RG Fundraising and Telemarketing in 2021
Adam Watson, MFIA:
For the past four years, we’ve written these summaries of the previous year’s fundraising whilst pulling predictions for the following twelve months out of the Fundraising Partners branded hat. There will be no prizes given to anyone who guessed that we got 2020 wrong. In our defense, COVID. Enough said?
We did however get a couple of the general themes correct and one thing painfully right.
We predicted that sub-contractors would continue to provide the majority of acquisition in 2020. At last count, around 95% of new F2F acquisition was recruited by these organisations.
We said that a few leading agencies would look at their business models because “business as usual” would not sustain them for much longer. We have seen one supplier leave the Australian market and come back with a completely new model whilst a new retention rewarding billing model has hit the streets through a couple of others.
“Collective action is in the air” were the wise words written by Paul Tavatgis last year, and that’s what is beginning to happen. Guided by Fundraising Partners, the Irregular Giving Project was launched in March and has since amassed an army of 300 fundraisers from around the continent and world who are working collaboratively to make better regular giving fundraising.
Well ahead of the IVE benchmarking report, Dr Peter Coleman predicted that attrition for phone acquired RGs was going to need to be looked at. He was more right than we had feared. We saw costs rise and retention drop like a stone (especially in NZ) without many charities measuring it or acting on the information.
Having adjusted for any other COVID-type issues such as asteroid strike or alien invasion, we’re happy to stick out my neck and make a few more prognostications. So, here goes…
Further diversification is on the cards for 2021. COVID showed us that having all our eggs in one basket is no longer an option. This wind change might put less pressure on volume for the F2F agencies but will pile it onto the phone suppliers. I fear that lower pressure will not lead to better practices, but at least those who are doing it badly will have less negative impact on the sector.
Compliance and due diligence will no longer be dirty words. I see charities investing more heavily into ongoing compliance and due diligence, not just at the start of a campaign. This might put up costs but will eventually rid the sector of some undesirables.
Paul Tavatgis MFIA: Face to face in 2021
One prediction for 2021 that is probably safe to make is that predicting the future will become a lot harder. Beyond that I’m not prepared to make any bold statements. However, here are some (hopefully) helpful thoughts about the current environment, how it might impact face to face fundraising, and some suggestions for how to adapt and prepare for what might be coming our way.
An uncertain world
One thing we can expect is rapid change in society and the economy. At the time of writing a COVID19 outbreak in South Australia has closed the state’s borders at incredibly short notice. Despite positive news about vaccines we should expect there to be regular and rapid changes to rules around travel and business during 2021.
For face to face fundraising this means that there will be more “stop / start” periods. Practical impacts of this might include:
2021/2 budgets will feel the impact of the fall in acquisition numbers from 2020. Smart charities will look to invest what they can in acquisition but will need to seek quality rather than quantity in their regular giving acquisition.
Charities will need to continue to be flexible with acquisition budgets but should also remember that a genuine partnership with a F2F agency can’t just be “switched off” without damaging the agency.
Cashflow for agencies will be uneven. Agencies that are more skilled at cashflow management or with more diversified fundraising offerings will be able to manage pauses more effectively than smaller, more focussed suppliers.
Face to face agencies piling into telephone fundraising continues to risk that channel, which is itself facing issues of decreasing quality and retention.
We should assume that travel inter-state and within states might be limited. Territory planning and careful use of available territory will be more important than ever.
The economy is looking…?
So far, the real impact of the economic crisis has not hit. Government stimulus is keeping a lot of businesses and households afloat. This is beginning to unwind, and the Reserve Bank of Australia is predicting that unemployment will peak at around 10% in the middle of 2021. The RBA is also showing that business and consumer confidence is returning to normal levels, but that this is fragile and further severe outbreaks could quickly change this.
Face to face fundraising has the advantage that it is to some extent counter-cyclical or at least cycle neutral IF face to fundraising is done well. This means focussing fundraising in areas where everyone isn’t out of work and applying high quality fundraising techniques to the right potential donors.
Unfortunately, at present most face to face fundraising does not do this. Fundraising Partners know this because we see fundraising in action every week. Top tips to make the most of the opportunity in 2021:
The “standard pitch” that direct marketing (because they aren’t fundraising) agencies use is just not good enough to inspire a long-term commitment to a cause. Why are we wasting so many of these opportunities by blurting out a 30 second spiel that starts with “…we’re getting peoples’ details for a campaign that starts in 5 weeks….”?
Charities need to know what is happening in face to face programs – do you know what the “standard pitch” even is for your own charity? Get out there and observe training and walk alongside the fundraisers – what you hear may surprise you.
Where are the stories and where are the relationships with donors? We’ve been told at every fundraising conference for the last 1000 years that these are key to good fundraising – why are they irrelevant to face to face fundraising? Get these core elements back into your face to face program and see retention increase.
Good face to face fundraising will find good donors even when economic times are harder – all we have to do is actually deliver some good face to face fundraising.
The supplier “market”: the race away from quality
This is where it gets interesting. The supplier market for face to face fundraising in 2020 has been a mad scramble by agencies to “lock in capacity”. There is an old saying “if you’re not at the table, then you’re on the menu”. In face to face this is literally true – charities are being shopped around by middlemen to sub-contractors on “the menu”.
