By Robin Thomas CFRE, Chief Executive, Morgen Thomas Ltd
With contributions from Frank Warn FCCA, CPA (Aust), Associate Director, Morgen Thomas Ltd
We are seeing a variety of reactions (and indeed actions) from the charities with whom we work – in both fundraising and management consultancy capacities – to the unprecedented times in which we find ourselves. Some have virtually completely retrenched; they are waiting for the world to change and hoping for the best.
Others are proactively addressing how they resource and deliver their charitable activities, and are embracing new ways of working – such as using digital channels. In this they are balancing both cash preservation and income generation.
Their starting point, of course, is the need to survive in order to continue serving their beneficiaries and fulfilling their missions: revising existing budgets to identify immediate cost savings to prolong cash flow and ensure financial stability to fullest extent possible; revisiting contracts and the like; so their charitable work can continue into an indeterminate period and thrive in uncertain times.
However, the pandemic is also requiring us to think differently about fundraising. Not merely with virtual events or doing more appeals online, but by fundamentally rethinking relationships with our donors, and in two related ways.
The first rethink we encourage with our clients is a commitment to donor retention: concentrating on repeat donors, investing in them and upgrading them. Poor donor retention requires an organisation to invest heavily in finding new donors, and this is always one of the most challenging -and expensive – aspects of fundraising, and even more so at a time when wider society is so preoccupied.
The cost of losing regular donors is immense. A recent study in the US found that every $100 gained in 2017 was offset by $96 in losses through gifts not repeated. Even more stark: the 54% increase in income came from long-term donors giving more, yet this was counteracted by a 52% loss from gift attrition. All that work for a 2% net increase.
The second rethink is this: we are finding that committed regular donors can be the basis for successful fundraising to grow reserves and even to build endowments, not to make the charity ‘rich,’ but to ensure resilience. Charities who do outstanding work in stewarding their supporters are finding ready audiences for this message. Committed donors are being shaped by what they see going on in the world right now. They are keen to know their cause is thoroughly prepared for the future, whatever it might hold.
Morgen Thomas Ltd is a specialist management and fundraising consultancy dedicated to the charity sector. We support charities with income generation, business planning and management, communications and governance. Based in Birmingham but working nationally and internationally we have partnered with organisations in the healthcare, education, heritage, arts and community and international development sectors, helping them to raise hundreds of millions.