#63 Proud but concerned

September 22, 2018

The hardest part of writing this article was finding a title. I eventually came up with ‘proud but concerned’ as it encapsulated how I feel about my industry.

 

A recent back-and-forth in the comments section of a previous post concerned me as one reader stated that the main problem with the industry was people discussing problems with the industry. Secondly, they suggested that people like me were profiting from vocalising alarmist opinions and passing them off as fact when the industry is fine, and we should stop trying to find fault.

 

I firmly disagree, but of course I would.

 

Before I launch into my diatribe I’d like to take a moment to share some good news. I completed a Mystery Shop for a client a couple of weeks ago that filled me with hope for our sector. She was positive, friendly and most importantly, honest. The very next day, one of my Mystery Shoppers completed a Shop that was so good that he signed up to the fundraiser. The day after that, whilst on a Skype call with another client, I was reminded how passionate, inspiring and thoughtful a fundraising management team can be. It was a great week.

 

This, longer than usual piece, like all my articles is not for profit, but hopefully starts a few conversations within our sector and enlightens a few onlookers and interested parties. Here goes…

 

Fundraising works best when you stick to the basics. They are tried and true and have worked for decades. Face-to-face fundraising (F2F) is no different. There is room for innovation and individualism within these processes so that all our efforts do not look the same, but for best fundraising we should not stray too far from these truths.

 

In the 1990’s, when it first started, face-to-face was the personal solicitation of a recurring monthly gift made in the streets and doors of Europe. These personal and inspirational conversations spread to the shopping centres, airports and markets around the world to form a wider interpretation of the original format, but the core fundraising kept in-line with its origins.

 

As time has passed, paper forms were replaced with iPads and monthly gifts were swapped for instant debits and a four-weekly cycle. Lotteries and payroll giving were added to the menagerie. As the reputation of F2F grew, third-party agencies were needed to supply the much-wanted volumes of new donors.

 

For the past ten years, the third-party agencies grew to dominate the market and dictate terms to their clients. Many were created by passionate and honourable people who found a new way to help those causes by using the talents they had built from prior experiences, and a few saw a way to make money once their energy sales were outlawed.

 

In Australia, the mix of third-party professional fundraisers and in-house teams have recruited over a million new donors in the past four years. This is incredible. Everyone involved in this feat should take a bow and be proud of their part.

 

However, with attrition results worsening and some standards slipping, criticism is rife and there is a feeling that we have moved too far from the original plan, and the notion that the ends justifies the means is prevalent in our sector.

 

I mystery shop a lot of teams, sometimes professionally and sometimes for fun and have witnessed a lot of fundraisers lying to me about the commitment they require from me. They tell me to cancel other charity subscriptions or just do it for a month and then cancel. They say that nothing will come out of my account until I receive a call from the charity or that I just have to tick the box that says ‘24-months’ but it doesn’t really mean anything. High targets, low skills and a lack of understanding of the mechanics of fundraising leads, in some cases, to bad outcomes.

 

The sad truth is that I hear these kinds of lies more often than not.

 

The problem is not always the individual fundraiser, they are merely repeating what their manager told them. They often have no real understanding of the costs attached with each pledge they sign up. If they knew how much the charity were paying the agency for that new donor and knew how much they were costing their charity every time they misled or lied to the potential donors I’m sure they’d stop doing it.

 

Short generic pitches aimed at gathering nods and yeses and ending with lines like “just do it for as long as you can” may have been in the fundraiser’s vocabulary for decades but they are now seen heard in almost every conversation I have with the representatives.

 

On the other side of the fence, World Vision seem to get a different response from the public. Despite not being PFRA members they are signing up more people and raising a lot more money than most other campaigns. Furthermore, whilst I hear agencies receiving complaints from shopkeepers requesting that our aggressive fundraisers move away from the front of their stores, I see florists donating free flowers to World Vision fundraisers doing the same job. I attribute this to two reasons (a) they have a very strong and popular brand (b) they do not follow the agency-style sales and marketing approach to face-to-face.

 

We must all agree that the industry cannot continue in this vein with cost per acquisition (CPA) rising and quality falling, so in which direction are we heading?

 

A couple of agencies have made no secret that they are changing tact and looking at hybrid models aimed at giving the charities more control over the fundraising messages. Other agencies have swapped their commission-only contractor model for an employment model, and many charities are asking consultants like me whether they should start their own in-house team.

 

The power-balance appears to be shifting from third-party agency rule to one where the charities take control of their own futures. Starting an in-house team is not easy. Its outcomes will be almost solely dependant on the fundraising manager put in place to train, coach and develop their fundraisers, and we do not have many candidates that can do well in the role. Those potential applicants currently employed by our agencies only know agency-style fundraising, sales and marketing, so you’ll just end up in the same position as before but with a much heavier wage bill.

 

Before jumping into this decision, our charities need to understand the methodology of their teams. If they want a sales-style organisation that signs up three or more people per fundraiser per day of which two will cancel in year-one, they can hire a sales manager. One of the strengths of an in-house team is that you can offer different products that mean, in some limited cases, that you can still make money with these attrition rates.

 

If you want a low volume high retention organisation you need to hire someone different. Someone with a genuine passion for your cause motivated to grow your organisation and spread your messages far and wide – with strong fundraising skills. However, there are not a lot of these people around.

 

So, is there a place in our future for agencies?

 

I think so and I hope so. The hope part is due to my personal experiences and because I have a lot of friends who live on the agency-side of the fence. They work hard, care about their causes and want to make a positive difference in the world.

 

For our agencies to flourish we will need to get back to basics. Remember why we started having these conversations and cut those free who are dragging our reputation through the mire. The mentality of ‘sign them up at all costs’ has to end. This will not be easy. Many agencies run on fine margins that can come tumbling down with poor results. Creating an honest dialogue between us so that we can identify our flaws and eliminate bad behaviours is a start. The PFRA has set a Standard that we must abide by, but we can and must take it further. The Standard outlines basic rules but does not speak to tactics used to acquire a new donor.

 

Our future is uncertain. We know that our charities will always need regular giving donors, and I hope that we are the ones finding them but unless we make a few amendments to our practices we may lose out to phones, DRTV and online. I am willing to do my part by offering a few agencies some free mystery shops in NSW and report back confidentially to them, so they know whether they have a problem in their ranks.

 

If you are an agency owner and would like feedback on your teams, please email me at adam.watson@fundraisingpartners.com.au.

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