Daniel Fluskey: Why fewer people are giving to charity and what we can do about it

08 May 2019 Voices

Daniel Fluskey explains what the latest fundraising statistics mean for the charity sector.

Yesterday, CAF's UK Giving 2019 report led to some stark headlines on charitable donations. From the research, the number of people saying they have given to charity has dropped from 61 per cent to 57 per cent over three years. While a drop between two years could be seen as a one-off, the fact that this is over three years, with a year-on-year drop (even if slight each year) is more concerning if it is showing the signs of a trend. 

Also out yesterday was IoF’s new research with PwC - Fundraising for Impact – which is showing that there’s a challenging environment for fundraising charities: economic uncertainty, costs of compliance, GDPR, and a focus on improving the experience of current supporters are all reported factors. But UK Giving suggests that the total amount donated the charities has remained the same, with £10.1bn given each year – so giving remains constant, but it’s coming from fewer people who are giving more. So let’s ask the impossible question – why? And, start to think about the one that has to follow, what can we do about it?

People still care

First off, let’s knock one suggestion out of the park: people don’t care anymore. Rubbish. They do. "People don’t care anymore" is an excuse, not a reason. Look at Extinction Rebellion, environmental causes, protests about human rights, rise in donations to media and journalism, calling out sexual harassment, promoting equality, or even responses to Notre-Dame (debates about "worthy philanthropy" aside). People care, but how they express their feelings (and what action they take), may well be changing. It’s our challenge to meet their values and expectations, not theirs to find us. 

So, what else might be a reason? "Fewer Britons donate to charities after scandals erode trust" was the Guardian’s headline. To which I would say: that’s chronology, not causation. Yes there were scandals last year. But I think there are more important underlying factors (though they might be less headline grabbing). As Karl Willding said yesterday, "simply blaming a fall in public trust won’t do". Trust is indeed important, but it is not something that comes out of the blue – trust is the outcome of a whole number of things – not the cause in itself. 

Fundraising has changed

It comes down to the asking. Because what, when, and how people give is a product of how they are approached. To understand giving, you need to look at the fundraising. UK Giving stats say that people report that they are less likely to be approached for money (especially through face to face, door to door, and particularly direct mail). If charities have been asking less it’s not surprising that fewer people are giving.

So we need to look at how fundraising has changed in those three years of reported falls in giving. In our research with PwC the number one area of priority for charities was "Improving the experience of current supporters". I’m not sure that would have been the case three years ago, my guess is it would have been more focused on traditional acquisition. Charities have really stepped up in thinking about how they get a better, more engaged, more loyal relationship with current supporters in a way that I think is different from before. This is undoubtedly positive and may explain why the people that do donate are giving more if they are getting a great and improved experience from charities they support. But has it come at the cost of doing less outreach and activity to find new supporters? 

Charity fundraising doesn’t happen in a bubble. A combination of external factors are at play here - the last few years have seen big fundraising agencies go into administration (particularly in public and telephone fundraising), and the impacts of GDPR are starting to bite, especially in direct mail. Acquisition is tough, expensive (costs of activity are going up), and some of the traditional ways of reaching new supporters simply aren’t there. Fundraising regulation has changed and the costs of compliance are more of a factor than they were. Individually, none of these are necessarily wrong or to "the reason", but taken together their cumulative effect may well be contributing to a whole environment that isn’t the easiest for fundraising. (We may well need to take stock and ask whether we have the right public policy environment that we want that supports and encourages charitable giving. A bigger question, for another time.)

In the face of a tough environment charities are reducing their fundraising activity and spending as well as being concerned about the future economy and impact of Brexit (both in terms of potential future cost increase or donors’ concerns about disposable income). But that feeds the cycle – a decrease of investment on activity leads to a decrease of return, which then means future costs are shaved down again. This can only work as a short-term tactic to navigate a couple of tricky years, rather than the basis of a long-term strategy.

Could it be that this cycle might be a contributing factor to the reported figures on a decline in trust? If charities are less present, less visible, communicating less with people, isn’t it likely therefore to correspond with people saying that they trust charities less as they aren’t part of their day to day experience? Possibly. The link to the presence of fundraising being a driver of trust is one I hope we can look at more.

Reasons to be cheerful

But it’s not all doom and gloom. Legacies have seen striking and real growth over recent years (as a result of strategic investment, activity, and training). Community fundraising seems to be performing well. And digital engagement continues to develop and innovate. But changing a trend takes time and effort, it’s not something that can be "fixed" overnight. In our research, the longer-term outlook from charities was relatively positive. The majority of charities surveyed predicted growth in the future three years, with digital engagement and individual giving the top areas. They also said that ‘finding new supporters’ was the most important area for the future.

Charities seem optimistic they can do this, but that’s predicated on having got the right foundations in place – a strategic plan and business case, and an improved donor journey for when new supporters do come on board. If we want to reverse the trend UK Giving is reporting we need to be fundraising, reaching more people and asking well, based on a sound strategy and with sufficient investment. The question for every charity, board, fundraiser and public policy maker to think about: are you doing more than aiming to "managing decline", or are you putting in place the conditions and activity for growth?

Civil Society Media's Charity People & Culture Conference takes place in September and this year the overall theme is 'Wellbeing & inclusion in modernisation'. View the programme and book online here.

 

 

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