Leaders and experts in some of the key fundraising methodologies give their views on the last 18 months post-GFC, and declare their bold predictions for the immediate future. So whether its direct mail, major gifts, events or some of the other fundraising methodologies you use, check out the form here.


Leaders and experts in some of the key fundraising methodologies give their views on the last 18 months post-GFC, and declare their bold predictions for the immediate future. So whether its direct mail, major gifts, events or some of the other fundraising methodologies you use, check out the form here.
Face-to-face Fundraising

Ross Howe – chief executive officer;
and Paul Tavatgis – director
Cornucopia Fundraising

How has the area of face-to face (F2F) performed over the last 12-18 months post GFC?

During and immediately after the GFC, many F2F suppliers tended to grow their operations and results in Australia and New Zealand. Although the GFC impacted corporations and had an impact on unemployment, it also had the effect of reducing interest rates and some consumable expenses (e.g. petrol prices) which meant the majority of Australians had stronger cash flow.

Combined with higher media awareness of the needs for charitable donations, this provided a spike in people giving via F2F and saw a very successful winter/spring period in 2009. Winter 2010 was slower though, which seems to be the result of declines in recruitment of fundraisers, caused by lower levels of inbound travel and lower unemployment levels within Australia.

As a result of the fall in event and corporate income from the GFC, there has been a significant increase in demand for F2F fundraising. This has come from nonprofits already using F2F, seeking to build their donor numbers, and also from nonprofits that have not previously used F2F and not had significant regular giving programs.

A number of new F2F suppliers have entered the market, mainly as offshoots from existing agencies. However, even with these new agencies the available F2F capacity has not been sufficient to meet the increased demand.

How do you see the area of F2F performing over the next 12-18 months?

We predict minimal growth in F2F capacity as lower levels of inbound travel and lower unemployment levels will continue to impact recruitment of F2F fundraisers and therefore acquisition of F2F donors. Additionally as the Australian economy grows, the Australian dollar rises and unemployment decreases, there is more talk of interest rates rising by an additional 1% in the next 12 months. This will reduce cash flow and impact on the average Australian’s ability to give to nonprofits.

F2F has proven to be relatively ‘recession proof’ and may indeed be counter-cyclical, with negative economic conditions creating a slightly more positive outlook in general for F2F.

F2F fundraising has greater acceptance in the general marketplace. Combined with greater willingness to provide personal banking and credit card details on the streets or at front doors, this will continue to see F2F acquisition be effective. The F2F sector is also better prepared than in the past to work with media in the event of any negative coverage.

Events

Liliana Sanelli
Director
Perfect Events

How has the area of special events performed over the last 12-18 months post GFC?

Organisations were hesitant during the GFC to hold events and spend. Many were nervous and I know of some nonprofits that decided to lose their deposits rather than go through with holding their events. I’m aware of two events held in the last 18 months that ran at a loss.

Since the start of this year, things have been picking up again – it appears that people are spending now or wanting to spend. We are seeing nonprofits exceeding fundraising targets at their events.

How do you see the area of special events performing over the next 12-18 months?

Nonprofits are getting smarter about what kind of event they want to produce; they’re not holding events just for the sake of it. Nonprofits realise they need to have a solid purpose behind their event to attract people.

I think events will continue to flourish, and we’ll start to see new trends in events. For example, I know some events will include a live cooking show, playing off the back of TV programs such as MasterChef. I think as people get increasingly tech-savvy, events which incorporate technology in novel and innovative ways will become more popular.

Telefundraising

Ashley Rose
Chief Executive Officer
MonDial Fundraising

How has the area of telefundraising performed over the last 12 – 18 months post GFC?

Telefundraising has fared well in most circles, continuing to deliver a solid ROI. In the midst of the GFC and in the months after, telefundraisers expected a battle. They expected raising funds to be tough, so they were well-prepared and put in a lot of effort, which made them better at what they were doing! We’ve certainly not seen any decline in results.

Nonprofits are investing more in donor development if they have tightened their spend on acquisition. That is fairly typical in a situation such as the GFC, because nonprofits are more interested in working with their existing donors to maximise their ROI for money already spent over the past two years.

