# Who is thinking about the future of fundraising?

- Link: https://fundraising.co.uk/2019/12/02/who-is-thinking-about-the-future-of-fundraising/
- Published: 2019-12-02T14:08:54+00:00
- Author: Giles Pegram CBE

**Howard Lake is, and here are my thoughts on his [excellent white paper on the challenge and possible directions from which progress might appear. Please read it](https://www.oneadvanced.com/siteassets/resources/advanced_whitepaper_charities.pdf).**

Ever since Howard and I talked over dinner at the IoF Convention in 2018, I have
been waiting for this.   I’m not sure why I don’t know that others are thinking 
at this level.   There is a lot of talk about, for instance, behavioural science,
and I find it fascinating, exciting and compelling, but essentially it is tactical
not revolutionary. 

What Howard is talking about is revolutionary thinking.

## Advertisement

Before I start to comment on his paper, may I lay down a couple of my own givens?
⌊
Helping hand⌉First, I believe one thing on which I am unshakable.   The natural 
instinct of individuals to want to make a difference to the world by giving money
and time to help meet needs in the community, in society, or across the world, is
the same now as it was 1,000 years ago.   It was the same in 1389 during the re-
building of Troyes Cathedral and will be the same in 1,000 years’ time – so long
as the human race hasn’t been foolish enough to allow itself to become extinct.

What has and will change is the way that charities harness that desire to make the
world a better place.   This is pretty fundamental.

![Innovation cartoon](https://wfay6x.infiniteuploads.cloud/2019/12/fundraising-innovation-
licensed-by-giles-pegram-20191203-1024x824.jpg)

Innovation – source: Cartoon Bank. License #TCB-141284

 Secondly, the word _‘innovation’_ always makes my hackles rise. When I was at 
NSPCC there was once a discussion at SMT about making _‘innovation’_ a KPI. One 
of maybe just five or six. I vehemently argued against this. Why should innovation,
_per se_, be something to be celebrated?

I hear fundraisers today saying that conventional fundraising is broken, and so 
innovation is critical to future success. Was the Ice Bucket Challenge the result
of innovative thinking? Was the amount of time and money spent by charities trying
to dream up their own innovative version of the Ice Bucket Challenge time and money
well spent?

We don’t need afternoons with blank sheets of paper, flip charts and post-it notes.

We need thinking, analysis, ideas and rigour. As well as creativity and lateral 
thinking, of course.

To my mind, effective innovation starts with two things.

First, a thorough understanding of current best practice. How did it come to be 
so? What was fundraising was like 2,000 years ago, as recorded in the Bible? What
was fundraising like 1,000 years’ ago, for the rebuilding of Troyes Cathedral? And
just 50 years ago, when Harold Sumption articulated so many fundamental truths about
fundraising?

And then, more recently, how has fundraising best practice changed in the time since
you and your team started as fundraisers?

Secondly, looking outside our sector, and gather the learnings from other sectors.

Commerce and technology obviously. And also psychology, sociology, social psychology,
political science and economics, to name a few.

With all of that insight, then to **think**. What can we learn? What insight can
we draw? How might the learning of other sectors be brought to bear on fundraising?

How can we connect what is happening in one place to what is happening in another
place, and come up with something previously unthought-of?

Then, and only then, to ask _What if…?_

That, for me, is what innovation should be about.
 

## Howard Lake’s white paper

Coming to Howard’s paper, he says that only major donor income and legacies are 
increasing.   I regard that as very significant.

Trust income will either come from trusts set up by major donors, or institutional
trusts, whose giving will be determined by the performance of their investments.

![NSPCC Full Stop campaign in Top Shop window](https://wfay6x.infiniteuploads.cloud/
2019/12/nspcc-full-stop-campaign-top-shop-window.jpg)

NSPCC Full Stop campaign in Top Shop window

However, I’d be very surprised if there hasn’t been a significant increase income
from companies.   Tell me if I’m wrong.  

During the Full Stop Appeal NSPCC was at the leading edge of creating integrated
company partnerships.   There might be a promotion, sponsorship, employee fundraising,
payroll giving and events.   Directors would be cultivated as major donors.   _‘
Charity of the Year’_ adoptions became commonplace.   Then the rise in Corporate
Social Responsibility (CSR) and the triple bottom line. 
All of this being seen 
together as an integrated partnership between both the company and the charity. 
One that would evolve over time. 

