Charity fundraising in uncertain times

These are difficult times for Charities. Government support has been eroded and so has Corporate sponsorship. There remains the generosity of Joe public and he is less enthusiastic these days.

According to the Charities Aid Foundation, regular giving though still providing around £10 billion in donations is now accounted by fewer people.

These fewer supporters therefore give more individually. Charities are also increasingly reliant on legacy contributions. One medium sized Charity recently announced that it collects 50% of total income from legacy gifts. In the past legacy income were regarded as welcome windfalls. They were unpredictable and though wealthy supporters were courted and encouraged to include the charity in their wills, the results were long in showing. Charities that tend to do well offer care, sympathy and the possibility of relief via research for cures of long drawn out suffering from specific illnesses like Alzheimer’s, Cancer and Heart disease.

All this implies that many Charities have falling income and so legacies while accounting for a larger share of total income, this is from a smaller cake.

There are of course many factors that account for the decline in public generosity. One may be the effects of the recently introduced General data privacy regulation.

Organisations that used to communicate regularly with their customers and supporters via the mail now need the express permission of people on their mailing list to continue this practice. Direct mail used to account for 70% of the total ad spend of Charities. It was the most efficient advertising vehicle acquiring up to 80% of income raised via advertising. The most recent analysis of advertising spend shows that Direct Mail now accounts for 36%.

Charities have switched ad spends into the Television medium, which though a great way of promoting the cause is less effective in raising money directly. Some use it to promote their own lotteries. Many advertise in daytime programmes and these whilst less expensive cater for a downmarket audience. Ideally TV should be part of a multi-media strategy.

Some enterprising direct response advertisers get around GDPR by continuing to use the mail by substituting the term “Householder” for named individuals. Others analyse their supporters by Mosaic post codes and thus expand their householders mailing list.

Inserts in carefully selected newspapers and magazines also provide scope for a wider telling of the story to a more relevant audience. There is even space to remind supporters of the benefits of charitable bequests without making it the sole reason for advertising.

And then there’s the quality press, selective and very adaptable.

How to get Ahead in Advertising

The function of advertising is to inform and persuade. Before you can do that, you have to grab the attention of the prospect. This can be difficult. Attracting attention means diverting the mind from other more important issues. This difficulty often leads to over prioritising entertainment, so that one remembers the advertisement but not the brand being promoted.

Years ago, I did some small scale research which involved showing prospects cut down versions of commercials with the branding components missing. The commercials were selected to make the case, but I was still surprised by the high proportion of viewers who couldn’t recall the brands. Particularly since these were heavily promoted brands.

Some advertisements having attracted attention then fail to suggest good reasons for prospects to think better of the brand.

Rosser Reeves invented the concept of the Unique Selling Proposition, where a brand offered a valuable benefit which was either unique to the brand or was not capitalised by competitors. Many successful brands benefited from this USP concept in the second half of the 20th century. Sadly it seems to be less common now.

Which is why the brands that sell on a USP benefit stand out.

Think of brands who attract attention and then suggest positive user benefits and Direct Line comes to mind. They use Harvey Keitel in his wise guy persona. Then he provides tangible benefits not promoted by competitors.

Landlord protection for unpaid rents is one. A taxi ride home after a car accident is another. This is good advertising and as such is very effective.

Insurance companies suffer from an increasing level of customer complaints and simply trumpeting clichés makes for waste.

https://www.youtube.com/watch?v=8BoiUG8DOUc

Lessons from two smart cities

Observing how other cities are adopting change is arguably the fastest way towards sustainability for your own environment.Two cities I have recently visited are involved in novel ways of improving the lives of their people.

Consider Singapore. In geographical terms, it’s about half the size of London and supports a population of nearly five and a half million people.

Inevitably it is characterised by a multitude of high-rise buildings but the other overwhelming impression is just how green it is.

It wasn’t always so.

In 1965, when they gained independence, Singapore was “filled with slums, choked with congestion, where rivers became open sewers, no natural resources and few jobs for the workforce. Now it’s a clean, modern metropolis, economically successful and the highest rate of home ownership anywhere”.

