Just seen this and had to respond. All good ideas seem to have thousands of people who claim to have come up with them, but I'm claiming (some) credit on this one. Many years ago (early 1990s), me, John and a couple of others (Brendan? Not sure)were in the pub next door to Oxfam after a long day in the office. Somewhere around the 3 pint mark we were tossing around ideas for how to reinvigorate our fundraising and the idea of asking for the ludicrously low amount of £2 per month was born.

We almost didn't test it becasue of the fears laid out in the article above, but we ended up mailing out £2, £3, £5 and £10 asks, against a control ask of either £10 or £15. The result clearly showed that the file of responses generated by the £2 ask was worth more than any of the others, with a mean average annual value of over £40 before any tax reclaim.

Sure, the potential for upgrade was a factor - but in a positive way. Generate a file of donors who will invest a small amount to try out your charity, and over a period of time, as they get to know you, they may agree to give more. Or leave a legacy. Or campaign for you. Hopefully all 3, and more. Now't wrong with that.

Over the years I've repeated the test of average values many many times, and got the same result each time - £2 a clear winner. And with upgrade results which staggered us the first time they were so good.

There should be a plaque on the wall of the Dew Drop Inn btw. 6 years later a similar conversation around the third pint mark was tossing around the idea that all donations should be eligible for tax effective giving. An intensive lobbying campaign later and the new Gift Aid was born...

Mike

£2 a month is a negligble amount for many. So not I expect the first standing order or direct debit to be cancelled when money is tighter.
Not sure I could afford 1 or 2 percent to any one charity. The ones I want to support get what I can afford. For some reason my mortgage company, gas/lecky company, water company and council also think they should have a chunk of my income.

Basic servicing costs can be cheap. I know standing orders don't cost us anything, sending thank you letters and newsletters is pretty cheap and we get a lot of non-financial support too.
If one person just donates £24 a year, not gift aided, that won't be much for the charity.
Times that by ten thousand people, rather more impact for the charity.
Others may turn down the idea of £2 a month. I for one will happily accept it.
And for whatever reason, people can choose to give additinal gifts or increase their donation at some point themselves.

Like Adam I think £2 is a ridiculously low figure to use. During the recession we're being encouraged to concentrate on the most cost-effective methods of fundraising. £2 a month doesn't cover most charities' basic servicing costs, particularly if typical attrition rates apply. So the campaign could actually suck money out of the sector, leaving less to be spent on charitable activities.

But my main gripe with the £2 a month approach is that it assumes that everyone needs to give the same amount. At 0.1% of average earnings, its a negligible amount in many working people's budgets. We should be setting them much higher targets. But for students, many OAPs and those on state benefits it may be too much. Any fixed amount of money, whether £2 or £20 or £200, is wrong for the vast majority of the population, whose personal financial circumstances differ greatly.

Usually I am an ardent supporter of generic campaigns like this, and think NCVO generally does sterling work. Some years ago they supported the "Giving Campaign", which was trying to get people to think about proportional giving - typically 1% or 2% of income to good causes. This gets round the problem with fixed amounts. I think we need to return to this kind of approach.

I understand where you're coming from, Adam. That kind of statement could be viewed as misleading - and maybe it isn't even all that believable as a proposition. However, I know that charities have good reasons for making such statements and are not really being disingenuous.

Speaking as a donor, as well as a fundraiser, my view is that charities should be as transparent as possible about the need for funds, how they will be used and what that will achieve.

This can present many challenges, though, since most charities have the greatest need for unrestricted funds, which is one of the factors that contributes towards the more 'woolly' or difficult to substantiate claims about what your gift will be used for and what it will achieve.

Unfortunately, on the whole, people are far less likely to respond when asked to pay for the salaries of project workers, or the staff at the head office that develop the projects, evaluate their effectiveness (and therefore ensure the charity's work is making a difference), or support people working in the field, the costs of fuel bills, light bulbs, insurance, and all the other things that charities need to pay for to achieve their missions. As a result, they often aim to get donors to buy into that mission and vision instead, which is when you get statements like ones you take issue with.

In truth, though, I don't think there are any charities saying, 'if you give £2 it will save the world' and people understand that their contribution, with the contributions of many others, will help that charity to work towards their mission and vision for saving the world or making the world a better place in some way.

Fundraisers constantly grapple with the challenge of being transparent as possible (which they want to be) whilst raising the funds that the charities they work for need to survive and do their good work - and this is easier for some organisations than others. One thing I'm certain of though, is that all of them are, in one way or another, genuinely trying to make a positive difference to the world, in often very challenging conditions. I think they should be supported, rather than criticised for that.

