Is this the Future of Child Sponsorship?

5th September by Tobin Aldrich

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I’ve spent a lot of my career working on individual giving programmes and in particular focusing on regular giving.  The late 1990s and early 2000s was the heyday of regular giving in the UK and the model of mass recruitment of monthly donors primarily through face to face has spread across the fundraising world.  But the world has got a lot more complicated since then.

When I started in fundraising, the gold standard for a regular giving product was Child Sponsorship.  The charities with child sponsorship programmes had the highest value supporters with the best retention of any of the INGOs and were the source of widespread envy from the rest of us. It was easy to see why - child sponsorship, when done well, creates a real connection between the donor and the communities being supported. Sponsorship is a truly one donor to one child relationship and this direct link makes it unique as a modern charity donation product.

The sponsorship concept was successfully applied to a number of other cause areas. WWF have developed a highly successful regular giving product around the concept of animal adoptions and other animal sponsorships also work well. Centrepoint have built a regular giving programme around the concept of sponsorship of a room in hostel.  But these are typically not real one to one relationships. WWF’s tiger, for example has a lot of foster parents.

Child Sponsorship always had its critics and those who know how the sponsorship charities operate understand just how complex the administrative process behind it can be. But for a long time it was extremely successful.

For the past decade, however, child sponsorship has been in steady decline in almost all markets. It has become gradually more difficult and expensive to recruit new donors and the result has been slow but remorseless decline. This is now putting more and more pressure for the charities to rethink a model that fundamentally dates back to the 1970s and before.

But perhaps the ship has sailed. For a long time, I’ve been intrigued by the US charity, GiveDirectly. We now have loads of research that tells us that the best way to bring people out of poverty is to give them money. It turns out those who are best able to decide what poor people need are the poor people themselves. Who knew? GiveDirectly were set up in 2008 based on the idea of setting up programmes to identify poor communities and give families regular monthly payments with no strings. The charity was set up by tech people and has been built on data which allows rigorous tracking of payments and measurement of impact.

GiveDirectly has grown massively and is now an over $200m charity but it had been mostly funded by foundations and major donors. I have been waiting for them to develop an individual giving programme for years. The charity has the technology to link an individual donor to a single beneficiary and to track the outcomes which means it could create an extremely powerful donor offer.  

And now they have done so.  I got an email from them with their new monthly giving product.  You can choose a poor family in Africa to give money to and they will get all of that money to raise them out of poverty.  And you will be told what that has achieved.

The email I got from them to ask for support was perfectly tailored for this, admittedly probably niche audience. As well as an exceptionally detailed Q&A on how the programme works, they included the results of their A/B testing to launch it!  The Q&A is worth checking out, the level of transparency is incredible.

It will be very interesting to see how this product does. GiveDirectly raise so much money from other sources that they might not promote it that hard.  How much do donors really care that their money reaches a specific family? (GiveDirectly’s email told me that their test shows that this product produces 28% more recurring gifts than their standard donor offer)

I think this is important. There is a demand from donors, particularly the sort of high information, affluent individuals who give to international causes, for more authenticity and they are getting better and better at seeing though marketing spiel. There’s a market for people looking to make a real impact.

However successful this particular product turns out to be, I think the trend towards authenticity and real one to one connection is clear. This is very challenging for the existing international development charities burdened as they are with decades of organisational infrastructure and approaches that get in the way. If they can’t re-invent their entire model, I wonder how long they can retain their mass individual supporter bases.

Regular giving will continue to be a critical income area for charities. I think we are now seeing what its future might look like.