Veteran architect and urban planner Cheong Koon Hean oversees the city’s public housing has developed the concept of livable density which is about “creating quality of life despite that density”. Pocket sized public gardens are linked by canals and pretty bridges, Vertical gardens adorn the sides of buildings, whole floors are given over to gardens used by everyone. Three million trees grow in luxuriant profusion amidst rivers and ponds. The botanical gardens are beautiful and it’s orchid collection not to be missed. Bishan park is part of network whose ultimate goal is the provision of 400 miles of walking and cycling tracks. By 2030, Singapore will be gauged by the Green mark standard whose aim is to reduce energy use and carbon emissions. Renewable energy is being developed rapidly and the smart money says they will achieve their targets.

San Francisco is one of my favourite cities. They have a target: 50% of their electricity will come from renewable sources by 2020. Since solar panels and wind turbines already account for 40% of electricity purchased, the target is likely to be exceeded.

It also has policies on recycling and composting. It aims to eliminate landfills and incinerators by 2020.All food waste, grass cuttings and foliage is collected and converted to compost as “fine as sand”. Hotels are involved in this recycling programme too because it saves them money. The City now bans the sale of small plastic bottles and are installing drinking fountains. Supermarkets are now no longer allowed to hand free plastic bags to their customers. The city is now targeting bans on packaging materials such as polystyrene and cellophane and developing the use of old fashioned washable diapers.

No reason why our cities cannot emulate Singapore and San Francisco.

Does technology only have to serve the rich?

The divisions in this country have been bought into sharp focus since the recent referendum. Some people in the winning side are behaving as if they have been given a mandate to take us back to the days of the black shirts.

There is less goodwill towards people who have settled here despite their contribution to the economy. Has compassion for the third world poor diminished too?

And yet the advances in science and technology means that much more can be done to help.

Apparently, the Earth is hit by 430 quintillion Joules of energy from the Sun every single hour: That’s enough to meet the World’s energy needs for a year. Furthermore solar energy has never been cheaper at thirty cents per watt. Installations of solar panels are growing exponentially and battery technology has improved dramatically too.

That is why countries like China and India are investing so heavily as are companies like Tesla, Apple and Google. Low-level technology such as spray-on can transform windows and glass in buildings into solar panels. In Britain, schemes already exist to convert pedestrian footfalls into energy to light up buildings.

Sustainable energy that doesn’t need huge infrastructures and national grids can transform poor people’s lives. Better standards of living in their own Countries can mean fewer migrants, less carbon emissions and global warming.

Schumacher was right when he wrote about how low level technology could help the disadvantaged in his book: ‘Small Is Beautiful’ forty years ago.

Ultimately, Helping the poor in the third world, helps us too. 

The law of unintended consequences

In China and India there are more young men than young women. The problem in China was exacerbated by the one child policy, but in both countries was created by a cultural preference for baby boys. The technological advances that allowed the gender of the unborn baby to be determined and the availability of surgery for abortion did the rest.

The cultural norm had been early marriage. Now with a gender gap, young women could exercise choice. So goodbye to dowries and being second-class citizens. Now better educated, women had real power. The drift towards automation left many young men unemployed echoing Mahatma Gandhi’s warning: “What we need is not mass production, but manufacturing by the masses”.

The surplus to requirement young men drifted, joined gangs, formed bad habits and sometimes turned criminal. A few became the prey of recruiters to terrorist groups where the incentives were money, pornography and drugs.

Their salvation will only come if they are given opportunities to educate themselves possibly through the internet. In rural areas, Satellite TV and mobile phones leap-frogged the traditional route of terrestrial television and landlines. Now the concept of a linked world as imagined by the communication theorist Marshall McLuhan could do the same for education. Online schools and Universities will emerge to teach basic education and higher knowledge.

Technology can also create jobs. Electricity can be made available without a national grid through solar panels and improved storage batteries. Graphene can be extracted from the methane created by cow dung and fabricated into suitable material forms. 3D printing may also be possible, reducing the need for long journeys to an industrial hub.

Others may become economic migrants and in addition to a better life, they will have a better chance of finding a partner. Many societal thinkers believe that migration is not only inevitable but could be a force for good in an ageing Western world. Educated or self-taught, they will find opportunities in the new digital world as explored in Professor Douglas McWilliams new book: The flat white economy.  Immigrants, particularly the skilled ones add to the store of capital and even the others take jobs that the native population don’t want. Imagine the NHS without Doctors and Nurses from abroad.  The digital explosion in London depends on the importation of skills from abroad.

Immigration could actually be beneficial for the ageing West and not the bogey it’s currently depicted to be. In fact it might be a case when ‘the law of unintended consequences’ could be a force for good.

What is the incentive for saving?

