A suggestion to improve fundraising in emerging markets: just a technical issue, asks Olga Alexeeva

 

Caroline Hartnell

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Caroline Hartnell

Caroline Hartnell

People who looked at our relaunched Latest from Alliance at the beginning of last week might have noticed that Olga Alexeeva was to be one of our contributors — and looked forward to reading what she had to say.

As the absolute professional that she was, Olga had sent in her first post before we launched last week. We were ready to post it when we received the shocking news of her death. Sadly, realizing that this will be her one and only contribution, I am publishing this as a guest post.

As she always did, Olga throws out a provocative question: if middle-class donors in Russia could easily give £5 a month to the cause of their choice, as say in the UK, rather than having to give £200 to make it worthwhile, would they be more likely to give to a wider range of causes? What do you all think?

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An interesting debate occurred at the conference centred on an important question: should fundraisers just follow donor wishes and raise money for causes people will agree to support or should they educate donors and promote issues that need attention, even at the expense of financial results?

Russia has seen recently an explosive growth of so-called ‘help funds’: fundraising platforms, mostly online, that are usually initiated by middle class volunteers but also sometimes by some companies. ‘Help funds’ raise money from the middle class typically to pay for operations of seriously ill children and to help state orphanages or animal shelters: three causes that apparently attract most interest and funding from new donors in the Russian middle class. Most ‘help funds’ are also built on a strong position that they give money ‘directly’ to individuals in need rather than to charities.

Despite clearly helping to increase overall giving in Russia considerably, this approach resulted in over 80% of middle class giving in Russia going to only two or three causes. It also nearly completely misses the non-profit sector. Various experts watching the rise of ‘help funds’, including me, used to moan about public distrust of charities, lack of understanding of problems by the public, ‘stupidity’ of Russian people, etc.

But, I wonder, maybe the problem is actually rather technical than cultural? In Russia, as in many other emerging market countries, there is no system of direct debit and there is generally a lack of other credible channels of recruiting donors for regular donations. So, a charity which undertakes a fundraising campaign does it often to collect a single donation from each donor it attracts. It is a very expensive way of fundraising and as a result only affordable for very large charities. But, more importantly, such a system pushes charities to raise an asking price for a single donation – around £200 per donor, rather than £5 as in the UK.

As a result, populism reigns! If you donate £5 a month, it is generally a negligible sum which you forget about unless you lose your job and have to cut every possible direct debit. So when you decide to give, you go for a cause rather than a fixed solution. But if you are asked to give £200 you want to know for sure before making such a sacrifice where exactly your money goes. Donors that make a sacrifice tend to go for quick fixes to be sure their sacrifice is worth the effort. Donors signing up for £5 a month react emotionally and do not pay attention to details.

So, fundraisers in Russia and in other emerging markets keep struggling with this dilemma. Should we, in the words of one conference participant, only raise money for ‘hearts’ (meaning heart disease operations) and ‘cuties’ (meaning animal welfare) because donors give to that and not to other causes? Or should we educate our donors and promote strategic giving at the expense of the bottom line?

I have a feeling there is a third way – work on making repeat giving easy and accessible in emerging markets countries, solve this technical problem and thus decrease the ‘asking price’ of a middle class donation from £200 to £5. I have a feeling it would instantly help to raise funds absolutely for anything!

Tagged in: Donor choice Emerging markets Help funds Russia


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