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In 2019, we celebrate a new chapter in Pareto Fundraising’s Benchmarking: being one step closer to delivering ‘Benchmarking live’ through an interactive online portal. It will better help charities turn insights into action, find solutions to fundraising challenges and identify opportunities for program development.

To produce this year’s report, Pareto’s team of data scientists and engineers crunched the data on 22.4 million donors, 208.7 million gifts and analysed 237 million rows of data from member Australian charities.

The full data analysis and reports belong to the charities who participated in Benchmarking. But in the spirit of sharing, here are some of the key learnings.

FUNDRAISING INCOME HAS PLATEAUED

Overall, the amount of fundraised income from the member charities plateaued in 2018. This was mainly due to regular income (face to face) not growing for the first time in 10 years of Benchmarking. Member charities have commented that face-to-face volumes are most likely down because of supplier capacity, increasing prices, and other issues such as increased compliance requirements. As this is the first year this has happened, it’s too early to tell if this represents a trend, but it’s one that we will watch closely over the coming year.

In terms of channels showing improved performance results, online, social media (ie, Facebook), telephone and broadcast media (ie, direct response TV) are key channels for driving growth. As is bequest income.

THEY’RE NOT YOUR DONORS, YOU’RE ONE OF THEIR CHARITIES

About 40% of all donations received by member charities in 2018 were from donors who also gave to at least one of the other member charities over the past decade. Active single-gift donors supported, on average, 2.65 member charities in 2018. Active regular givers supported an average 2.21 member charities. And that’s only amongst the 56 members whose data was analysed in the cross-pollination section. What this tells us is that most charities share a lot of their donors with other charities. But it’s not particularly bad news. The more charities a donor supports, the more loyal they are to each and every one of them. Especially compared to donors who support just one cause, who have the lowest loyalty (retention) rates.

What lies beneath the numbers?

  • It’s important to show your donor that your organisation is the best way to meet their aspirations or they might switch their giving.
  • Meeting donor service expectations – consistently – can have a significant and positive influence on the loyalty and lifetime value of your donors.

IT’S NOT ABOUT ONE GIFT – IT’S LIFETIME VALUE THAT COUNTS

In 2018, one-third of charitable income came from long-term donors who had been giving for five or more years.

Benchmarking shows single-giver retention is just 42 donors in 100 (42.88%). This statistic alone presents one of the greatest risks to future income stability, as most mid-value, high-value and bequest giving comes from long-term, single-gift donors.

To make an investment in a single-gift acquisition program pay off, organisations need to focus on strategies and channels that yield stronger future income. Setting and measuring ROI over a longer period and then investing in donor development to realise longer-term income from mid-value and bequest income is crucial.

What lies beneath the numbers? 

  • Reducing donor attrition is the least expensive and most successful strategy to increase fundraising income.
  • Retention strategies require a long-term view. Investment of time and money needs to be made throughout a donor’s time as a supporter.

IT’S A GREAT TIME TO BE WORKING WITH GIFTS IN WILLS

Gifts in wills are really coming into their own and taking pride of place in the fundraising portfolio. in 2018, In 2018, $258 million was received, the largest figure ever reported. The average bequest value was $65,000. Bequests continue to come from two main longer-term sources: active single-gift donors and non-face-to-face regular givers (some of whom also make additional single gifts).

What lies beneath the numbers?

  • An organisational strategy to grow gifts in wills is critical for organisations committed to long-term, sustainable funding streams.
  • With gifts in wills typically starting to be realised by seven to 10 years after confirmation, a move from short to long-term thinking is required – typically as part of lifetime value modelling.

THE RISE OF MID AND HIGH-VALUE GIVING

There has been 11 years of steady growth in higher-value donations. There are more donors giving high-value gifts, with a 1.4% increase in the number of donors giving a gift over $5,000. But there are less donors giving $1,000-$5,000, with a 2.4% decrease in donors. However, our Benchmarking shows that most charities are still under-performing when it comes to high-value fundraising.

What lies beneath the numbers? 

  • The best fundraising ROI comes from high-value giving groups.
  • Fundraisers need to seize the opportunity to develop their mid-value fundraising strategies as a key feeder to high-value gifts and bequests.

REGULAR GIVING – STILL THE ENGINE ROOM OF FUNDRAISING

Regular giving has been a reliable driver of growth across the sector for the past decade, but it’s starting to show signs of a plateau, mostly through an income drop in the face-to-face channel. Even so, it’s still the channel driving a large volume of new donors into the market. But today, the organisations really making regular giving work are those using a variety of channels to capture regular givers to diversify risk.

What lies beneath the numbers?

  • The best regular giving results come from a mix of solicitation channels.
  • Fundraisers need to play the long game – looking at returns over five-plus years and building donor engagement towards a bequest commitment.

ONLINE INCOME AND TRAFFIC IS GROWING STEADILY

Online income has grown 280% since 2009 and 64% since 2014. And charity website sessions have grown more than 100% since 2014. Just over $119 million was attributed to online giving via the member charities, which reflects 8.4% of the total $1.414 billion in charitable contributions made in 2018.

Online giving has not yet filled the gap left by reduced investment in other channels (ie, direct mail) but this may slowly change as the Builder generation (donors aged 70-plus) ages out.

So, don’t over-invest while the return on investment is still low, but invest to build your digital community and infrastructure. And work hard to understand how your donor moves across many touchpoints and devices before they make the decision to donate.

What lies beneath the numbers?

  • Invest in a steady digital fundraising strategy that has a three to five-year return on investment.
  • Digital fundraising is not an isolated channel.  Your digital program should be part of an investment in a mix of healthy channels.

AND AS TO THE FUTURE…

There is no silver bullet as to where ‘the next big thing’ in fundraising will come from. Future income growth will come from diversifying your income across a range of channels, and knowing how those channels work alone and together.

The future is data-driven fundraising, so make a long-term business case and investment in the fundamentals of data hygiene, integrity and donor development.

The 2019 Pareto Benchmarking Study includes 161 graphs and tables illustrating the statistical findings from the analysis and recommendations as to how fundraisers can use this information to build better relationships with their donors and raise more money.

To find out more, contact Clarke Vincent at [email protected] or 02 8064 5420.


Clarke Vincent

Clarke is Development Director at Pareto Fundraising. Clarke has developed a strong passion for innovation in fundraising over the past decade at Pareto. He enjoys discussing insights and strategy that help to start fruitful relationships with charities that seek help with fundraising.

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