People appear to have gone off the habit of saving. For years wiser folk have recommended putting aside one-seventh of income for the proverbial rainy day.

The average savings ratio is now a meagre 5%, so why are we ignoring this advice?

Some are too poor. Day to day survival is a battle for many. They are targets for the payday loan crooks, some of who charge 1200% interest.

The fear of debt that kept our Grandparents cautious appears to have evaporated. Indeed the economy is largely based on borrowing. Get a car on the never-never. Use your credit card to fund a holiday. Furnish your home with the notional zero percent interest.

For the few thrifty folk, there seems little incentive to save. Conventional saving accounts are not being encouraged by Banks and Building Societies. Current interest rates are as low as 0.6% and that scant return is liable to tax. George Osborne’s plan to have Banks not deduct 20% of interest paid will only help the less well-off wage earners on the lower tax threshold. They will welcome this change, but they will account for a tiny proportion of savers.

ISA’s were popular when the tax free interest they generated was worthwhile. Today the rates for Cash ISA’s are at best 1.41%. A poor return for an Economy purporting to be growing by 2.5%. So the drift to Share ISA’s should grow, if and it is a big if, they generate a better return. Here the fine print becomes a warning.

Share prices can go down and in the volatile climate, careful savers may consider that now is the time to indulge and spend.

Then there is the Pension savers, an incentive tax scheme, whereby tax is deferred until the rainy days your savings can be retrieved. The Chancellor would like to collect these taxes when he’s still in charge, but fears a political backlash.

So it’s up to the Business in the wealth management sector to offer benefits that encourage people to save.

But what can they say?

Some try to demonstrate trustworthiness in a generic sense but without a proposition most are not credible. Hiscox did this well and Lloyds have the most beautifully shot series of films with memorable sound tracks. Others talk about longevity which in the light of recent failures elicits little positive response. Without upward trending performance graphs some can try calling on the reputations of wizards like Warren Buffet, Anthony Bolton and Neil Woodford, but it’s still a difficult sell. 

Advertising needs to have a credible and persuasive sales proposition in the way Rosser Reeves meant.

And that depends both on the financial service companies and talented creative people in advertising.

Reasons to holiday in St Kitts and Nevis

I knew very little about these islands. Like most of you, I had known they were in the Caribbean and guessed their economy was largely based on Sugar and tourism.

What I didn’t know was their differences with other islands in the West Indies. Was the scenery more stunning than that of St Lucia? Were the locals friendlier? Was it easier to get to than Barbados?

It is likely that this holiday hot spot is desirable but is it sufficiently different from its promoted sister nations to merit consideration? What it needs is uniqueness and reasons to go now. Non deferability in fact.

Selling Travel provided both factors in their March issue in an article headlined “Celebrating in St Kitts“. It listed six things to do in the islands at different times of the year.

On the 27^th of March, the fifteenth annual ocean swim between Nevis and St Kitts is open to all. Two and a half miles of excitement and fun.

In June St Kitts will host a tri-nation cricket tournament featuring the West Indies, South Africa and Australia.

Other events include a music festival, Restaurant week, Latin fiesta and at year end Carnival.

As Selling Travel says: “One of the best ways to experience the colour, personality and culture of St Kitts is to visit the island when a major event or festival is taking place”.

I was sufficiently intrigued to investigate further. Flights from London are regular. Next a call to a travel counsellor and a visit to the website provided the reassurance that the islands were attractive, sufficiently unique and offered things to do for people who wanted more to do than fly and flop.

However these reasons need to be promoted , perhaps by working with British Airways and relevant tour operators initially and if possible by mounting an effective advertising campaign.

Tell prospects about St Kitts and Nevis and they will come.

Pensionable age extension - An election loser

Politicians are talking about the necessity of raising the age when people can collect their state pension. The current expectation is that people born after 1978 would be able to collect their state pension when they reached 68 years.

George Osborne thought the pensionable age should rise to 70, but other people think it would have to be much higher. Some think that our increasing longevity warrants a pensionable age of 82.

This will be increased gradually, but people now aged 30 will be expected to work until they stumble into retirement at 82. They will already have worked for 12 years and the prospect of another 52 of servitude is bound to be unwelcome.

A man aged 30 today is expected to live for another 51 years, so the average man will not live long enough to collect his pension. The average woman of 30 has a life expectancy of 85, so her longevity will cost the State three year’s pension. Hardly fair for sixty years of contribution. We think of these contributions as savings for old age, but the Government has used these payments to pay for existing pensions. So there’s nothing in the pot for future generations.

