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More than 90% of charities have reported a fall in trading income during the lockdown period. Innovation holds the key for a new future.
Last updated: 15 Oct 2020 6 min read
It is no secret that charities have been hard hit by the coronavirus pandemic. According to a recent survey conducted by the Institute of Fundraising (IoF), the Charity Finance Group (CFG) and NCVO supported by PwC, charities face a £12.4bn shortfall in income for 2020 as they grapple with the impact of the coronavirus pandemic, including social distancing.
On average, charities received 29% less income than they had budgeted for between 23 March and 12 May. They expect their total income for 2020 to fall by an average of 24%.
With social-distancing measures likely to remain in place for the foreseeable future and against a backdrop of wider economic uncertainty, demand for services provided by charities has never been more acute. So what to do?
Not surprisingly, some charities are trying new approaches to fundraising to plug the income gap. Matt Saunders, founder of Charity Box, a digital consultancy specialising in the charity sector, says: “Some responded quickly and launched emergency appeals, putting resources into comms with supporters to ask for the additional support and stabilise their income. Others were slower off the mark and went for grant funding.”
What seems clear is that the more tech-savvy charities have been better able to weather the storm, moving quickly to facilitate remote working by staff and exploring novel ideas to online fundraising, Saunders explains. Many are looking to diversify their income through a blend of online fundraising challenges, recurring monthly donations and enhancements to their websites and comms to support the move online.
He adds: “We’ve seen charities yield great successes so expect to see 'virtual’ events become a bigger part of online fundraising strategy in the future, as the pandemic has helped prove their value.”
The campaign that called on people to “Run 5, Donate 5, Nominate 5” raised over £30m for Run For Heroes, although some speculate that donors may be coming to the end of their goodwill with these kinds of initiatives.
Although it may have been forced upon them out of necessity, there are signs that the pandemic has helped create a shift in mindset towards digital, data management and the potential of online fundraising and payment systems, says Saunders. “We’ve observed an up-tick in the number of fundraising providers that handle digital payments – anecdotally more people have been asking about text giving and other means of taking donations ‘on the go’.”
East Midlands-based charity St Barnabas Hospice saw income from its charity shops and face-to-face events decimate during lockdown. Veronica McBain, head of marketing and fundraising, says despite widespread fear of digitalisation within the hospice sector, the ability to adapt has been key to survival. She also agrees that the pandemic has forced a lot of charities to bite the digital bullet, possibly ahead of time.
“As an organisation, we have long embraced technology and already had rather a lot of appeals and fundraising events that our supporters could join in with by using online payments and donations,” McBain says. The option to accept both online and frictionless payments will have allowed many to survive, she adds. “The future seems to be arriving faster thanks to this disrupted year and perhaps that’s one of the positives we can take from the overall picture this year.”
A case in point is the crisis appeal the charity launched, which raised around £40,000. The charity has also rolled out a series of virtual challenge events, the most successful of which was ‘On Yer Bike’, which had raised £13,000 on JustGiving by the end of August as well as a significant amount offline.
“The future seems to be arriving faster thanks to this disrupted year and perhaps that’s one of the positives we can take from the overall picture this year” Veronica McBain, St Barnabas Hospice
“Our ‘Gin and Jammies’ campaign turned virtual for those who wanted to throw a party via video call, rather than getting together at friends’ houses. Alongside this, we are selling our own brand of gin, which has been one thing that’s been able to continue,” McBain adds.
At the time of writing, 19 of the charity’s 26 shops had reopened, with more to follow. It was able to restock for the shop openings thanks to two weeks of donation drive-through events, which resulted in 640 supporters donating 4,150 boxes and bags of items. “A massive part of the success for this initiative was that online booking made signing up to Gift Aid so much easier for supporters and reduced face-to-face contact at drop-off,” McBain says.
Michelle Wright is founder and CEO of Cause4, a consultancy that advises charities on strategy and works with the private sector on philanthropy. She says charities that can embrace innovation quickly will stand a better chance of survival, and potentially reach new areas of funding or delivery. Organisations that keep stubbornly trying to plough the same fundraising field will struggle, she warns.
“It’s about demonstrating relevance, empathising with your target donors and telling them what they want to really hear. We don’t need to over-model this,” Wright says.
All charities will need to invest in digital as the fundraising landscape of the future demands a greater mix of face-to-face and online fundraising initiatives.
As bucket collections and cash donations remain on hold due to the coronavirus crisis, people are taking new approaches. In Dublin, for instance, graduates from Trinity Business School’s MBA programme are helping charities collect donations through a start-up that allows people to make donating part of their everyday spending. Change Donations gives donors the option to round up their purchases and donate the difference between their payment and the next euro to the causes that they care about most.
“Our whole ethos revolves around building a community of everyday philanthropists,” explains William Conaghan, Change Donations co-founder. “We all want to make a difference, but Covid-19 has made us rethink how that’s possible.”
Fundamentally, success will depend on how messaging works with donors, Wright explains. “Let’s not focus on the organisational message and instead it’s got to be about delivery of services. It’s creativity of that aspect that will help charities win funding.”
Reinvigorating income isn’t about the survival of individual charities but countering the devastating impact the pandemic will have on those who rely on the services charities provide. From that perspective, fundraising innovation isn’t just a nice to have, it’s absolutely critical.
Charities and Third Sector