Debate: should charities invest in shops to ride out the recession?

A recent YouGov poll found that more people are giving to and buying from charity shops. Is now the time to expand? We ask three experts

Charity shop donations (picture courtesy of Traid)
Charity shop donations (picture courtesy of Traid)

It is not simply about opening up shops and expecting the money to flow in. Charity retailers, like any other high-street business, are experiencing challenging times.

Well-organised charity shops with experienced retail management staff are able to campaign for more public support. We have seen our sales and profits rise and will be investing more in the business as we continue to expand our chain of shops. My advice to any charity looking to make more out of its charity shops, or even open up its first one, is to employ the best management you can afford to protect your investment.

Stock generation is vital to the success of our business. BHF shops are as busy as ever, but levels of donated goods are down as consumers rein in expenditure and hold on to their goods.

One problem for charity shops is the increasing number of commercial companies collecting stock, with as little as 3 per cent of the income from doorstep collections going to charity.

- Ken Blair is chief executive of the British Heart Foundation Shops Division

You bet charities should be investing - if they have the ideas, the cash and the bottle. It's not easy to persuade a trustee board to increase fundraising spend when corporate, trust and contract income is probably in decline in a recession.

However, there is strong evidence to suggest those companies that maintained or increased their marketing spend in previous recessions were by far and away the most successful during and after those periods of economic decline were over.

Why should charities be any different? But - and it's a big but - the investment has to be carefully targeted, tested and refined. There are some great retail opportunities to be had, but the proposition has got to be a cracker. Cancer Research UK is doing great 'retailored' designer originals in its trendy shop in Marylebone in London. They almost certainly bring in the punters from all over southern England. After all, everyone likes a bargain. Really slick merchandising is at the heart of any retail proposition, and that's exactly what charity shops are.

- Peter Maple is senior lecturer at London South Bank University's Centre for Charity Management

Investing in charity shops is never a short-term, 'quick-fix' solution for reduced income, especially during a recession. We all know that charity shops struggle to deliver a significant return on investment compared with other fundraising activities, and a number of well-known charities are struggling to attract the required levels of donated stock.

However, there are good reasons why charities might consider investing in this area. For example, a recession is a great time for snatching up deals on shop leases, and there are deals out there that could reduce set-up and overhead costs.

Gift Aid schemes for donated goods are cumbersome, but they allow charities to capture donors' contact details, providing them with a list of warm donors whose support has yet to be maximised. There is also an increased appetite from the public for buying from charity shops.

If a charity is well known in the local community, opening a shop that complements and enhances existing donor relationships could pay dividends.

- Chris East is director of revenue fundraising at Action Planning


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