By Hayes Knight – 12 August 2012

A recent seminar to a special interest group of Chartered Accountants saw a funding expert as well as a fundraising expert share their knowledge and views on key fundraising trends in New Zealand.

Almost all our charity and not-for-profit clients and contacts tell us how difficult fundraising is at present.  It’s a very competitive environment for the donor’s dollar.  Accordingly it’s important to keep up to date with what’s changing, new trends and what organisations can do to ensure they continue to thrive in the current climate.

At a New Zealand Institute of Chartered Accountants Not-For-Profit seminar two expert speakers shared their knowledge and insights into today’s fundraising climate: Jenny Gill, CEO of what we understand is Australasia’s largest philanthropic trust, the ASB Community Trust, and Carol Painter, senior consultant at specialist Australasian fundraiser firm, Xponential Philanthropy.

In this article we attempt to share some of the key take-away points for those unable to attend this seminar.

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Some of the key trends impacting the availability of donor dollars in New Zealand are:

  • The global financial crisis
    • Many philanthropic organisations have been hit with the double whammy of seeing their capital eroded and then facing reduced investment income on their remaining capital – this equates to less available for them to distribute.
    • The flow-on effect negatively impacts the NZ economy and NZ business which in turn affects many parts of the population.  Therefore more people will come to rely on the support from  charities and NFP services.
  • The Christchurch earthquake has been a focal point attracting a lot of discretionary donor dollars.  It has also caused some charity and NFP organisations to cut back on some traditional fundraising initiatives through not wanting to compete.
  • The legacy of finance company collapses – many would be donors in or nearing, retirement age have lost a substantial portion of their savings in finance company collapses.  This reduces their ability to give.
  • The Government has cut funding in some areas.
  • The Government is changing how it is funding some areas e.g. contestable funding and seeking to fund a smaller number of providers to deliver a greater amount of services.

Research

Recent international research shows that in the United States (US) and Australia people are ‘giving’ less, probably understandably due to the world economic situation. There has been a downward trend since the all-time giving peaks in 2007.  Philanthropic giving tends to lag behind but essentially follows the rise and fall of the economy as measured by GDP.   There has previously been a lack of good research in New Zealand.  However the recent Philanthropy NZ commissioned BERL study is excellent and well worth reading to understand some of the unique features of philanthropy in New Zealand. Visit www.giving.org.nz to download a copy of the 2011 Giving New Zealand report.

From this study it is heartening to see that we Kiwis are a quietly generous bunch.  We rank ahead of Canada, Australia and the United Kingdom in terms of giving as a percentage of GDP. In fact the only country to beat us is the US.

Personal giving remains the backbone of fundraising.  However in NZ we have a higher proportion of philanthropic funding from trusts and foundations than many of our international counterparts.  In 2011 the BERL report estimated that $2.67billion was donated in NZ.  This was split between:

Type of Philanthropic Funding Amount Donated Percentage
Personal giving $1.55b 58%
Trusts and Foundations $971m 36%
Business $151m 6%

With our aging population demographics, bequests are a potential growth area.  Currently bequests represent about 8% of personal giving.

Changes in funding policies – ASB Community Trust

The ASB Community Trust has long been seen by many as a leader in thoughtful funding.  Hence their strategic direction in this area is worth watching as they often lead the market.  The ASB Community Trust’s recent funding approach highlights some key trends:

  • Look to support organisations that can show measurable impacts on entrenched social issues
  • Look for an evidence base to underpin policy development
  • Fund fewer groups and extend this to some long term multi-year commitments
  • Maintain quick turnover grants for smaller groups
  • Lower budget allocation to capital projects – i.e. less funding to brick and mortar projects
  • Do not pick up where Territorial Local Authorities and Government withdraw
  • Ask more questions about the effectiveness of the groups they have been funding

Tips for applying to funders

  • Do your research
  • Make contact
  • Make sure you fit their funding criteria – if you don’t fit don’t apply
  • Provide a complete application on time
  • Report back
  • Acknowledge any grants

Fundraising techniques – recent trends

There is no silver bullet when it comes to your fundraising.  Many traditional fundraising techniques still work well when applied intelligently.  However strategically smart NFP organisations also look to what is changing and what may be new sources of fundraising appropriate for them.  The following are some observations about new techniques and tools.

Online Giving

  • The fastest growing form of fundraising worldwide. But still only a very small percentage (estimated internationally between 2 and 4%).
  • Tools like FundraiseOnline (www.fundraiseonline.co.nz ) are gaining good acceptance as an easy means for NFPs and individual funders to utilise an online fundraising platform.  These allow the combination of integrated website, blog and email campaigns.  Having personally used the online channel for a fundraising initiative I can attest to how effective  it is.

Face to Face / Street Fundraising

  • An increasingly common form of donor acquisition by big charities in NZ.
  • Average 4.2 years sign-up (in established programmes) and $22.21 donation each month.
  • This now has a self-regulatory body; the Public Fundraising Regulatory Association with 22 charity members plus companies who carry out the work.
  • This technique has been subject to some bad press about overload and has even spawned a new term “Chuggers” i.e. Charity muggers.

Payroll Giving

  • Introduced at the beginning of 2010.
  • Over $5.7m raised to date.
  • A growing technique but faces some challenges such as acceptance due to workload for employers.

Tax rebate waiving

  • The concept of charities promoting donors waiving their rebate in order to donate a further 33%.

Commercial activity

  • A growing interest from charities to acquire and operate income generating activities.
And finally; don’t forget the basics…
  • Passion, emotion, and the personal touch help promote support.
  • Databases are powerful, but only if accurate and used with care.
  • Don’t forget grandma’s good lessons like the importance of a sincere thank-you.