Digital fundraising - a world of opportunity

April 2014 Amina Ali, Andrea de Ruiter, Michele Madden and Secil Muderrisoglu, in collaboration with the Resource Alliance

Contents
Contents .................................................................... .2 Foreword ....................................................................... 3 Introduction .................................................................. 4
The digital environment in a changing world.4

Success factors for digital fundraising around the globe 5

Factor 1: Trust in non-profits....5 Factor 2: Giving culture among the population....10 Factor 3: Access to digital technology.14

Pulling it all together: summary and conclusions .. ...20 What should you do?.....................................................22
Further information...24

Appendices.25

Foreword
High levels of public trust and confidence are at the heart of an effective civil society. Therefore it is perhaps not surprising that this report identifies trust as one of the most important factors in successful digital fundraising. The way in which non-profits raise and spend money is the most important factor relating to trust. Here in the UK, for example, ensuring that a reasonable proportion of donations make it to the end cause was cited by the public as the top factor influencing levels of trust, according to recent data from nfpSynergy. Meanwhile, as this report identifies, there is a relationship between high levels of corruption and a poor culture of giving. Russia provides an apt example of this. Consequently, a willingness to explain how an organisation operates and why it spends money on the things it does is crucial to enhancing and maintaining confidence in the work of our sector. Digital tools and channels provide an effective means by which to demonstrate openness and transparency, as well as to ask for donations. Websites, social media, SMS and others allow non-profits to demonstrate how they are making a positive difference to the cause they serve. These platforms can also be used to help address many of the issues identified in this report, including concerns of corruption and the need to build a culture of giving. Technology is so fast moving that it can be hard to keep up. From MySpace to Facebook to WhatsApp, to smart phones and responsive web design, a week doesnt seem to pass without another new tool being announced or trend taking favour. Here at the Resource Alliance we have always had a keen interest in how digital fundraising is developing. Our International Fundraising Congress is often the first place to explore the potential of new techniques, while our free Fundraising Online conference is renowned worldwide for being the best digital fundraising event of its kind offering participants access to strategic and tactical advice, support and case studies that will help them ensure digital is fully integrated into their communications. As this report identifies, shared learning of this nature is an effective way to ensure non-profits arm themselves with the knowledge and skills they need to capitalise on opportunities as they arise. This report provides rich material to reflect on, as well as serving as an excellent reminder that while new digital tools and techniques are exciting and their potential should be explored, ultimately non-profits must never lose sight of the key principles of fundraising. Enhancing public trust and confidence should be at the heart of everything they say and do, no matter what communications channel is being used. Neelam Makhijani, chief executive of the Resource Alliance

Introduction
The digital environment in a changing world
Technology has changed the world we live in. Global communication has created possibilities and connections that did not exist before. Undoubtedly this has brought problems with it nor is it distributed evenly across the globe. However, it has opened up new opportunities for non-profits everywhere to engage with their communities and key audiences, whatever their size and purpose. From our work with non-profits in the UK we know that digital fundraising is an area for growth. But what does this mean for non-profits operating in very different environments? What are non-profits doing in very diverse cultures and developmental stages? Is this an area they should be investing in? Our aim with this report is to explore the different contexts and try and tease out what different elements, stages of development and culture mean for digital fundraising in countries across the globe. With this in mind we set out three success factors for digital fundraising: trust, culture and access to technology. This report is by no means a definitive picture of digital fundraising in these regions. Rather, we have used existing sources of information along with data from our interviews to explore the area. Most importantly, we wanted to discover whether digital fundraising is an area of development that non-profits should invest their valuable resources in - and to a certain extent the results surprised us. A variety of variables affecting digital fundraising were explored and of course these have different weights and differ in how easy they are to tackle. Obviously a small nonprofit in any country cannot on its own tackle the endemic corruption that may exist in the sphere it operates in, or change the banking system so that people trust it more. We found that in emerging economies digital fundraising is still in its infancy. The reasons for this are complex and differ across the countries and regions that we examined. During the data collection and analysis we considered a range of variables that might be influencing the development of digital fundraising. These included, but were not limited to: the percentage of the population living below the poverty line, school life expectancy, literacy rates, GDP and perceived corruption levels. We were able to identify three key success factors that influence the development of digital fundraising in the countries we examined. These were: Trust what level of trust exists towards public institutions and non-profits? Culture of giving how do the public give and volunteer? Technology how widespread is internet and mobile phone use?

