Charity Trends Are All Wrong Due To Fear, Uncertainty and Doubt

The article below is based on some recent great work from my old company Qbase. It seems to me that charity Trustees and Directors need to realise the long term impact of their actions. Over the past few years, Supporter Acquisition has been cut significantly - largely due to the poor press charities received and the resultant ICO targeting and fining of charities. Fear, uncertainty and doubt over GDPR, (consent, legitimate interests, Privacy Policies & statement wording, record enhancements & profiling) plus concerns over the compliancy of 3rd party prospect sources has stopped many charities' recruitment activities, or reduced it significantly.

Report: Donors lapsing from databases faster than they are added

New research has shown that the numbers of supporters lapsing outweighed new supporters by five to three on databases in 2016, in what the report said was an “emerging trend”..........read more

Prospecting is generally a loss-making activity. Retention and subsequent gifts turn an unprofitable first-time-giver into a profitable Supporter - that typically takes 12 to 24 months from recruitment. So many charities will be seeing an improved bottom line due to the reduction in Acquisition costs.

BUT BEWARE!

Without a viable influx of new givers who can be converted into Supporters, the long term effect will be dire. As the income from the active base reduces (due to file shrinkage), the short term profit increase will reduce until, at some point in time, overall profitability will decline. Judging by the Qbase research, that point in time is imminent. On average 5% of the active Supporters are lapsing, whilst only 3% of the average database are "new". So filesizes are shrinking. And reversing the trend of a reducing filesize is hard. Very hard. And it takes substantial investment in acquisition, followed by a 12 to 24 month period before those new Supporters start making a positive contribution. Maybe now is a good time to check on your charity reserves?!The good news is that, whilst clarity over GDPR and the concerns listed above has been slow coming, the industry is in a more informed place now. At Kudos we are working with clients across all sectors to ensure compliance and to develop suitable acquisition, retention and reactivation strategies. Done properly, data enhancements, profiling, targeting and direct marketing CAN be undertaken. Privacy Policies and statements, compliant consent, etc CAN be implemented. We understand PECR, we understand GDPR - most importantly we understand data, direct marketing and how to develop effective, compliant strategies.Contact Us!To find out more about Kudos Data Solutions and our Data, Systems & GDPR services, please click here or give James Squires a call on 0330 043 1593 or email james.squires@kudos-data.com