Things to know about selling to Charities

4977858094_8d6c00d379_nIn our last “What you need to know about selling to your target sector” we gathered some insights about selling to Retail (read the blog here). This time we will focus on selling to Charities.

One of our fundamental principles is that new business campaigns need to deliver as quickly as possible which depends on getting the details right early on. After all, you want to generate real opportunities with serious buyers and not to look back in 12 months at a big waste of time, effort and money.

That means knowing the sector and its vagaries before you start so that you can allocate resources optimally and cut out wastage. If you are a creative/digital/PR/comms agency Owner or Business Development Director then the background in this article should help you make your campaign deliver results sooner rather than later.

What is the Voluntary Sector anyway?

The voluntary sector is a fairly big sector, with a total annual income of £68 billion from around 165,000 organisations. Charities spent approximately £400 million last year on advertising according to a study by nfpSynergy reported on Civil Society in September last year – not to be sniffed at.

Most people think of a charity as those guys advertising during a disaster, the recipient of your monthly charitable donation direct debit, or the beneficiary of your painfully gotten 10K run earnings. But, look at a list of the top 1000 charities and it’s immediately apparent that the sector is far more than that. ‘Charitable status’ includes a whole host of diverse organisations and some of them simply aren’t worth considering. Private schools, religious trusts, care services providers, housing associations, family foundations, membership organisations – you get the picture. These are a waste of time so cut them out right at the start.

Who to target

Our clients often want to keep who we target open to avoid ruling out opportunities, usually because they’ve encountered a smaller charity that does in fact spend some money. Our advice? Don’t do this in the voluntary sector – focus your energies on those with a large enough income otherwise be prepared to waste a lot of time chasing clients that simply can’t afford you.

If you need some evidence to convince others in your agency, Read this sustainability review from the NCVO (National Council for Voluntary Organisations). To summarise: Government spending cuts, tepid donation growth and income levels that haven’t risen since 2009 are what the voluntary sector currently faces. The sector is under pressure so you need to focus your efforts.

Source of Funds

Voluntary organisations get their income from a variety of sources. We’re all familiar with fundraising and donations, but many charities exist entirely from other income sources – Government grants, trust grants, or from delivering services to organisations such as the NHS, local authorities, medical research bodies, international organisations.

Our recommendation is simple: Generally, you should focus on charities with a strong brand (often but not always B2C focused) who need to do regular commercial or fundraising focused campaigns. There are exceptions – e.g. membership organisations or others who need to communicate with large audiences – but they generally don’t spend as much.

Income

The litmus test is income. There aren’t that many really big charities – over say £150m income. At that level the client might invest £500K to £1 million in a digital project, for example, but there are only 15 or 20 of them. If you look at incomes over £50 million then there are around 75 of them, which is enough for a campaign but not a big enough market to easily sustain your business. There are around 115 to 120 charities with income over £30m but the budget limitations smaller charities face as often as not mean that you can’t do what they want for the price they want, and the risk is that you do a lot of chasing before everybody realises that.

If your motivations are commercial rather than altruistic then our advice is not to pitch to any charity with an income less than £30m – in the long run it won’t be worth it.

To check on a charity’s income: Charity Commission’s register of charities. It’s not fool proof but gives you a good guide.

Purpose and Field of Interest?

What they need = how to sell to them, right? It’s well worth checking out any voluntary organisation’s purpose, remit, objectives and scope before you instigate a conversation. They’re often stated on the website, or you can infer it, but failing that look for the Chief Executive’s recent speeches and press releases. You’ll find a lot more diversity than in many other sectors so experience of the field is highly desirable.

Fundraising is a commercial necessity for those that do but other drivers are often as important, if not more so. Be it service provision, support, awareness or lobbying – these objectives are owned by different departments, each one a stakeholder, which means there are multiple entry points and multiple buyers to satisfy. A strategy that includes clear, tailored messages for each department will pay dividend.

Digital Charities?

Digital is worth a special mention … in V1 of this article I wrote ‘There’s a digital boom going on in charity but it’s some way into it’. Then I did some research. I’m wrong. This infographic in charity digital news which says more charities than ever lack basic digital skills (58%). And it’s getting worse, up from 55% last year.

So why my misconception? Based on what we’ve seen over the last 18 months, many charities are trying to close this gap. The Charity Times regularly runs digital transformation events with speakers from big charities and we know from our conversations that many have recently or are planning to instigate big digital projects. Some of the bigger CMS providers, such as SiteCore, have made big inroads, evidence that while the sector is a long way from digital as core business, it is catching up fast.

Be Prepared for Serious Competition

Don’t be surprised by expressions of interest and pre-qualifying questionnaires from 20 agencies and then pitch shortlists of 8. Of course the smarter ones realise this does nobody any favours but this type of thinking is still widespread.

So, don’t approach lightly. You’ve got to have a really tight proposition otherwise don’t bother. And don’t be conned by the friendliness of some of the smaller charities – you’ll chat a lot but you won’t win the work.

Sales Process

At the top end of the income scale, charities buy in a similar way to blue chips. You can expect procurement and compliance to get involved and there’s a long lead time. Even with the smaller charities where there isn’t so much bureaucracy, things may move slightly more quickly but don’t expect to sign up a new client within 3 months of starting a campaign because it won’t happen.

It is worth trying to start off by selling a low cost exercise – a workshop or scoping exercise – to make it easier. It’s a great way to speed up the sales cycle without having to go through round after round of form filling and presenting but even still you may still find yourself in a competitive pitch situation.

Get Known

The voluntary sector is a small sector. The CEOs and decision makers across Comms, Marketing, Digital… many go to the same events and know the same people. The most successful agencies in the sector actively network and sponsor or speak at events. It’s a big commitment but there are ways to do it without spending a fortune and it undoubtedly helps.

Three Tips for Wining the Pitch

Know the field: Youth, Children’s Charities, ailments, International Development, Arts, Military, Education, Minority Rights, the list goes on… they all have different issues. If you’ve no direct experience then do your research so that you know you address their fundamental needs.

Value vs Price: Except for the very largest charities, price will be a big driver so be very clear about the value you bring. Unless the Chief Executive is in the pitch, whoever you pitch to needs to demonstrate value to the Trustees and if you don’t demonstrate value you will probably lose the pitch.

Understand the brief: Do the due diligence. Meet the client before answering the brief to make sure you understand the thinking behind it and challenge anything you think is wide of the mark. You will need to stand out and the best way to do that is to understand the business problem behind the brief and offer something different.

The Voluntary sector is an interesting sector and is tougher than you probably expect. Despite the name, you’ll have to work harder to win a client than in many other sectors so it’s important you make sure it’s the right client. Planning to avoid wasted time and effort is an absolute necessity.

Finally – if you want growth then go after other sectors too because being a voluntary sector specialist alone won’t do it.

 

Other Sources and Further Information

NCVO: National Council for Voluntary Organisations: Website or Twitter

ACEVO: Association of Chief Executives of Voluntary Organisations: Website or Twitter

Charity Times: Website or Twitter

Charity Commission: Twitter

The Guardian Voluntary Sector News: Website

Charity Digital News: Website

Civil Society: Website

Third Sector News: Website

 

Image Rights: Charity Tuesday banner, Tintagel by Howard Lake, used under creative commons license.

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