Charities opt for brand aid

Fundraising: as the Lottery cuts into their income, charitable institutions are having to devise long-term commercial strategies

THE RELEASE of Help!, the much hyped compilation album for Bosnian charity War Child, is an effective if old-fashioned approach to charitable fund-raising. In its first day on sale, Help! sold 70,000 copies, raising pounds 700,000 for charity.

War Child looks likely to achieve its pounds lm goal through this quick-turnaround, one-off initiative. However, securing a steady income flow over the longer term is not so easy. The impact of compassion fatigue and increased demand for aid is forcing other charities into longer-term, more strategic marketing activities.

UK charitable donations have fallen by pounds 6lm since the launch of the National Lottery last November, according to National Council for Voluntary Organisations. There is public confusion about how much Lottery money goes to charities, a survey conducted by NOP for the NCVO reveals. Those interviewed believe 20p in every pound spent on lottery tickets goes to charities; in fact the figure is 5.6p.

Medical research and overseas charities have been hit hardest, says Tony Page, business development director at Age Concern. "Of more direct relevance to run- of-the-mill charities like ourselves is growing competition for funds from a number of organisations - such as hospital trusts, schools and even parent-teacher associations," he says.

That is why Age Concern was involved in the launch earlier this month of a flowers-by-post gift service, Charity Flowers Direct.

Four charities - Age Concern, the British Heart Foundation, Help the Aged, and the Imperial Cancer Research Fund - are co-founders of Charity Flowers Direct. Each has invested money in developing the service in exchange for a share of trading profits and 20 per cent of every order made in its name. When consumers place an order, they select one of the participating charities. Forty other charities have expressed an interest in the scheme.

Charity Flowers Direct is a watershed in fund-raising, Mr Page says: "We have created an environment where major charities can work together as shareholders in a 'mint fund-raising venture'. The emphasis is on quality: the general public likes to buy from charities, but only if the products are up to standard. Creating products and services consumers want to a standard they expect from any other consumer product or service will now become widespread."

Charities have long sold Christmas cards, and some have successfully established affinity cards: the Imperial Cancer Research Fund has one with the Leeds (now Halifax) building society which has so far raised pounds 3m. Age Concern provides its own insurance service and also sells funeral plans and alarm systems. However, these are exceptions. Greater emphasis must now be placed on marketing and branding if a charity is going to successfully compete both for private and corporate funds.

This is openly acknowledged by the International Red Cross, which approached world governments for extra funding 10 days ago, midway through its financial year - an unprecedented move due to the overwhelm- ing demand for aid. In July, the organisation launched a corporate fundraising initiative - HelpAd - in anticipation of just such a shortfall.

So far, 20 companies are committed to participating and a further 60 have expressed serious interest in HelpAd, which is a way to raise money from marketing and advertising budgets by encouraging companies to cross- promote products by advertising on the packaging of complementary goods.

Participating brands will be charged to do so and have the right to feature the HelpAds/Red Cross logo on the pack. Pricing will be based on a rough formula of pounds 4.70 for every 1,000 ads, or branded packs. SmithKIine Beecham, Grand Metropolitan, Pizza Hut, Tesco, Van den Bergh Foods and The Body Shop were among the first to sign up.

HelpAd director Paul Adams says: "We are offering brands a new and exciting way to promote themselves at point of sale. They will feature in all our publicity and be seen to be supporting a worthy cause." Green Giant tinned sweetcorn will cross-promote with Dolmio sauces to encourage consumers to combine it more often with other ingredients. A leading telecommunications company will promote itself on cans of Virgin Cola to reach the youth market.

The first HelpAd-branded products will appear in store next February. A pounds lm promotion- al campaign to publicise Help- Ad and highlight participating products will break later this year, created by London advertising agency Simons Palmer. Targeting marketing budgets is a necessary new tactic, according to the chairman, Paul Simons. "We estimate the world's companies spent $250bn on advertising last year," he says. "Our objective is a 1 per cent share of this."

Mr Adams says: "We could have launched an aggressive global fundraising campaign to boost donations, but this would have been only a short-term solution. Our aim is to improve the lot of those in need over the longer term. We don't want to divert money from other organisations, we want to find money in new ways."