We do not pretend that this report represents an empirical analysis of the weight of the various elements as the three we focus on are to a degree a subjective choice. This report unpacks our findings in these key areas in further detail and explores what the implications might be for non-profits. Further research will need to be undertaken as this area develops and we hope this is only the beginning of this

conversation. Digital fundraising manifests itself in many different ways. For the purposes of this report we focused on the following forms: mobile (SMS/text and mobile web), internet and email. Our research focused on emerging economies within the following regions: Central Eastern Europe, Latin America, South Asia, Asia Pacific and Africa, with particular attention paid to emerging economies such as the BRICS nations (Brazil, Russia, India, China and South Africa). For this report we conducted desk research using existing sources of data to help understand the factors that influence digital fundraising development in these regions. We then carried out telephone interviews with nine non-profit practitioners and three non-profit digital fundraising experts from countries in the identified regions plus the UK as a comparator. Raw data from the desk research is available on request.

Success factors for digital fundraising around the globe

Factor 1: trust in non-profits
What do we mean by trust in non-profits?
We defined public trust in non-profits in relation to trust in the integrity of a nonprofits operations and the effective use of donations. We also considered what factors influence trust. Our research probed how concern over public trust influences how non-profits approach digital fundraising and the effects of public confidence in the safety of online financial transactions.

Key issues on trust

The influence of public sector corruption on trust in non-profits
The Corruption Perceptions Index (CPI), carried out by Transparency International, measures levels of perceived public sector corruption in 177 countries (Chart 1). Corruption is ranked from 0 (very corrupt) to 100 (very clean).

The UK has a CPI score of 76/100 making the UK the country ranked 14th globally for least corruption. A survey of the UK general public shows that two thirds (66%) trust non-profits a great deal or quite a lot, making non-profits the fourth most trusted institution1. This is not to say that public trust in non-profits in the UK is not disturbed by revelations of non-profit financial misconduct (e.g. the Cup Trust taxavoidance scandal in 2013). However, survey data consistently shows high levels of trust in non-profits so we can suppose that belief in the integrity of public institutions or in regulation mechanisms persists despite these revelations. Research shows there are connections between levels of perceived corruption in a country and concerns non-profits have about being able to fundraise among the public. India has a CPI score of 36/100 and ranks 94th for least corruption which is in the bottom half of countries. Interviews with non-profit practitioners in India reveal apprehension about lack of public trust towards non-profits. One digital fundraising practitioner discussed a focus on building trust in a new non-profit over a period of years before attempting to solicit donations from the public attempting to fundraise before building a trustworthy reputation having proved disastrous for other organisations. Give India, an online donation site, was partly set-up to provide a mechanism for people to be sure that non-profits were credible and trustworthy. However nonprofits still struggle against perceptions that many non-profits are corrupt.

nfpSynergy, Charity Awareness Monitor, May 2013

[Non-profits are often] automatically accused of misusing peoples money [and so] even the good people have a bad name and it becomes important for them to establish their credibility.
- Expert, India We can consider a willingness to give to a non-profit one measure of trust in nonprofits. Looking at the other high growth BRICS countries (Brazil, Russia, India, China and South Africa) we see a relationship (no study was made of causality) between high corruption levels and the proportion of people giving money to charity. Russia has a high level of perceived corruption (28/100) and also one of the lowest reported levels for donating money to non-profits with a score of 6 per cent2. Brazil and China have less perceived corruption but still score in the bottom half of the corruption scale 42/100 and 40/100 respectively. Accordingly both have moderate-low giving levels with 10 per cent of people in China and 23 per cent in Brazil reporting have donated money to charity.

Trust in the safety of digital financial transactions

In some parts of the world non-profits face the challenge of large proportions of the general public being wary of making financial transactions online. Our interviews with non-profit practitioners reveal low take-up of online donation methods and reports of public concerns about the use of personal information provided during donations. In Romania a non-profit practitioner linked this to the political context of being a former communist state. In other cases, the difficulty of engaging the public in making digital donations is linked to the lack of infrastructure to support it in some countries. Mobile broadband penetration rates in Mexico are very low at 10 per cent and only 38 per cent of Mexicans report having internet access at all3. The lack of internet access for the majority of the Mexican population is a strong barrier to engaging in digital fundraising. Furthermore those that do have some kind of internet access may be relying on internet cafs which are often regarded as unsafe for financial transactions.

[In Mexico many people] dont have a computer at home so they have to go to a cafe where they use the internet. They dont want their debit card or personal information on public computers.
- Practitioner, Mexico Internet commerce is also not widespread among the general public, only 8 per cent of Mexican adults reporting having bought a product online in the last 12 months (Chart 2).

