The RNID's customer care initiative

The Royal National Institute for Deaf People (RNID) like many charities is increasingly providing services under contract to both the public and commercial sector, which is why it has been pioneering a major customer care programme in the charity sector. It is the UK's largest not-for-profit service-providing organisation for deaf and hard of hearing people. Its mission is to earn recognition from deaf people as the key organisation promoting their access to society. Its recently introduced Customer Care Initiative is one of the main cornerstones in its plan to turn this mission into reality.     

Do UK charities have a lot to learn?

This article discusses the key findings of some recent research carried out into the application of market segmentation in the UK charity sector. 410 of the top performing charities (as ranked by income from voluntary donations) were surveyed to profile their major donor groups. Respondents were also asked to indicate how this data was used for fund-raising purposes both in terms of new donor recruitment and existing donor development. The findings show that with the exception of a very few large organizations, the UK charity sector still has much room for improving the sophistication of its fund-raising techniques.     

World Vision case study of Sigma,an analysis tool based on the Alterian database engine

One of the major issues charities have been concerned with for many years is the inability to access donor records for marketing analysis purposes—donor information has literally been locked up. Charity database tools such as Raiser's Edge and Alms have been built to provide donor details on a record‐by‐record basis rather than to provide summary information across the entire base. These tools carry out this function very well and have the added benefit of providing data to call centre staff as they make or receive calls from donors. As each charity has to compete more intensely for their share of donor value, however, more detailed behavioural analysis of donor bases is required. To do this, access to the entire donor data is essential, not one record at a time, but structured in a way that allows ad hoc querying. This paper discusses the various technologies that can be used to access donor data for analytical purposes and explains the merits of a new database engine developed by Alterian that allows easy and fast access to many records across multiple data tables. It also shows how one organisation has used the engine to develop a bespoke analysis tool for the charity sector and how a leading relief and development agency, World Vision, is using this tool. Copyright © 2001 Henry Stewart Publications     

Widening the appeal of charity

In the UK there is a contracting donor pool, but a significant growth in registered charities. This paper discusses the impact of individual, organisational and environmental factors on giving, and also distinguishes characteristics of givers and non‐givers. The focus of the paper is on the long‐term solution to the problem of recruitment of donors, by expanding the current supporter base for the charity sector. Copyright © 2000 Henry Stewart Publications.     

Giving donors good reason to give again

The donor bases of many charities suffer high lapse rates that both restrict growth and carry a heavy cost in recruitment needed to replace the lost donors. This paper argues that it should be possible to reduce these high lapse rates, based on the experience of businesses that have reduced their lapse rates by giving customers better value. Giving customers good value gives them good reason to come back for more. The paper looks at evidence that donors, like customers, want satisfaction in return for their money. The paper proposes a model of donor value to identify how charities can give donors more for their money, providing a route to reduce lapsing and so improve charity profitability and growth.     

Charity shops in sectoral contexts: the view from the boardroom

Charity shops seem inherently contradictory in many ways. This paper unravels some of the contradictions by analysing charity shops in their ‘sectoral contexts’. First it puts forward different meanings of ‘sector’ and introduces notions of ‘sector values’. Then it presents results from empirical research into UK charity shop organisations, to show how senior managers of charity shop chains deal with ‘sectoral contradictions’. Finally, it asks how the sectoral contexts influence the management philosophies and marketing strategies (in the broadest sense) of these senior managers. Copyright © 2000 Henry Stewart Publications     

Charity brands: A qualitative study of current practice

A number of fundraising managers and directors of UK charities were interviewed with the objective of understanding to what extent branding was used in the sector, what development possibilities exist for commercial techniques in charities, and what the constraints may be on such practices. It was found that many charities already use day-to-day brand techniques, (without describing them as ‘branding’), but brand development work was scarce. Charities have a number of objectives competing with fundraising when considering their brand content. They must also satisfy the need to respect issues about how the cause itself is communicated, and possible needs to re-educate the donor community or the public. One commercial practice in particular could be developed further in charity branding: this is the idea of using the personality of the charity itself as something with which donors could associate positively.     

Blurred vision: public trust in charities

Recent evidence that people's trust in charities is low holds serious implications for a sector that needs high levels of public confidence and support to thrive. This paper reports on qualitative focus group research initiated by the Third Sector Foresight Consortium on Trust, set up by the National Council for Voluntary Organisations (NCVO) and the Henley Centre. Strong negative views about fundraising and marketing strategies, ‘fat cat’ salaries and fraud are only partially offset by favourable opinions of the aims and role of charities in society. There appears to be a ‘blurring’ of the voluntary sector's identity and boundaries in the public mind, with overlaps with the state and business sector threatening to obscure the distinctive character of charity and widespread suspicion of the abuse of charitable status. A consequent demand for greater openness and accountability focuses on information about charity finances and performance measurement. Suggestions for further research and strategies for the charity sector to respond to the findings conclude the paper. Copyright © 1999 Henry Stewart Publications     

