In the first part of this three-part blog about data analysis in the charity sector, I’m not going to talk about data analysis much at all. This may seem counterintuitive but there is method in my madness. The results of a recent survey and a speech by the chair of the Charity Commission should be a resounding wake-up call for UK charities. I believe that how they use data analytics to respond to the challenges highlighted could make or break some of them in the months and years ahead.
It is not new to suggest that charities should use data analysis to improve their fundraising and performance. I’ll go into detail on how they can do that in a later part of this blog, but we need to backtrack a bit before we talk about data.
Data in and of itself is worthless. It only has value if it is placed in context and interpreted properly. For a charity, this starts with an understanding of its purpose and objectives.
The importance of charities having a clear purpose, behaving charitably and inspiring trust has never been more important. This was the key message of a speech given at the end of last year by Baroness Stowell, the Chair of the Charity Commission.
“I call on all charities to consider the impact their behaviour has in the world and to ask: is what we are doing and does the way we are doing it make us proud, and chime with what our beneficiaries and the public associate with charitable behaviour?” she said.
She spoke passionately about the need for charities to achieve a culture change and be “driven by the charitable purpose that got you on the register in the first place”.
Some of the main points of her message were reinforced by the results of the 2019 Donating Trends survey by Third Sector magazine, notably on trust and purpose.
The headline news from the survey was that the percentage of people saying they give to charity went down to 77% last year. This is a dip from 81-82% in each of the previous three years, mainly due to fewer men donating. The most common reason stated was lack of money, with 60 per cent saying they couldn’t afford to give. This was more of a factor for younger than older people.
Other highlights were:
1. Lack of trust
Trust in charities continues to decline. This an ongoing problem following the Kids Company affair, allegations of sexual misconduct by Oxfam workers in Haiti and concern about aggressive fundraising techniques. So much so that Management Today headlined an article about the third sector last year in scathing terms: “Charities in crisis: Why we’ve lost faith in the third sector”.
The Third Sector report says faith in charities continues to fall. The public is wary about how donations are spent and being pressured to donate. Older people tend to be less trusting than younger age groups.
The importance of trust cannot be overstated. In her speech, Baroness Stowell said: “People have seen some charities displaying uncharitable behaviour – whether that be aggressive fundraising practices, exploitation of vulnerable people, a single-minded pursuit of organisational growth – and they have become less inclined to trust them unquestioningly. They feel that the promise of charity has not always been kept.”
How trusted is your charity? Is your strategy consistent with your charity’s purpose? Do you have SMART KPIs that measure how well you are delivering your strategic objectives?
These are some of the questions I ask charities before starting a data project.
2. What motivates people to give?
If lack of trust is a reason not to give, what motivates people to give? The main one is that they believe in the cause, but this has declined from 65% to 57% since 2016. The figure is higher among women than men, and more important for older age groups (though it still matters to young people). People also give because they say they like to help others (44%) and if they have a personal or family reason to support a particular cause.
The most important issues for donors are that they can relate to the cause, see the results, participate with friends, the cause is transparent and ways to donate are easily accessible.
With the rise of crowdfunding sites and peer-to-peer support for people who share a problem, charities are now in a crowded market.
A vital question for a charity is whether it provides a service its supporters and beneficiaries need? Or, can the same ends be achieved from a crowdfunding site or in another way?
Do you know why your donors support you and where your new donors are going to come from?
3. How people give
Cash appeals by way of collecting tins or buckets and donation boxes remain by far the most popular way people give. This is most probably due to the fact that they make a spur of the moment decision, it’s easy to do and donations are relatively small.
Next come direct debits, fundraising sites such as Just Giving and text messages.
But do you know how your donors would prefer to give if they had a choice?
The Third Sector survey revealed that 46% of people dislike donation tins and buckets. While 39% of people would like to sponsor people they know doing events such as runs or bike rides. Also, somewhat surprisingly, contactless payments are not favoured especially among women (only 3% say they prefer it).
Do you have these statistics for your charity?
Questions like this are one of several that I ask charity management teams at the start of every data analytics project I run.