We look at the technologies that are shaking up the way people giveFUNDRAISING

THE FUTURE OF

THE FUTURE OF FUNDRAISING

potential breaches of data protection rules. So could digital innovation be the answer to the sector’s woes?

Branislava Milosevica, digital transfor-mation consultant for several prominent charities, believes the answer is yes. “We need to create a range of fundraising prod-ucts that truly live in the digital ecosystem, where the majority of our supporters are and will increasingly be in,” she says. “Such a model will help us create a new genera-tion of donors before the current charity fundraising model collapses – because make no mistake, collapse it will.”

Her comments are in line with the pro-jections of the country’s biggest online giving platform, JustGiving, which cur-rently processes the vast majority of digital donations in the UK. Its chief marketing officer, Charlie Wells, optimis-tically predicted earlier this year that online giving would represent almost half of all UK giving by 2020.

JustGiving and other online giving plat-forms such as VirginMoneyGiving and BT MyDonate dominate in the online giving space at present, but the recent launch of Facebook’s updated “donate” tool in the US suggest this dominance may well come under pressure in the not too dis-tant future. Other innovations such as contactless donations, virtual reality fundraising and crowdfunding through websites such as GoFundMe and Indiegogo could also shake up the world of digital fundraising.

Sceptics point out that the internet has been around for almost 30 years, yet only 16 per cent of charitable donations were made online in 2015. But Matt Haworth, author of The Digital Fundraising Book, says in his book that it is only a matter of time before digital takes over.

“As our population ages and old donors die off, the public will become increasingly hostile towards old-school techniques,” he says. “Intrusive offline fundraising doesn’t have a place in a world of digital communication that peo-ple are used to being in control of and participating in.”

In the following four pages, we look at how technology is being used in five areas of fundraising and assess the likelihood of future success.

Traditional fundraising techniques have come under intense pres-sure over the past 12 months: numerous telephone fundrais-ing agencies have gone under, income

from face-to-face fundraising is at its low-est level since 2009/10 and several major charities are under investigation for

With traditional fundraising channels

facing big challenges, is digital about to take over?

Susannah Birkwood reports on the

emerging trends

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Katie Cutler and Alan

Barnes, for whom she

raised money

When Katie Cutler started raising money last year for Alan Barnes, a disabled pensioner who was mugged outside his home, she bypassed the charity sector.

Rather than raising money for a charity that worked with victims of vio-lent crime, she created a page on the crowdfunding website GoFundMe so that the money people donated would go directly to her and she could pass it to Barnes. She raised £329,000 in a week.

Donation-based crowdfunding is part of a trend in which people are relying less on charities to help them fulfil their phil-anthropic aims. At a time when trust in charities is at a record low, some people are opting to remove them from the equation altogether.

Others – such as the friends of the mur-dered MP Jo Cox, who raised £1.5m on GoFundMe for Hope Not Hate, the Royal Voluntary Service and the White Helmets – are attracted to the way that crowdfund-ing sites allow them to raise money for several charities at once. Unlike event-based fundraising pages, which send the money directly to the charity concerned, crowdfunding sites direct the money to the fundraisers, who can then split it

among several different organisations. The downside is that they do not allow donors to claim Gift Aid and, in the case of GoFundMe, they take at least 6.4 per cent of every donation as profit.

JustGiving estimates that this form of fundraising will raise $1.3bn for good causes in the US this year and, though the UK market is much smaller, according to the innovation charity Nesta it grew by 500 per cent to £12m in 2015. Nesta says it could soon have significant implica-

tions for community and voluntary sec-tor organisations in this country.

Will the implications be positive, though? Several small and medium-sized charities have begun curating their own crowdfunding campaigns (see Case Study, below), but there is concern that charities could lose out on donations as a result of supporter-led campaigns that cut them out of the loop. Charlie Wells, chief operat-ing officer at JustGiving Crowdfunding, says that in the US the rise of crowdfunding has caused competition for fundraisers. “People who create personal crowdfund-ing pages aren’t going on to create charity fundraising pages,” he says.