2 3

CAF, World Giving Index 2013 ITU World Telecommunication/ICT Indicators Database, http://www.itu.int/en/ITUD/Statistics/Pages/stat/default.aspx

This corresponds with insight from a depth interview in Mexico which raised the issue of the general public lacking experience of carrying out financial transactions online and that this was an activity usually limited to the wealthy Rich people or middle class people, they purchase online all the time, not

only from Mexico they buy from all over the world. They dont care they do it. The poor people, they dont do it, they dont know how to do it.
- Practitioner, Mexico

Levels of trust and their implications for digital fundraising

Non-profits operating in countries with high corruption levels face a challenge in changing public perception that non-profits may be wasteful or spend donations fraudulently. Non-profits are, quite rightly, highly concerned about their reputation, but this may lead to a reluctance to engage in the necessary fundraising among the public in early years, either digitally or by traditional methods. New developments for combatting corruption or public resistance against corruption continue to emerge; a non-profit in India created the zero-rupee note made to resemble a 50 rupee note. These valueless zero-rupee notes are given by the public to officials who request bribes as a way of voicing opposition4. This campaign developed by a non-profit also helps show the non-profit sector as in opposition to corruption. Research from the Charity Awareness Monitor show the main factors

Global Corruption Barometer 2013

that put the UK public off from giving to non-profits are too little money going to the cause (62% of the public) and not being clear on how donations are spent (51% of the public)5. Transparency about how donations will be used and how much of donations are spent on the cause is core to develop donor trust and support perhaps even more so in countries where perceived corruption is high. In some countries safe and accessible means to make digital donations (e.g. mobile broadband or fixed internet access) is not prevalent among many people. It is also apparent that familiarity and ease with making transactions online, for example experience of buying commercial products online and being comfortable and familiar with providing credit/debit card details would mean a smoother transition into donating online to charity.

nfpSynergy, Charity Awareness Monitor, July 2013

Factor 2: a giving culture among the population

What do we mean by a giving culture?
A giving culture exists when, on balance, a particular social group holds positive views and behaviours towards giving time or money to others The Charities Aid Foundation (CAF)s annual survey provides insight into giving behaviour in 135 countries. The World Giving Index is a composite score based on three measures of giving behaviour: the percentage of people who, in a typical month, donate money to charity, volunteer their time, and help a stranger. The percentage that represents each countrys score is the outcome of averaging the responses from these three measures.

Key findings on giving cultures

In CAFs 2013 survey, the countries scoring the highest world giving indices were the US (61%), Canada, Myanmar, New Zealand (all 58%), Ireland and the United Kingdom (both 57%). With the exception of Myanmar, this top six consists of developed nations (Chart 3 and 4). However, the list as a whole demonstrates a systemic shift in global giving rising engagement in emerging economies.

Out of the BRICS, India and China are particularly representative of this shift. In India, more people donate money to non-profits in a typical month than in any other country in the world. Despite the fact that its population is not as large as Chinas (870 million vs. 1,100 million) more than twice as many people donated money in India than in China (244 million vs 113 million). Considering Indias

relatively large middle class, it makes sense that a larger proportion of its population has the capacity to give. Although China overall World Giving Index ranks it near the bottom (16%, rank 133), the large increase in number of people helping a stranger (from 283 million in 2011 to 373 million in 2012) suggests attitudes towards giving are shifting.

One of the key factors underlying these differences in attitudes towards giving is each countrys respective giving culture. Religion, in particular, seems to be important. There are relatively high levels of religiosity in India (80%) and Brazil (74% Roman Catholic) the two BRICS where donating to a non-profit is more common than in others (28% and 23% respectively). Russia, in contrast, has the lowest levels of religion (15% Russian Orthodox) and also the lowest percentage of people donating (6%). Myanmar is the only emerging economy in the World Giving Index top 6. Its position comes as a result of an exceptionally high incidence of donating money (85%). CAF has suggested that this high incidence, in turn, may be attributed to the fact that about 90% of people in Myanmar consider themselves Buddhist.6 Our own research with the UK public consistently shows that a higher proportion of regular worshipers are donors (nfpSynergy, Charity Awareness Monitor). The link between religion and donating to a non-profit also became apparent in our in-depth interviews. For instance a digital fundraiser working in the Arab region said that giving is promoted primarily by Islam religion, which dictates people to donate a

CIA Factbook: https://www.cia.gov/lobrary/publications/the=world=factbook/geos/bm/html

6

certain percentage of their salaries:

In Ramadan, people use all their charity money to feed people. [] In the region here it is very common that you put in front of your house a table [with food] and you give it to whoever shows up.
- Practitioner, Arab region Although religion fosters giving, in this case, the type of giving tends to be tangible and short-term rather than strategic and long-term:

To me, its like the Chinese saying: Giving people fish rather than the tools to fish. Thats why I advocate for more strategic giving rather than giving to satisfy the conscience, the religious obligation.
- Practitioner, Arab region Digital fundraising and giving, according to our interviewee, could provide a means to stimulate people to donate to non-profits that strategically use the money so that it yields the best results for the cause in the long run. A digital fundraising practitioner working in Romania said religion was the main motivation to give and donations are being made mostly to church. The next challenge, she said, would be to encourage giving to non-profits:

