New Zealand Charities: ‘Science-based’ Fundraising is Key to Transforming the Sector

New Zealand Charities: ‘Science-based’ Fundraising is Key to Transforming the Sector

the new zealand cause report - shape of the charity sector

the new zealand cause report - shape of the charity sectorDavid Powick recently returned to New Zealand as a Fundraising Consultant after eight years in Australia, where he collaborated with American fundraisers. Using his global experience and approach, he comments on JB Were’s recent report ‘the Shape of the NZ Charity Sector’, the first comprehensive report comparing the New Zealand charity sector to six other developed countries.

 

The New Zealand charity sector performance on the world stage

The JB Were report does a great job of showing how we compare to other economies with active non-profit sectors. Key points from the report include:

Large contribution to the economy: the New Zealand non-profit sector contributes $17 Billion to the economy (8% of GDP). The overall value of the sector, including volunteers, represents 5.8% of GDP. This is only 1.3% behind the US.

Large number of non-profit organisations per capita: there is 1 organisation per 168 people in New Zealand. This is more than Australia (1 organisation per 422 people) and the US (1 organisation per 339 people).

Highest volunteer contribution: New Zealand volunteers contribute $3.5 billion to the sector and represent 6.2% of the New Zealand workforce. This is more than twice the involvement of Australian volunteers (3% of the workforce) and more than volunteers in the USA (2.5% of the workforce).

Growing philanthropy: New Zealand donations are up 7% pa since 2004.

– A crucial contribution: 24% of New Zealand charity income is from philanthropy (higher than all other countries compared in the report).

– Aussies know we love our sheep! Per capita, New Zealand has the most charities that protect or care for animals.

 

Once again, Kiwis punch above their weight on the world stage, but I suspect, we still haven’t reached our full potential. The JB Were report agrees there is potential, but indicates “something has to change to enable continued sustainability and that involves a combination of where funding comes from and how it is used.” – The New Zealand Cause Report.

 

Taking a lead from the USA

When I began my fundraising career in Australia, donor fatigue was setting in at the organisation I served. The writing was on the wall that if we didn’t change our approach the future of the mission was at risk.

So, in a radical move, the organisation engaged two experienced American Fundraisers to expand philanthropic programs outside of the traditional regular appeals and events commonly run by Australian nonprofits. Watching these experts in action opened my world to the opportunities for growth that existed in the community around me.

American fundraisers, and more recently British fundraisers, have moved to Australia and New Zealand, and some have made significant contributions. The best of these benefitted from the rigour of the academic programs, professional associations and ethical standards that have been built around the fundraising profession in their home country. Their former employers, universities, hospitals, churches and social service agencies, are powerhouses in fundraising: more than 104 US universities have endowment funds over $1 billion, and in 2015, non-profit organisations contributed $878 billion to the US economy.

 

The science behind the art of fundraising: Investment

The USA didn’t arrive at this point overnight. For more than  30 years, they have developed fundraising into a profession and adopted a more ‘science-based approach’. The science-based approached uses data, research and proven methods to assist non-profit organisations across the country to build meaningful relationships with their supporter base, providing the best possible return for mission.

 

How Australia’s non-profit sector has begun the professional transformation

The Australian charity sector has faced mounting pressure over recent years, including the end of the mining boom and a changing economy, as well as declining government support to some non-profit organisations. However, alongside this, there have been several developments that have supported the non-profit sector and fundraising as a profession, including:

– The charity regulator, the Australian Charities and Non-Profit Commission

– Strong academic centres, including: the Australian Centre for Nonprofit Studies at the Queensland University of Technology, and the Centre for Social Impact at the Swinburne University of Technology

– Incentives to encourage greater philanthropy, such as Private and Public Ancillary Funds

 

These changes are helping Australia move towards the same level of results and professionalism seen in fundraising abroad and could be compared to the transformation the US fundraising sector underwent 20 years ago.

A survey conducted in the US at this time by Duronio and Tempel on the progress of philanthropy in the USA concluded that employees were beginning to experience a stronger commitment to non-profits and improved permanency in jobs. This improvement was attributed to the transition of fundraising from art to science. Interestingly, this transition was in turn accredited to the education that many working in the sector undertook at one of more than 240 US universities offering non-profit focused courses.

 

How New Zealand is changing

Some New Zealand non-profit organisations are already engaging in science-based fundraising programs. From ‘the Cause’ Report’, we know that New Zealanders are incredibly generous. It is not accurate to feel like we are at the back of the line behind the United States and Australia. But, we are behind in our attitude and expectations of our non-profit organisations.

Two employment issues affect fundraisers. Many people who are responsible for raising money also juggle gift processing, receipting, membership and appeals, while also doing administration. They find it hard to carve out the time to plan and create strategic fundraising programs.

The other issue is pay. Employee costs in New Zealand have consistently been around 40% of total sector costs, which is a lot lower than the United States (71%) and Australia (51%). Certainly, we have a high rate of volunteer participation, and this might mean a small reduction in the number of staff required, but I suspect the overall rate of nonprofit pay is lower here.

 

While I am still reacquainting myself with New Zealand nonprofit landscape, my initial thoughts are to encourage organisations to:

– Present a bold vision that steps out of their comfort zone

– Recruit board and employees who are committed to this vision

– Invest in the development of their employees

– Pay the salary that attracts and rewards skilled professionals

– Diversify their income streams (not just rely on government grants)

– Invest in relationship-based fundraising

– Constantly get out of the office and listen to donors

 

Encouraged by the New Zealand Cause Report, our many great non-profit organisations should invest in a science-based approach to their fundraising programs.

 

David Powick

David Powick

Fundraising Consultant at AskRIGHT
David Powick is a New Zealand fundraising professional with successful international experience in assisting non-profit organisations secure lead gifts for capital campaigns.
To find out how David can help your organisation, contact d.powick@AskRIGHT.com.
David Powick