MIND THE GAP – how might opt-in affect charity income?

February 5, 2016 News, Opinion

2015 was a testing year for the fundraising sector, particularly in view of the media and political frenzy triggered by the tragic Olive Cooke case, and the recent release of the FRSB report into the case. Are charities over-targeting their donors? What are the implications of the potential new regulations being discussed in response to these concerns?

With the EU Data Protection Regulation text now agreed we know that consent needs to be much clearer, but consent can still be given on an unsubscribe or opt-out basis, so should charities be dealt harsher regulation by going down an opt-in route and the FPS? http://www.dma.org.uk/article/eu-dpr-agreed.  It is really difficult to assess the impact of the move to opt in: we are moving into a world of the unknown. This is in part because we still don’t know the exact form the regulations are going to take, but equally because we really don’t know how the giving public will react. Will people be happy to opt in and continue receiving communications, and might they continue to give without the constant prompting?

Let me address the first of these points. The RNLI recently announced that they have done the maths and forecast a £36m hole in their income by 2020. We have produced similar forecasts for other charities, but at best they can only be guesstimates based on a range of assumptions for which we have no concrete evidence. Another recent study published by the REaD group suggests that almost half of the British public will reconsider their charitable giving leading to an annual loss of over £5 billion across the sector as a whole. However, this contrasts with another piece of research conducted by Wood for Trees partner About Loyalty, showing that over 90% of donors score high on trust and satisfaction with the charities they give to. So perhaps donors are happy with the role charities are playing for them, and will be willing to continue to share their details if done in the right way and for the right reasons. Our sister company, MyLife Digital has developed a Trust Platform that puts the control of an individual’s data back into the hands of the individual, by allowing them to decide who they share their data with, who can see it and what can be done with it, all with informed consent. (www.mylifedigital.co.uk)

And on the second point – will the public really stop being charitable because we cannot communicate directly to their inbox? I am a big fan of the mantra ‘if you don’t ask you don’t get’ but the truth is that overall charitable giving in the UK has hardly changed in the last 10 years – despite increased communications. We are already seeing changes in the way people give to charities with social media driven events such as the Ice Bucket Challenge and Giving Tuesday creating new fundraising impetus. Direct Response TV is no longer as simple as broadcasting an ad and waiting for the phones to ring. People are living in a multi-channel world, accessing information in a variety of ways, and acting on this through multiple platforms. If you are optimistically inclined you could argue that whatever the means, people will continue to give – but as fundraisers we will need to adapt the way we communicate with them, and the way we measure the effectiveness of these communications.

So changes are coming, whether through regulation or as a result of the changing social and technological landscape. Our challenge is to change the way we think and prepare ourselves for what is to come, and to view these changes as an opportunity rather than a threat. Charities who get themselves ahead of the data curve (both sharing and measurement) will be the ones best placed to maintain, or increase, their share of the generosity of the British public.

 

Jon Kelly  Director of Analysis, Wood for Trees