The big change would have to be the philanthropic behaviour. Basically, here, people are accounting a donation when they give to a church.
- Practitioner, Romania A country or regions socio-political history is another important factor defining its giving culture. A digital fundraising expert working in Romania said, We have everything related to technology, internet is present everywhere, but we have cultural problems, and suggested these may be due to Romania being a former communist country. It could be that in countries which have historically experienced a high level of surveillance, there is less public trust in digital platforms. In countries where digital fundraising is a relatively new phenomenon, the culture of giving often still has to accept it and use it before it will be a success. A digital fundraiser practitioner from India said that he is deliberately holding off from digital funding in the first three years of his charitys existence. He had seen other organisation fail because they started fundraising online before they had won peoples trust. He therefore felt there was a need to build trust and develop a giving culture first:

Ive seen a lot of organisations within one month asking for money. [] Most of the money goes to building their own personal activities. I dont like the idea when the money goes to their own activities. [] Most of the philanthropies are not doing the proper channels. Before raising money, I want to be able to show that I can make a difference. I want to show that so much can be done without funds. - Practitioner, India

Giving cultures and its implications for digital fundraising

A giving culture is crucial to digital fundraising. Even if a country has all the necessary infrastructure in place, if cultural barriers to digital giving persist, digital fundraising is unlikely to be successful. Knowing about the giving culture in a country or region provides insight into the type of fundraising that will be most effective. In Mexico, for instance, the giving culture is inspired by a strong sense of community. Unsurprisingly, therefore, people are much more likely to help a stranger (38%) than to donate money (22%) or volunteer (25%):

Mexico has a great volunteering culture. People are happy to donate human resources. If you post on Facebook about a community event or help needed at a school people will turn up to volunteer.
- Practitioner, Mexico More generally, each country has its cultural features that digital fundraising can benefit from (religion, strong sense of community), but similarly culture can limit digital giving (lack of trust, socio-political history). Sometimes, the perceived barriers to fundraising dont present a problem in reality. When speaking about support needs in emerging economies, a digital fundraising practitioner said there are cultural fears around getting into the culture of asking money. Although fundraisers were under the impression that there would be a bad response from people when asked for money, this was not at all the case. Indeed, when we ask people in our research with the public why they donated to a charity, 5-10% usually say simply because I was asked to (Charity Awareness Monitor).

Factor 3: access to digital technology

What do we mean by digital technology?
Technology fashions social behaviour and attitudes in a number of ways. Increased access to technology and innovation broadly refers to new technologies and improved user experiences that have a positive impact on those outside the technical industry, empowering everyone at an increasing scale. People now have greater access to use and purchase technological products as well as a chance to directly contribute to the development of these products and services. Today, technology seems much more user friendly and affordable than it used to be and this is not only fostering global connectivity but also helping the promotion of transparency, citizen advocacy and democracy. In this report increased access to technology is explored in terms of global mobile phone usage, internet penetration, smartphone ownership and use of social media.

Key findings on digital technology

The latest figures show that mobile phones have now become widely accessible worldwide (Chart 5). Although access to the internet is not as prevalent as possession of a mobile phone subscription, mobile internet use is on a steady rise in emerging economies (Chart 6). Interestingly, the increase is almost as fast in emerging economies as it is in developed countries, most prominently in the BRICS. Mobile internet users defined as those people who have engaged with at least one mobile internet activity in the last six months mostly use their phones to check their emails. Looking at our interview analysis, we gather that there is a perception within emerging economies that non-profits are not fully aware of their potential reach through mobile technology.

They [Brazilian non-profits] dont explore new opportunities through fundraising companies; through mobile phones, smart phones, apps for example
- Practitioner, Brazil

Internet penetration is considerably higher in developed than in emerging economies (Chart 7). While across most developed markets at least two-thirds of the population use the internet, the figure is around a third of people in Latin America and the Middle East, a quarter in Asia and a tenth in Africa. However, the number of actual internet users in Asia reached one billion in 2012, dwarfing the number of users in other regions.7 Over the last five years, emerging economies have increased their share of the worlds total number of internet users from 44% in 2006, to 62% in 2011. Today, internet usage in China represents almost 25% of the worlds total internet usage and 37% of emerging economies internet usage. 8

7
8

nVision Research Beyond 2020: The future of customer service Ibid

Keeping this in mind, there are significant differences between the BRICS countries, as well as among other emerging economies. For instance, Brazil has more internet users (45%) than the Latin American average of 34%. Also India has fewer internet users (10%) than Southern Asia on average (25%). Although there is a divergence between and within the BRICS, there are factors applicable to both BRICS and developed countries, such as the fact that young people tend to go online more than older people do. In emerging economies, 30% of those under the age of 25 use the internet, compared to 23% of those aged 25 years and older. At the same time, 70% of the under 25-year-olds a total of 1.9 billion are not online yet at all.9 As highlighted in the quote below, the age discrepancy between technology users and the potential donors make digital fundraising more so challenging for emerging economies where this gap is wider.

