The glare of the media spotlight has fallen on charity fundraising, triggering a Government-mandated review. Given the primacy of data in driving donors and supporters, David Reed looks at what options exist to sustain direct marketing in this sector.
In May, Bristol resident Olive Cooke took her life and in doing so triggered one of the biggest backlashes against charities - and especially their use of data - which have been seen in the UK. It emerged during the inquest that Cooke had set up 27 direct debits to a variety of causes and in the course of one month received 267 fundraising letters.
In the narrative verdict given by the coroner in July, however, none of this was commented on. But the verdict in the media and among some of the public was clear - a vulnerable woman had been chased too hard and become over-committed. Prime Minister David Cameron announced an investigation into fundraisers’ activities, led by Sir Stuart Etherington, chief executive of the National Council for Voluntary Organisations.
Changes are also to be introduced to the Charities Act which will require charities with incomes of more than £1 million to set out their fundraising approach in their trustees' annual report, including the use of professional fundraising agencies, as well as steps to prevent inappropriate fundraising from vulnerable people. Professional fundraisers will also have to set out what steps they were taking to protect vulnerable people from high-pressure tactics.
Since Cooke’s death, charities have been in a tailspin. Many rushed to check whether her name appeared on their own donor, supporter or prospect lists, while others have withdrawn from cold fundraising altogether, according to sources in the industry. Large charities have welcomed the review and new laws, but behind the scenes there is panic about their impact on the third sector.
In particular, there are as-yet-unknown implications for a range of charity data uses. Frequency of contact across the sector is firmly in the firing line, since this was routinely identified by commentators as a cause in the death, even in the absence of evidence this was the case. Data swaps, which many smaller charities rely on to fund their own marketing, may have to be reined back. Identifying and screening out vulnerable prospects could be the toughest challenge of all, not least because of the sensitivity of the data involved.
Here are four initiatives which the charity data sector is considering to sustain itself:
In the calmer days of 2014, the Institute of Fundraising published a new set of guidelines for charities called “Treating Donors Fairly”. It set out the standards and practices which are required of fundraisers and paid particular attention to the question of vulnerable donors.
According to the IoF: “We believe the most respectful and inclusive guidance for fundraisers is that they should take ‘all reasonable steps to treat donors fairly’. An alternative approach would have been to impose a more general restriction - such as ‘do not approach someone who you think may be vulnerable’. This would be likely to lead fundraisers to treat people differently based on a personal characteristic (such as a disability or age). We believe that everyone should have the opportunity to donate if they are able to do so, and that denying people the chance to give based on their physical appearance or behaviour may be considered discriminatory.
The Institute was trying to strike a difficult balance between the need for causes to maximise their revenues and the wish to avoid causing offence by identifying somebody as vulnerable without clear evidence. That leaves charities to work out for themselves what best practice around this should look like.
“It is about training staff so when they are talking to people to pick up on whether or not they have an understanding of what they are doing,” comments Comic Relief’s head of CRM, Liz Curry. As a telethon with a late-night audience, callers can exhibit a range of responses from over-excitement through drunkenness to deep emotional response because of their direct experience of a featured issue.
“The question is, how do you identify them? If there any doubts, we encourage them to phone back, for example, if they are emotional because of a recent bereavement. Our volunteers can’t take a donation over £20,000 - they have to escalate anything over £5,000 to a supervisor and anything over £10,000 comes to us. We then get somebody to call them back. But we are lucky because all of our calls are coming in to us, not going out, so we can be more cautious,” says Curry.
Whispers around the fundraising sector suggest that some form of Register will need to be created and operated “The Financial Conduct Authority already has a big focus on it,” points out Janet Snedden, strategy director at Amaze One. “Even defining a vulnerable person is highly complex. Across the industry, we will see initiatives to make sure vulnerable people are protected. But it is not an easy one to address. At some point, there will be a register like the preference services,” she says.
Changes to the Charities Act could make this a statutory requirement, leading to its creation and operation on a similar footing to the Telephone Preference Service, operated under contract by a third party on behalf of the whole industry. While some view this prospect with either scepticism or even dread, it has clear political appeal.