Strategies for competitive advantage in nonprofit organisations

In the commercial sector, a range of strategies has been proposed for competitive advantage. Many of these strategies are inappropriate for nonprofit organisations. (The terms ‘nonprofit’, ‘not-for-profit’ and ‘charity’ are used interchangeably in this paper.) This paper proposes four generic strategies for competitive advantage in nonprofit organisations: externally driven, niche, differentiation and awareness. The niche strategy has two sub-strategies: the issue or emotional niche and the geographical niche. Differentiation has three sub-strategies; differentiation by audience, differentiation by product and differentiation by belief. These four strategies are not mutually exclusive and many nonprofit organisations move from one strategy to another. A development model for these transitions is proposed.     

A qualitative investigation into the donor lapsing experience

• Donor attrition is costing charities a fortune. Previous research has examined the relative importance of the antecedents to donor loyalty versus lapsing. This study qualitatively builds on this. It reports the results of workshops and interviews that took lapsers and donors back through their donor and lapser journeys. It drills down into and unpacks their experiences—inclusive of the (previously undocumented) lapsing experience itself. It reveals striking similarities between the cancellation of a direct debit and other more conventional purchase decisions. Most worryingly, it seems that most people stop supporting a given charity because they had never really had any loyalty to it in the first place. Charities are not meeting people's needs as donors. There is a distinct lack of understanding between charities and their donors, and donors are lapsing because charities give them little reason to stay. The authors conclude with practical recommendations for the management of attrition.

Copyright © 2009 John Wiley & Sons, Ltd.     

Relational exchange in nonprofits: The role of identity saliency and relationship satisfaction

In practice and research pertaining to charitable giving, the emphasis has been on identifying the characteristics and motivations of donors, but few have asked why donors continue to support a particular nonprofit. This study examines the relationship between renewing donors and nonprofits and their impact on charitable giving levels using identity salience and relationship satisfaction as key mediators of nonprofit relational exchange. In a survey of 719 repeat donors in the United States, to a broad range of nonprofit organizations, identity saliency and relationship satisfaction are introduced as mediating constructs, and the results confirm that both constructs partially guide donor motivations and charitable giving. Theoretically, this suggests that the more a donor identifies with a nonprofit organization and the more satisfied the donor is in the relationship with the organization, the higher their intention to donate. This finding supports previous research in segmentation strategies and service‐dominant logic in the nonprofit sector. Managerial implications of this research include indication of a paradigmatic shift from relational exchange to transformational exchange (or value cocreation) in nonprofit organizations' approach to donor cultivation.     

Brand orientation in charity organisations: qualitative research into key charity sectors

The study explores, through qualitative research, levels of brand orientation in large, medium and small‐sized charity organisations where brand orientation refers to the extent to which the organisation regards itself as a brand. The results indicate that charity managers are largely endorsing the conversion from charity organisation to charity brand. Brand status was seen to offer a shorthand communication of what the charity organisation did, its cause, and what it represented, its values. Significantly, it was also seen to fulfil organisational objectives such as raising awareness, building trust, fundraising and parliamentary lobbying, with a more focused and more consistent communication of what the organisation stood for. Strategically, however, charity organisations were not making the best use of their brands. It was suggested, for instance, that more sophisticated targeting of key donor segments with research‐based, tailored messages, might help reverse the trend of declining donor numbers. Overall, however, the study provides much evidence of brand orientation in the charity sector with most charity managers clearly wedded to the concept of putting the brand at the heart of the organisation. The charities that enjoyed a full commitment to the branding process from all their stakeholders were best placed to reap the benefits of charity brand status. Copyright © 2000 Henry Stewart Publications.     

The diary of a charity donor: an exploration of research information from the Royal Mail Consumer Panel and Mail Characteristics Survey

This paper looks at direct mail in the United Kingdom across all market sectors and in detail at the charity sector. It uses the research information that Royal Mail has been collecting foroveradecadetoshowthegrowthofthe medium. The diary system used by the Consumer Panel gives an insight into the typical donor and their relationship with charities. This paper looks only at direct mail: ‘personally addressed advertising material that is delivered through the post’. This definition means that leaflets put through the letterbox are excluded. Copyright © 1999 Henry Stewart Publications     

Market segmentation - are UK charities making the most of the potential?

This paper discusses the findings of research carried out into the application of market segmentation in the charity sector. Four hundred and ten of the top performing charities (as ranked by income from voluntary donations) were surveyed to determine what techniques of segmentation they apply to their database. They were also asked to indicate how this information is used to inform and determine appropriate fundraising strategies. The findings show that with the exception of a few large organisations, the concept of market segmentation is as yet not utilised to its full potential in the development of successful fundraising strategy.     