[Our] target audience is mostly youngsters below 35-40 [years old], when we target (lets say) housewives of over 35 or 40, we have to redefine our approach. We do offline; we target hot spots such as malls, parties, sari shops, gold shops etc.
- Practitioner, India There is also a clear increase in the level of smartphone ownership in each of the BRICS countries. This is true even in India, although levels are substantially lower than elsewhere (Chart 8). Surprisingly, levels of ownership in Russia are higher than in the US and though behind Russia in terms smartphone ownership, China has higher levels of regular mobile internet users.10 Another key trend is the increase in

9
10

ITU World Telecommunication ICT statistics http://www.itu.int/ITU-D/ict/facts/2011/ nVision Research Beyond 2020: The future of customer service

access to the internet on the go. The smartphone enables people to be online throughout the day, wherever they are. They might hear about a non-profit in the news, ask it a question on Twitter, visit its website and make a donation, all while waiting for the bus. A practitioner working in Brazil highlighted this increased access to the internet:

In Brazilian markets, people have much more access to online, because they can access at their work, at their home but [smart] mobile phones are not that spread out within the country, still expensive.
- Practitioner, Brazil

Research into global social media usage by Global Web Usage found that in the first quarter of 2013: Facebook is the largest social platform in the world in terms of monthly active users, followed by Google+. There is a rise in active engagement across all social platforms with Twitter the fastest growing. Older internet users are driving social platforms growth globally. Local social platforms continue their decline around the world with the exception of China and Russia. 6 out of the top 10 social platforms are Chinese social media sites. Since China has the worlds biggest internet population and many of the global sites including Twitter, Facebook and YouTube are banned there, the size and popularity of these local alternatives is not surprising. Still, the proportion of adults who are social networkers is higher in the UK and US than in the BRICS (particularly India, where it is just 11%); the proportion of the

online population regularly using social networking apps is higher in the BRICs (including India) than in the UK and US.11 Overall, the view on digital fundraising via social media is that it is good for visibility but does not necessarily generate successful outcomes in terms of fundraising:

We have tried fundraising with Facebook, was about a year and a half ago, wasnt really successful. What we found more successful was when we pass people back to our website and then actually they would make a donation. .. They dont stay on one page long enough to want to make donation.
- Practitioner, Malaysia

Level of digital technology and their implications for digital fundraising

Needless to say, access to technology and innovation lie at the heart of successful digital fundraising. Global use of mobile finance has surged in recent years e.g. using the mobile wallet (paying by mobile instead of cash or card) and using mobile banking services. This is driven by the spread of new technology and a mobile banking infrastructure. Besides, increasing levels of mobile banking indicate strong public trust in the safety of making financial transactions online and public digital know-how. These are both important precursors to the success of online fundraising. However, looking at the qualitative research we have conducted with practitioners and experts from emerging economies, we understand that lack of technological infrastructure thwarts online giving. In addition, issues such as overregulation, lack of regulation, lack of transparency and lack of tax benefits act present obstacles to successful digital fundraising. This causes non-profits to focus on collecting one-off donations which does not secure long-term income and is an expensive fundraising method that is affordable only for very large non-profits.

Infrastructure of online giving is easier in the UK; in the Arab region you have difficult[ies], because mature online giving mechanisms might not accept banks in the region as recipients.
- Practitioner, Jordan

We dont do mobile fundraising In India when you donate you need to share quite a few details and giving all these details is just not possible over the phone.
- Expert, India

There are very few mobile texting fundraising campaigns going on [in Brazil] mainly because of the high costs charged by telecommunication companies
- Practitioner, Brazil

11

Ibid

In addition, technological access is still not homogenous among BRICS or other emerging economies. More specifically, access to computers, mobile phones and the internet is still an issue in many places, especially among older age groups, although increasingly less so. Considering the noticeably higher internet penetration in developed countries, lack of access to technology is likely to pose an important challenge for digital fundraising in emerging economies. It is important to note that technology does not present a serious barrier from non-profits perspective, especially not when compared to culture and capacity:

Technology is important but most of them [the small non-profits in emerging economies] will have a computer [] I think technology is almost a less of a barrier. [] You can use an old computer to do all those stuff; you dont have to have the newest technology. It doesnt feel like that thats the barrier it feels like its people and time to do it.
- Practitioner, UK

We have everything related to technology; internet is present everywhere but we have cultural problems.
- Practitioner, Romania All in all, the future for global digital fundraising looks positive in terms of the impact of increased access to technology and innovation. There has been an increase in platforms which allow people to engage and interact virtually with their local community. This kind of neighbourhood networking is likely to grow, offering a convenient means to connect to the locality and to feel (at least virtually) part of the local community. This is an opportunity for non-profits to virtually access local communities and encourage them to fundraise together for a cause, whether it is local or not. Also, as access to internet and phones increase, non-profits will need to be aware of their supporters increasing expectations in terms of customer service and they should be able to focus and make use of their supporters data more efficiently in order to develop better and more influential digital fundraising methods and campaigns.