Will people accept these changes?

The large number of people likely to be affected makes this move a vote loser for the political party responsible for its initiation. In the end, this may only be a red herring to introduce a new retirement age of 70.

And there’s another reason for watering down these proposals. Employers may baulk at the retention of so many elderly staff who may earn more than young entrants and who are less able to cope with technological developments. What if unemployment amongst the elderly rises and unemployment payments fill the space intended for by wages?  

Also increased longevity doesn’t necessarily imply good health. Many chronically ill individuals will have to be paid sickness benefits.

It may be that the very prospect of a delayed start to retirement will spur the growth of private pension provisions. We currently save less than 5% of income for our old age. Financial experts think the ratio should be more like 15%. But the Chancellor is sending the wrong signals with tax caps on pension pots over £1.25 million. Pensioners also pay tax on the residue of their funds after the tax free portion is deducted. 

Mr. Osborne and his successors must devise better incentives for people to save because the State cannot provide in the way William Beveridge anticipated all those glorious years ago.

Perhaps Neil Kinnock was right when, on the eve of the 1983 general election, he warned us ‘not to get old’.

Tourism: Hazards and opportunities

Tourism is leading the world out of recession. According to the United Nations World Tourism Organisation, international tourist arrivals grew by 4.4% in 2015 to 1,184 million. An increase of 50 million tourists compared to 2014 figures.

Tourism currently creates 9% of the world’s gross domestic product and also accounts for 9% of total employment. As a sector it grew faster than the conventional economic power houses such as Finance, Retailing and Manufacturing.

In Britain, the International passenger survey suggests that overseas trips by UK residents have reached 63 million, a significant improvement from the numbers generated in 2010. However not everyone has benefited.

Countries with a warm climate and attractive scenery rely on tourism for a major proportion of their annual revenue. They need a regular supply of tourists from wealthier nations with cold and uncertain weather. These affluent tourists have an abundance of choice. Discerning tourists select from a shortlist of countries based on factors such as type of holiday desired, price, distance, convenience of airport and flight times. Then they consider whether the destination is desirable and unique rather than merely acceptable and ubiquitous.

Overseas tourist boards must communicate their advantages. However pressure on the domestic front has led to dramatic falls in advertising in the countries who supply these visitors. Advertising spends have dropped from £45 million in Britain to £16 million, when a longer term view suggests a greater effort should be made to retain and even grow the number of guests.

Then there is the safety issue. The world appears a more dangerous place as terror attacks in Indonesia, Egypt and France indicate. The complexity of the reasoning and randomness of the attacks make prevention difficult particularly in countries with porous borders, high unemployment and disaffection amongst the young.

                              

Tunisia has suffered particularly. The UK foreign office warns: 

“Further terrorist attacks remain highly likely including against foreigners”.

Tour operators have been diverting their customers away from Egypt towards Spain, Florida and Mexico.

For countries in the risk zone, greater security, surveillance, rapid response units and the active co-operation of its citizens is essential. These days with mobile phones, everyone has the opportunity to record suspicious behaviour.

Other countries need also exercise caution, but must make a strong case to attract tourists. Otherwise they will not benefit from the growth in worldwide tourism.   

Lardiness and how to beat it

Obesity apparently costs the UK £47 billion a year. Saving just a proportion of this, say 10% will make a deficit reduction larger than anticipated by the Chancellor in the first year of the new Government.

Why are we fat?

Obviously because we eat too much and of the incorrect mix of carbohydrates, fats, protein and fibre in our diet. Advice about portion control and proper nutrition is the official response to the problem but the odds are stacked against success. Processed, i.e. “bad” foods are cheaper than more healthy ones and there is a link between poverty and obesity.

The second reason is our general lack of activity.

Dr Linda B. White, writing in the Healthy Living website states:

Exercise is not optional. Your life depends on it. According to the good Doctor, the benefits of exercise are many.

These include the maintenance of a healthy body weight because bigger muscles burn up more fuel in the form of calories. Bones thicken and joints become more flexible. The heart, lungs, nervous, digestive and immune systems benefit. Sufferers from Type 2 Diabetes, Arthritis, Depression and Parkinson’s have some of their symptoms alleviated by moderate exercise. There are also claims that exercise enhances your libido and extends life span.

