What are the trends, challenges and opportunities in cash appeals for charity fundraisers today?
The landscape of cash appeals in individual giving (IG) fundraising has evolved over the past few years. For UK charities, understanding how these changes impact on the success of campaigns now and in the future is crucial to ensuring ongoing and sustainable income. In this blog, we explore the latest trends, challenges, and opportunities in cash appeals, offering insights from industry experts including Alex Hyde-Smith, Director of Income and Engagement at Alzheimer’s Society, Karen Suter, Head of Individual Giving at Alzheimer’s Society and Helen Daw, Head of Partner Strategy at Woods Valldata.
A recent poll from Woods Valldata involving 100 charity fundraisers revealed that 52% of them felt cash appeals had changed in the last 5-years. Fundraisers felt some of the changes include:
- How supporters respond to cash appeals
- Declining mailing volumes as a result of opt-in requirements
- Audiences being more reactive to Current Affairs
- A more digital-first approach
And that there are things that haven’t changed as well, such as appeals looking and feeling the same today as they have done for many years with the same standardised format, that being ‘description of need’ and ‘financial ask’. As Alex Hyde Smith responded:
“Where the format works and continues to work, it has remained largely the same. But I think there have been some changes.”
So what trends are we actually seeing? Read on to discover more…
1. Trends in cash appeals
Shifting demographics and behaviour
One notable trend is the shift in donor demographics and behaviour. As Alex Hyde-Smith from the Alzheimer's Society points out, while older donors remain a crucial demographic, there is an emerging interest from younger donors. Interestingly, younger generations, who predominantly consume digital content, can be influenced to research a brand through a direct mail communication. This might be due to the novelty of receiving physical mail, which stands out amid the digital noise they are accustomed to. Royal Mail Market Reach did some research into this alongside WARC in their free report ‘Driving effectiveness with direct mail’. They coined the phrase ‘phygital’ to describe how physical mail is driving digital traffic.
But at the same time, Alex cautions about focusing on demographic over connection to cause. He says, “you don't want to acquire younger donors, you want to acquire more donors that care about your cause… I think we have to find our donors where they are [the channels they use], but I think we need to find them based on their interest in our cause, and their loyalty and their care and concern for four cause and our organisations. And think about age as a secondary proxy for that, but not as a leading leading trait of what we're looking for.”
Moreover, donors today are more reactive to current affairs. Events such as the COVID-19 pandemic have significantly influenced donor behaviour, with people looking to contribute to causes that address immediate and impactful issues. Alex Hyde Smith explains, “People want to see charities solving big problems, and not just providing a service where there's a gap, but actually doing something to influence and change that gap.” And that might also be stimulating a change in fundraising tone and message for some charities.
Integration of digital channels
Digital channels have become integral to cash appeals. Where not so long ago, digital was just being tested, it’s now firmly in place with many charities adopting digital into all aspects of their IG activity.
In fact, in a poll conducted by Woods Valldata during the Changing Face of Cash Appeals webinar involving 100 charity fundraisers, an average of 44% of ask comms and 47% of thanking communications are digital.
It's fair to say that direct mail remains a strong performer, and is here to stay for now, alongside the integration of digital platforms which allow for broader reach and engagement. Digital appeals provide a cost-effective way to test different creatives and messages quickly. However, as Karen Suter highlights, while digital channels are excellent for testing, the challenge lies in converting online donors into repeat givers. And this is something a lot of charities are still exploring and developing within their programmes.
Helen Daw explains charities are looking at ways to answer key questions around digital such as:
- What is the motivation behind their support?
- Do they go on to give again or is it just a one-off?
- Do online givers tend to support different charities at different times?
And the answers to these and ongoing measurement will help influence charity approaches into the future.
2. Challenges in cash appeals
Data privacy and consent
The introduction of the UK-GDPR legislation in 2018 and the heightened focus on data privacy have had a profound impact on IG fundraising. Charities have had to re-evaluate their data practices, often leading to a reduction in the number of supporters they can contact.
