Joe Saxton: The managed decline in individual fundraising

The sector's self-inflicted wounds may achieve what the worst financial crisis couldn't do and see public donations drop

Joe Saxton
Joe Saxton

I spoke to the chief executive of a charity the other day who had asked one of her major donors for £1m the week before. She and her colleagues had debated long and hard about what to ask for. Ask for too little and the charity could raise less than it might; ask too much and the donor might be outraged. Investigations on the internet indicated that the donor had already made several other sizeable donations after selling his business. Luckily, he said yes.

Here's the rub. The new ruling from the Information Commissioner's Office says that, without the millionaire donor's permission, this kind of research using publicly available data isn't allowed. Equally, using postcode information, or even previous donation history, could be deemed something a donor might not expect.

It is yet another example of how fundraising by modern British charities has been battered over the past 18 months.

The Olive Cooke investigations uncovered a plethora of ways in which large charities were cutting corners, selling donor data and applying more pressure than was acceptable. The new Code of Fundraising Practice consultation is almost certain to result in the tightening up of the code. And forthcoming EU legislation that requires charities to get explicit consent from donors if they want to communicate with them on an ongoing basis could remove tens of thousands of people from the databases of charities with even medium-sized donor lists. All this with negative press from the media and politicians about chief executive salaries, campaigning and fundraising.

My point is not whether these changes are justified - some of them are - but that almost every type of fundraising from individuals is affected: direct mail, doordrops, telephone marketing, major donor cultivation, text messages and even online. Perhaps only face-to-face has escaped by doing better self-regulation for more than a decade.

Almost no charities now recruit donors at a surplus. To do that, a charity needs to cultivate and woo donors to give several more times, and ideally for years to come. But the mechanisms by which they do this have been torn apart by cumulative change. I no longer know how a typical charity can recruit new donors, let alone develop their donations over time. Operating within the new rules will cost charities more: they will have to communicate with people more than necessary because they can no longer screen which donors are - or aren't - suitable for legacy or regular gift appeals.

Without change, the prospect for donated income from individuals is probably at best a managed decline. The largest charities might be fine because they have the resources to innovate and switch to events, corporate and community fundraising. But we shouldn't forget that individuals are the largest source by far of donated income. Nor should we forget that another key source of income for charities is government, and austerity has had its impact on that. Brexit will too.

Since the financial crisis hit in 2008, people have continued to be hugely generous, and the total income of the charity sector has grown every year. I very much doubt it will be the same in the next 10 years. Our self-inflicted wounds will achieve what the worst financial crisis couldn't do: see the public give less.

Joe Saxton is the founder and driver of ideas at the research consultancy nfpSynergy

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