Focus On: International Fundraising: DM Fundraising Across the Pond
The British and Americans share many similarities, most notably a common language. But there also are many differences. Any American tourist in London will notice the Brits’ dissimilar pronunciation of words such as privacy or schedule, and peculiar terms such as “lift” instead of elevator or “boot” instead of trunk.
Direct-response fundraising in the United Kingdom also shares some similarities with its American counterpart, but most notable are the differences. Our colleagues acrossthe pond face different challenges than we do and, as a result, thetechniques they’ve developed and the results they receive also are dramatically different.
Over the past decade, I have sought to learn more about direct-marketing techniques from across the ocean, and in my journeys I’ve had the privilege to meet John Watson, who many consider to be the dean of direct-response fundraising in the United Kingdom.
John’s clients have included some of the biggest nonprofit and commercial clients in his country. He sold his first company to Ogilvy and Mather in the 1970s, and his second agency, WWAV, became the largest direct-marketing agency in the country. He sold WWAV to Rapp Collins in the 1990s and, after a few years of what he refers to as “garden leave,” he has started again. His new agency is named Watson Phillips and Norman.
There’s lots to learn from British marketers such as John — whether you’re interested in fundraising in the United Kingdom or just want to apply similar tactics with your program here in the United States. The following is taken from a phone conversation I had with him recently.
JIM HUSSEY: John, when did direct-response fundraising take hold in England?
JOHN WATSON: The mid-1980s. Until then, charities weren’t very competitive with each other, and they certainly didn’t do very much direct marketing ... it wasn’t popular. Then several of the large charities started to expand, and it became very successful — but purely by asking for a single cash gift. So typically they asked for 15 pounds … and once that had been collected, then the quaint old English custom was basically not to write to them again because it was thought to be intruding on their privacy. So it didn’t take very long before people figured out that the return on investment wasn’t very sensible … and that was largely why we started to develop the committed-giving process. (Committed giving is the British term for monthly or sustainer giving.)
JH: The majority of donors recruited through direct marketing in the U.K. are committed donors … those who pledge to give on a monthly basis … correct?
JW: Correct. They generally commit to giving 2 or 3 pounds a month through direct debit.
JH: American donors are less open to allowing a charity to have access to their bank accounts. Why do you think the English are much more open to that than Americans?
JW: I’m not sure that we’re more open to it … I think there is a reluctant acceptance of direct debit. There are a lot of subscription organizations and the utility companies — gas and water and those guys — who push direct debit quite hard since it’s much cheaper to collect payments.
JH: So the typical British citizen pays many of their bills by direct debit?
JW: Yes. But older people still hate paying by direct debit. They’d rather send you cash.
JH: So what’s the avergage age of a typical donor over there? Over here our typical direct-mail donor is in his 60s or 70s. Are your donors much younger since most use direct debit?
JW: Yes. There are certain causes that have donors whose average age is in the 20s or 30s … for environmental groups like Green-peace. But for most charities, they’re typically older. They would be around 45 years old.
JH: We would love to have donors that young. But the typical direct-mail donor list in the United States is composed of strictly older donors.
JW: The American experience (of relying on direct mail) doesn’t work as well here for the simple reason that the cost equation for direct mail is so much worse in the U.K. The cost of postage is much higher because we don’t have a nonprofit rate. The print volumes are also very much lower and much more expensive. So direct mail is really struggling because the cost of sending a direct-mail pack in the U.K. is going higher and higher, and it’s priced almost out of the market. We simply can’t afford it anymore.
JH: So instead of relying on direct mail to recruit donors, what other mediums are used? I know that U.K. charities rely a great deal on person-to-person fundraising on the street. During my trips to London I’ve noticed many fundraisers for various charities working on the sidewalks.
JW: In terms of importance, face-to-face fundraising is actually the biggest single method of recruiting new committed donors in the U.K. If you want to get a lot of committed givers, then face-to-face is by far the most cost-effective way of doing it. But it has run into huge political problems because if you walk down Oxford Street on a sunny day you’ll probably have 20 different charities all coming up to you asking for your support. So it has a bad name, although it still works very well.
JH: What other mediums are successful in recruiting donors?
JW: A lot of donor recruitment has been driven by television advertising in the U.K. for the last four, five or six years. We have a huge number of TV channels that we didn’t have before, so the costs of advertising on TV are quite low. Increasingly, we’re moving to e-mail communication and even SMS (text messaging). You know the big Live 8 concerts? All of the tickets for that in London were sold by text.
JH: With so many committed donors giving on a monthly basis through direct debit, you must have very high retention rates.
JW: Very high. Typically you’re looking at only around 10 percent to 15 percent attrition per annum. Charities that are in the news are probably seeing as little as 7 percent attrition.
JH: Wow. American fundraisers would kill for those types of rates.
JW: What we pay in terms of the cost of recruiting in the first place is very expensive, but it is worth it.
JH: What can British charities learn from American marketers?
JW: We contact our donors much less than you guys. U.K. charities must become more comfortable with upping their communication frequency a lot more. We’re still, in my view, very creaky in doing that. The average U.K. charity would find it uncomfortable to contact donors more than four times a year.
JH: What are the more prominent charities in the U.K.?
JW: The big one is the National Society for Prevention of Cruelty to Children. They are very big in TV. The British Red Cross is very strong, particularly in emergencies such as last year’s tsunami. Oxfam is very big. The environmental charities, such as Greenpeace and Friends of the Earth, are very strong fundraisers. The Salvation Army is also very big in fundraising. There are a couple of big American groups … Third World child sponsorship has become very big in the U.K., and those charities are American. The Americans are much pushier in terms … forgive me; I don’t mean this personally … But Americans are much pushier in terms of recruiting child sponsors. And I mean that in a good way. And child sponsorship is one of the most powerful asks currently in the U.K. And (such) charities need the American approach to drive it through.
John Watson is managing partner of direct-marketing firm Watson Phillips and Norman in London, England.