Apathy is the challenge. A draconian measure would be to tax sugar and trans fats as we do tobacco, but there isn’t the political will and the ad spends on Soft drinks laced with sugar and high fructose corn syrup dwarfs anything that public service advertising can mount. And then there are the promoters of fast food like the burger chains, with their salt and fat laced inexpensive tasty products. The leading brand regularly appears in the top ten list of TV advertisers.

But it can be done as Germany did in the 80’s. Then we used to laugh at them as the fattest people in Europe. Fortunately there are signs that the tide is turning. Childhood obesity appears to be falling so a shift in public attitudes will be easier.

A Government Tsar should be appointed to organise the drive. Then we can expand the reach and influence of the relatively small public service health promotional budget by involving all interested parties, including the NHS, the media, gyms, chefs and creative advertising people.

Tales from the Carlisle Arms

Alcohol was always a necessary lubricant in the advertising business. Pubs were landmarks and everyone knew where the Mucky Duck was located. Turn left at the Crown and two Chairmen, past the Dog and Duck you will find the Carlisle Arms. Characters spent time, sometimes lots of it and the quality of food was not an inducement. Jeffrey Bernard was often unwell there.

Maurice was a regular. He used to stop off there after work for a few jars before taking a taxi home to Barnet. One evening lasted longer and on the way home, after the taxi careered around a roundabout, Maurice fell off his seat and disappeared from sight. The taxi duly arrived in Barnet and the driver said: "We’re here, Guvnor". When there was no answer and not spotting Maurice, he assumed his passenger had slipped off at some traffic lights, cursed himself for his carelessness and drove back into the West end.

Up pops Maurice, asking; “Are we there mate?”

Alistair decided to drive home late one night despite being well over the limit. Past Baker Street and on the elevated section, he decided that since he knew the road ran straight for a mile, he could afford to shut his eyes. He awoke, on a roundabout and heading for the central reservation, he jerked the wheel around and crashed into the barrier. Below him on the pedestrian underpass an elderly Jamaican woman, on her way to an early cleaning job, stood shaking as she brushed glass off her woolen hat. She said: “I tell you what, someone’s trying to kill me. Third time this has happened this week”.   

And I killed my new car and the only taxi in Central London plying his trade at 3 am. Curiously there were hundreds of witnesses.

Even stranger, they were all taxi drivers.

On liars

The world is full of liars. Politicians lie. Bankers and business-men are economical with the truth and most people tell fibs at least some of the time.

 Liars seek to justify their dishonesty. "It was only a white lie" or "I lied because I didn't want to hurt you".

In fact, the truth is more likely to hurt the liar, because the lie seeks to cover up a lapse of morals, ethics or legality.

Most people lie for self-interest and only when this is threatened. A few people lie almost all of the time, even when there's no personal benefit.

Billy Wilder's film, Witness for the prosecution, contained a court room scene, in which Sir Wilfred, a defence barrister, played by Charles Laughton, is cross examining a hostile witness Mrs Helm and catches her out in a series of lies.

The lady's portrayed brilliantly by Marlene Dietrich is then finished off by Sir Wilfred so:

"And now today you've told us a new story entirely", his tone changing from humorous to serious, "The question is, Frau Helm, were you lying then, are you lying now, or are you not in fact a chronic and habitual LIAR?"

He wins his case, but because the film is based on a short story by Agatha Christie, there is a twist in the tail.

Chronic liars tell the truth when it suits them, when very drunk, frightened or extremely angry.

How can you deal with liars?

If life was simple, you could avoid the proven liar altogether. In a more realistic situation, consider if the liar's statement could be a lie. If it is a lie, then is it a casual purposeless one or a deliberate lie told with purpose.

If you think it is, then ask yourself what could the motive be? Examine the possible alternatives and decide the level of importance each carries and how they affect you.

My Dad gave me a piece of valuable advice: If you must lie, hope you have a good memory.

Walter Scott said it more poetically : "Oh what a tangled web we weave, when first we practice to deceive".

A matter of principle

David Abbott was a brilliant copywriter. He was also a man of principle when it meant something. Bill Bernbach said: "A principle is not a principle till it costs you money". David refused advertising briefs from Cigarette accounts worth a great deal of money. On principle.

Today the new Advertising chieftains have a wide range of advertising accounts to be principled about.

Take payday loans for instance. Friendly actors try to persuade disadvantaged people that borrowing money at interest rates so bizarrely high that make it look like a typing mistake. And then add arrangement fees and penalties to load the profit pot.