Has this not resulted in an increase in income?
 ⌊Donors - man and woman laughing⌉
If I’m right, then essentially that leaves Individual Giving. Lowish giving by individuals
making gifts, setting up monthly direct debits, taking part in mass participation
events or challenge events, or just buying a poppy on Poppy Day, and so helping 
to raise £50,000,000 on the one day.

So how do we measure success with individual givers? How are we innovating, according
to my definition of _‘innovating’_?

It is nearly ten years since I regularly attended review meetings between the charity
and the agency.   Or, rather, two agencies: below-the-line and above-the line.  
We would look at the relative performance of donor recruitment channels.   Direct
mail – door drops – DRTV – inserts – off-the-page – BRTV.   And then face-to-face
and door-to-door. 

How much has changed?
 ⌊Two paths - split testing - Pexels⌉ When sending an Appeal
to donors we might do a split test.

Spend on approach A and get 46% return, after, say, six months.

Spend the same on approach B and get 54% return.

So, approach B _‘works better’_ than approach A, and should be used in future.

That’s the purpose of split tests, isn’t it?

But does it _work better_, if approach A gives the donor a better experience than
approach B, and so increases the lifetime value?   And approach B reduces it?

How much has changed?

In 1991 I had the pleasure of working with John Watson on the first successful DRTV
ad, ‘Ellie’.  

 
Over a couple of years John’s agency and the NSPCC team refined and honed it. 
It was then pretty much perfect, of its time.   But 28 years later the DRTV ads 
I see are almost identical.   Exactly the same format, the same length and the same‘
ask’. ‘_£2 a month._’

How much has changed?

![Botton Village fundraising](https://wfay6x.infiniteuploads.cloud/2019/12/botton-
village-fundraising.jpg)

Botton Village fundraising

 This example of giving donors choices in how the charity engages with them, created
by Burnett Associates, is 30 years old. It is clunky and dated. But it is really
significant.

How has the thinking behind it evolved? Show me an example that has benefited from
30 years of research, insight and learning? I suspect you can’t. Few charities have
even reached this level of sophistication.

How much has changed?
 

## Meanwhile, what is happening in the real world?

![Growth in Amazon - source: Bloomberg Factset](https://wfay6x.infiniteuploads.cloud/
2019/12/amazon-growth-1998-2017-1024x819.jpg)

Amazon grows up and up – source: Bloomberg Factset

In 1994, Jeff Bezos founded Amazon.   (Put your own views on employment practices
etc. to one side. They are not relevant here.)

He sold books online.   He insisted he was not in the book business but in the information
business.   Seven years later, in 2001, when I was aged 51, Amazon made its first
profit.   17 years later, last year, Amazon’s profit was £3,000,000,000.
 ⌊Humanoid
head and neck⌉

Artificial Intelligence has evolved in leaps and bounds since 1956, when I was six
years’ old. We’re still only scratching the surface. I’m quite sure that, within
a few decades, robots, or humanoids, will be able to do pretty much everything a
human can do.

Surgery? Yes. They will have access to all the knowledge, wisdom and insight of 
all our surgeons across the globe.

Lawyers? Yes. They will have complete access to all case law.

Manual labour? Yes. They will know all the ‘tricks of the trade’, be stronger and
more efficient.

Stephen Hawking was so aware of AI’s significance that he was concerned that the
development of full Artificial Intelligence could spell the end of the human race.
Of course, we must make sure that it doesn’t.

But that won’t mean that there won’t still be needs to be met, but we will have 
vastly more time to endeavour to meet those needs.

![IBM Quantum computer - photo: IBM](https://wfay6x.infiniteuploads.cloud/2019/12/
ibm-quantum-computer.png)

Quantum computing development at IBM

_The IBM Q System One quantum computer. The temperature is kept just above absolute
zero – colder than outer space. The casing also seals out the external universe 
of noise and interference._

I can just grasp the concepts behind quantum computing, which was only conceived
in the early 80s, when I was in my 30s.

Even I know that ordinary computers store data and perform computations as a series
of bits that are either 1 or 0. Quantum computers use qubits. Each qubit is somewhere
between 1 and 0 but you don’t know where. The implications of this are vast.

By the time you had 280 perfect qubits, you would need every atom in the universe
to store all the zeros and ones.

Quantum volume is doubling every year, according to IBM, but nobody can say how 
far this doubling might go. When the first computers were invented, their inventors
had a good idea of what they could do.