Conversion of cash donors to regular givers via telephone is getting good results for those nonprofits doing it (a positive year 1 ROI). But this is a largely untapped opportunity as few organisations are conducting cash donor acquisition appeals and converting these supporters on a regular basis.

How do you see the area of telefundraising performing over the next 12-18 months?

I can only see it continuing to grow, and there are three main drivers of that.

The F2F market continues to grow the volume of new donors acquired. Telephone use is widely accepted as essential in the communication, development and retention of regular donors. The need to adhere to the Payment Card Industry Data Security Standard (PCI DSS) compliancy, and arrival of paperless debiting from banks all require higher levels of data management. Better data practices drives telephone fundraising.

The better nonprofits get at managing their data, the more they see telephone fundraising as an option. I have seen nonprofits that aren’t opposed to the method of telefundraising, but have been deterred by the data requirements.

Corporate partnerships

Richard Woodward
Principal
Richard Woodward and Associates

How has the area of corporate partnerships performed over the last 12-18 months post GFC?

It has performed well. Organisations that know how to successfully engage corporate partners and put in the hard yards of activity have secured sponsors; The National Gallery of Australia and Taronga Zoo both had record years last year for example.

In my observation, too many nonprofits used the GFC to justify their own inactivity and failing in this area, as though the GFC was the only thing stopping them from securing sponsors.

How do you see the area of corporate partnerships performing over the next 12-18 months?

It’s a time of great opportunity. Companies have budgets to spend and are looking for opportunities. Nonprofits that understand what companies really want and how to engage them and have a plan for engagement will prosper whilst the rest will continue to struggle.

You have to remember that the GFC was an external influence; it impacted an organisation’s ability to secure corporate partnerships, it did not change the competency level of organisations to secure corporate partnerships; organisations that do not understand the right way to engage corporates will struggle whatever the economic situation.

Hailey Cavill
Director
Cavill + Co

How has the area of corporate partnerships performed over the last 12-18 months post GFC?

As we know, Australia was the only country that didn’t go into recession, but it certainly did put the frighteners on corporate Australia. There is far greater caution and accountability for expenditure. Corporate philanthropy may be down in tough economic times, as it is much harder to account for – but funding which is tied to clear and measurable objectives is safe.

More companies are now moving to a partnership model – where there are benefits for the company, their customers and the cause – rather than pure philanthropy with only social outcomes.

The corporate social responsibility (CSR) movement began long before the GFC so those companies that had already adopted a CSR strategy are sticking with it. CSR is not a short-term strategy, and it doesn’t look good to withdraw it once it has been communicated to staff, stakeholders and consumers.

Lots of companies are aligning with a charity as part of their CSR strategy and the rest are doing it for building reputation, increasing sales, reaching a specific target market and so on – all commercially measurable.

How do you see the area of corporate partnerships performing over the next 12-18 months?

I can only see it growing. As business confidence resumes and retail spending resumes, companies will again be spending marketing dollars and they will be more innovative, entrepreneurial and try new strategies. They will look at a nonprofit alignment as a way of achieving objectives.

Companies have a finite amount of money to spend, and they tend to want to spend it on building trust in their brand and differentiating themselves. Corporates are increasingly aware that aligning with a nonprofit ticks a lot of boxes for them, from staff engagement to reputation and differentiation. They see it as a smarter way to get bang from their buck.

Nonprofits that adopt an attitude of abundance and see themselves as an asset and not a beneficiary will do well in corporate partnerships.

Direct Mail

Leo Orland
Account Director
RobeJohn and Associates

How has the area of direct mail performed over the last 12-18 months post GFC?

Direct mail has continued to fare very well. Campaigns have been bringing in the expected income, and we’ve seen direct mail remain a main – if not the main – fundraising revenue stream for our clients.

Several campaigns have been outstanding, and not just for personalised mailings. ‘Householder’ mailings, which are generally not considered for acquisition, have actually performed very well. It takes a lot of work, but we’ve found that having the right list, the right offer, the right timing, the right creative and the right media has paid off.

More than the GFC in Victoria, it was the 2009 bushfires that we thought may cause some softness in response rates, but we didn’t see a significant change. While there was some fluctuation at the top end of databases that could be attributed to the GFC, it settled back to normal quite quickly, and the 2009/2010 tax appeals did very well. Average gifts are holding strong.

