The Phone-paid Services Authority has said the reason for the 6 per cent fall in total income generated by charity text donations was an increase in regulation and a fall in marketing spend, according to its Annual Market Review 2016/17.
In its Annual Market Review 2016/17, published this week, the PSA have said that the Fundraising Regulator’s abolishing of the “soft opt-in model” and a “reduction in marketing spend by charities” in the 2016/17 financial year are the reasons behind the fall in text donations in the last 12 months.
As Civil Society News reported in July, text donations to charity in 2016/17 fell to £115m, a 6 per cent decrease from the previous year’s figure of £122m. These figures were initially published by the PSA in its annual report.
Also, despite the 6 per cent decrease in income, charity giving was still the largest sector in the phone-paid services market.
Fundraising Regulator prevents charities from using soft-opt in
The PSA said that one of the key factors behind the fall in charity-text donations in the last 12-months was due to the increased regulatory action of the Fundraising Regulator.
“The Fundraising Regulator has abolished the soft opt-in model preventing charities from using the mobile number provided via a one-off donation process to contact the individual for follow-up donations,” said the PSA.
Forcing charities to move to a “hard opt-in”, requiring the consumer to provide consent before the charity can contact them, has meant that “TV advertising can no longer be used as a vehicle to recruit one-off donations followed with a call to encourage repeat donations”.
The PSA said its research now showed that charities were focusing marketing spend budgets on driving regular donations on a monthly basis instead.
Text donations to ‘return to growth’ next year
Despite what the PSA called “a turbulent 12 months” for charity text donations on 2016/17, it still predicted charity text-giving will “return to growth next year with donations estimated at £124.4m for 2017/18”.
The PSA also said that “monthly donation subscriptions” was experiencing “strong growth – albeit from a small base” which will likely “offset the decline in total donations” seen in the last financial year.
The PSA also predicted that non-broadcast charities would introduce “the £20 donation point” which enjoyed a great deal of success during broadcast telethons. It also predicted that charities would explore the possibility of increase the one-off donation amount from £3 to £5.
Jo Prowse, chief executive of the PSA, said: “Consumers love donating by text. It’s easy, convenient and trusted. Our annual market review shows that consumer satisfaction with charity donations is the highest of all phone-paid services.
“The introduction of the £20 price point reflects a growing confidence in this form of fundraising and we will continue to support this important sector to develop.”