Contactless Technology: Worth the Investment?
As cash is dethroned and contactless becomes King, we find ourselves tapping our way through coffee shops, pubs and train stations with less and less of us carrying a jingling pocket full of change. So, with contactless devices popping up in every tube station, shop and taxi in the country, why is it that so few charities are adopting the same approach? Especially when, according to the Institute of Fundraising, 70% of charities are reporting a decrease in the percentage of donations given in cash.
Before we delve into the figures, note that this is a synopsis of the report. If you’d like to jump ahead and download the full copy, you can do so by clicking here.
Why are charities reluctant to adopt contactless?
One of the main reasons charities have been slow to adopt contactless, is that there’s very little data available on how effective these devices are in a fundraising situation. Last year, when HM Treasury called for evidence on cash and digital payments, it was a clear sign to the sector that there was a need for more data. How are charities expected to commit portions of their already limited budgets to unproven technology? We hear this feedback from charities every day, “How do I know it will work?“. Well, in anonymising our data and making it more widely available, we hope to fill the gaps and help fundraisers make more informed, evidence-based decisions on their future fundraising strategies.
On top of a lack of data, charities have entirely different needs to corporates. While traditional POS devices may be perfect for paying for a round of drinks, they don’t provide the tools a charity requires to inspire giving. Compounding this, for spontaneous donations – a simple “tap and go” fundraising system – a perpetually open field is needed, unlike that provided by a traditional commercial device. The lack of a Gift Aid solution also means that charities would be 25% out of pocket from the get-go.
In short, regular contactless devices just don’t fit the bill in the charity sector.
At GoodBox, we offer charities of all sizes the opportunity to both rent and purchase contactless devices built bespoke for the non-profit sector. As well as that, we have much bigger, purpose-built devices for larger reception areas with high footfall like museums, cathedrals and visitor centres. As such, the report is broken into three different sections. We analyse the cost effectiveness of rented, purchased and purpose-built devices separately and explore the profitability of each from a charity’s perspective.
It’s important to note that this report provides a nuanced view, and while the average results seen are extremely encouraging, they are not representative. Contactless devices won’t give you wings, and they certainly won’t ensure automatic fundraising success (although we have seen this happen!). For this reason, fundraisers should take a considered approach. The purpose of this paper is to analyse the cost effectiveness of contactless devices, but the next in this two-part series will analyse the approaches taken by the most effective contactless fundraisers and distil replicable techniques for success.
Right, let’s dig in…
1. Purchased devices
When some contactless fundraising devices cost a few hundred pounds, it’s understandable that charities would like to see if they’re up to the task first. Return on investment figures varied greatly, which told us the style of fundraising had a big impact on how the devices performed. In total, the organisations included in the report spent £69,035 on the upfront cost of the devices, and raised a total of £313,967, giving an overall return on investment figure of 340%.
“84% of organisations who had purchased hardware have seen a full return on investment within 12 months, with 2 organisations seeing a full return in just one month.”
2. Rented devices
If you’re looking at event driven fundraising, or simply to test drive a device, then renting is a great way to get a feel for contactless before making the commitment to purchase. We’ve often found that organisations who have rented a device in the past and have been impressed, will buy devices afterwards. So, is it worth it? And if so, what’s the most cost-effective way to do it?
After crunching the numbers, we found that the total upfront spend by all rental clients included in the report was £17,225 and those same devices brought in £53,849.
This gives us a return on investment number of 212%. So cost effective? Absolutely.
But what’s the best way to get the most out of your rental device? We found that short term rentals, used for event fundraising is a much more profitable approach for charities when compared to long term rentals. If you’re looking to run a long-term campaign, then purchasing a device is generally the more cost-effective option.
3. Purpose built devices
Larger, open spaces with heavy footfall require bigger, attention grabbing devices. That’s where the GBx Pro steps in, our device purpose-built to catch eyes and hold it’s own in large visitor areas. The clients included in this section are big museums, cathedrals and churches. These devices saw the biggest return on investment figures for a number of reasons, from an engaging ‘ask’ to crowd control and constantly testing and retesting the strategy. We’ll explore these factors further and provide tips on how to replicate their success in the next White Paper. In this section, clients spent a total of £71,611 on the devices, and the devices returned to them £1,062,411.
“Purpose-built devices saw a return on investment of 1,384%”
To wrap it all up
So, we’ve looked at both buying and renting devices. We’ve seen that purchasing gives an average return of 340%, renting provides an average of 212% and purpose-built devices sit ahead of the crowd at 1,384%. The expected lifespan of our devices is 5 years and over that lifespan, we predict an overall return on investment of 2,485% and that the cost of the hardware should make up a fraction of the total funds raised – expected to be only 3.86%.
While the numbers sound brilliant, and they are, we prefer to look beyond them to the impact they have on our charity partners work. These incredible organisations are able to boost their donation income and continue to help house the homeless, preserve endangered wildlife, maintain some of the most beautiful buildings in the country and help those most in need. It’s our goal to enabling charities of all sizes to thrive and continue their amazing work by making cutting edge tech accessible to all.
Click Here to download your digital copy of the full report. Enjoy!