Prosocial customer in the public sector: A PLS-SEM analysis applied to blood donation (active donors)

The act of donating blood creates social and public value (as a transformative service), but donors do not always repeat, so this study analyses the antecedents of attitudinal loyalty in donors. In addition, this research identifies active donor profiles to design personalised strategies to increase customers’ attitudinal loyalty. An online survey was conducted with 30,619 active donors who have donated blood at least once over the past two years. The study applies a quantitative modelling model called Partial Least Squares-Structural Equation Modelling (PLS-SEM). Analyses confirmed that motivations, obstacles and service quality influence satisfaction and donor attitudinal loyalty. Also, three active donor clusters were identified, as donation centres must adjust to each cluster to create value for society. This research contributes to understanding the factors that increase donor loyalty and closing a gap in the literature on prosocial consumer behaviour, and thereby other public services that depend upon the willingness of the individual. Furthermore, this approach enables the design of a more effective policy agenda and helps to focus public investment on developing strategies to engage willing and experienced donors.     

Changes in UK tax‐effective giving: implications for donor fundraising strategies

Strategies for fundraising from committed donors in the UK have long placed considerable emphasis on tax‐efficient giving, in particular the use of deeds of covenant and gift aid which enables charities to recover tax paid by the donor and thus increase the value of a donor's gift. However, recent developments and proposed developments in UK legislation and Inland Revenue procedures are about to make radical changes to this regime. Although in general the changes are beneficial to charities, the precise implications will, in many cases, require a significant change in fundraising strategies to make effective use of the new giving environment. This paper seeks to analyse the nature of those changes and the consequence for fundraising strategies. In relation to three main strategies some approaches to further research are proposed, which a charity may wish to apply in order to assess whether and to what extent new approaches to committed donor fundraising are required. A preliminary version of this paper was presented at the Institute of Charity Fundraising Managers Convention (Academic Stream) in July 1999, but it has been substantially changed to take account of further government announcements made in November, 1999. Copyright © 2000 Henry Stewart Publications     

Doing well by doing right: a fundraiser's guide to ethical decision‐making

• The level of trust a prospective donor has in a charity will, in part, determine whether the individual chooses to support the charity as well as the amount of that support. A key factor involved in trust is an organization's ethical standards. Donors prefer to make donations to organizations that maintain the highest principles. If an organization can consistently make the best possible, most ethical decisions, it will be recognized as being an ethical institution, which in turn will enhance the trust it engenders, and, therefore, the support it can attract. A number of ethical decision‐making models exist. Adopting a decision‐making model will ensure that a methodical approach is used and that the incidents of rash decision‐making will be reduced. Using an ethical decision‐making model will help individuals arrive consistently at the best solutions to ethical dilemmas, defend those decisions, enhance public trust, secure more donors, and raise more money. The value of sound decision‐making and effective ethical decision‐making models are reviewed in this paper.

Copyright © 2005 John Wiley & Sons, Ltd.     

A processing fluency perspective on overhead aversion: How much is too much?

Overhead aversion has afflicted the nonprofit sector in recent decades. Yet, questions remain regarding how high is too high from a donor perspective and at what level overhead expenses just “feel right.” Using processing fluency as a theoretical foundation, the central purpose of this research was to investigate whether a nonprofit overhead ratio fluency level exists that significantly reduces both donation likelihood and nonprofit perceptions. Results from two studies show that a 25% overhead ratio appears to be the proximate ceiling regarding what fluently fits within a potential donor's schema for acceptance. Overhead ratios exceeding this threshold tended to decrease donation likelihood and nonprofit perceptions in a relatively stable manner. Moreover, the 25% threshold seems most relevant to human and animal causes and not as relevant to arts and cultural nonprofits such as museums. The results suggest that donors have a preconceived overhead ratio limit. Nonprofits that exceed that threshold are in danger of deterring donors. If nonprofit overhead ratios exceed the donor fluency threshold, nonprofit managers should consider distinct promotional strategies that entice donors and diminish overhead aversion effects.     

How to make sure your donors read your publications

Voluntary organisations pour large chunks of their usually slender resources into producing publications in the hope that these will carry their many promotional messages to a variety of audiences, particularly donors and other supporters. The authors feel that little is known about how donors view and use these publications and whether or not their senders get good value for money. This paper presents an outline of findings from research recently commissioned by the authors into how donors read and use the publications and other printed communications sent to them by charities they support. The conclusion is that many charities could take simple actions to improve their publications, and some suggestions are made. From the authors' experience they supply guidelines charities can follow if they wish to change the way donors perceive, read, enjoy, remember and respond to the publications they send. Also included is a checklist for basic strategic planning so that any charity can ensure that tomorrow's donors will receive communications based not just on what the charity wants to send, but also on what the intended audience wants to receive.