Here’s a question for fundraisers in the UK and the European Union:  Would you rather lose 50% or 85% of your donor base?

That’s the essence of what’s at stake as fundraisers stand on the tracks staring at the fast approaching train of new regulations on donor data protection that go into effect May 2018.

First, some background on what’s coming and some frightening results of early testing indicating it’s not gonna be pretty.

In the DMA Data Privacy Survey of 2015, more than 80% of those surveyed indicated that easily understood terms and conditions of privacy policies and assurances of strong data security are essential. And 90% of consumers said they want more control over their data that organizations exchange.

And so the new General Data Protect Regulation (GDPR) has strong public support. That’s not the case among organizations in the charity sector, where there’s been lots of complaints about fairness and accompanying idleness. But, for those not whistling past the graveyard there remains plenty of confusion and uncertainty.

What’s absolutely clear is that, beginning 14 months from now, if charities want to communicate with their donors they will first need to get some form of donor permission that likely far exceeds the current approach to permission (or lack of it) — or face financial penalties or worse.

OPT-IN OPTION: The Fundraising Regulator reports early finding. 

What will this mean for the market? The UK Fundraising Regulator (a descriptive name if nothing else) has published case studies on 5 charities who are moving to an explicit, Opt-in model to gain donor permission. Note, opt-in is not an explicit, stated, legal requirement, merely the interpretation of very fuzzy language about “unambiguous consent…” A term that only a bureaucrat could love.

• In 2015 the Royal National Lifeboat Institution (RNLI) tested an opt-in approach and determined that they will lose 50% of their donor base and estimate a negative financial impact of €17 million.

• Cancer Research UK (CRUK) indicated that 80% of its new supporters had NOT opted-in and estimated “tens of millions” lost. If given an Opt-Out choice CRUK finds that 50% of its supporters opt out.

• Re-Think— no idea what their opt-in levels will be

• Macmillan- no idea what their opt-in levels will be

• The Rose Road Association. 85% of their database lost.

So, based on these limited findings: Best case = 50% loss of donor base. Worst case = 85%.

With 50 to 85% as benchmarks from big, well established and respected brands is this the best we can expect?  Should every charity plan on this or worse?

One Bite At The Apple

Under the coming regulatory regime, it’s important to note that once an organization has asked someone to Opt-In their donor contact strategy is set, only donors who’ve opted-in may be contacted. The organization can’t come back with opt-in request after opt-in request.

Questions UK/EU Fundraisers Considering an Opt-In Option Need to Be Asking:

• What would losing 50% of your database look like?
• What would losing 85% of your database look like?
• Is there reason to believe you can do better than this?
• Where will that lost income come from? What impact will that have on your work?
• Will your loyal supporters feel that they need to opt in?  Or will they assume their donations are consent?
• What will it do to long term income e.g. legacy income, upgrades etc
• Will your reserves cover short term loss?

WHAT ABOUT THE OPT-OUT OPTION?

Not as much data for this option as for Opt-In. However, CRUK reports finding that 50% of its new supporters opt OUT of communication.

I suspect that the higher-level of trust a donor has, the higher the level of their willingness to opt-in, or, not opt-out. What’s beyond speculation or suspicion is that organizations who don’t have large reserves to carry them through a period of loss are in for big trouble for the intermediate term and even more trouble where their potential legacy income is concerned.

In short, either with opt-in or opt-out it’s time for some serious thinking. Some serious planning. Some serious and studied execution.

Of course, for the deniers there’s the school of thought — not altogether wrong — that this culling of the database may be a good thing. After all, the ‘tippers’ who have no real interest in the organization are costing the charities money.

However, this fatalistic view that 50-85% loss is both a foregone conclusion and a good thing is mostly just pre-rationalizing for the lack of serious thinking, planning and execution that will, in turn, lead to exactly what was argued as unavoidable and a ‘good’ thing: 50-85% loss.

Being ‘right’ likely comes at a hell of a high cost to the beneficiaries of these charities.

First Mover Advantage

How many charities can we realistically expect donors to opt-in to? (Answer: a fraction of the number they currently donate to.)

Whatever the UK/EU equivalent of an Oklahoma land rush or land grab is, we’re about to see it happen next year. It’s most unlikely that donors will affirmatively choose to communicate with all the organizations they currently support.

How will the all-too-common practice of list exchange — the process by which charities pimp out their donors — affect the donor’s decision to opt-in or opt-out, regardless of whatever the organization might add to its privacy statement to make this practice more transparent?

(Answer: Potentially a lot, according to the feedback studies I’ve reviewed that suggest the practice is well-known to donors, despised, and not easily forgiven/forgotten).

Most importantly. How do you avoid the coming calamity? So how does an organization sift those donors who probably want to continue from those who just don’t realize they need to opt-in? (Answer: See my P.S.)

The countdown to a new and donor-controlled communication process has begun. A word to the wise….

Roger

P.S. To find out ‘how’ and ‘what’ you can do about all this, Agitator readers who can should attend the free seminar led by DonorVoice in partnership with the Decision Making and Behavioural Economics Research Group of City University London.

On March 29^th at 2:30pm in Central London, behavioral science expert Dr. Kiki Koutmeridou of DonorVoice and Daniel Fluskey, Head of Policy & Research at the Institute of Fundraising will give the latest advice, policy guidance and explore the science behind increasing donor consent — regardless of what opt-in/opt-out options you may choose.

The Science of Supporter Consent seminar will offer practical advice based on a significant body of empirical knowledge to help you avoid losing valued supporters.

Places for this free event are quite limited. To book email Charlie Hulme (chulme@thedonorvoice.com) today.