In-House Vs Agency

Due to the high cost of recruitment  a suggestion often made by senior management is to bring a Face to Face fundraising program in house.  The general conversation seems to run along the lines of “hire some back packers, get them out on the street and it’ll be as good as what we have at the moment but cheaper, more reliable and we’ll have more control over it”. This argument is flawed in a very large number of ways, as well as being really quite disrespectful to the people who have devoted their careers to making F2F work. In case you’re ever in a position where someone in your senior management team suggests bringing the program in house, keep this guide handy so you can smack their arguments down quickly and efficiently.

Recruiting Fundraisers is hugely difficult

Let’s say you’re lucky enough to have recruited a person to who is experienced enough to run your team but not so burnt out  that the thought of ever asking someone for money again terrifies the hell out of them. The first thing you’re going to have to do is find someone for them to work with. Recruiting new fundraisers is one of the most frustrating things in the universe. Very few people wake up in the morning and decide that they’re going to apply for F2F fundraising jobs that day. You have to sell the idea to them in the advert. When you find an advert that seems gets respondents, the respondents will often turn out to be unsuitable. When you find an advert that gets decent respondents one week, you can run it again the following week and no one will respond.  Also be prepared to do this in perpetuity. If you ever get to a point where you think that you have “enough” Fundraisers, you’ll still need to recruit or you will find that the on you had have suddenly all gone and you have no one again.  This process will cost you lots more money than you realise and far more heartache than you ever thought necessary.

The only organisations who have made an in house fundraising team work in Australia to scale are ones that have in-built or adoped recruitment mechanisms for recruiting fundraisers. Greenpeace, The Wilderness Society and UNHCR have all succeeded done this in Australia, for different reasons.  Greenpeace and TWS have a cultural cache built from their public engagement for the last few decades. UNHCR have understandably strong connections to refugee and recent immigrant communities who often face a lot of prejudice when looking for employment. This means that their F2F team often pick up highly intelligent and incredibly skilled people who may have struggled to find work in more conventional sectors.  I’m sure this alone doesn’t make their recruitment a walk in the park, but it helps. Another overseas example of an in house success story was started when one of the charity’s main suppliers going under and the charity hired the entire work force. They were such a large organisation that they were able to sustain the recruitment costs needed to keep a team.

Managing an F2F team is REALLY hard

When you have some fundraisers on board, do not underestimate how much time, effort and pain will be required to keep them out there signing people up. F2F has a ridiculous staff turnover for a reason. The Fundraisers will spend all day in rain, sleet, heat, hail and wind being told “no”.  This means they either resign soon after they start or they are crazy. Crazy is perhaps a little harsh, but in order to survive they will need the following qualities

• Headstrong (this means they will only do what you ask them to if they agree with it)
•  Excellent negotiation skills (they will practice this by negotiating every single possible issue with you)
•  Passionate about the cause (if they are passionate about the cause they tend to be passionate about everything in their life, to the extent that their results will stop should at the slightest thing happen in their personal lives. E.g. One fundraiser stopped getting results because he couldn’t decide what he wanted to get his girlfriend for a birthday present)
• Inspirational (they affect other people, not just when they’re pitching either. If one person is having a bad day, it’s likely everyone will have a bad day

It’s not just about the Fundraisers

If you are running an in house program purely for financial reasons, it’s unlikely that you have taken into account what goes on in the background. Before the Fundraisers go out they’ll need locations and permits booked.  You’ll need staff to enter the data or at least verify it. You’ll want welcome calls meaning more cost internally or outsourced.

You’ll loose flexibility

One of the great advantages of an agency is that when things aren’t going well, they’re likely to be able to move capacity onto you campaign from somewhere else.  If you have an in-house program you’ll never have this option.  You can increase your recruitment budget, but that doesn’t guarantee an increase in recruitment.

It’s not likely to solve your problem

This is the real kicker.  There are plenty of good reasons for starting an in house team, (some willing subjects with which to test new methodologies, a gang of experienced F2fFers knocking down your door in a desperate need to work for you) but they’re rarely themain reason for starting one. More often than not it’s to substitute for a lack of available capacity or a need for more consistency in results. In house teams provide no guarantee of this. This isn’t to say that they can’t be found in an in house team, but there no correlation with their in-house/outsources status. Good teams are good teams no matter who employs them. The main difference is that an agency is far more likely to be able to deliver you a good team in less time than starting one yourself, completely from scratch.

Balancing average pledge

As a fundraiser working for an agency I was very concerned with retention.  Our efforts for recruiting a higher percentage led us to looking at the effects of pledge amount.  We found what most of you reading would expect, that generally. The more you give, the more likely you are to cancel sooner. As we prided ourselves on giving our donors the best return on their investment we then worked hard and successfully on reducing our average pledge.  The followed a positive impact on retention and our clients were generally happy; on top of the improved retention a drop in average place in F2F generally also means a cheaper cost per donor.

However one thing that I didn’t realise at the time was medium term effect of a lower average pledge. The first, most important and perhaps most surprising that a lower average pledge means it takes longer to break even on a cohort of donors. There are a number of assumptions that are involved in this statement, and feel free to challenge any of them, but the evidence I’ve seen for myself plus the anecdotal evidence, backs it up. Assuming that the recruitment cost is based on donation amounts with a retention clawback or built in, assumed discount. Assuming that the reduced gift means that there is a relatively consistent attrition level across all donation rates. And assuming that the improved attrition isn’t more than say 10% better at year one. The reason for this is that there is less money coming in in “profit” from the donors who passed the break even point. The reduction in pledge is necessarily caused by a lowers targets across the board, meaning it stops donors signing up for more than they can afford or care to give, but it also lowers the amount that people who could afford to give more, give less.

On top of this, the reduced pledge means reduced overall income and, to rub salt into the wound, less financial gain from upgrades.  As an RG fundraiser, the frustration felt from these issues is only topped by the knowledge that this is only a medium term problem and you’re actually getting better value for money. Regular giving is all about the long term. It may take you six months longer to break even and be running a $10,000 under budget, but you know in two years time this will have paid off, probably several times over.

So what’s more important here? Higher initial income or more donors down the track. The slightly dull answer is somewhere that you need to find balance that works for you and you’re suppliers. They know that a high average pledge will mean higher attrition and less work for them in the long run, so they’re likely to work with you to try and keep it in boundaries that work for both you and them. It’s also important to remember that constantly pushing the pledge amounts down won’t increase retention after a certain point.