India’s middle classes and donations from them have been growing at a rapid pace. According to PSJP’s report on Philanthropy in India, published in October 2017, ‘this may be the biggest story in Indian philanthropy, and the area with the greatest potential’.This growth in funds being raised has been fuelled by international and Indian NGOs who have realized the value of this income. Donations from the general public do not come with the high levels of restrictions of corporate donations, which means that they can be strategically and tactically deployed where the need is the greatest. Ingrid Srinath, in her article ‘Retail Giving: The power of many’, has captured the immense value that retail donations bring to non-profits and their causes.
But retail donations can be pushed to an even higher level. Having observed the Indian and global fundraising market, here are some suggestions.
Bring on new supporters AND invest to keep them for life
Most organizations – and there are notable exceptions – focus almost exclusively on acquiring new donors and don’t do enough to build long-term relationships with their supporters. A short-term focus on numbers and quick outcomes means that too many NGOs pay too much money to bring on board new donors. In India, unlike in more developed and competitive markets, it is still relatively cheaper to acquire new donors; hence the somewhat lazy focus on acquisition. Between 60 and 70 per cent of donors give only once and non-profits are unable to truly maximize the value of the initial investment.
Retaining these donors and converting them into life-long champions would be far more effective in building a sustainable portfolio. This will require organizations to focus on engagement opportunities. Over a period of time this will mean shifting a greater proportion of their fundraising expenditure into strengthening relationships with existing supporters. This includes better telling of our success and impact stories and how supporters are contributing to that success.
There are examples of organisations developing a pyramid of engagement which starts with those who are generally interested in the cause; moves up to those who share content, petition-signers and regular volunteers; and progresses to supporters who join action groups or even engage new members to join the cause. Matching engagement opportunities with those supporters who are most likely to carry them out requires a real understanding of supporters and their motivations.
I would be curious to know how many organizations are aware of their donor retention rates and have a strong plan to positively affect that metric.
The quality of relationships with donors is also affected by poor acquisition practices and scant respect for data security and donor privacy. We are already seeing apathy and mistrust developing among donors. A recent report, Doing Good Index 2018, published by a Hong Kong-based research and advisory organization, the Centre for Asian Philanthropy and Society, finds that Asian philanthropists mistrust NGOs and their work, which prevents them sharing their wealth with organizations in the region. Donor engagement is crucial to stem this development. It is worth looking at good practice examples of donor engagement within the field.
Collaborate with other non-profits to grow the number of givers
While the number of givers is growing, the numbers are are still relatively small. Collaboration among international and national NGOs could be a way to build an ecosystem that fosters giving and enables all stakeholders to be more effective. ABCR, Brazil’s association of fundraisers, is a great example of the fundraising community collaborating to share successes, grow talent and set standards for ethical fundraising. One of ABCR’s first successes was in establishing an ethical framework for its members. As described in PSJP’s recently published report on Philanthropy in Brazil, it is also the organization responsible for introducing the Giving Tuesday idea to Brazil: the first Dia de Doar – or #diadedoar (day of giving) – took place in 2013 and it now takes place annually, with ABCR encouraging fundraising organizations to plan for it and raising awareness of it among the public.
An area of collaboration for NGOs in India could be around fundraising effectiveness, with joint research to measure, compare and maximize their annual growth in donations.
Invest in fundraising talent
A paucity of good specialist fundraising talent is a real barrier to quicker growth of retail fundraising. The larger fundraising organizations such as Save the Children, UNICEF and CRY have a responsibility here and should collectively invest to support capacity development opportunities for fundraisers.
Invest in innovation
The growth of digital payment systems, messaging platforms and social media presents a great under-exploited opportunity. China’s tech giant Tencent has shown that it is possible to use a combination of social sharing, payment systems and good content to revolutionize fundraising. The next big leap in retail fundraising in India will surely happen on the back of a disruptive digital breakthrough.
Irwin Fernandes is Director of Public Engagement at Oxfam International.
This article originally appeared in Philanthropy for Social Justice and Peace on August 31 2018. The original article can be viewed here.