A soft drinks company is to launch a "premiumised" (their word) milk brand with higher protein content and all the lactose removed. Their spokesman adds they will take the sugar down by 30%.  Critics are mystified. Natural milk has no other sugar type than lactose. The implication is this brand will have added sweeteners. If this is their usual additive high fructose corn syrup then the implications are more serious because HFCS has been described as addictive and accused of causing obesity.  

Obesity is now recognised as a greater health risk than smoking ever was. It is a worldwide problem associated with a western style diet of fast and processed meals

loaded with dangerous hydrogenated trans fats, excess sugar, high fructose corn syrup, and salt.

Obesity is linked with the greater incidence of Type 2 diabetes, heart disease and many types of cancer. Wiser folk watch what they eat and exercise but since obesity is also associated with poverty, many people find that processed food is cheaper and therefore affordable.

These are established truths so why are the food brands not doing something about their ingredients and methods of manufacturing ?

Eventually cost pressures on the NHS will force the Government to do something as they have with payday loans. However politicians act too slowly and the problem will only get worse.

We need more David Abbotts to take a stand against amoral advertisers.

Tourism... Back on track?

The signs of an economic recovery are everywhere. Apparently we are back where we were before the long recession started.

Despite the need to keep borrowing, the Chancellor is in a buoyant mood. Even the International monetary fund has raised its estimate of UK growth from 2.8% to 3.2%.

Raised confidence generally leads to increased spending and travel is one area that should benefit.

According to our National statistics, UK residents took 58 million trips abroad in 2013 compared to 56 million the previous year.

There’s still a way to go before the pre-recession total of 69 million, but the signs are hopeful. Trips taken in the first quarter of 2014 were 8.7% higher than in the first quarter of 2013. And Heathrow coped with 6.6 million passengers in June, despite capacity problems. Ryan Air have just revealed bumper profits and Easy Jet have increased their capacity in Gatwick by 16%.

An area of concern is the tendency of people to book late and the promotion of late discounted deals by price comparison advertisers like Secret Escapes encourages this trend. Their ad spend in the last twelve months hit £3 million. Other discounters like Hotel.com were active too. Even conventional tour operators publicly advertise discounts where once they would be more discreet.

Over capacity is one problem. Stay vacations are another. The speed at which some countries switch from being deemed safe to dangerous is also a factor. Egypt’s tourism business is still suffering from the Arab spring revolution.

Perhaps tour operators should adopt the discounting habits of some airlines who offer better deals to early bookers.

Inheritance tax: the opportunity for charities

Three recently published articles should interest charities specially those who depend on legacies for survival.

The first was an article in the London Standard of Tuesday June 10 and concerned Britain’s millionaires. According to Lucy Tobin, there are 513,000 households in the UK which have been identified as worth one million dollars or more. Of these 1044 are very wealthy with assets of over 100 million dollars.

In the same issue in another article, Lucy Tobin discussed the benefits of leaving money to Charities in your will. Apparently there is a significant tax advantage, in a reduction of inheritance tax, if you bequeath 10% or more of your assets to Charities. Money left to Charities is of course tax exempt but the tax paid after this and tax-free allowance by beneficiaries also drops from 40% to 36%.

An example highlights this advantage.

Assume you have assets of £1,325,000 in your estate when you die. Excluding The IHT allowance of £325,000, there is £1,000,000 for which tax is due.

If no money is left to a Charity, inheritance tax of £400,000 will have to be paid leaving £600,000 for the beneficiaries. Plus of course the tax-free allowance of £325,000.

If however 10% of the estate is provided for Charities, then in addition to them benefiting by £132,500, inheritance tax at 36% will be paid on £867,500, totaling £ 312,300, leaving £555,200 to the beneficiaries. Plus the tax-free allowance of £325,000.

In other words your generosity of awarding £132,500 to good causes is only costing your other heirs £44,800.

This surely is an opportunity that should be promoted by Charities?

Andrew Papworth publishes Harvest, a monthly newsletter and in the June issue writes about baby boomers. He states that the time to approach them about possible bequests is now, since they will begin the journey to the “unknown land” soon. People born between 1946 and 1966 will die between 2017 and 2046. Their wills probably drawn up between 1997 and 2026.

Only 37% of all adults have made a will and the numbers rise slowly as we get older. 36% of adults currently between the ages of 45 to 54 have, 58% of adults aged between 55 and 64 years have also made a will and the proportion rises to 79% for those over the age of 65.

And Andrew says: time is running out if you plan to approach the baby boomers for legacies.

