Technology has rendered many traditional fundraising methods obsolete. James Thelluson investigates the impact digital has had on fundraising and charity communications

Thomas Schlutz-Jagow’s leans forward, visibly excited.

“I have never seen something quite so transformative. Big data is the Holy Grail. Social and digital technologies are a massive opportunity to enhance everything we do,” he says. “The benefits of social and digital are very clear: precision, agility, integration, real time reactions and cost reductions.”

Schultz-Jagow is global head of communications at Amnesty International. A vastly experienced corporate affairs pro, who started with Greenpeace in Germany in the ’80s, and has been a leader in NGO campaigning and communication ever since. Not a man easily given to hyperbole.

“If you can collect data sensitively and mobilise supporters through digital channels effectively then you can do great things for your cause. For example, I’d love to use social media to crowdsource a global campaign. We’re not quite ready to do this, yet. But the good news is we will be very soon.”

Many in the charity sector would agree with Schultz-Jagow.

According to a NominetNet Trust report of 2012, “Unprecedented levels of data capture and interrogation…[are] shaping [charity] strategy as well as day to day operational performance.”

Just as social and digital technology has revolutionised marketing and communications in the commercial sector, technology is challenging every aspect of the way charities and not-for-profits (NFPs) think and work.

From telemedicine to telemarketing, the digital revolution is creating new opportunities to improve the sector’s commerce, community management and campaigning strategies.

Take Twitter. Just Giving claims it raised £2.5m from 116,718 donations via 3.7m visits generated from Twitter in 2013. That’s 73% more than 2012 and in the last two years, the amount raised for Just Giving from Twitter has almost quintupled.

Or consider the impact of blogging: individual online fundraisers that engage with their supporters by blogging, sharing videos and pictures, and sending thank you emails, raise an average 264% more than those with a standard fundraising page, according to analysis by software and services firm Blackbaud.

Results like these are focusing the minds of those charged with managing fundraising and communications for charities.

In the old days, knocking on doors with sponsorship forms in close-knit communities was the modus operandi for many. It just doesn’t work any more.

Tim Kitchin, a marketing consultant who runs IT innovation programmes for the Chartered Institute for IT, says, “The trouble is that doing all this has become incredibly difficult for charities which are fractured across campaigning, caring, and researching, and tiring for supporters who are pulled between volunteering, fundraising and campaigning. The problem is made still worse by the fragmentation of the fundraising sector.”

He adds, “Tools like Virgin Money and Just Giving have been a godsend for beleaguered eventers, but in using them, many charities have lost control of their fundraising relationship, and the data that makes them actionable. More importantly still, they have lost the ‘single holistic relationship’ which lies are the core of charity loyalty.’

Many are fighting back to regain a higher level of touch in a crowded market. One example, cited by Kitchin, is Leukemia Foundation’s ‘World’s Greatest Shave’. By having a dedicated, integrated campaign platform and collection mechanism, the fundraising initiative brings all its fundraisers into a single, focused and committed relationship. They see progress to targets; they recruit friends, colleagues and family into extended teams and they unlock a piece of the inner-Australian-psyche – the urge to compete. A small, but far from coincidental side-benefit, like the ‘Movember’ initiative, is that actions tend to be demonstrative and newsworthy, and hence raise more attention.

“This helps make every fundraiser, in a small way, a campaigner,” says Kitchin.

USA-based consultant Chris Sorek, ex CEO at alcohol charity Drinkaware, which wins plaudits for its social and digital work, sees the ability to test campaigns, research and generate insight as another benefit of a social world.

“If you do the insight work right, then the rest can fall into place and the benefits of social communication flow. First, and foremost, it’s cheaper. Traditional fund raising and communications is expensive and time consuming. Second, it’s faster. People get the ‘ask’ as the issue is happening. Third, it’s more accountable,” he says.

Trufflenet Health is a social research company with clients such Novartis. They help organisations including charities get better insights into what people are saying or doing. They call it ‘social intelligence.’ They do monitoring and risk management, too, tracking opinion and debate about brands, campaigns and charitable issues.

Director Janet Gunner says, “There’s a wealth of information out there online which charities could be using to improve their commercial and marketing communications. This intelligence can be used in many ways - to improve products and services, anticipate risk or make fundraising campaigns work better.”

Jason Suttie, MD at Copper, a digital marketing specialist with experience in the sector, highlights another key driver for digital and social investment in the sector, “Charities are finding that their average supporter is using social and digital technology in everyday life and they’re expecting to use these channels to communicate with them.”

He adds, “We’re also finding that there’s a greater understanding that people use different channels in different ways. So, charities need to be where they are and using the right tools in the right place. The current buzzword is ‘omnichannel.’ We’re seeing this even more with commercial organisations where there is an offline element introduced into a digital process and likewise digital elements introduced in offline processes.”

