Predicting the future of funding good causes is tricky, partly because charities often see themselves as the main purveyors of a better world and can imagine change for good only in a charity context.
Every year we read the usual sector reports on charity giving, then speculate on the future of traditional fundraising. The problem with these reports is that they are based on donations to charity, not financial support for broader social good. They hardwire an assumption that charities are the only option for people who want to fund social good, then measure trends in line with this assumption.
New, innovative ways of financially supporting social and environmental good are thriving. But they remain largely ignored by charity leaders because of how income generation is defined, measured and reported across the sector. Non-traditional, non-charity funding options are excluded from giving-trend reports because they transcend the charity sector balance sheets.
But what if we analysed and reported on new definitions of giving? What if we broke out of the narrow, charity-centric classification of funding and doing good? What would we see?
The Hidden Revolution, published by Social Enterprise UK, the Co-op Group and Nationwide, demonstrates that there is more than one way to fund social change. Social enterprises are forces for good and channel more than 50 per cent of their profits into social or environmental causes.
Mainstream charities are not the only
purveyors of social good. It’s time to stop measuring the speed of the horses while others are building cars
The Hidden Revolution suggests the total turnover of the UK’s 100,000 social enterprises could be as high as £59bn, with three times the number of annual start-ups as mainstream businesses. And the 2017 NatWest SE100 report has identified an average, year-on-year increase in turnover of 73 per cent between 2013 and 2017 across this sector. Only a tiny, charity-related proportion of this narrative is reflected in the reporting of sector giving trends.
Crowdfunding is another area delivering significant financial growth for social good. Donations to good causes through UK crowdfunding rose from £800,000 in 2013 to £43m in 2017. Once again, only a proportion of this income went to and was reported by traditional charities. These figures include donations to movements, businesses, social enterprises, individuals and charities. If a traditional, fundraising activity reported a four-year, 5,200 per cent increase in income, sector income reports would be bursting with excitement. But they are curiously silent about a 5,200 per cent increase in giving through a broader social good agenda because it transcends the annual charity reporting parameters.
As with charitable giving, there is no single version of the truth when it comes to new ways of financing cross-sector good causes. But what is clear is that their rate of growth is outstripping traditional charity giving channels. This data needs to be visible, interrogated and interpreted alongside the traditional fundraising metrics, not excluded because it sits outside historical fundraising definitions.
Here’s the challenge. Mainstream charities are not the only purveyors of social good. Outside the sector there are many hybrid, entrepreneurial social models with financial trends worth analysing and reporting. If we do, we will see beyond stagnating individual giving trends. By learning from other income generators in the social good space, charities will see a world of possibility in which giving to good causes is broader than we ever imagined. It’s time to stop measuring the speed of the horses while others are building cars. It’s time to challenge assumptions and redraw the metrics of annual sector reports so that they point charities towards the future, not the past.
Leesa Harwood is a fundraising consultant