Cathy Pharoah: Give poor Felicity Donor a break

We should ask some searching questions about the fall in giving, writes the co-director of the Research Centre for Charitable Giving and Philanthropy

Has the sector become shock-proof? The results of the UK Giving 2009 survey showed a decline in giving of £1.3bn in the past year: about £13,000 per fundraising charity and a significantly bigger drop than most of the falls in retail sales. But reaction has been muted; there have been no screams of pain or calls to action.

These results should be a wake-up call for all of us who are concerned about giving. As the Government plans long-term public spending cuts, we need to face up to the possibility that, for the foreseeable future, it might be hard to grow giving - or even maintain it.

We should be asking many more questions about the patterns underlying this fall in giving. We need to find out which donor groups have been the most and least affected, and understand why charitable giving seems to be taking a bigger hit than other areas of consumer spending.

Without knowing what the real challenges are, it is difficult for charities to plan effectively. What is the main problem? Is it unemployment, falling incomes or consumer confidence?

The report suggests the main problem was fewer large donations. But we don't know whether this means an across-the-board reduction among the affluent or a small number of very major donations.

Charities will be under greater pressure than ever to maximise returns on fundraising, and one way to do this is high-precision donor targeting so that campaigns are not wasted.

The familiar donor demographics (older, middle-class, living in the south east, having children) need to be further unpacked. Do older people and people from higher social classes give more simply because of their generally higher incomes, or do other factors come into play?

Where people have the same income levels, do we find that younger groups are just as generous as older people, or more generous? Do women with children give the same as single young men, and do people who live in different areas give differently?

With a clearer understanding of these issues, we could begin to explore why apparently similar people vary in their generosity.

Such information is one of the keys to discovering potential new donor pools. In a paper published in the Harvard Business Review in April this year, 'market segmentation' gurus advised marketers to abandon traditional demographics in favour of more psychological customer profiling.

With fresh leads on neglected or new donor pools, fundraisers might even give a break to poor Felicity Donor, aged 38-and-a-half and juggling her professional career, mortgage, childcare and dental bills.



£9.9bn - Value of individual giving today, according to UK Giving 2009

11% - Annual fall in UK donations

1.04% - Annual fall in retail sales in 2008/09, according to the Office for National Statistics

1% - UK giving as a percentage of GDP

2.2% - US giving as a percentage of GDP. Donations in the US fell by 6.3 per cent in 2008/09

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