Instead of equating frugality with morality, Lawrence Jackson says it’s time for charities to take control of their marketing spend and realise that to make a big impact, they’re going to have to spend a dollar or two.
Whether it be someone shaking a tin at the traffic lights, a cold call at dinner or a personalised letter from a charity, chances are: you can recall the last time you were asked to donate.
And yet, despite what feels like increasing persistence from a growing charity sector, fewer Australians are giving.
According to the Giving Australia report in 2016, while the average donation has increased by 38 percent, the number of Australians giving had gone down by about seven percent over the decade.
So, what is wrong with giving, and how do we fix it so the sector can benefit from digital disruption, rather than be shattered by it?
The donor/charity social contract is fractured
Donors support charities for many reasons, but almost always in response to a charity directly asking them to whether by telemarketing, direct mail, social media or otherwise.
With push promotional activity, the marketer (in this case, the charity) has to take the product to the donor in a sales-oriented way, just as other push products like life insurance, energy providers and phone companies do.
This is in stark contrast to a pull activity, in which the consumer is highly motivated to buy, and only needs help to know how to go about it.
Charities seem to be held to an unfair double standard when it comes to societal attitudes to charitable marketing. This insightful Ted Talk by Dan Pallotta explains how “instead of equating frugality with morality” we should “start rewarding charities for their big goals and big accomplishments (even if that comes with big expenses).”
Charities are currently stuck between the proverbial rock and a hard place. How can they get donations from people without spending on marketing?
Digital is changing the landscape
The rapid rise of digital platforms’ crowdfunding has led to a new trend in giving, with people donating to personal causes, such as one person’s cancer struggle, because new technologies have enabled real time and rapid social fundraising.
Crowdfunding is both an opportunity and a threat for the charity sector. On the positive side, it offers an efficient platform allowing real-time donations at a fraction of the cost of traditional fundraising methods.
But the challenge is it can bypass charities altogether, as the many stories of individual campaigns for a person’s struggle already show. These stories are very compelling, and the individuals are (usually) incredibly in need of support but it does nothing for eradicating the source problem – such as finding a cure for cancer research or addressing the causes of homelessness.
Some commentators have encouraged the sector to relax on the basis that people giving to these campaigns are new givers and not jumping the fence from the traditional charity sector. But that doesn’t solve the puzzle of how to attract (and retain) new supporters to survive.
How do we embrace the change?
Countless other industries have already been disrupted by digital. Alternatives for retail (Amazon, Ebay and Alibaba) to travel (Expedia, Trip Advisor, AirBnB) and taxis (Uber, Lyft, Juno).
It’s reasonable to assume crowdfunding and whatever else Silicon Valley has in store for us – from blockchain to cryptocurrencies – will impact and potentially upend most traditional methods of fundraising.
How quickly this will happen is unclear. But what is clear is that if we don’t rewrite the donor/charity social contract, our sector will be shattered.
Surely it’s time to rewrite the contract, so charities are much more transparent about their administration, operating and marketing costs?
For this to happen, charities will also need to inspire more people to give by showing them where their charitable giving goes, including pointing out that the funding of some level of administration and marketing is an essential and critical part of running any organisation, for profit and nonprofit alike, and not “waste or overhead” to be scorned and despised.
Lawrence Jackson is a longtime fundraising and philanthropy practitioner, consultant and commentator.