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Regulation and fall in marketing spend caused decline in text donations, says PSA

03 Aug 2017 News

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.”

Civil Society Media will be holding its ninth annual Charity Technology Conference on 9 November 2017. For more information on the event, and to book your place, click here.

 

 

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