Alistair McLean, chief executive of the Fundraising Standards Board (FRSB), says: “Typically, when complainants contact the FRSB, they raise a concern about a specific organisation. What has differed in recent weeks is that we have been handling complaints from people that recognise the vital work that charities do and the pressing need for donations to fund that work, but their concern is that charities are asking too much.”
He adds: “The collective experience of being approached by many charities simultaneously compounds things further and the FRSB has called for limits to be imposed on the number of approaches, among a range of additional recommendations to raise fundraising standards.”
McLean notes that, “the Institute of Fundraising has made some improvements already to fundraising standards, helping donors take greater control over the ways that charities communicate with them and we welcome these initial developments. But there is much more work to be done by charities themselves, sector bodies and Government to establish what additional rules and checks should be in place.”
At the level of each individual charity, business rules and propensity models will dictate just how often an individual gets approached based on the likelihood of getting a response. In the wake of the Cooke affair, many will have been examining whether these rules are tight enough or followed correctly.
At the industry level, however, it is not clear how any cap could be applied to the total frequency of contact any one individual receives. “When this hit the news, I was expecting our phones to be ringing off the hook with complaints and furious requests to be taken off our lists,” says Suzanne Lewis, managing director of EDM Media UK. “We have not seen that. I did a call around our clients, particularly within the two weeks from the One Show making its request letter available. It got 30,000 downloads, but each client has only received about 15 requests.”
She points out that most of the systems which provide consumers with control over how their data gets used are very blunt instruments. “Mailing Preference Service is an on-off button, not a dimmer switch,” she says. While some consumers resort to writing “Goneaway” on items of direct mail and posting them back to register a desire not to be mailed, the reality is that consumers routinely give to charities and mostly to more than one at a time. Arbitrating whose turn it is to make an ask would be challenging.
“Any charity worth its salt would check if they had Olive as a contact, what they had sent her and their data protection statements,” says Curry. “One of the reasons why our sponsors, like the BBC and Sainsbury’s, support us is because of our reputation and public trust. They would not support us unless we were following best practices.”
She compares the bi-annual Comic Relief fundraising push to disaster and emergency appeals made by organisations like DEC. “We come along, they give us money and that’s it. We don’t believe they want anything more,” says Curry.
For other charities, however, there is significant pressure on revenues and therefore a need to maintain some market presence, especially for smaller organisations. But the real difficulty for the Etherington review, the charity sector and individual causes is that nobody actually knows for certain just how much donor data is used and by whom.
Tim Drye, managing director of DataTalk, is trying to co-ordinate a data tracking exercise which could provide hard evidence. “The first thing to do is pull together stop files, deduplicate them and provide a report showing what percentage of the total is on each charity’s file,” he says. To ensure statistical validity, Drye needs a minimum of five - and ideally 30 - charities to share their data.
Depending on the size of those organisations, this would cover 60 to 70 per cent of UK donors and create a benchmark. “The second step is to get unarchived campaign lists from the last 12 months. Those reports could feed into the review so we can represent the true level of activity. We are data marketers, surely - we need to do this stuff,” he says.
Looking ahead, he is keen to establish a data tracker, similar to what the music industry uses to follow streamed and downloaded music and apportion copyright revenues correctly, which would follow all charity data being used. But he warns: “There is a fear factor - charities are nervous that the number will be too high. Ultimately, however, the horse has bolted because the people that matter already think it’s too high.”
Charities have to report on their governance as part of their annual reporting requirements. To prove they are following best practice, Christine Andrews, managing director of DataIQ, is calling for the adoption of a common standard to be assessed through an agreed auditing process.
“What I am trying to get charities to do and the FRSB to consider is a way to take the lead and ensure that all parties are applying the right standards through a consortium-based audit,” she says. This would assess the work of third parties in particular, since these were especially targeted in media stories. “Most charities use the same agencies for their trading, banking, fundraising, SMS and digital broadcasting. There is a need for someone independent to check they are doing the right things in data protection, data governance and data security. The best thing would be an audit against an agreed common standard.”
Etherington will undoubtedly make proposals that tighten the requirements on charities around their use of data and approaches to donors in some way. New laws will follow. For some, that is a reason to wait and see, rather than moving first to change their data processes. One way or another, however, charity data usage will look very different 12 months from now.
To hear more from Liz Curry and Christine Andrews book your place today for DataIQ Link, click here.