Cathy Pharoah: Charities should pool data on the recruitment and retention of donors

Attrition rates are not necessarily an indication of failure, says our columnist; what matters is the size of the donor base and its lifetime value

Cathy Pharoah
Cathy Pharoah

Doing surveys can be a thankless task. Months of work collecting data boil down to a couple of key results that can then backfire. Such was the fate of the recent Donor Attrition and Retention Survey. The Public Fundraising Regulatory Association attracted little praise for its heroic efforts to increase survey participation (which went up) and increase transparency about the annual return on investment from face-to-face fundraising, while its results on attrition rates prompted a new round of criticism.

Yes, face-to-face fundraising is a contentious approach, and this makes the recent allegations of poor practice in The Sunday Telegraph, and the fall in standards mentioned by the PFRA's Nick Henry, doubly worrying. Yet the flak about face-to-face attrition rates comes in a vacuum, because we provide almost no other comparable ROI benchmarks. What about direct mail, TV and advertising returns?

Payroll giving attrition is said to be 10 to 15 per cent a year, and research has suggested a general sector attrition level of 30 per cent. But there is a big gap in the maths here. If overall attrition is really 30 per cent, wouldn't the number of charity donors be constantly growing? Data on participation in giving surveys by the National Council for Voluntary Organisations and the Charities Aid Foundation indicate that the number of donors hasn't increased since 2005 at least. Over the longer term we seem to be recruiting and losing donors at roughly the same rate, with no overall net gain.

Attrition rates are not by themselves an indicator of failure. Web-based marketing, for example, reaches ever more potential customers at ever lower costs and rates of sales conversion. What matters is whether the customer or donor base grows overall, and how much lifetime donor value offsets costs over the longer term. This is where charities would benefit from pooling data on recruitment and retention to build a complete picture of cost dynamics in the fundraising market. Perhaps the Institute of Fundraising could take a lead on this. Then we might identify the black hole into which donors disappear.

The PFRA sets an excellent example in monitoring face-to-face, enabling the sector to examine impact in a hugely important area. Face-to-face fundraisers are the high-profile 'front of house' of the major charities whose brand values make it legitimate for fundraisers to speak to strangers on the street. That brand value is the most valuable asset that the sector as a whole possesses - not just individual charities. Yet we risk damaging it through fundraising that, in spite of some success, is contentious, is outsourced and involves only basic training.

It is vital that we get our contact with the public right. We need to invest in quality, compare the long-term performance of all fundraising methods and review the most effective role face-to-face can play in the total fundraising ecology.

Cathy Pharoah is professor of charity funding at Cass Business School

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