Pulling it all together: summary and conclusions

Poverty, war and disease mean that the development of non-profits around the globe is as necessary as ever. There are obvious differences in the role and purpose of NGOs in different countries but at their heart they are all working to make a better world for all citizens. Money, stable political systems and development have resulted in voluntary sector growth in developed countries. However, in emerging economies, the non-profit sector has not had the same opportunity for growth. Unstable political situations, fragile environments and poor infrastructure all add to

the issues non-profits face in terms of lack of capacity and funding to grow. This also affects their ability to engage in effective fundraising activities and compromises further growth. Fundraising is intrinsic to the delivery of objectives and growth for most non-profits. Wherever it is undertaken it can only be successful if it is inspiring, attention grabbing, convincing and enables donors to see the impact of their donations. These principles hold true whether it is a small community project in rural India or a mass participation event in the USA. In a nutshell, this research demonstrates that these basic principles, as stated above, are crucial for all types of fundraising, including digital fundraising. On the other hand, it also reveals that although digital fundraising brings in innovative and unique ways to achieve success, it appears to be still in its infancy in developing areas of the world.

Summarising the key success factors

This research highlights that the above mentioned factors are crucial for successful fundraising anywhere in the world and they manifest themselves as layers of a pyramid as shown below.

Chart 7 underlines the fact that non-profits should take into account all these three factors; the ground layer is trust in non-profits, the next layer is a giving culture and the top layer is digital technology. According to our findings, trust in public institutions is the primary issue non-profits should consider. This is because if there is lack of public trust in a country it is highly likely that non-profits would find it difficult to succeed in any form of fundraising methods. Perceptions of (and evidence of) corruption in public institutions can extend to the non-profit sector. This influences both how non-profits feel about soliciting donations from the public and also public trust that donations wont be used fraudulently. A precursor to engaging in digital fundraising is familiarity with

using online financial transactions and trusting that these transactions are safe. In many countries this is not yet the case except among the upper middle class or wealthy. The middle layer of the pyramid shows that the existence of a giving culture or warmness towards giving to non-profits as an external provider (rather than giving or supporting individuals within a communitys own sphere of influence) is also significant. If there is an absence of this type of giving in a country, it is hard to encourage people to donate and non-profits would experience different set of challenges. Actions will be around introducing and promoting giving in general prior to engaging with or developing digital fundraising. According to our research, for some countries, cultural factors make its people more likely to donate to a charity, help a stranger or volunteer their time, these same factors may have the opposite effect in others. Religion, for instance, is often a stimulus to charitable behaviour, but sometimes encourages people to focus their giving on religious institutions, making it difficult for non-religious non-profits to get in on the fundraising. An awareness of and sensitivity to these kinds of cultural nuances is crucial to fundraise effectively. Contrary to possible presumptions, our findings discovered that technological infrastructure actually comes at the top of the pyramid, on the way to successful digital fundraising. Although internet penetration, mobile internet usage and smartphone ownership are all rising globally, levels still vary significantly depending on the country and demographic groups, (and are relatively low when compared to UK and US levels). Considering that mobile internet usage goes hand in hand with social media usage and the relatively light levels of usage of both in emerging economies it does not come as a surprise that fundraising organisations use digital platforms to gain visibility, raise awareness and market their non-profit rather than to fundraise directly. In other words any organisation which creates a digital giving platform where there is no trust in non-profits and no giving culture is very unlikely to succeed.

As the diagram above suggests, all non-profits need to first answer several key questions before committing any of their resources to digital fundraising efforts. Key to success in digital fundraising initially lies in understanding the parameters, threats and opportunities around public trust and giving culture in an organisations home country. Technological infrastructure and advancement, whilst crucial, is not enough to be the silver bullet on its own.

What should you do?

In this section we would like to present three models for the non-profits considering attempting to tap into digital fundraising methods. Please note that we are not able to cover the situation in every country with these models. Nevertheless we believe, with some degree of flexibility, these three scenarios are broad enough to encompass most individual situations.

Situation 1: Weak foundations make digital fundraising hard

Weak Trust in public institutions Giving culture Technology Medium Strong

In situation 1 we present a country that scores low on all factors in the model that we view as necessary for success in digital fundraising. Assuming that a non-profit is operating in such an environment, where trust in public institutions is low due to high levels of corruption, giving culture is non-existent and internet penetration is

low, e.g. around 15%, we would recommend this non-profit not to spend time and money developing digital fundraising methods. This is because it is not within the non-profits sphere of influence to tackle these issues.

