Every day we are reading and hearing about how the economic crisis is getting worse. Charities rely heavily on donations and gifts from supporters, disposable income that is dwindling as more people are made redundant, super funds diminish and people safeguard against possible lay-offs. So how will charities survive?
A not-for-profit is no different from any other organisation – it must run its affairs carefully and efficiently, maximise its income and ensure it does not run at a loss. Like many other organisations, some are not run as efficiently as they could be, and indeed individuals that work for a NFP or are volunteer board members may lack the experience or expertise that some of the larger charities have, making the task even more difficult.
There are lessons that can be learnt from others. Why do some organisations prosper? Good decisions and good management obviously play a part, but size helps. If the organisation is larger there is more to play with – and more to lose – but smaller organisations don’t have a big supporter base to call on. Small variations in income can have a big effect. So what to do? Here are a few ideas.
1. The need for a supporter base.
Even small organisations can have a large supporter base. The secret is to first acquire, then maintain it. This takes time and money, but after two or three years, fundraising becomes easier. Corporate Australia tells us that it costs businesses six times more to gain a customer than keep existing customers, and the same can apply to charities. Invest in building your database now. You may make a loss short term but it is an investment toward the future.
2. How to communicate with your supporter base.
Basically, you can meet face to face, write to them (email and letter), or speak to them (inbound or outbound phone calls). Using a combination of these methods is useful, as it reinforces the message and increases your success rate. Acquisition for a small or even medium size charity is a problem, however, as there will often be a need for specific skills or technology that is beyond the resources of the organisation. More on this later.
3. Give them something back.
This might be information such as newsletters; ownership – sponsoring a person, project or research; or a prize such as a lottery. You can’t expect anyone to support you without receiving something in return.
Kidney Health Australia (KHA) opened its own in-house call centre more than 14 years ago. Over the years it has upgraded and improved its services and today has a large database of donors who regularly support the organisation. It segments its database in a way to break its supporters into varying levels of regularity and type of support e.g. lotteries and donations. In this way, it can concentrate on moving supporters from acquisition to the categories of occasional or regular supporters in a variety of ways. However, it is important to constantly feed the acquisition program as people always drop off the ladder.
Its message is threefold:
- Supporters can register for a regular newsletter that keeps them up to date;
- The organisation supports research and improvements in treatment; and,
- It offers prizes for its lotteries.
All three play a unique part in maintaining the support database.
But if you are starting from scratch – or a low support base – then building your database requires investment in expertise and technology.
KHA’s database is created around Microsoft CRM, which integrates well with other Microsoft tools and accountancy packages – this aids the reporting process that is vital in maximising income. However, the crucial part of fundraising is maximising staff time in the process. Last year, KHA upgraded its call centre to a new dialer, which can link easily to its own, or other, databases. Staff efficiency has risen even further, which has reduced the cost per sale. It allows productivity per hour per agent reports, which help identify low performance areas and training needs.
This has been so successful that at the end of last year it moved its operation to larger premises (not bad during a time of financial depression) and now offers its services not only to other charities, but also to private companies through a separate operating arm, SolutionK. The call centre is also on track to exceed its fundraising target for the first quarter.
However, KHA doesn’t have all the answers itself. It outsources its IT services, some of its mail house and relies heavily on other organisations in those areas for which it has neither the in-house expertise, nor technology. In other words, KHA concentrates its resources on what it can do well, thus maximising that investment, but outsources certain areas to others who can be more cost productive.
It’s called working smarter not harder.