Sorek emphasizes another facet of the changing ‘charitable consumer,’ “Millenials get technology. They like to ‘dip in and dip out’ of support (which means they will respond to a digital ask and then move on in their thinking), and if the message is presented properly, the charities can easily morph or refocus messages after the campaign starts to make them more relevant and drive higher levels of supports (e.g. likes) and funding.”

But is the sector embracing the opportunities as fast is it needs to?

The National Computing Centre “found that charities invest the LEAST per head in technology of ANY sector.”

Research conducted in 2013 by Connect Assist suggested 65% of charities still confessed to using manual entry databases in an age when e-CRM is all the rage. Only 16% think they are using SMS effectively.

Some charities are grappling with the basics, while others are addressing more complex issues such as integration.

As one technology consultant, who wanted to remain nameless, says, “The problem is some management teams or their trustees don’t get it. It’s scary, changing fast and may not seem core to what they do. If it’s a question of putting money into digital technology or investing it directly into known solutions, it’s not surprising boards have a dilemma? But those that get their strategies right will have a competitive advantage. Those that don’t will find it harder to survive. The bigger campaigning or fund raising charities are on it. The others are still waking up.”

But it’s tricky to find a clear long-term strategy. How do you deal with the proliferation of options? How do you decide what is delivering real value to make the right decisions? Then there’s the dark shadow of IT failures in the NHS and elsewhere, too, to send shivers down your spine.

According to Schultz-Jagow, “Understanding the myriad of options in front of you is key. The temptation is to invest in a channel or a campaign but not to have a clear sense of what you want to achieve strategically.”

If getting the right strategy is the first obstacle (and when isn’t it?). Another is about internal skills and structure.

Suttie highlights this organizational challenge, “With increasing volumes of data, interpreting the data becomes a real challenge. Analytics are becoming key. Having someone with the knowledge to be able to form clear business decisions from the various data inputs is essential but often hard to find in-house.”

There’s also the classic ‘cart before the horse’ syndrome. Organisations invest in smart ways to collect data or create apps and then find that they don’t have the back end in place to do anything with the data they collect or the enthusiasm they generate.

The final barrier is cash. Or rather the lack of it. UK donations to charity have fallen by 20% in real terms in the past year from £11bn to £9.3bn in 2011-12 – a fall of £2.3bn when adjusted for inflation. The number of people donating fell, as did the amounts they gave, from an average of £11 to £10 a month.

This report, compiled by the Charities Aid Foundation and the National Council for Voluntary Organisations, suggests charities are in a “deeply worrying” financial situation with small and medium sized charities disproportionately affected by the reductions in giving.

“We all have to face the fact that the state, whoever is in power after 2015, will have less to spend. Unless we see substantial changes to the laws and the tax breaks around charitable giving, even the large charities will struggle to make ends meet. That’s why we have no option but to explore the changes which technology are bringing,” says Derek Wyatt, ex-Labour MP and chairman at Trinity Hospice, London.

This is deeply ironic, of course.

It is clear to everyone in the sector that - longterm - social and digital technologies can deliver lower costs and increased efficiencies by reducing print bills through to the time spent organizing volunteer events.

Yet the financial climate makes new investments (for example, in systems) riskier to make. Many big technology companies, from Google and Microsoft down, help charities with freebies and discounts on software, hardware and other useful things. Yet you would be forgiven for wondering if the old adage – ‘For a ha’pence of tar the ship was sunk’ – will still apply to many smaller players in the sector.

But let’s not despair; necessity is the mother of invention. And with the cost of living crisis still constraining charitable giving, charities are looking to technology to make ‘every little count’ (to coin a phrase).

Which is why micro-donations are attracting interest. If every cardholder in the UK donated just 30p a month, it would raise over £150m for charity every year. Pennies, the electronic charity box, is a new way of doing something old fashioned – dropping spare change into a charity box – only this is about rounding up the total on any card based retail and internet transactions. At the click of a mouse, consumers can donate up to 99p to charity. Last year, 4.5 million donations were made with pennies.

Alison Hutchison, CEO, says, “Charities, like any businesses, are looking for new ways to maximise their returns. Digital developments are often the most cost effective, secure and successful methods to achieve this in addition to traditional fundraising techniques. It’s a natural evolution. As new methods for giving become established charities are utilising the opportunity to increase funds for much needed services.”

Pennies is just one of a number of companies and innovators looking to enhance the way charities work. The promise is as large as it is in other sectors. And it poses the same strategic and operational challenges. But is it the be-all-andend- all? Leaving the final word to Schultz-Jagow, “Is social and digital the death knell for traditional charity approaches? No. We still do traditional letter writing. Letter writing was the beginning of Amnesty and it’ll never die. But we still have meetings. We still use email. People still want real interactions. How old-fashioned is that?!”