Notes from Ken Burnett following his review of the document ‘Current Situation and Tendency of Internet Fundraising in China’.
This summary from the report shows that on-line digital fundraising has already made great progress in China recently and is likely to show even more potential for growth in the very near future. But, while there is good cause for optimism, some lessons have been learned and it is clear that Chinese fundraisers can gain even more, if they learn to do Internet fundraising right.
- Written by
- Ken Burnett
- December 17, 2015
Corporate donors are the main source of charitable giving in China, whereas individual giving is very low. This merely reflects the current stage of development of Chinese fundraising and should be viewed as a great potential, not a problem. In years to come individual giving will grow many times over and will become several times larger than corporate giving. A key to that growth will come from Internet-based fundraising.
For most people in China the Internet is almost certainly their easiest way to donate, safely and securely from their own home or workplace. But it should be understood that while most people may give via the Internet, the fundraising that attracted them will often be off-line.
For example, the donor who sees a television interview or film featuring environmental destruction and then goes online to make her gift. The gift is channelled via the Internet, but the fundraising has been done by television. This distinction – funds are raised one way but the money comes in via another channel – is very important for fundraisers to realise and to track accurately.
Mobile giving is indeed an irresistible trend. But again, care should be taken to differentiate between genuine fund raising and mere fund collection. Both are important, but one is much easier than the other.
It would greatly facilitate growth in Internet fundraising if all organisations were not constrained in their ability to use the Internet and were not required to go through the public-raising foundations. That said, there is a need to control Internet fundraising to ensure that standards are high and the public are protected from inappropriate, excessive or bad fundraising.
Much of the growth recorded here seems to come simply from the fact that people are being asked more. This is good, up to a point. As has been seen recently in the UK, charity donors and the public generally (not at all the same thing, of course) are generally very tolerant of being asked more, but there is a limit. And when donors reach the point that they feel they are being asked too often or asked badly, then the effect on giving can be catastrophic.
It has not been possible for me to look closely at the various donation platforms and ways of donating on-line in China. It seems that the market is in a very early stage of development, that there are many innovations and ideas coming to market most of which may fail but some will succeed and probably in a very short time the market will look very different.
Some general observations
- Electronic giving still requires a proper thank you policy and a commitment to the 5 Fs – to frequent fast fabulous feedback (and with electronic donors, thanking and offering frequent feedback is really cheap).
- In feedback, look forward, as well as reporting on what your donor’s gift has done. Donors will feel good if they know what their gift will do in the future.
- Make your donor happy. Aim for a smile and even out-loud laughter.
- Make sure the language is right. Don’t seem impersonal and automated or sound like a big corporation. Close, friendly, approachable is best.
- It seems at present more men donate in China than women. This again may be a factor of the early stage of development of public fundraising in China. Generally, slightly more women than men give and donors (except perhaps electronic donors) the givers tend to be older (50+) and from well-educated and financially secure sectors of society. While, the statistics shows the generation after 80s-90s in China are the main group of charitable online-giving, since they are also the most active users of internet in China.
- Small amount donors are similar to ‘coin in the tin’ givers. These people are not ‘real’ donors. Because of their numbers they can obscure the statistics greatly. To be a real donor evidence of repeat giving is needed. So a donor should be counted after his, or her, second gift.
- Crowdfunding seems to have big potential in China. But for this to take off there will need to be real benefits for the ‘donor’. The sums involved may be small, so the benefits may be quite intangible and should be easy to deliver (ie via the Internet, donors will see something that will make them laugh, cry, or be happy – preferably something that is so good it can go viral). Great feedback will be key to crowdfunding – the 5 Fs).
- Some NGOs don’t value donors’ service or prepare it well. This is not good for their fundraising development. It is also a mistake to assume that higher cost of managing fundraising is a bad thing. Fundraisers want donors to give again, to renew, to feel so good about their giving they’ll recommend it to others. An example is child sponsorship schemes, which lead to very high retention and to high annual gift rates, but are costly to administer. The higher cost, though, is greatly outweighed by the greater LTV (lifetime value) that results from a happy sponsor.
- We want donors to have ‘Wow’ moments. But obviously for online donors such ‘wow’ moments have to be low-cost and easy to deliver. The cost of their operation should be seen as a necessary cost of doing business.
- A donor-led journey. As with all fundraising, the best route is to take donors on a journey that quickly moves them from single gifts to regular, low level monthly giving and then ultimately leads to a bequest, or legacy.
- ‘Item-sell-for-charity project’ and e-shops This seems to have big growth potential (the Alibaba experience is interesting). This will further grow if donors know something about the cause and what their donation will achieve. People are more likely to buy any product if they know even a small part of their purchase does good. But just saying so is not enough – it works best if you can show the good work the donation makes possible and also indicate that it’s a good value purchase (ie the customer is not paying more for the charity product, instead the retailer or manufacturer is accepting a lower profit).
As the report shows, these approaches will help to develop the culture of donating, and even the donating habit.
Charity shops and gift catalogues are parallels worth studying in the West.
Here are some examples on SOFII: