Marketing and Fundraising: Harnessing the Two Speeds of Charity Growth

Fundraising 2

A misperception of charity activity is that fundraisers and marketers are addressing different goals. This is not the case. They might work in different ways, but both exist to build a stronger cause and drive charity income.

Fundraising works at a faster speed, and marketing more slowly. Fundraising effects are biased to income first then brand health. Marketing effects focus first on connecting people to the cause, with income resulting from that. Fundraisers use response tactics to tip smaller groups of people into supporters. Marketers use brand building tactics to shift the associations and preferences of broad groups of people who are currently further away from the cause. Different means, different speeds, same ends: cause and income.

And what a time to grow the cause and income. The great recession of 2008/9, austerity, Brexit, pandemic, lockdowns, inflation, and interest rates have made the last 15 years challenging. Since 2019, ad hoc giving is down, regular giving has flatlined and consideration to give has fallen (1).

Now is the time to get the two speeds of income and cause growth working together as hard as possible. Why?

…. because downturns pull categories apart

Analysis of previous economic downturns (e.g. The IPA: Advertising in a Downturn (2)) shows that organisational behaviours during the downturn can impact performance in the post-downturn recovery. Defending share of voice, not throwing away a good brand campaign, taking advantage of cheaper media can all drive performance in the downturn and afterwards.

And while we might not technically be in recession, times are hard. UK GDP in the three months to June 2023 showed 0.2% growth (3). Inflation is persistently high. Interest rates foreshadow a mortgage timebomb in 2024. And people expect this pain to last. 45% of people think we are in the middle of the crisis. 28% think the peak is still to come (4).

People’s habits are changing. 26% of people have switched to a cheaper brand, and 37% have shopped around for better value good and services (4). Only those better off (i.e. more affluent, older) are weathering the storm. And many charities are competing harder for a disproportionate share of this audience’s giving.

The charity category has become very competitive. Q2 2023 charity media spend is up by 28% (vs Q2 2022) (5). This is being driven my charities investing in marketing. The competition for emotional connection has rarely been stronger. Brilliant new campaigns from British Heart Foundation, Alzheimer’s Society, and Marie Curie, in addition to long-standing campaigns from Macmillan, Guide Dogs, Battersea make this an incredibly exciting category.

So, how do you get the two speeds of income and cause growth working in harmony?

  1. Embrace the idea and implications of two speeds.
  2. Build a very specific case for short and long-term growth.
  3. Really, really work on the expression of the cause..
  4. Test
  5. Measure and Model

 

  1. Embrace the idea and implications of two speeds.

To repeat the premise of this article, fundraising and marketing address the same goals at different speeds. Fundraising makes an important contribution to the appeal of the cause, but mostly to short-term income growth. And marketing makes an important contribution to longer-term income growth by building slower moving connection to the cause. Same outcomes, different speeds.

It’s important for fundraisers and marketers to embrace this. For fundraisers this means giving up some of the credit for income to marketing colleagues. Accepting that while the CPA might attribute all income to fundraising efforts, econometrics will paint a different picture. For marketers this means encouraging the contribution fundraising can make to brand health. Thinking hard about increasing this contribution and being thoughtful around creative alignment so as not to jeopardise high performing fundraising assets that aren’t quite ‘on brand’.

It also means bringing finance colleagues, the ELT, and Trustees on board with the two speeds. But bear in mind this will take months and years. The steps below could all happen over a 6-18-month window.

 

  1. Build a very specific case for short and long-term investment.

Making the case for slower growth, as well as faster growth is hard. In prolonged downturns the priority is to maintain services, protect reserves, and care for beneficiaries. The rough guidance for not-for-profits is that 45% of total fundraising and marketing investment is allocated to band building (6). So, given these challenging times, a strong case needs to be made.

There is a growing body of industry evidence for the benefits of brand building for charities – several entries into the IPA Effectiveness databank.

The impact on income.

The impact on cause strength.

How this acts as a beacon for support from others.