The acquisition and retention of donors

One of the biggest challenges facing Charities today is the growing reluctance of new donors to provide contact details. They know that if you know where they live, you will undoubtedly send letters asking for more help.

Direct mail accounts for nearly three quarters of all advertising spend and is justified by its relative level of returns. Donors are gauged by the lifetime value because the return on above the line advertising investment is usually much less than the initial spend. One large charity averages an almost immediate return of 30% on its conventional advertising spend and without the possibility of further attributable donations has to find other justification for continuing the process. Awareness building is one. However since the overall aim is attracting more regular donors, list building remains a priority.

When advertising in conventional media like the press, usually the most cost efficient after Direct Mail, consider asking permission to stay in touch with donors. Thank the reader for the time spent and always say please. Promote your cause and stress the urgency behind your appeal. New donor acquisition will be difficult so the more attention paid to the copy and coupon the better. Enlisting the support of well-known people with a vested interest helps. And don’t waste money even in justifiable media if your appeal is placed where it will not be seen. Many charity ads are buried in advertising ghettoes, which encourage the turning of the page.

After acquisition of donors, retention is very important. You have already segmented your list to make your mailing programme more effective. Some donors will only want to be mailed once a year, others are happy to be approached more often.

The sort of residential neighbourhoods they live in can identify valuable donors and the Royal Mail will help you appeal to their neighbours.

Then have a direct response expert like Drayton Bird audit your mailing package. He is probably the best marketer equipped to make the improvements to retain donors and improve their responsiveness. 

Campaign Magazine named him one of the fifty most important individuals in UK advertising during the previous twenty-five years. 

David Ogilvy also rated him highly and he wasn’t one to scatter praise. 

Contact Drayton directly: Drayton@draytonbird.com 

When stuff hits the fan

Your business is doing well and then the BBC drops a bombshell. It announces that you as a retailer sold unsafe mattresses and sofas that were not treated with fire retardant chemicals that are necessary by law. Your spokesman says:

"We take the safety of our customers very seriously".

Really?

A charity is exposed for paying £ 70,000 to its chief executive, as part of his renumeration package, for his children’s school fees. A spokesman for the charity justified the package worth over £ 200,000 per year as a reflection on "the complexity and responsibility of his role".

A financial service company’s wrongdoings are leaked to the press, resulting in a sharp drop in its share price. If it made an explanation or excuse, I missed it.

All these reactions were wrong and suggest they were not prepared for these events to occur.

Keynes once remarked on the need for preparedness because: "There is always enduring uncertainty". 

Murphy’s law states that if something can go wrong, it probably will. Pray for it not happening but prepare for the worst.

Every organisation should have a crisis management programme in place. One that is carefully thought through, researched and rehearsed. It involves a continuous process of risk assessment and timely communication through the media channels. This means having a professional team in place prepared for if and when something goes wrong.

Then they will not make up crass statements to the press, but rather apologise, organise collection and possible remuneration, talk of the steps taken to help prevent a recurrence and seek to salvage damaged reputations.

Don’t just tell me about the problem...

Most charities are good at describing problems they hope can be solved with your donation and support.

One describes the dangers faced by very young children and implies that these hazards can be stopped. Full stop. Another tells you of the third world children forced to drink contaminated water. A leading wildlife charity describes the plight of the snow leopard and implies that adopting one of these beautiful endangered creatures will somehow protect it.

Most will talk about their achievements on their website, but few do in the advertisements and advertisements are what potential donors see first.

It is however important to be realistic in your claims. Can children really be protected when a lot of abuse takes place in the home?

And what can be done about the number of cases in the UK of children used in sex trafficking?

Writing in the Sunday Times, Jonathan Leake and Ross Clark tell readers how to save the world’s most endangered animals. Their five point strategy involves fighting the poachers, blocking the trade at the borders, educating people, particularly the Chinese of the damage done when they buy these products, incentivising local villagers to look after their wildlife, encouraging tourism, and a captive breeding programme for wildlife parks.

Human encroachment and loss of habitat also speed the process of extinction for beautiful endangered species. Few of these basic problems can be solved by Charities.

So don't make unrealistic claims. All they do is make the case for the cynics.

Is the Internet effective for Charity fundraising?

Can the Internet deliver donations to Charitable causes more effectively than conventional media routes such as direct mail and press advertisements?

Many fundraisers responsible for spending advertising budgets believe so.

Many experts have their doubts.