He says JustGiving’s own platform, launched in 2013 as Yimby.com and rebranded last year, expects to crowdfund £50m for good causes this year, but only 20 per cent of this will go to charities. Wells nevertheless believes charities stand to gain more than they will lose because some platforms, such as JustGiving Crowd-funding, send fundraisers information about charities related to their interests, which makes them more likely to support those organisations in future.

Eleanor Harrison, chief executive of Global Giving, one of the longest-running of the 700 online crowdfunding plat-forms, is also positive. “The average first-time campaign raises about £7,500, so it’s not a solution for everybody – but it’s an amazing way to kick-start or expand your online fundraising,” she says.

Dignity in Dying chose the website Crowdfunder to raise the £10,000 it required in August 2015 to fund a series of advertising billboards that urged MPs to support the Assisted Dying Bill. “We’d never done anything like it before,” says David Pearce, the charity’s director of fundraising and marketing. “We weren’t sure whether our audience would respond well to crowdfunding, but we needn’t have worried.” The campaign reached its target within three days and within a further three weeks it had raised £30,000. Dignity received more than 1,100 gifts and 239 new donors from the campaign, Pearce says. The average pledge was £27 – a similar value to the charity’s average direct mail donation – and 85 per cent of pledges came from people signed up to Dignity’s email list and social media accounts. “This would not have worked if we hadn’t spent months before emailing people every week and building up people’s knowledge of and affinity to the campaign,” says Pearce.

CASE STUDY Dignity in Dying

Is crowdfunding the wave of the future?

THE FUTURE OF FUNDRAISING

Charity shops posted their slowest growth in more than a decade last year, when income rose by 2.6 per cent compared with 2014. Their sales on eBay, how-

ever, grew by 17 per cent to £16m. Nick Aldridge, chief executive of the

PayPal Giving Fund, says: “The conveni-ence of shopping online means that online sales are continuing to grow across the retail market, and that’s very likely to continue, whatever people say they prefer in terms of an experience.”

The PPGF certifies charities to partici-pate in eBay for Charity, a dedicated fundraising area of the main site where they can host auctions, sell items to sup-porters and receive donations from eBay buyers and sellers.

“Over the past few years, charity shops have faced more of a struggle for growth on the high street, not least because of the falling price of rag,” says Aldridge. “That’s making them a bit more entrepre-neurial about exploring different revenue streams like this.”

What is happening at eBay for Charity appears to contradict the findings of an nfpSynergy survey carried out last year, which found that, asked where they would shop for various items, 54 per cent of people said they preferred charity shops and only 40 per cent preferred online marketplaces such as eBay.

But Aldridge cites the British Heart Foundation – which runs the nation’s largest network of charity shops – as a shining example of how a charity eBay shop should be run (see Case Study).

Ambitious charities that are not yet at this level can access free consultancy from eBay for Charity to help them get there, Aldridge says. “If they’re growing fast or facing challenges, we have experts who go in and help them solve those problems. It’s available to any charity that enrols or re-enrols with the PayPal Giving Fund.”

Aldridge says that at least 2,000 charities are yet to re-enrol with the fund after it replaced its website with a new PayPal-based platform earlier this year. Some of these charities have thousands of pounds in their accounts, he says, but might not realise they cannot access this money without registering on the new site.

eBay for Charity has an ongoing part-nership with the video games retailer Humble Bundle, which raised £1m for charity last year by means of a “choose your own charity” feature through which customers could make donations when

they made purchases. Its ambition for the new platform is to form more partner-ships with other online marketplaces.

eBay for Charity is also trying to increase the number of sellers who donate a proportion of their proceeds to charity. Charities received a combined £1.5m in this way in 2015, and Aldridge expects this to rise significantly in the coming years because the company recently started promoting the option of donating to its casual sellers.

“It’s a much greater audience than we’ve ever had before,” he says.

In 2006 the British Heart Foundation became one of the first charities to launch an eBay shop. For the first five years, the charity generated sales of about £165,000 a year, but in 2013 it invested in a dedicated warehouse in Leeds so that merchandise sent from shops across the country could be processed by a team of experts, each with a specialism in different types of goods. Sales rose to £1.5m in 2014 and, according to Mike Taylor, BHF’s retail director, they are now growing at about 25 per cent a year. Staff in BHF’s 737 shops receive regular training so they can identify valuable items such as first-edition books, vintage toys and certain medals. They do this by using websites including ValueMyStuff and the paid-for service Terapeak, which allows them to check the popularity and average selling price of any item they want to sell. The most unusual item the BHF sold on eBay was a ventriloquist’s dummy; the most expensive was a £3,500 Chanel handbag.