Rachel: Your analysis sounds basically spot-on to me - but I'd argue that what you're saying misses the point. I don't disagree that charities *need* to upgrade their supporters, or that recruting is expensive. But I *do* have a problem with charities pretending that they only need £2 to save the world - which is the impression some charity adverts are designed to give, and which simply isn't true. How can charities hope to win donors' respect and trust when they are signed up on a false premise? 

Adam, Intelligent Giving

Frank: Take your point. We explain all here.  We ask our visitors for £2 because we like to think that - just as you'd pay for a magazine or newspaper, you should at least consider paying for the service we provide here. It doesn't come for free. Does it raise us lots of cash, though? No. Should we really be doing it? Not sure. The point is, though, that we're not promising to save the world for two quid, and we don't have a call-centre waiting to phone you up and upgrade you. Anyway - I hope that helps clear things up.

Adam, Intelligent Giving

Does the cost of the administration wipe out our donation's worth? Will we be asked for more in the future? Are ou having a laugh?

The true net figure is the total given by the donor over the period they are actively donating, minus not just the cost of newsletters and any other communications the charity sends them, but also the cost to the charity to recruit that donor/ get that first gift in the first place.

It is usually the cost of recruitment that is by far the highest in this mix and - in my experience - donors whose first gift to the charity is on the lower side often may not go on to give enough to cover the cost to the charity of 'recruiting' them, let alone make a positive net contribution. The cost to recruit a donor depends on a number of factors (including the method of recruitment), and the money raised on the longevity of the support as well a the frequency and the value of gifts, but recruiting donors on a low monthly amount means they have to continue giving a monthly amount for a much longer time before the charity breaks event and this is the main reason that charities then need to 'upgrade' donors who sign up to monthly giving at the lower end of the scale.

This probably sounds incredibly harsh - and, of course, charities are grateful for every gift; whatever the value - but to ensure they are getting the best possible return on their fundraising budgets, and are generating the funds they need to achieve their missions, basing recruitment decisions on net lifetime value is critical.

If NCVO's campaign manages to help keep charitable giving front of mind during this challenging time, it can only be a good thing. However, from what I have read, it sounds like the campaign is focused on causes, rather than charities, and on raising awareness, rather than asking directly - meaning it would not be possible to measure any impact on giving. It may, never-the-less, help charities to attract donors (and keep existing donors giving actively) by promoting the need to give, and making them more receptive when they do receive an ask from a specific charity.

So do you expect charities to ask for what they want to end up with, up front? Never change the amount?
eg rather than £2 a month, ask for £30 a month?

How many people will sign up to give that, merely as an example? I know I won't, no matter how much I might admire the work being done by the charity.
So does the charity benefit from asking for what won't be given? Or is it better to ask for a minimum to start with, with the possibility the person will want to give more?

I'll happily consider a £2 a month ask. Might not sig up to it, but will consider it. What monthly donation would be your minimum ask Adam? And would you then never ask the person to increase donation?

SimonK: I've got this argument from chats with fundraisers who've freely admitted that "we only run £2 appeals so we can upgrade people; we'd never do it if we only got £2 from people." Obviously, I can't tell you who told me that, and, as RSPCA Cambridge points, out a £2 campaign could be administered efficiently. But I still don't like the idea that £2 campaigns are run almost entirely because charities want to upgrade people. I think it's disrespectful, to say the least.

Adam, Intelligent Giving

I guess it would depend whether the donation could be entirely managed electronically and whether the donor was expecting a paper newsletter etc.

If the charity is already signed up with JustGiving then a monthly donation of £2 would have essentially no extra overheads, and JustGiving offers various resources that the donor can view to stay in touch with the progress of the appeal. It's also possible to use JustGiving to offer donors ways to select particular projects to suppot.

http://www.justgiving.com/staffyneutering  

Where exactly is the evidence that "the costs of administering the donation alone almost wipe out its entire value"? Just boldly asserting something doesn't, you know, actually make it, like, true.

Funny really. How much is £2 a month worth net? Even if never increased.
While someone on limited income may not be able to afford £20 a month, £2 a month is more affordable.
I honestly cannot think of any charity who would turn down an offer of £2 a month. Besides IG.
And asking for £2 a month, some people insist on giving more.

My own charity can easily provide information and newsletters for well under £24 a year. Do larger charities cost more per person to accept donations than us much smaller charities?
I would expect not.

Still, those charities able to turn away donations obviously can manage on other resources.