Event fundraisers 'losing £195 million a year' by not using online sponsorship
Howard Lake | 19 July 2004 | News
Research by online sponsorship company Bmycharity reveals that each year fundraising events could raise £140 million more in Gift Aid while saving £55 million in banking and administration costs simply by using online sponsorship tools.
Bmycharity says that its research shows that almost all charities are still failing to make the most of the efficiency and effectiveness gains delivered by online sponsorship fundraising. By channelling existing sponsorship income through online fundraising services the sector as a whole could each year claim £140 million more Gift Aid and reduce administrative and banking costs by a further £55 million.
Ben Brabyn, Managing Director of Bmycharity, believes that, although a growing number of charities are using online sponsorship services, most are keen to offer these as an additional service to make fundraising easier for time-poor supporters. He points out that the biggest benefits are the dramatic increases in Gift Aid reclaimed and the efficiency savings in administration. Bmycharity’s research shows that this can amount to an additional £200 for every £1,000 raised.
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Of course online sponsorship fundraising is not suitable for all supporters, since donors need access to the Internet and either a debit or credit card. Yet Brabyn is convinced that it is the most cost-effective way to reach a growing proportion of event sponsors. Bmycharity has found that sponsors who do donate online are mostly 20-40 years old and professional, a valuable audience for many charities.
Having conducted the research, Brabyn believes that event fundraising managers should be asking themselves “how can we encourage our event participants to collect as much of their sponsorship money online as possible?”
The research was conducted in-house over the last 6 months. The £140 million of additional Gift Aid is derived from comparing the Giving Campaign’s figures for sponsored event Gift Aid reclaim (at 20% of the net donated funds by value) with the average experience of Bmycharity and Justgiving over the last three years of a little over 70%. The difference – (70%-20%)x 28.2% – is multiplied by the CAF figure for UK annual sponsored event fundraising of £1 billion – giving a Gift Aid increase of £140 million.
The £55 million saving is based on an analysis of the average banking, administrative and data capture and fundraising support costs of a sample of charities that Bmycharity has studied. Bmycharity acknowledges that, while the figure is broadly accurate for the sector as a whole, this benefit will vary significantly from charity to charity since it is dependent on the existing cost structure of the organisation.
One benefit which wasn’t quantifiable was
the value of data capturing the results from online sponsorship fundraising: donors rather than charity staff will have entered the details of their address and data protection preferences. This will be in a form that provides scope for detailed profiling and data mining and improved online and offline targeting.
About Howard Lake
Howard Lake is consultant editor of UK Fundraising. He founded the site in 1994 and successfully sold it in 2022. As director of Giving X Ltd he is exploring growing giving on a massive scale.
He is the founder of Fundraising Camp and co-founder of GoodJobs.