CASE STUDY British Heart Foundation

How eBay has changed the game for charitable retail

BHF: one of the first with eBay shop

Customer relationship manage-ment software systems have become an essential fundrais-ing tool, helping charities to segment their donor bases, sub-

mit Gift Aid claims electronically and monitor who they contact and when.

In 2015, the digital marketing agency Positive and CharityComms surveyed 74 charities and found that three-quarters used CRM systems, although many said they had concerns about the software.

The charity digital consultant Ben

Blankley believes that a good CRM sys-tem is the single most important tool charities should invest in to take their fundraising communications to the next level. “When you begin to scale your oper-ation upwards, the three magic words are data, data, data,” he says. “A series of Excel spreadsheets won’t cut it. Neither will that note stuck to your monitor.”

John Bird, the managing director of Blackbaud Europe, estimates that about 2,000 charities use CRM systems, of which about 1,450 use Blackbaud’s prod-

CRM is moving with the times

WaterAid decided to change from Raiser’s Edge to Microsoft CRM Dynamics in 2014 because it felt Blackbaud’s system was limiting its supporter engagement ambitions.

“We also noticed that the rapid growth of our dataset was affecting system performance and we were concerned that the resulting effect on usability would become unacceptable,” says Simon Capper, the charity’s head of performance and insight.

The move to the new system took two years and it was launched in June this year. Not only did the charity set aside the appropriate funds to cover the costs of the IT consulting firm Ciber, but it also made sure it had its best, most experienced staff working on the project full-time for its duration.

Capper says the new system has already saved the charity “many hours”, but admits the learning curve for staff has been steep. “There is just so much that is new and unfamiliar,” he says.

CASE STUDY WaterAid

ucts, making it the clear market leader. The benefits include the ability to keep track of donors and marketing interac-tions with them; the ability to share data with different teams across organisations; the ability to store data in one location; and the ability to quickly generate reports on donors for funders or trustees.

Another benefit that might soon be added to the list is the ability to comply more easily with new fundraising regula-tions, such as the impending Fundraising Preference Service. Bird says Blackbaud wants to develop its software to help charities capture donors’ communica-tions preferences and enable them to bet-ter communicate their impact.

“CRM systems need to be at the heart of how charities manage these new regu-lations,” he says.

Blackbaud has long been the market leader for CRM systems, but two US-based companies have been threatening this dominance over the past few years.From 2010, Microsoft Dynamics and Salesforce began tempting many large charities to move to one of their so-called platform CRM packages because they were dissatisfied with the package prod-ucts produced by Blackbaud and its main competitors. Bird claims, however, that the move to newer platforms has been a disaster for some charities. “They have some missing functionality, such as the ability to process monthly direct debits and claim Gift Aid,” he says. “Charities have invested huge amounts, but it’s not paid off.”

Iain Pritchard, a partner at the charity IT specialist Adapta Consulting, says charities that move to platform CRM packages can face costs in excess of £1m.

Not every charity has come to regret its decision to change provider, however. WaterAid, which had used Blackbaud’s flagship product, Raiser’s Edge, for 25 years before moving to Microsoft CRM Dynamics two years ago, says it has re-cently started to reap rewards from the new system (see Case Study, left).

THE FUTURE OF FUNDRAISING

During two weeks this summer, thousands of people went shop-ping at two of London’s busiest shopping centres, but found themselves in a forest filled with

Bengal tigers. Thanks to virtual reality headsets, about 5,000 shoppers in the Westfield shopping centres were trans-ported to the tigers’ forest habitat in Nepal. It was all part of WWF’s Tiger Experience, a virtual reality experience designed to combat the public’s negative perception of face-to-face fundraising. “A lot of face-to-face agencies base everything on volume of sales, but it’s more effective to inspire people,” says Gabriel Hartnell, senior fundraising campaigns manager at WWF UK. “We wanted to increase the number of recruits per fundraiser through fun and engaging content.”

