Can I ask you a question?
June 15, 2010 Mark Hrywna
If someone walked up to you on the street and asked that you give them your credit card or checking account information, the odds are that you would think that they think youre a rube with a turnip truck. That sounds just crazy enough to work, so some nonprofits are enlisting canvassers to raise money in metropolitan cities around the U.S. and abroad.
Face-to-face fundraising has been employed for years in Europe and some charities have started using the practice in America.
Oxfam America launched its street canvassing program this past March, successfully meeting donor acquisition and fundraising test goals in Boston, Los Angeles and Washington, D.C. The programs next phase will expand into canvassing to San Francisco and Santa Cruz, Calif., Portland, Ore., New Haven, Conn., and Philadelphia, Pa.
Canvassing is a long-term investment that pays off with increased brand awareness, expanded constituencies, and increased unrestricted revenue, according to Ken Mallette, annual fund director at Oxfam America. For every 1,000 monthly gifts Oxfam America receives, one million people see the Oxfam brand, he estimated.
Canvassing is such a popular technique in Europe and there is such a high number of fundraisers on the street that Oxfam affiliates there find its harder to engage with potential donors, according to Mallette. In the U.S., the market is much less saturated, so weve had a greater level of success with it, he said. Oxfams program implementation began the first week of May. Cities were chosen by Oxfams vendor, Grassroots Campaigns, Inc. (GCI), based on factors that include success rates from other campaigns and organizations, city demographics and market analysis.
Oxfams goal for 2010 is to generate $720,000 from 15,455 one-time donors and more than 5,000 monthly donors. Further out, the charity is looking for $5 million in five years from 28,915 new monthly donors and 192,300 one-time donors.
Face-to-face is really important to us because it gets lots and lots of pledge donors. Its the most effective tool weve found and its very easy to scale up, said Owen Watkins, global fundraising specialist, face to face, for UNICEF. The beauty of face-to-face fundraising is that its just not intellectually difficult. Its basic Fundraising 101. It is really hard work though, he said.
For UNICEF, the number of face-to-face pledge donors continues to rise, to $220,000 this year from $180,000 last year and $72,000 in 2007, according to Watkins. Almost half of the pledge donors that UNICEF acquires are from face-to-face fundraising, or canvassing. Pledges are the single largest source of private funds, he said, and also the single largest pledge acquisition channel. The total donor numbers are growing strongly with the average donor value increasing, according to Watkins. Face-to-face fundraising revenue has continued to grow despite the onset of the economic crisis, he said, even in badly hit countries such as Spain or recently launched programs in Greece. It also seems to be more relevant to younger generations of donors, he added. For a nonprofit to do it in-house can be time consuming but more profitable than hiring a vendor, Watkins said, suggesting organizations considering face-to-face fundraising first try contracting with an outside firm. All markets that have an in-house operation started with an agency before moving to an in-house model, he said, adding an agency generally brings more volume. Nonprofits then only have to deal with managing the agency rather than recruitment, and can examine how the program progresses and whether to bring it in-house if itÕs more cost effective. Leading market in-house programs acquire some 15,000 donors a year with an average gift of $17.50 per month, according to Watkins. While all markets are different, he pegged a rough estimate of $100,000 for starting a face-to-face program. The typical margin for an agency is 16 percent.
The profitability of canvassing varies depending on the market, Watkins said, and there are markets that are so expensive organizations should qualify it with other techniques. Some markets break even in four months while others generate revenue of more than 2-to-1. One market is returning 12-to-1, he said, though he declined to identify it, and there are problems with scalability. The English-speaking market is more expensive. I dont really know why but it would be good learning for us. Equally, some markets are money pits, he said. The number of donors and the amount raised from canvassing in general for UNICEF, however, has grown through the recession while other fundraising channels have not, Watkins said. Save The Children (STC) in Westport, Conn., started testing face-to-face fundraising in 2001, eventually building the program to a dozen or more metropolitan areas, as well as a door-to-door program. The charity has seen some success testing in smaller markets, such as Austin, Texas, and less so in places like Columbus, Ohio, according to Robin Van Etten, associate director, sponsorship marketing. The charity expects to be in about 15 to 18 cities this summer and is working with its vendors to better target donors on the street by identifying and engaging them more effectively and offering the appropriate product. If you talk to an 18-year-old, maybe you dont offer them a sponsorship, maybe a one-time gift. Were trying to get our monthly givers to be identified within the right age demographic, Van Etten said. Age impacts retention dramatically, she said, adding retention improves dramatically after age 35. With warnings about identity theft a common refrain in the U.S., one might think someone on the street asking for their personal information would scare off donors. American donors are no different than others around the world, Watkins said. The method of engagement may be different but once you have engagement, youre having conversation with the donor, he said.
Van Etten said shes probably one of those people who might give a second thought to offering up their credit card information, but there are a lot of trusting Americans. When people show concern about giving information, we do have a takeaway to drive them to the Web site where they feel more comfortable and secure, she said. Youre always going to have a handful of people who will not like canvassing so you manage those complaints, Van Etten said, and more so with door-to-door than canvassing. Save The Children sends a Do not knock list to its two vendors on a monthly basis, in addition to training and following protocols for the proper permits when it comes to door-to-door solicitation.
Trust me, face-to-face fundraising works everywhere, Watkins said, adding its worked in every market in which its been tested. It must be made relevant to the market, he added. While profitability will vary, canvassing programs are effective for acquiring donors if thats an organizations goal. Acquisition is only half the story — retention is crucial, he said.
Retention, retention, retention The average global renewal rate for all pledge donors is about 94 percent after the first year but as with any fundraising channel, the real value comes several years down the road. From year two onward, a program could lose 6 to 7 percent of donors but the first year can be massive. You could lose half your donors, Watkins said, so management of those donors is critical. The attrition is the biggest downside and much greater than other traditional channels, such as the Web, DRTV or direct mail, Van Etten said, but the door-to-door attrition is much lower than canvassing attrition. Part of that is youre going to people who are older, own their homes, as opposed to the street which is a younger, less stable demographic, she said. Canvassing is definitely a great way to generate high volume as far as new acquisition, youre able to reach a lot of people, Van Etten said. The number of contacts on a daily basis is pretty phenomenal, she added, so even when canvassers are not converting people into donors, at least its a touch point with a potential donor in the future. The challenge is on the back end, dealing with attrition, which is a continuous work in progress. Some of the success with that is offering the right product to that, Van Etten said. It still pays out, but you want it to pay out better.
Canvassing versus direct mail Nonprofits generally have a host of reasons why they dont want to do face-to-face-fundraising, from hurting their brand to people complaining about it, or fear regarding lack of control over it, according to Watkins. The fundamental difference between canvassing and direct mail comes back to managing donors, Watkins said. Face-to-face donors are interactive. Canvassers are having a conversation with the ability to motivate, persuade and ask. Donors can ask questions and be open to persuasion while nonprofits can directly motivate them to donate to the cause and directly ask them to donate. Direct mail donors, on the other hand, are broadcast donors where nonprofits are sticking something in front of them. Broadcast donors are hard work because theres little interaction and urgency to move, he said, but with interactive donors, you can get them in easier but lose them, too. Its a monologue rather than a dialogue and donors have to overcome an inertia hurdle to donate. You dont have the power of a direct human ask, Watkins said, so not all direct response is the same. Interactive donors are easier to get in numbers, but also can be easier to lose while broadcast donors are harder to acquire in numbers but tend to be more loyal, according to Watkins.