Much to the relief of many, it has been announced that the government is scrapping it plans to introduce statutory regulation around charity fundraising.
Instead they will be pushing ahead with the controversial Fundraising Preference Service (FPS). It is controversial because many people, as reported in the media, the ICO included*, do not agree with the concept. Be that as it may, and whatever your own personal thoughts, it looks like it will come to fruition so what does that mean for charity marketers?
[quote align=”center” color=”#999999″]The FPS gives us the opportunity to demonstrate responsibility. [/quote]
The first and most fundamental principle when dealing with change, is to accept it and if possible welcome it. Whilst FPS might not be the most popular solution the idea behind it is sound – that is to improve the perception of charity direct marketing amongst consumers. This can only be a good thing, both for fundraisers and the direct marketing industry as consumer confidence in both sectors is at an all time low and as a result donations are falling. When consumer confidence is high donations increase.
The FPS gives us the opportunity to demonstrate responsibility. It will not render direct marketing fundraising practices such as outbound calling and direct mail ineffective, it will actually make it a more legitimate, effective and cost efficient way to raise money. In fact, if you are a glass half full person, it could even bolster charity ROI on fundraising, rather than reduce donations as many fear.
FPS is an extension of suppression and data hygiene
Here’s why. It has long been proved that suppression (the removal of inappropriate records from a marketing database, such as people who have passed away or moved house – goneaways) enables organisations to save money by not wasting valuable resource on individuals that can’t spend/donate because they will not receive the direct mailer or telephone call. Given that the average customer database decays at a rate of around three per cent per month it amounts to a significant amount of money saved if these records are removed.
Imagine you have a database of 100,000 people and three per cent of them are out of date, that equates to 3,000 people. The average direct mail pack now costs 80p to produce and send meaning that £2,400 is wasted. Over the course of a year this could add up to over £20,000 – a significant amount of money for charities.
The FPS is an extension of suppression and data hygiene and must be viewed as such. It should be viewed not a tool designed to reduce the pool of potential donors, but as a cost saving device. Ultimately, if a person signs up to FPS it’s a strong signal that they do not want to receive communications from charities and therefore it would be wasteful targeting them in the first place. This means that it will cost less to bring in the same amount of revenue and hence ROI will increase.
Whilst it is still unclear how FPS will work; for example how long the exemption will last and what happens if sign ups are preexisting donors, what is clear is that this gives consumers a safeguard and a very positive indication that vulnerable people will be protected.
Phil Lightfoot is MD of Communication Avenue.
Main image: Data analytics by Hilch on Shutterstock.com
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