The 360-degree CGI film used for the Tiger Experience was the first of its kind, but WWF isn’t the only UK charity to have experimented with virtual reality fundraising. In January, Unicef began working with the face-to-face agency

Together Fundraising to showcase Clouds Over Sidra, a short VR documentary about a Syrian child refugee, at a number of private sites.

And from May 2015, Amnesty Interna-tional ran a three-month VR street fundraising campaign in which in-house fundraisers showed potential donors 360-degree photographs of the devasta-tion caused by barrel bombing in Syria. It has not repeated the campaign, but in March it began a website that offers a “virtual tour” of Syria.

It’s still not clear, however, whether VR increases donations. Hartnell says WWF attracted an average of 16 new donors a day during the Tiger Experience, a 50 per cent increase on the 11 it normally signs up in two weeks. But he says that average direct debit values remained static at about £7 a month.

David Cravinho, the global fundraising specialist who led Unicef’s testing of VR technology for fundraising, says that on average it might take a fundraiser between 10 and 13 conversations to sign

up one regular donor, but with VR that number typically comes down to about five or six. Amnesty says it recruited 1,935 regular givers from its VR street campaign, which it says equates to a yearly income of £170,000.

Hartnell says another big advantage of VR is that is gives charities access to private sites they might not otherwise be able to use for fundraising. Many shopping centres have banned face-to-face fundraising because they believe it irritates people, he says, but often they are willing to work with organisations doing experiential marketing because it draws customers in.

Mink Boyce, client services manager at Together Fundraising, agrees that VR has a tremendous pull factor with the public. “People see it in shopping malls now and say ‘what’s that?’” she says. “It has an immediate appeal.”

But it won’t be a novelty in face-to-face fundraising circles for much longer, she says, so charities that want to try it should seize the moment now.

Early days of virtual reality suggest it has a ‘pull factor’

Since the Royal British Legion became the first UK charity to use contactless technology in October 2012, when it used mobile card payment terminals

sponsored by Barclays during London Poppy Day, other organisations have followed suit with ever more crea-tive ideas. In 2015, Comic Relief used contactless on statues of celebrities such as Rowan Atkinson and Dawn French, and in May this year the Blue Cross began using it on jackets sported by the dogs it takes to its awareness-raising events.

Cash is still the most popular way for people to make ad hoc donations to good causes, according to research by the Char-ities Aid Foundation and YouGov, but allowing supporters to donate by the tap of a card means that charities are gaining access to a market that almost tripled last year in the UK to about £1.5bn of transac-tions a month.

The technology is a good way for chari-ties get closer to people who might other-wise give them a wide berth, the research

shows. YouGov found that 18 per cent of people said they would be likely to do-nate to street fundraisers if they could pay by contactless, and people who avoided direct debit sign-ups because they were uneasy about sharing their personal in-formation gained comfort from knowing their donations were anonymous.

The anonymity of contactless is a big disadvantage for charities, however. Mar-tin Gill, director of the consultancy HomeMade Digital, says such donations pose a challenge to supporter relations and finance teams because their inability to capture donors’ data means charities cannot build relationships with people who donate in this way, nor can they claim Gift Aid. Payment providers are working on developing the technology’s functionality to correct these downsides, he says.

Gill is also concerned that the method – which typically asks donors to pay a fixed low-value amount – could negative-ly affect the average value of donations. He says that charities should persuade do-

nors to give £5 or £10 rather than lower sums in order to avoid the administrative burden of having thousands of people donate tiny amounts.

The charities that have experimented with this technology so far have raised relatively modest amounts. The food poverty charity Mary’s Meals, the recipient of a contactless initiative developed by the marketing agency Earnest, has raised less than £1,000 in five months, and Comic Relief said it did not raise significant income from its 2015 project.

The Blue Cross, Save the Children and Sue Ryder all declined to say how much they had raised from their respective contactless trials. The Mayor of London’s contactless scheme Penny for London closed down this summer, having raised a fraction of its target.

Gill believes the best strategy for smaller charities that are unsure about exploring the technology is to wait until the larger organisations have got more of their supporters donating in this way.

Jury still out on value of contactless donations

THE FUTURE OF FUNDRAISING