But what really matters is creating a specific body of evidence of the benefits of two speeds of growth for your charity. Where is your income now? How much incremental income might you need for marketing spend to payback? Where might this payback show-up and over what timescale?

 

  1. Really, really work on the expression of the cause.

Part of the magic of slower-moving growth is that it relies on building associations in the minds of large numbers of people who are not quite ready to support, but might in the future, when some trigger tips them closer.

And the best way to do that is via emotion.

Emotion shortcuts the brain’s processing, harnessing our innate attraction to novelty, characters, stories, relationships, and music. For people who aren’t currently that interested in what you do, emotion is a powerful tool.

So, the job for marketers and fundraisers is to fixate on the most emotional aspect of the cause. Yes, cancer affects 1 in 2 of us, but Macmillan have chosen to focus on the isolation and loneliness it brings. Yes, Prostate cancer impacts 1 in 8 men, but Prostate Cancer UK have chosen to focus on the danger of men not talking about it. It’s crucial not only to convey the challenge but to emotionalise the cause.

And when it comes to the effectiveness of cause communications, at least 50% of charity brand campaign effectiveness could driven by the creative work itself (7). There are so many good charity ads out there now, it really pays to invest in the best possible creative.

 

  1. Test it all.

Even after successfully presenting a case and gaining the support of stakeholders, it’s natural for a sense of caution to persist. To ease this worry, a carefully planned testing approach can boost confidence, and there are options to consider.

TV can be bought regionally – a cost-effective ‘dry run’ of future national TV activity.

Digital channels can be closely aligned to TV test regions.

Test TV regions can be closely matched with controls to enable robust comparisons.

Or a lower cost national burst can be run.

This is also an opportunity to test integration. Integration between fundraising and marketing can unlock benefits but is best approached with care and consideration. An essential first step is to align on audiences – getting the right audiences to see the right mix of fundraising and marketing activity. A second step is phasing activity so that marketing primes fundraising. Working through audience and phasing are two important early steps to integration that can produce positive uplifts.

 

  1. Measure and Model.

Finally, measurement.

Measurement can unlock so much insight and confidence of course. But it’s also a great way of surfacing challenges to building the case for two speed growth.

Who gets the credit for income growth?

Who gets the credit for brand growth?

How much of total charity income can brand activity be modelled against?

What about returning givers – has the brand campaign impacted them?

Where do we expect the slower moving income to show up?

What are the pre-existing models, in the ways of working and expectations of finance colleagues, for how income is drive by the charity? Are they comfortable with the idea that some of it will appear in 3, 6, or 9-months’ time or beyond?

A useful first step is the creation of a connected measurement framework which fundraising, marketing, and finance teams align on – moving all the way from campaign inputs, through to faster moving indications of success, to slower moving ones, finally through to organisation outcomes.

In conclusion, the fusion of fundraising and marketing within the charitable sector, despite their different approaches, is instrumental in strengthening cause and increasing charitable income.

As we look back on the last 15 years, facing financial crises, austerity, a global pandemic, and economic challenges, there is still a tough road ahead. While consumer habits evolve and economic pressures mount, charities are relentlessly competing for their share of donations.

Embracing this two-speed dynamic is crucial, fostering collaboration among teams, and crafting a compelling case for short and long-term investments. The emotional resonance surrounding the cause, creative excellence, and well-executed tests are key components in this.

Additionally, as we explore new areas, measuring and analysing reveal what this approach can achieve and what difficulties it might bring. A connected measuring system that brings together fundraising, marketing and finance helps us from the beginning of campaigns to long-term organisation results.

 

(1) Medialab Charity Sector analysis
(2) IPA Publication: Advertising in a Downturn 2008
(3) Commons Library https://commonslibrary.parliament.uk/research-briefings/sn02784/
(4) Medialab Cost of Living Research
(5) Medialab Charity Sector Research
(6) Marketing in Context publication (the IPA)
(7) https://www.nielsen.com/insights/2017/when-it-comes-to-advertising-effectiveness-what-is-key/

 

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