Charities face market saturation

According to a new survey conducted by ICM on behalf of the Media Trust, 70% of the public believe 'there are too many charities doing similar work and competing with each other'.

According to a new survey conducted by ICM on behalf of the Media Trust, 70% of the public believe 'there are too many charities doing similar work and competing with each other'.

The research, based on a poll of 1000 adults aged over 18 across the UK, has prompted a key debate about charity branding, duplication and accountability. It has also led to discussion about the role of the Charity Commission and whether it should have more powers to prevent duplication and encourage amalgamation.

There are currently over 185,000 charities in the UK, many of which compete for the same donations. The Charity Commission lists over 620 cancer charities, and more than 200 charities working for homeless people in London.

And while the sheer number of organisations is having a negative effect on the charity sector by leaving potential donors confused, the sector continues to grow: the Charity Commission registers up to 6500 new charities every year.

As the potential for confusion grows and the rivalry between charities increases, more aggressive marketing strategies are also emerging.

Recent provocative ads for children's charity Barnado's, showing children as grown-ups in harrowing situations, is a case in point. The Committee of Advertising Practice even urged media owners not to run one of the ads, showing a baby shooting up with heroin, as it was likely to cause offence, before recanting after the ASA decided the ad's serious message meant the shock factor of the execution was reasonable.

Andrew Nebel, director of marketing and communications at Barnado's, has said he hopes the recent campaign 'will pave the way for more challenging ads'.

Yet the Media Trust's report says the danger in following the commercial sector's lead of competitive advertising is that the voluntary sector may come to be seen as even more divided in the public's eyes. So should charities build strong, differentiated brands on their own, or is co-operation the way forward for the sector?

For small charities, collaboration may the way to go, but the report shows few are keen on permanent mergers. According to the report: 'The consumer is loyal to brands. It may well be the brand name, rather than the cause, which attracts donations in many cases. It is by no means a foregone conclusion that the donations will keep rolling in once the charity's name has been swallowed up by a merger.'

One group that has found a way around this conundrum is the cancer charities.

The Institute of Cancer Research has a long-standing relationship with the Cancer Research Campaign and Leukaemia Research Fund, as well as a more recent partnership with Breakthrough Breast Cancer. They have managed to ally the formation of a mutually beneficial alliance with continued independence for each member organisation.

And in July, six charities, including Oxfam, the NSPCC and the Red Cross, combined their direct marketing operations in a bid to maximise the benefit of the government's New Gift Aid system, which allows donors to make a declaration to instruct the Inland Revenue to hand 28p in every pounds 1 of income tax to charities.

According to 1999's Charles Russell Charity Survey, 88% of charities with joint arrangements thought them a success.



INDUSTRY VIEWS

Simon Waugh, group director of marketing, Centrica

'Charities need to build a strong brand identity and a franchise with core supporters. If a charity is doing identical work to another one, it should consolidate, rather than lay out two lots of overheads. But niche charities with a real point of difference should capitalise on that. People like to know where their money is going.'



Peter Reynolds, director of fundraising, Breakthrough Breast Cancer

'It is critical for charities to establish an identity that the public understands, with a strong case to support. Companies also want to work with charities with strong brand identities to achieve their marketing objectives. Charities should consider mergers where they are in the best interest of their supporters and beneficiaries - so they must be thought through carefully.'



Trevor Dahl, Woolworths Kids First manager

'I believe there are over 180,000 charities in the UK, but now some are banding together and seeing synergies between themselves. I think this is a very positive thing. Branding is crucial to the success of charities. At Kids First, we were able to build on a well-known retail brand and give what we do a real meaning in the community.'



Martin Vintner-Jackson, creative director, Enterprise IG

'In recent years the market has changed and charities are now having to operate like commercial businesses. We encourage charities to develop a good strategic plan. They must have a distinct selling point and be specific about their goals; if they don't, they'll simply disappear. If they don't have a point of difference, they should form an alliance with a similar charity.'



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