No-one has the remotest idea of what quantum computers might be able to do.
 ⌊Fundraising
campaigns collages⌉ 

## So how has fundraising evolved whilst the world has been evolving so fast?

Howard writes that Blackbaud’s Steve MacLaughlin tweeted this year: “For over 40
years now, the share of wallet going to charitable giving has been stuck around 
two per cent.”

Isn’t this odd – surprising – even shocking?

Let me come back to Howard’s white paper. He writes:

_“For example, online retail spending has increased to over £70 billion a year in
the UK, and about a fifth of all retail spending now takes place online. A small
percentage of that figure donated to charities through affiliate commission would
make a huge difference, but this has not happened.”_

Why?

Then he writes:
_“Digital fundraising, the area where scale, automation and personalisation
has the greatest potential, has shown great innovation and increasing sophistication.
Yet its evolution is unevenly distributed amongst charities, many of whom still 
report a lack of access to digital skills.”_

Why?

Howard’s paper suggests various possible ways of creating a quantum leap in fundraising.

He talks about a campaign to implement a Robin Hood Tax, a microdonation scheme 
that would consist of a tiny donation to be taken from each financial sector transaction.

Also affiliate shopping schemes which have the potential to divert a small slice
of the population’s multi-billion pound online shopping expenditure to a charity
of their choice. Topping-up or rounding-up donations to the nearest pound could 
enable millions of us to give small amounts almost daily.

Alternatively, Howard says, growth could come from a sector-wide reappraisal of 
whether charities are finding and recruiting the very best fundraisers, tackling
the issues of lack of diversity and equality.
Then he talks about the potential 
of collaboration between charities, and a possible [_Incentive prize_](https://fundraising.co.uk/2017/02/16/time-for-an-x-prize-for-fundraising/).

You really need to [read Howard’s paper](https://www.oneadvanced.com/siteassets/resources/advanced_whitepaper_charities.pdf).
⌊
Segments - wooden toys suggesting individuals under a magnifying glass⌉ Let me posit
one thought from me. Just one.

As a self-confessed technological disaster, I am the last person to suggest **how**
we should harness technology massively to increase income, but I do have a view 
as to the **what**.   **What** we should be trying to achieve.   **What** we should
be demanding of rapidly evolving technology.

That we should be able to regard all of our existing donors, our potential supporters,
and the 50% of people in the country who are never even going to think of supporting
us, as **segments of one**.   Literally.   We should know so much about people that
we can use technology to treat each one of our donors as individuals, knowing:

• Why they support us?
• Why us, and not another charity?• What made them start 
to support us?• Which aspects of our work do they particularly like?• And which 
they’re less interested in?• What parts of our communications with them do they 
like?• And which don’t they like, and so we should change?• Whom do they know, to
whom they might be advocates of our work. And how can we go through our donor to
the prospect?   (c.f. [Richard Turner](http://twitter.com/ifundraiser))• And so 
much more.   So very much more. How many variables? 00s?  Why not?

Over the last few years I have been doing work with Salesforce.org.   I have seen
the power of their current technology.   I suspect very few charities are using 
even one tenth of that available technology.   And I’m pretty sure Salesforce.org
haven’t yet reached one tenth of what they will develop over the next ten years.

So you should be anticipating that the degree of individualisation in your charity
should be increasing 100 times over the next ten years. And maybe achieving 10 times
results.

Howard reports that engineers at X (formerly Google X), the division of Google that
focuses on producing major technological advances, operate with the notion of ‘_10x
thinking_’. They describe this approach thus: ‘_true innovation happens when you
try to_ _improve something by 10 times rather than by 10 per cent_’.

Is that built into your thinking? Do you believe I’m totally wrong? And Howard? 
And Google X? Or are you so busy with the day job that you haven’t really given 
it much thought, at the level Howard suggests?
⌊Disrupt⌉ How many of you have embraced‘
_disruptive innovation_’?

_“A disruptive innovation is an innovation that creates a new market and value network
and eventually disrupts an existing market and value network, displacing established
market-leading firms, products, and alliances.”_

That’s what Jeff Bezos did.   That’s what we must do.

(And this is no way inconsistent from my views on ‘_innovation_’, above.)

I can’t believe that in ten years’ time we’ll still be judging our success by the
response rate on a cold direct mailing.

Thanks, Howard, for writing the article. I hope that others in the sector will read
it, be inspired by it, or even consciously reject it. But it is too significant 
to the long-term future of fundraising just to ignore it: not to engage with your
thinking.

**Giles Pegram CBE**
**Consultant****1.xii.2019**