This has made it more challenging to maintain and grow mailing lists. As noted by Helen Daw, the stringent opt-in requirements, brought in because charities wanted to make sure they were doing the right thing, have significantly influenced mailing volumes and cross-sell opportunities.
Charities that have been risk adverse in relation to UK-GDPR are seeing the repercussions of these policies in fewer opportunities to mail supporters and the reduction in income that comes with that. Where appropriate, some charities are now exploring legitimate interest mailing practices, and the supporter response has been positive. After all, it’s highly probable that supporters have not been entirely cognisant of their need to ‘opt-in’ to hear from their preferred charities and may have been wondering why they’ve been forgotten. As Karen Suter says, “We make it so difficult for them to continue to hear from us because they forget to tick a box. That's it. They don't hear from us again.”
Cost of living and economic factors
The current economic climate, marked by rising living costs, has also affected donor behaviour. While response rates may have declined, those who do give are often donating larger amounts. This trend might indicate that while fewer people may be able to afford to give, those who can are increasingly generous.
But Helen Daw suggests that it goes further back than cost-of-living crisis to GDPR and the enquiry following the Olive Cook case which happened around the same time. Cold acquisition, which had been such a mainstay of the success of cash appeals, shrank away to nothing for quite a long time. “So, acquisition into cash appeals changed at that point,” says Helen, “and has been different ever since.”
The combination of no acquisition engaging with new supporters, and opt-in only policies for mailing supporters, has hit cash appeals hard. And although COVID saw a surge of people wanting to support charities during the pandemic, this was an anomaly and we’re seeing a return to response rate trends pre-dating the 2020 pandemic.
3. Opportunities for innovation
The donor experience
One of the significant opportunities lies in enhancing the overall donor experience. This can be done in small ways, such as creating more personalisation in thanking, or in bigger ways such as a culture-shift towards a more holistic supporter experience across the charity rather than a department-focused or event product-focused approach.
The use of platforms like Woods Valldata’s SmartThank allows charities to create highly personalised and cost-effective thank-you communications after returning their appeal response. Personalised communications help donors feel valued and appreciated, which can improve donor retention and lifetime value.
Adopting a holistic approach to donor journeys is another crucial area. Moving away from product-focused communications to audience-focused journeys can significantly enhance donor engagement and increase life-time value. This approach requires robust CRM systems and data integration to provide a seamless experience. Alex Hyde-Smith suggests this shift not only improves donor satisfaction but can also maximise overall fundraising returns.
4. Practical tips for effective cash appeals
1. Leverage multi-channel strategies
While direct mail continues to be effective, integrating digital channels can broaden your reach. Consider using email, social media, and targeted digital ads alongside traditional mailings to engage a wider audience.
2. Focus on storytelling based on hope
Compelling storytelling can significantly boost the effectiveness of your appeals. Share impactful stories that resonate with your donors, highlighting the difference the charity is making and what difference their contributions make.
3. Test and optimise
Use digital channels to test different messages, formats, and creatives. Analyse the results to identify what resonates best with your audience and refine your approach accordingly, but also remember that digital response needs to be measured carefully in relation to loyalty and life-time value.
4. Embrace data and technology
Invest in technology to enhance your data management and communication capabilities. Platforms like SmartThank available to charities partnering with Woods Valldata on their response handling can streamline your thank-you processes and improve personalisation, ensuring a better donor experience.
5. Your next steps
The landscape of cash appeals is evolving, driven by changes in donor demographics, behaviour, and technology and most heavily influenced by shrinking databases. By keeping an eye on these trends and introducing innovation and change into existing programmes, charities can effectively navigate the challenges and capitalise on new opportunities.
If you need support with your response handling and cash appeals, contact Woods Valldata. We are experts in large-scale cash appeals for UK charities.
Every year Woods Valldata processes over 400 million data entries, scans over 7 million forms, and handles over £175 million in payments. Reach out to us or visit our website to learn more about how we can support your fundraising efforts.