Situation 2: Promising but donors need reassurance

Weak Trust in public institutions Giving culture Technology Medium Strong

In situation 2, we suggest that there is scope for non-profits to develop and run successful digital fundraising activities. Although trust in public institutions is weak, there seems to be some sort of giving culture, possibly at a micro/local level. Also, this country enjoys moderate levels of technological advancements such as healthy levels of mobile phone usage, fair levels internet penetration and broadband subscriptions. To a non-profit operating under these circumstances we would recommend that it is as transparent, professional and accountable as possible in all its communications order to raise its profile as reputable, honest and fair organisation in a country where public trust is low.

Situation 3: Digital rewards are down to fundraising creativity

Weak Trust in public institutions Giving culture Technology Medium Strong

Under situation 3, an organisation tempted to develop and utilise digital fundraising would be in a great place to do so. Having a high level of trust in institutions and a medium strength culture of giving coupled with moderate levels of internet penetration, mobile phone usage and broadband subscriptions provides a favourable environment for effective digital fundraising practices. Non-profits operating under these circumstances would benefit from committing their funds to, and developing expertise in, generating effective online mechanisms.

Some things to bear in mind on the digital journey

Here are some recommendations aimed at organisations which are interested in advancing at digital fundraising, which is an increasingly appealing and a potentially cheaper way of increasing donations.

 Build the knowledge base available to you. Study what successful fundraising non-profits are doing - examine the donation pages on their website, even try making a donation. See how other non-profits communicate with donors on social media or through other communication channels. Accessing successful examples of digital fundraising can provide a road-map for different methods and help gain the buy-in of senior management or key stakeholders. Exchange knowledge and share best practice with other organisations; fundraising can be competitive but it shouldnt be seen as a zero-sum game where one charitys gain is anothers loss. Grow digital literacy by providing training opportunities for staff and the infrastructure to carry out digital fundraising activities. In some countries there also needs to be a growth of experts in areas such as website development, social media, CRM and communications that specifically deal with not-for-profit sector. Start developing digital communications through using social media, email and website communications. Any non-profit which goes straight to digital fundraising will struggle. Digital communications by non-profits allow supporters (in the broadest sense) to get used to communications by Twitter, Facebook, YouTube and other media, before any asking for money is made. Learn to be comfortable with asking for donations by dispelling fears around being perceived negatively and receiving bad reactions from the public. In many countries with a developed fundraising culture street fundraising is often perceived as annoying by the public but non-profits do it because its successful! Try developing micro-donations, these can enable people to donate without worrying as much about how they will afford it, and the small amount may even be a way of testing new methods of donating e.g. microdonations by text. Donations added onto purchases could recruit donors already engaging in e-commerce. The affiliation with trusted stores/brands can also increase trust in the legitimacy of the charity. Be prepared. People who are used to shopping online may have expectations of a similar quick and easy user experience when making online donations to non-profits. Ensure everything is working smoothly and that digital fundraising messages and traditional marketing communications are integrated and do not contradict each other. Develop strong internal financial controls. Ensure there is up-to-date information to account for donors funds and increased reporting to donors. This can lead to improved public perception and confidence in non-profits.

Further information
The Resource Alliance: http://www.resource-alliance.org/

Appendices
About nfpSynergy nfpSynergy is a research consultancy that aims to provide the ideas, the insights and the information to help non-profits thrive. We have over a decade of experience working exclusively with charities, helping them develop evidence-based strategies and get the best for their beneficiaries. The organisations we work with represent all sizes and areas of work and include one in three of the top 100 fundraising charities in the UK. We run cost effective, syndicated tracking surveys of stakeholder attitudes towards charities and non-profit organisations. The audiences we reach include the general public, young people, journalists, politicians and health professionals. We also work with charities on bespoke projects, providing quantitative, qualitative and desk research services. In addition, we work to benefit the wider sector by creating and distributing regular free reports, presentations and research on the issues that charities face. Our size and our story: nfpSynergy was created in 2002 as a division of the Future Foundation. Two years later, the founder Joe Saxton led a management buyout. We now have an annual turnover of 1.4 million and 18 staff members, including a variable number of interns. We also own our own premises in Spitalfields. Tracking research: We run tracking surveys that monitor the attitudes and opinions of key stakeholder groups relating to the not-for-profit sector. The research is carried out on behalf of a syndicate of participating charities who share costs and data. The aim of our tracking studies is to provide lower cost, more frequent and more detailed research than any organisation could achieve by acting on its own. Our monitors include: Charity Awareness Monitor (CAM) - the general public Journalists Attitudes and Awareness Monitor journalists Charity Parliamentary Monitor (CPM) - MPs and Lords Youth Engagement Monitor (YEM) young people Brand Attributes (BA) brand awareness among the general public In addition, we have developed syndicated tracking studies on local authorities, politicians in the devolved bodies, the general public in the Republic of Ireland and regional audiences across England. Qualitative research and consultancy: Each year we deliver around 30 projects for non-profit clients. We carry out focus groups, conduct face-to-face and

