Maximising Gift Aid income is the name of the game... Phoebe Cooper from RSPCA shares how the charity increased opt-in rates and income with behavioural economics and telephones.
Hello Phoebe! What's the background to the Gift Aid work you've done at RSPCA?
When we recruit a supporter, we introduce the option to opt into Gift Aid. Unsurprisingly, not everyone ticks the box at that time.
Once a donor becomes an active supporter in our database, the donor development team presents them with Gift Aid wording in all our financially related postal and phone activities, giving supporters another opportunity to opt-in or to inform us if their Gift Aid eligibility has changed.
In addition to this continual drip-feed of Gift Aid communication, we conduct annual outreach activities to contact supporters who give in a Gift Aid-eligible way but have not opted into Gift Aid or informed us that they are non-UK taxpayers.
As of May 2021, less than 60% of active supporters giving in gift aid-eligible ways had opted into Gift Aid.
Tell us about how you have improved opt-in rates. What did you do differently?
We had trialled email and direct mail (post) for our annual activity in the past but response rates were low, around 1% for direct mail and email respectively.
Through the lens of behavioural economics, one could deduce that these low response rates were related to system 1 vs system 2 thinking.
According to Daniel Kahneman1, decision-making is taken on by two systems in our brain. System 1 operates automatically and quickly with little or no effort and no sense of voluntary control. System 2, on the other hand, allocates attention to the effortful mental activities that demand it and is often associated with the subjective experience of agency, choice and concentration.
While almost all of the marketing activity we do taps into system 1, Gift Aid requires the use of system 2. Through this behavioural economics lens, one can begin to understand why direct mail and digital were not yielding the desired results for Gift Aid specific activity.
The time had come to try a new approach. Why not simplify and personalise the experience for our supporters and call them? On the phone, you have someone’s captive attention enabling you to engage with them directly and immediately.
We decided to transition from our annual direct mail activity to telephony, with the first call going live in October 2021 in line with Gift Aid Awareness Day.
What a difference it made! We achieved over a 50% contact rate, with a Gift Aid sign-up rate of over 90%. This resulted in an in-year income for 2021 of hundreds of thousands of pounds of incremental gift aid income.
Are you still doing this work now?
As a result of the success of the 2021 Gift Aid activity, we decided to include this approach as part of our strategy. Fast-forward to 2024 and we have learned a lot about our supporters. As of January 2024, we have seen an 8% increase in Gift Aid opt-in rates for eligible active supporters.
Why is Gift Aid important?
Imagine a major donor came to your organisation, offering to take the total amount raised by donors matching specific eligibility criteria and add 25% on top. We would all be jumping at the opportunity!
That is essentially what Gift Aid is, but throw "HMRC” and "taxes" in there and somehow the magic seems to fade into imaginary visions of mountains of paperwork.
For charities big and small, every penny really does make a difference. However, this is felt even more deeply today with the cost of living crisis continuing to impact charities as demand increases while income decreases.
Gift Aid is a brilliant government scheme which holds the key to unlocking a significant bank of extra income without placing any additional financial burden on donors. What is not to love?
What can other charities learn from this?
From a supporter’s perspective, Gift Aid is not an emotional decision but an administrative one. It requires people to understand a disclaimer and to determine whether they are eligible to #TickTheBox, which ultimately allows the charity to claim money back from HMRC.
Reframing how charities approach the marketing side of Gift Aid through the behavioural economics lens mentioned above, they will be able to improve the supporter experience as well as the charity’s opt-in rates.
How can someone find out more?
Join me on Thursday, June 27, at CFG's Annual Conference in the session titled, 'Amplifying Gift Aid: A Marketing Case Study of Opt-in Optimisation,' taking place from 10:10-10:55. The session will provide insight into Gift Aid opt-in optimisation from a marketing perspective, with the help of a specific case study. Attendees will learn practical strategies for maximising Gift Aid revenue by integrating insights from behavioural economics and marketing examples.
Of course, feel free to connect with me on LinkedIn! I'm always happy to have a chat with fellow charity professionals, sharing learnings over a pot of tea.
Thanks for sharing your work with us, Phoebe. See you at Annual Conference!
About Phoebe Cooper
Phoebe is a Senior Marketing Executive at the RSPCA, managing the committed giving donor development team. Dedicated to maximising income for animal welfare, she is focused on delivering, protecting & growing support while nurturing & cultivating donors.
As a passionate advocate for Gift Aid, Phoebe has worked to enhance communications and increase Gift Aid income, as guided by data and behavioural science.
Her commitment to making the world a better place for every kind, goes beyond her role at the RSPCA. Phoebe is a Trustee for the Friends of Chichester Harbour, and is active with the DMA's Print Council & Sustainability Hub.
Reference
1. 'Thinking, Fast and Slow', D. Khaneman, pp.21-22.
To hear more from Phoebe and book a seat at CFG's Annual Conference, please visit our Events Page.