Fundraising

Every penny counts?

30 January 2017

Should charities be chasing millions of penny donations or one golden goose multi-million pound donor?

Pennies, a micro-donation tool, has announced that it has now collected over 35 million donations through its digital charity box, adding up to £8 million to charity coffers since its launch in 2010. The ‘digital charity box’ works by allowing people to make small donations to around 100 different charities when paying by card in participating retailers. Customers are prompted by the card machine, website or app checkout to donate a few pence (e.g. 50p with a sale worth £50).

To use the jargon, Pennies is creating a “digital ecosystem using new technology to create a more sustainable source of funding for charities”, according to its CEO, Alison Hutchinson: “In today’s cashless society a third of Brits never carry money; therefore micro-donations are a powerful new fundraising tool”.

Perhaps this is meant to reassure us in the wake of the dismal failure of ATM giving to really take off, but it flies in the face of other research which has concluded that cash is still the most popular way of giving to charity (55%) followed by direct debit (31%)[1], although the survey doesn’t specifically ask about digital or ATM giving.

Then there’s the salutary tale of Penny for London which closed in August 2016 just 22 months after its launch, after having raised just £3,000 of £25m a year target. The Mayor’s scheme, which encouraged Londoners to donate a penny or more each time they used their Oyster card to travel, garnered only 4,316 registered users.

Consider also that the UK donor base is generally older, while younger age groups are the most likely to say they never give to charity[2], so chasing the tech-savvy but elusive younger donor is likely to be a long, hard, uphill marathon, likely only succeeding in catching them after several years when they are older, wiser, more settled and with greater disposable income.

Nevertheless, it is true that some people, the younger generation definitely included, often prefer to give smaller amounts when the mood takes them, whether by innovative digital means or more traditional ones. During 2015 approximately £185 million was raised by bake sales alone in the wake of the pervasive success of The Great British Bake Off[3].

But this raises the question of actual ‘engagement’ with the charity concerned. Donation boxes are all well and good, but it’s repeat, regular donations and word-of-mouth proselytization which charities may feel that they really need – especially in this age of mistrust, disengagement and increasing individualisation and isolation. Pennies’ micro-donations are anonymous, and give to charities selected by the retailer. No data is collected, and therefore there can be no follow up by the charity in question.

Is this the way we’re headed? Towards millions of people giving minimal gifts to charities with whom they have minimal engagement and the added administrative burden of processing thousands of tiny donations?

Fundraisers always say ‘make it easy to give’ but the truth is that the giver actually has to want to give in the first place, and people generally won’t give if you don’t give them a reason to. As sector commentator Reuben Turner has pointed out:

The real tragedy behind Penny for London and many other initiatives is that they fail to recognise technology’s potential to deliver something far more important to us than convenience – and that’s meaning. 

Compare this to the £1.56 billion given by millionaires in the UK in 2014 and it’s tempting for a fundraising director to think: ‘why sweat the pennies when one big donation could solve all our woes?’

As I stated in an earlier article, there are now 715,000 millionaire living in the UK while London is home to a tenth of all billionaires (72 people with a combined net worth of over £200 billion)[4].

But it’s not easy to bag yourself a major donor (unless you’re a large and eye-catching arts institution, university or hospital with a spare wing to name). Only a relatively small number of larger charities seem to manage to attract million-plus donations, and neither is it for the faint-hearted since most big donors expect a sustained and substantial involvement with the recipient of their donation. So it takes a considerable amount of time and effort not only to attract a major donor but also to keep them on board.

So, back to our scenario: one million small change donors or one million-pound donor?

The answer, to my mind, lies in what the charity is trying to achieve, and whether one million supporters who are engaged on a very small level are worth more in terms of ‘support’ than one super-engaged-to-the-point-of-calling-the-shots donor!

As always, the reality for most charities will lie somewhere in the middle of these two extreme positions and while, as Tesco so proudly proclaim, ‘every little helps’, most charities are probably looking for more than Pennies.

 

 

[1] UK Giving 2015, An overview of charitable giving in the UK during 2015. Charities Aid Foundation 

[2] Ibid.

[3] CAF (2015) ‘Bake off polling’ https://www. cafonline.org/about-us/ media-office/greatbritish-bake-off-inspiresmillions-to-bake-forcharity

[4] How to approach ultra and high net-worth individuals. Civil Society Voices. Hugh Radojev, 23 November 2015 (https://www.civilsociety.co.uk/voices/how-to-approach-ultra-and-high-net-worth-individuals.html#sthash.HOQ0G9fr.dpuf)

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Cat Walker

Dr Cat Walker has worked in the UK voluntary sector for the last 17 years, including Charities Aid Foundation where she was Head of Research from 1999-2006, and Directory of Social Change where she was Head of STEAM (Sector Trends Evidence Analysis Metrics) from 2010-2015.

Cat now works as a freelance consultant and is the founder of The Researchery – a policy-focussed, strategic research surgery for those who want to get more out of data for evidence-led social change we can all believe in.

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