telephone depth interviews, run workshops and perform small and large scale desk research projects. Our clients include charities, housing associations and public bodies who use our research to inform their strategies and planning. Our consultancy work and projects cover a vast range. For example, we have recently worked with The Scout Association to develop a new membership strategy with current and former members, parents and Scout leaders. We have worked with Macmillan Cancer Support on a number of projects enhancing their service provision and delivery using qualitative research. Last year, we completed a piece of work for Scope, evaluating their vital Face 2 Face befriending service for parents of disabled children. Some of our clients include:

Social investment: Our social investment programme runs as a thread through every aspect of our business. At its core is the range of free research reports and briefings we produce each year to benefit non-profit organisations, which can be downloaded from our website. We use evidence from our research to campaign on behalf of charities on key issues, such as reducing the costs charged by mobile phone companies for charitable donations by SMS. We also support small nonprofits by providing free places at our seminars, giving talks to groups all over the UK and through pro bono research assistance. In addition, we support CharityComms (the sector body for communications) by providing them with free office space. Our approach to business shows that even a small company can put social investment at the heart of a business, contribute a huge amount to help voluntary and community organisations and still be profitable. Topics on which we have produced free reports include: understanding young peoples volunteering help seeking behaviour how charities use the internet branding and new technology fundraising governance By producing free reports, editorials and presentations we help small charities (with little or no budget for research) to benefit from our wealth of data and knowledge of the third sector. Please see descriptions of all of our free research at www.nfpsynergy.net/freereports As full members of the Market Research Society, we comply with their

code of conduct at all times, ensuring that research is carried out in a professional and ethical manner. We also have high standards of data protection find out more about on our website at www.nfpsynergy.net/dataprotection About the Resource Alliance The Resource Alliance works with civil society organisations and their leaders around the world to help them be more sustainable and more effective in their world-changing work. Our vision Our vision is of a strong and sustainable civil society through which people can better give voice to their aspirations, exercise their rights and change their world for the better. What we do The Resource Alliance works with civil society organisations and their leaders around the world to help them be more sustainable and more effective in their world-changing work. We help organisations become more financially sustainable by developing their fundraising skills and capability to enable them to diversify their funding. We support leadership development and governance to help organisations improve their effectiveness and be better at managing their resources, delivering their mission, and to have greater impact. We facilitate the opportunity for philanthropy and partners to join forces for greater impact. How we do it The Resource Alliance works in partnership with well-known and established NGOs at both a global and national level, as well as with local community organisations. We deliver training courses and conferences, as well as consultancy, coaching and mentoring, drawing on the expertise of both international and local trainers and consultants. We promote and recognise excellence and promote the sharing of skills, knowledge and best practice and encourage establishing of local and international networks. We engage with philanthropists and corporate sector leaders to stimulate ideas for strengthening civil society. We work globally, delivering conferences and workshops, training programmes and awards programmes: Conferences and workshops: The International Fundraising Congress - an annual conference which brings together around 1000 fundraisers from 60 different countries.

The International Workshop on Resource Mobilisation held every year in both Asia and Africa, renowned as the leading workshop for fundraisers in emerging economies. Fundraising Online a free annual conference delivered entirely online, covering digital fundraising techniques and their integration with other channels. Regional events we hold a number of regional events in collaboration with partner organisations in Africa, Asia Pacific, Central and Eastern Europe, Latin America and South Asia.

Training: Future Leaders Programme - an exciting and innovative course, aimed at transforming middle and senior managers into future leaders. School of Fundraising a series of courses to develop professional fundraisers. Tailored Capacity Development - a comprehensive and customised capacity development service, equipping NGOs with the skills, knowledge and capacity to mobilise resources. Emerge a 12 month programme for NGOs comprising of a cumulative mix of feasibility study, training and mentoring to improve resource mobilisation. Knowledge Hub a free resource including case studies, research, guides, blogs, videos, webinars, events, news and other valuable information.

Awards: The NGO Awards - celebrating and rewarding the best non-governmental and non-profit organisations Fundraising Awards - we proudly support national fundraising awards programmes organised around the world, as well as organising some of our own. Global Awards for Fundraising - this award programme sees winners of national fundraising awards compete against one another to be recognised with a Global Award.

2-6 Tenter Ground. London E1 7NH t: 020 7426 8888 e: insight@nfpsynergy.net www.nfpsynergy.net www.twitter.com/nfpsynergy www.linkedin.com/company/nfpsynergy