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Pareto
Talk
Tsunami Suicide and the
Earthquake in China
By Martin Paul and Sean
Triner
 Our sympathies and thoughts go out to the
millions of people affected by the two shocking and tragic events
in Myanmar and China in recent weeks.
The devastation, and the support from the international
community, brings back memories of the Asian Tsunami in December
2004 and the extraordinary response from the public with billions
of dollars in donations.
In fact, at that time the response was so overwhelming that many
charities – particularly ones not directly involved in providing
aid to those affected – assumed that because people had given to
that cause they would not give again, or as much as they had
before.
But what effect, if any, did the Tsunami really have on
giving?
All the evidence shows that donations continued to grow. In
fact, according to a study by the Queensland University of
Technology, they were up 5.6% in 2005/6 on the previous year. Our
own evidence from Pareto Benchmarking, which looked at results from
20 charities, shows that most continued to raise at least as much
money as they had before the Tsunami.
If we compare the revenue from an appeal sent in February 2004
with one sent in February 2005 for a medium sized charity in
Australia that has no connection to Tsunami relief [see graphs], we
can see that the charity raised as much money by mailing during the
end of the Tsunami donations cycle as they had the previous
year. In fact, they raised 30% more. (For our readers
in Hong Kong, AU$200k = HK$1.5m)
Their response rate was up from just over 15.5% to nearly 18.0%
and their average gift increased from $72.00 (HK$530) to $74.50
(HK$550).
One large Australian cancer charity conducted research
immediately after the Tsunami to better understand donor intentions
about future giving. Significantly more donors said they expected
to donate more in the future than they had in the past. Very few,
less than 8%, thought they would donate less in the future. And so
it transpired. The Giving Australia Report, an analysis of charity
annual reports, Queensland University of Technology studies and the
Pareto Benchmarking study all demonstrate that this is exactly what
donors did – they gave more to non-Tsunami charities after the
Tsunami than ever before.
The charities that really lost out after the Tsunami were those
that either didn’t send, or postponed a scheduled appeal,
committing ‘Tsunami suicide’ in the process. This decision affected
their immediate revenue and their ongoing relationship with their
donors. And it affected their beneficiaries by compromising the
organisation’s ability to offer vital services and programs because
of income they had foregone.
Whilst our hearts go out to those affected by the terrible
events of the past weeks, we have to respect the rights and
abilities of our donors to make decisions about what causes they
want to support.
After all, the need for cancer research or support, for
championing human rights or for reversing global warming have not
suddenly disappeared. Denying someone the chance to donate to
something of importance to them by deciding not to mail an appeal
is disrespectful to our donors.
The research suggests that giving to such a sudden and terrible
catastrophe is in another category of giving amongst donors. It is
an extra, rather than a substitute gift. Whilst some donors will
sit at home with their donation budget of $250 (HK$1.8k) for the
year and allocate it, the majority respond to the needs they see as
they arise.
The earthquake in China has had an enormous impact on our
friends and colleagues here. People in Hong Kong are donating
in droves. HSBC bank is matching donations through its appeal on
behalf of one of our clients, Red Cross China, up to HK$10m
(AU$1.35m).
Manfred Chan, one of our account managers who was working at
UNICEF at the time of the 2004 Tsunami says of the current crisis:
“...because this is local, I think more than HK$1bn will be raised.
It will be the biggest appeal in Hong Kong’s history.”
This brings the question of what to do for Hong Kong fundraisers
much closer to home. They may be convinced of our argument by
looking at the data for what happens after an emergency –
just three or four weeks after the event, things are at least back
to where they were – but what about the hours and days immediately
following the event?
Anecdotally many fundraisers believe income for other charities
decreases during the high levels of media attention.
Unfortunately it is not possible to do a controlled test, but
assuming there is a decrease, the question remains: is the
potential reduction so great it is worth postponing an appeal?
The answer is almost certainly no. A good donor communications
program should be contacting donors 10 to 20 times per year, and
any delay is effectively a cancellation – so you can say goodbye to
the money that would have been raised. Maths aside, if you hide
your need from your donors during this time they won’t see it, they
won’t give and your beneficiaries will be worse off. If you contact
them with your planned appeal they will see your need and will
respond. Some will of course make a decision that there is a
greater or more urgent need than yours right now – but that is
their choice to make.
Pareto’s own benchmarking study showed that, on average, the
majority of donors give to four or more charities. This supports
the argument that donors can make informed choices, can and do
support multiple causes and will make judgements about what really
matters to them.
Of course, it is important to be prepared and to respect donor
wishes. The same cancer charity mentioned above offered regular
donors the option of putting their January 2005 gift on hold for
one month. Nobody took up the offer. Be ready if they do ask,
especially if they have family members in one of the affected
regions – respectfully offer the choice to put a gift on hold or to
give a lower gift, but don’t lose your relationship with your
donor. We are all trying to change the world in different ways –
let the donor decide what their priorities are.
Once we start making these decisions on their behalf we get into
very sticky territory. How big a disaster warrants cancelling or
postponing a mailing? What is the right time lag between a disaster
and sending out a delayed appeal – when the media coverage dies
down? What happens if there is another disaster? Are we responding
to the media exposure or the enormity? This puts us in the
dangerous position of subjugating our own important cause to the
whims of the media and the decisions they are making: the ongoing,
but less newsworthy needs such as the plight of people in Darfur,
or the earthquake in China – who chooses?
Ultimately, you can still ensure your beneficiaries get the help
they need and deserve, be respectful to your donors, protect your
reputation and mail an appeal. You have a responsibility to your
beneficiaries to do so.
Martin Paul and Sean
Triner. At the time of the 2004 tsunami, Martin was Marketing
Director at Cancer Council NSW and Sean was working on benchmarking
at Pareto Fundraising – both were directly involved in research
projects looking at the effect of the Tsunami on charitable
giving.
Expertise | Integrity
| Passion | 