a position where they need our services”.

 

More agencies are moving to a base-wage employment model which comes with guaranteed wages, payroll tax and superannuation at 9.5%. Sadly, for the agencies, the move to the employment model means that the top fundraisers are earning less than before, and the worst ones are earning more. This massively increases the risk for our suppliers.

 

We cannot blame the suppliers for charging a fee that they consider fair for the work they do and the risk they run. They are walking a tightrope balancing their value to their clients versus their costs. Like any business, they charge what the market allows them to. We all know that face-to-face can be a tough gig and as long as the workers are being paid a fair amount and it is not just lining the pockets of wealthy owners, I am fine with this.

 

Most charities are not signing contracts without knowing what they are getting in to. They will look at the costs and decide whether they can justify an F2F campaign based on its likely returns, which at an average sitting at 100% of year one face-to-face still represents a fantastic return.

 

But I need to ask, with all respect, who is charging a multiplier of 17*, and, more importantly, who is paying that?!

 

With current attrition rates and average gift, you will not see a return for 40+ months, and that’s without the eForm fee, site costs, incentives and collateral. The only reason for paying this amount would be no add-on costs, the delivery of the highest possible quality donors and/or a clawback that extends to cancellations in the first six months, a minimum donor age of 35, credit card only, a dedicated account manager, 100% clean data with email and two telephone numbers and a free reactivation service.

 

If you are paying or charging this multiplier and have found that it is justifiable I will issue a public apology/correction on this blog. Please PM me.

 

* Source: Frost & Sullivan Individual Donor Survey June 2017

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