At the beginning of 2020 there were some promising signs that the free for all sub-contractor market might face some competition from innovative new models. The pandemic has put a lot of this innovation on hold or has slowed it down.
The Irregular Giving Project has stimulated alternatives and hopefully these will be more resilient in 2021.
Some ideas for how charities can move from being the main course to running the restaurant:
Prioritise quality – set red lines for key indicators in all areas of your program, don’t settle for the least worst option and please stop hiring charlatans to run fundraising in your cause’s name.
Collaboration is a potential way forward. We hope Rippling manages to get a good start and there are many other opportunities for charities to cooperate in developing better models for face to face fundraising.
Take responsibility for what is happening in the field and change things if you need to. This should be a collaborative exercise with your supplier – not one-way traffic – but they really need to break away from the “standard pitch” because it just isn’t working.
If it didn’t already exist, we’d be looking to invent face to face fundraising to overcome the fundraising challenges ahead. It is a great way to directly approach your potential donors and deliver a heartfelt and inspiring message. So let’s make 2021 the year we start doing face to face well again!
Peter Coleman Ph.D.: Tele-fundraising 2021
If 2020 was anything to go by, 2021 is set to be a year of ‘acceleration’ in the world of TM fundraising.
Even prior to COVID 19, there was a growing trend towards TM as an alternative to F2F regular giving acquisition. With F2F programs going on hold, the shift towards TM naturally sped up. Not only did we see established TM agencies experience a higher demand for volume. We also saw several F2F fundraising suppliers pivot to tele-fundraising as they adapted to the realities of COVID 19. We can expect this increased reliance on the TM channel to continue in 2021, with a wider array of suppliers jostling for their share of the market.
As 2020 accelerated the demand for volume, it also accelerated the shift to new technologies and new ways of working. Innovation was the name of the game, and this will remain the case in 2021. Two important areas of innovation are set to be:
Lead generation: With growing demand for volume coming from a growing pool of clients, TM data suppliers will be under increased pressure to explore new strategies for sourcing viable data that can deliver quality and quantity. Charities are also likely to employ new internal lead-generation strategies to help meet their targets.
Billing models: With former F2F suppliers pivoting to TM, we are already starting to see alternative billing models introduced to the market. How F2F ‘style’ billing models such as Cost-Per-Acquisition and clawback fare in a TM marketplace is yet to be seen, but the introduction of these models is likely to drive adaptation in how TM suppliers bill their clients.
With all this talk of growth and innovation, it is easy to lose sight of the basics. With so many charities struggling to reach their volume targets, many TM stakeholders continue to overlook the essential importance of donor retention. A ‘set-and-forget’ attitude remains all too commonplace. As TM is increasingly relied on as a source of RG acquisition, the sector can no longer afford to ignore negative retention trends or fail to explore why these trends exist in the first place. As such, 2021 will see more charities, TM agencies and data suppliers investigate the drivers of RG donor quality through this channel and adopt new strategies for maximising donor longevity.
2021 will be an exciting year for TM, but also one fraught with challenges. If there is anything to be learned from the difficulties faced by F2F over the past few years, it is that focusing on short term gain can be a real recipe for long term pain. The time to care about donor quality is now.
Adam Watson, MFIA: Final thoughts
As both Peter and Paul have said, challenges await us in 2021. Our best weapons to fight these challenges are our people. Our sector has an army of well intentioned, honest, and passionate fundraisers who share the will to make the channels the force they could be and want the tools to make this a reality.
The Irregular Giving Project has given us a list of recommendations to work through in 2021, and the launching of both the IGP and the F2F Global Summit have shown that there is an appetite for better regular giving acquisition and retention.
We, at Fundraising Partners truly love what we do. We love the channels we represent. We care for and are invested heavily in their futures and hope to see you all in 2021, 2022 and for the foreseeable future as proud fundraisers.
In closing, I need to stress that we know as well as any of you that 2020 has been tough. All of us at Fundraising Partners have been impacted by COVID and we all appreciate that you have too. We know that we would not have fared as well as we did without our friends, family and clients supporting us, so we’d like to say a big public thank you to all of you who’ve made a difference. THANK YOU!
On a personal note, I’d also like to offer my sincere thanks to the fundraising gods who chose to send Peter and Paul my way just before COVID hit, and to Genevieve for her sanity and commitment to our shared cause. It’s because of these people that we continue to move forward.
Happy 2021 and happy fundraising.
PS: We bang on about how we got the Irregular Giving Projected started during COVID, but we achieved so much more. Here’s the rundown of other Fundraising Partners’ successes between March and today:
a) One cat being thrust into international fame during a global summit
b) One baby born
c) One Master’s degree started
d) One obsession with baby Yoda developed
e) At least one broken rib
f) One fear of flying being nullified as there is nowhere to fly
g) Two rabbits thriving despite the introduction of point b)
h) Three books written (one highbrow written by a doctor and two for kids written by a very non-doctor)
i) Nine Lego ships built