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What can we learn from the success of text donation fundraising?

Last month the regulator for premium rate text messages, PhonepayPlus, released data showing that in 2014 text donations raised over £114 million.

Last month the regulator for premium rate text messages, PhonepayPlus, released data showing that in 2014 text donations raised over £114 million.

This is a great success story for fundraising and charities. At nfpSynergy we are pleased to have played an important role in the changes that bought about the development of text donations. Back in 2008 when I finished my stint as Chair of the Institute of Fundraising I agreed to take on the task of trying to make text donations economic.

At that stage a text donation of £1.50 only put 95p into the pocket of a charity. The rest was taken by VAT, and the mobile operators and intermediaries. Bit by bit a working group unpicked the barriers to removing VAT and operator charges, the critical one of these being a dedicated set of codes for text donations. This was followed by the operators agreeing to drop their charges.

At the same time we produced a report ‘Sending out an SMS’ which looked at the potential for text donations. Back in 2009, using some of our existing fundraising data, we predicted that by 2014 text donations could top £100 million. Equally important, we said that the new short-codes could result in a renaissance in responsive public fundraising. So we are really pleased that both predictions have come about.  

I am telling you this not just because we are proud of our involvement along with CAF and the Institute in these changes, but because of the key question: What can we do next to grow the fundraising cake?

In recent months the focus on fundraising has all been reactive and defensive. It seems inevitable that changes to self-regulation will move the balance away from fundraising freedom towards donor and public protection. Even without this, fundraising needs to diversify. We need more ways to raise money so that people can give and forget, not give and regret.

However these new successful fundraising activities rarely happen by accident. They take planning, collaboration, research, innovation, resources and energy. It’s increasingly unlikely that any one charity could do this alone. So what could be the next big, medium or little thing for fundraisers?

  • Lottery deregulation. All the evidence is that lottery deregulation will help charities raise more money. Sadly, the National Lottery scaremonger about the impact on its sales, and even sector bodies like NCVO are distinctly lukewarm.
  • Gift Aid. We have been talking gift aid reform for close on a decade. Sadly the changes implemented like the gift aid small donations scheme (GASDS) are a text book example of how to be bureaucratic. Worse still for those who want change, the sector has no common agenda. Somebody should seize the initiative and create an agreed sector blueprint for gift aid reform.
  • Digital fundraising. I think the big step changes in digital income are yet to come. Micro-donations hold great promise, but as a rule digital income has underwhelmed for most charities. We need more innovation in this area to really capture the potential.
  • Financial services.  The biggest single prize in fundraising is to see how charities could move into a slice of the ‘commission’ on financial services products. It’s a regulatory minefield, the 2012 changes as part of the ‘retail distribution review’ may make the whole area even more difficult. However if fundraisers can work together we could open up a whole new income stream for charities.

In truth there are probably a lot more areas which could encourage substantial income for charities. Yet the chances of them being realised without somebody leading the change and making it happen are close to nil. If we want to make sure fundraising has new sources of income in the future, we need a plan.


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