Andrew Papworth writes a regular newsletter called Harvest. His December issue has an article titled: Why you should not rely too much on the Internet.

“According to the Office for National Statistics, more than a third of women aged 65 to 74 and almost three-quarters of those over 75 have never used the Internet”.

And 

“Elderly women are often a key market for fundraisers and they are particularly likely to be missed by online communications”.

Drayton Bird says that Social networks can lose fundraisers a lot of money. He quotes using a statistic from the 'causes' application from Facebook:

“Over the last 12 months for which figures are available just $2.5 million has been solicited in the US by 19,445 charitable organisations. That’s an average of just $126 per organisation. They would have done infinitely better using Direct mail, but that isn’t fashionable”.

The problem is the sad fact that Internet advertising is peopled by practitioners who have made jargon an art form and who use it to make the practice very opaque. Transparency is absent for many campaigns.

The initial start point was search, a digital equivalent to Yellow pages where people looking for something specific are nudged into choosing a brand or service using adwords. This market is for people who are 'engaged'.

The digital version of mainstream offline advertising such as Press or TV are leader boards, banners, skyscrapers and MPU’s. When all this started they were priced in Cost per thousand impressions or Cpm’s in the American vernacular. And initially they were expensive, as high a £25 per thousand impressions. This was clearly unsustainable because it made the cost of buying online impressions more expensive than on established offline media. Digital publishers began to offer more flexibility in terms of geographic selection, behavioural and contextual targeting but prices had to fall. Advertisers were now more interested in the number of people who clicked on to their landing page or website. The average click through rate was 0.06% or 60 clicks per 100,000 impressions, so if you were foolish enough to buy impressions at £25 per thousand you would pay £42 per click. Horrendous.

The first to offer a low cost option were the blind networks or exchanges, who took over the unsold inventory of publishers and offered these for very little but at the expense of information about exactly where the ads appeared.

More recent is re-targeting where using cookies implanted in your computer, advertisers can provide messages to people who have previously shown an interest. Furthermore these messages can be transmitted across all the devices such as mobile phones, tablets, laptops and smart TV’s. This is known as householding.

Now the accent is on trading desks, real time buying using algorithms and programmatic platforms. Some of the more informed advertisers query the excessive jargon, are concerned about the lack of transparency and are considering having their own trading desk.

The jury is still out about whether these developments will make digital medium more effective.  

Gaining a better share of tourisms largesse

Tourism is leading the drive out of the recession. Its importance to the world’s economy is suggested by the work produced by the World Travel & tourism Council who estimated that in 2012, tourism generated 6.6 trillion dollars worldwide. This represents 9% of total GDP and a similar share of jobs. Tourism grew faster than the other economic powerhouses such as the financial, manufacturing or retail sectors.

Most of the gains are due to the belief that the bad days are over and because a resurgent airline business is making access easier by laying on more flights. Six months ago, a spokesman for IATA talked about European airlines being on a knife-edge. Now Lufthansa, Easy Jet and IAG, the owners of British Airways and Iberia have announced large profit gains for the most recent accounting periods. Tony Tyler, IATA’s Director general said:

“The strong growth of recent months, coupled with the continuing improvements in air travel demand in September, suggests that there could be a further acceleration in air travel growth before the end of the year”.

Not all of the smaller undifferentiated airlines will benefit from this trend.

People make their independent holiday destination shortlist first and easier access helps the decision process. For countries with limited advertising budgets, it helps if the national airline also promotes their country. A surprisingly high proportion do not. Sell the destination and then your differentiated, easy access service. Why else would you fly with Air Argentina if not to visit that country?  

It doesn’t have to be an airline though. Eurostar is giving people a reason to travel on its trains by promoting the hidden treasures of Paris in a charming typically gallic film commercial. See it here.

It makes you want to be impulsive and visit. And Eurostar is so convenient. 

Sometimes the favoured destination is served by a number of airlines. Price may be the major factor in the decision, but if this advantage is marginal, then flight convenience, departure airport, and perceived image matters. Skytrax rates airlines on the basis of product and service criteria. The top airline is Emirates because of the age of its fleet, quality of the website, airport service, cabin staff efficiency and friendliness and the on board product. The other podium places were taken by Qatar and Singapore Airlines.  

Airlines that don’t pay attention to all the service ideals risk being marginalised and prey for the major operators.

To see the Eurostar video in full: 
http://www.youtube.com/watch?v=NCyQo6rVrOI