How do you see the area of direct mail performing over the next 12-18 months?

I don’t see much changing. It will continue to be a main source of income for many nonprofits. It is increasingly important that direct mail be integrated with online resources. We will see greater giving online from the baby boomers, so campaigns now include a reply device, online payment options and even BPay.

Of note is the fact that in 2018, UK banks will no longer be issuing cheque books. This decision may flow on to Australia in the following years. If or when that time comes in Australia, it will have some impact on direct mail response rates offline. But we need to consider that by that time the baby boomers will be the biggest part of the donor market and may feel more comfortable giving online.

Sean Triner
 Co-founder and Director
Pareto Fundraising

How has the area of direct mail performed over the last 12-18 months post GFC?

There has been slightly less growth in this area as a result of economic conditions. Recent analysis of 28 charities showed that revenue from dm appeals was up 2%, but with inflation up by 3.1% and an increase in postage costs, it could be argued that net income was probably down slightly. Average gifts were slightly down, response rates were slightly down – but volume was up. Nonprofits were mailing more people, more often.

The economy was an exaggerator. Nonprofits doing well continued to do well; nonprofits not doing well did worse – unless they introduced new tactics. There were a number of organisations that tried new things and grew tremendously as a result.

Over the last six months, we’ve also seen a massive increase in cold acquisition mailings with extraordinary results. As a barometer, cash response rates to cold acquisitions stand at about 1%. But we’ve seen results such as 6.2%, 5.6%, 4.03%, 5.3% – and it probably comes down to a combination of tactics and testing.

How do you see the area of direct mail performing over the next 12-18 months?

Acquisition will probably continue strongly. Eleven of our clients are doing direct mail acquisition between January 2010 and June 2011 that weren’t doing it last year.

Response rates to these mailings are also improving, most likely because donors are taking up lower ask options and more money is being invested in mail packs.

Major gifts/capital campaigns

Brian Holmes
Director
Xponential Philanthropy

How has the area of major gifts/capital campaigns performed over the past 12-18 months, post GFC?

Successful major gift programs and capital campaigns are directly linked to a donor’s confidence of their personal financial security; so the GFC had a major impact on the confidence of big gift donors. As a general rule, donors give out of their liquidity rather than their assets. The GFC did not diminish personal generosity but it did diminish the size of gifts for either real or perceived reasons.

Over the last 12 months we have seen a recovery of donor economic confidence and as a result the gift size of major donors has increased. While not yet at the same level as pre GFC, there has certainly been a swift recovery.

With this, the number of capital campaigns has grown significantly. For some organisations it was a case of starting campaigns that were postponed because of the GFC while others are building on government economic stimulus projects or organisational confidence to move forward.

How do you see the area of major gifts/capital campaigns performing over the next 12-18 months?

There is no doubt that certain states have much greater confidence in the financial future than others. Queensland and Western Australia are literally preparing for the new ‘boom’. South Australia is following close behind. Victoria has an optimistic view along with Tasmania. New South Wales appears to be the most pessimistic. The growth in both the size and the number of big gifts seems to correlate closely.

With the growth of economic confidence and with the increasing spotlight on personal and corporate philanthropy, both locally and internationally, it is reasonable to predict that in the next 12-18 months Australia will see record giving in the major gifts and capital campaign arena. The issue will not be one of donor confidence but rather organisational confidence.

Philanthropic Trusts and Foundations

David Knowles
Director, Philanthropic Services
JBWere Private Wealth Management

In the last 12-18 months, there has been a concerted effort by long-standing philanthropic trusts and foundations to maintain grant making at pre-GFC levels, whilst taking steps to insulate their endowments from the effects of falling investment markets.

Some were able to maintain their usual granting levels, but anecdotally, we also heard of cases where some trusts and foundations had to cut back on their granting.

If the current cautious recovery in confidence continues, and investment markets improve, it is likely that granting levels will begin to increase over the next 12-18 months and return to their pre-GFC levels.

In the case of foundations that are not tied to funding particular causes, it will be interesting to see whether an economic recovery results in less funding for welfare, an area that attracted significant philanthropic support in the immediate wake of the financial crisis.