Monday, 7 March 2011

How long left for monthly giving?

I've heard lots of talk about the death of various fundraising channels recently, but not much discussion about monthly giving, the fundraising product that the sector couldn’t do without.

Now, I’m sure giving to charity via a monthly gift isn’t dead. But you could argue that we should be starting to worry about its health.

A very brief history lesson.

Since the mid 90’s the overwhelming focus of the UK fundraising sector has been the recruitment and upgrade of monthly givers. It’s become the key individual giving fundraising product for almost all charities, in many cases to the detriment of maintaining active cash files.

In the mid 90’s monthly givers were converted from the warm cash file. Then there was a step towards massive levels of cold acquisition using direct mail, door drop and latterly television. Finally, along came face to face, door to door and the telephone as volume sources.

Over time cold recruitment has become much much tougher. The less direct channels like traditional print and television have become less effective than they once were and we are now in the place where volume recruitment is pretty much reliant on the direct dialogue channels, face to face, door to door and telephone fundraising. Many charities I work with will recruit over 50% of their new monthly givers from direct dialogue channels in this financial year.

So what’s the problem with that?

Well nothing really, these direct dialogue channels will I’m sure, continue to deliver significant volumes of new monthly givers for a long time yet.

But you could argue that none of these sources are going to grow over the next few years. And if monthly giving is going to remain a key fundraising product, this will become a big problem for charities.

In the last couple of weeks both Manchester and Liverpool councils have reduced to three the number of days they will permit face to face fundraising on the streets of their cities. If this were to be repeated in other cities there is likely to be a reduction in the number of supporters recruited this way.

The telephone is only successful if there is enough high quality lifestyle, sponsored or profiled data to support charity demand. This is a real issue, volumes are reducing along with response rates at the same time data costs are increasing. Not a recipe for growth!

So if the key volume channels are likely to shrink, what comes next?

Well if the sector remains focussed on monthly giving, which it must in the short term as there are few viable alternatives, other sources must be found.

This really is the time to remove the notion of ‘data/supporter ownership’ from fundraising teams and encourage collaborative working across all of fundraising and campaigning. Cross selling to existing supporter groups is a method in the short to medium term to grow or maintain the monthly giver file.

The basic premise being that a group of supporters who have interacted with your organisation in any way, are more likely to be receptive to the offer than someone who you approach on the high street or who is called because they have completed a lifestyle survey in order to win a holiday.

  • Event participants, especially those that didn't return any sponsorship money.
  • Raffle ticket sellers, who sold the most tickets.
  • Online campaigners, those who take action the most frequently.
  • Catalogue buyers, that add a top up donation.

Are all examples of supporter types that have been successfully approached for a monthly gift and there are lots and lots of other examples.

A common concern is that approaching supporters for a monthly gift will mean they will become less responsive to their initial product. If you’re worried, test it. In the majority of cases you will find that the overall financial value of a supporter will increase with the number of relationships that they have, not decrease.

Oh, and when you’re asking them, make sure you acknowledge and thank the supporter for everything else they do for you. There’s nothing quite as rude as being told that the way you’ve been supporting for years is rubbish!

In the longer term it is likely that successful individual giving charities will invest budget in a much wider range of entry level products with the explicit aim of creating their own prospect pools for cross selling higher value products. With this will come innovation in the mechanisms for financial support and with that, probably the death of monthly giving!

But that’s a long way away right?


  1. Timely post, Paul. I've been amazed at the unquestioned assumption (until now) that there will be an endless supply of people prepared to give regularly every month to one or a small number of named charities.

    I sense the model will gradually evolve to one where individuals and groups will react to a continuous flow of near real-time data & stories from social change orgs that allows us to see needs as they emerge and act on them.

    It seems inevitable to me that the big charities will need to chunk up their work into smaller units - otherwise it will become increasingly difficult over time for an FD to plan ahead in the manner in which they have become accustomed.

  2. Thanks Paul.
    I agree with the main thrust of what you say. And I am sure there are lots of people who have engaged with causes in various ways who just aren't being offered the right inspirational opportunities!
    Just two wee points:
    1. DRTV (I declare an interest as I produce drtv for clients internationally): we see drtv holding up well. Second only to f-2-f in terms of year one ROI, and with very low levels of attrition. (That's in the UK. Not surprisingly, outside of the UK in less competitive markets it's flying).
    2. While I think we are a long way from running out of prospective low-level monthly givers, I do think we are seeing the emergence of a generation for whom low-level monthly gifts just aren't meaningful. So we will need to develop more meaningful offers (irrespective of the medium) to engage new generations. For example, higher level serial cash gifts rather than low-level monthly gifts.
    Thanks for your thoughts.

  3. Thanks for your comment Steve.

    I agree that the assumption that monthly giving model won’t continue to be the lead fundraising product in a world where people’s needs and behaviours are changing so rapidly.

    Innovation for too long has focussed on finding methods of delivering monthly giving, with little focus on creating an alternative to it.

    But I can see genuine innovation coming with lending products, micro donations and the rise of mobile as a payment and response channel.

    Well I hope so!

  4. thanks for the post paul! there is some good thinking here - and the one thing I'd like to add is in response to your last point. By no means am I the expert at monthly conversion, but historically I've seen a lot of charities fail horribly at converting run or event participants to monthly donors. The reason for support is just massively different. Does it mean it can't be done? of course not - most of the efforts I've seen for any type of conversion is horrendous at best. I would love to hear from anyone (ie Jono Grapsas) who has managed to convert these types of folks successfully... thanks for the food for thought Paul...

  5. @Derek Thanks for the comment, hope you don't think I was channel bashing! I see that DRTV still works for many UK charities. And totally agree with your second point, there is still a lot of potential in monthly giving, but we need to find more compelling offers and products for new generations of donors.

    @John thanks for your comment, will email you further thoughts on cross selling to event participants!

  6. It's really interesting to read your thoughts on this, Paul. As a relative newcomer all I've really known is the chase for the committed gift - recruiting, converting, upgrading... It's intriguing to hear murmurs of 'traditional' methods like raffle and cash becoming more important again, and alongside innovations like the lending products it certainly feels like an exciting time to be a fundraiser!