Oxfam yesterday revealed a sharp drop in income and attributed the fall to the economic climate, but its problems go further than that, says Tom Latchford.
The income slump announced by Oxfam yesterday was justified by that old favourite; the economic climate.
Of course charities in the UK are suffering. Families are feeling the pinch across the country, resulting in fewer donations that are hitting charities where it hurts. In this way Oxfam is synonymous with the sector as a whole.
But what was most worrying from Oxfam’s response was its resignation. The economy is without a doubt a key factor, but its problems go further than that.
The comments by director of finance, Bob Humphreys, illustrate this perfectly:
“After several years of pressure on household incomes, people are buying fewer new clothes and other items, which has a knock-on effect on the quantity and quality of donations to our shops.
"We need confidence in the UK economy to return – not least to help the many people in the UK who are struggling financially. We also urgently need people to donate any unwanted clothes, books and homewares to Oxfam, every item helps.”
So let me get this straight, footfall shopping is on the out but Oxfam is still putting all its eggs in a dying retail basket?
And unlike retailers - who have admitted it’s not just a lack of consumer confidence driving people away from their stores – Humphries also failed to detail a counter-strategy for Oxfam to pursue in spite of the economy and the struggles facing its shops. The attitude seems to be to redouble efforts and push on just as before, despite the £17.6m fall in income.
Charities must respond to changing consumer habits
Oxfam needs to be quicker to implement the techniques of our retail success stories – and there are some out there! – in order to catch up with changing consumer habits and the boom in online shopping. Look at Asos and Tesco, two brands that have combined technology with behavioural science and are striding ahead thanks to a clever use of multi-channel e-tailing, incorporating editorial content and a strong social media presence. The Oxfam ‘shop online’ function by comparison is miles behind, despite its potential to become a philanthropic eBay and cash in on the vintage trend.
In fact the same can be said across the board for Oxfam and many other charities; they are simply failing to approach givers through the right channels. The donors of tomorrow don’t have that instinct to drop off a bin-liner full of clothes at their local charity shop, in fact they’re probably recycling them.
This is the real and long-term challenge facing charities, not just the economy. Charities that are suffering, just like Oxfam, need to keep upping their game when it comes to fundraising in a digital demographic, which means boosting their social media presence and maximising the user journey across mobile and web channels.
The third sector can’t afford to lag behind other industries or ride off their coattails. It needs to innovate and speed up. Read the palm of any charity and you’ll see that its future is in social media optimised online and mobile pop-up campaigns that can respond to the news agenda. Think urgent appeals for the meme culture: immediate, straightforward one-click giving as simple as a Facebook ‘like’. And for repeat donations across the long-term this means using digital data to personalise communication across different media to improve emotional engagement and add lifetime value.
Tom Latchford is CEO of Raising IT
