It takes the average charity two years to recoup the money spent acquiring a donor who gives about £5 a month, according to the fundraising consultant Ken Burnett.
Burnett, who sits on the Commission on the Voluntary Sector and Ageing, gave a presentation to a round table on the future of fundraising in an ageing society at New Philanthropy Capital’s offices in London yesterday.
He said that too many donors did not continue supporting charities long enough to repay even their acquisition costs. "From the viewpoint of a donor giving an average £5 a month, it will be two years before any of the money that they’re giving goes towards the cause they think they’re giving it for," he said. "We’re coming close to eating our seedcorn, which has got to be the ultimate stupidity for a sector."
In an informal poll of donor recruitment costs, Burnett said, he found that a regular donor acquired through face-to-face methods cost a charity £160 on average, while a £5 ask by mobile phone cost £90, a two-step regular gift conversion was typically about £164 and a £3 regular donor acquired through the radio or press cost between £72 and £140, not taking into account overheads.
Paul Farthing, director of fundraising at the NSPCC, told the meeting that a bigger issue for the sector could be the increasing pressure from the public to reduce the number of charities. "The public will absolutely lose the plot when they work out that there are 400 military charities, 700 cancer charities and whatever else," he said.
He said one solution was for multiple charities to operate their brands under the same umbrella organisation. "You could have Breast Cancer Care, Breast Cancer Campaign and Breakthrough having one back office and one chief executive but three brands in the market talking to three different audience groups," he said, predicting that the mainstream media would soon bring focus on this area.
Farthing said donors were less inclined to commit to charity on a regular basis and that in 10 or 20 years’ time more people were likely to make donations of between £100 and £250 once or twice a year. "We’re entering an age of mini-philanthropy where people are seeking to feel as good as on the Secret Millionaire programme they see on TV by writing a cheque for £250," he said.
He said charities would need to think about redesigning their communications to target this new type of donor relationship.