New fundraising approaches needed to tackle fall in household giving, report warns

New fundraising approaches will be needed to replace some high street-based fundraising as household giving could fall by up to 25 per cent in 2020/21, new research has concluded.

There will be “major losses” in fundraised income in the near future, according to the report Reframing the Ask: Trends Which Will Shape Giving and Fundraising Post-Covid-19, commissioned by the Chartered Institute of Fundraising.

The report’s authors – Cathy Pharoah, visiting professor at the Centre for Charitable Giving and Philanthropy at Cass Business School, and Tom McKenzie, an honorary research fellow at the University of Dundee – say there is so little certainty in the current environment that outcomes for fundraising cannot be predicted. 

Applying the current lowest and highest Treasury forecasts for economic growth for 2020/21 to the estimated £8.4bn households gave in 2019/20 suggests there could be a fall of up to 25 per cent in giving this year, the report says. 

But it adds that on average, the Treasury’s independent economists predict a fall in GDP of 8.3 per cent, leading to a projected donations total of £6.9bn in 2020-2021, a fall of 18 per cent on the 2019/20 figure

“It is clear that most fundraising income sources will be directly affected by the state of the UK’s economic growth,” the report says. 

“Impacts will roll out over different time-scales. Undoubtedly there will be some major losses, hopefully mitigated by some of the strength of private household and private foundation giving over the last year or two.”

Despite concerns about the economy, the report notes that on average households have saved £44 a week during lockdown on transport, eating out and entertainment outside of the home – and some donors may be persuaded to divert these savings to charity. 

Some donors may decide to defer rather than cancel their giving during difficult financial times, and the report urges donors to stay in touch with these donors.

“Capacity to give will become increasingly polarised as Covid-19 has a more negative effect on some sections of the population than others, and those who can afford to give should be encouraged to do so,” the report says. 

“Lockdown lifestyle changes including greater homeworking and online shopping may become permanent, and new fundraising approaches will be needed to replace some high street and workplace-based fundraising including payroll giving.”

The report suggests that an increase in corporate giving may be one avenue for charities to explore. It predicts that many companies will reduce but not stop their giving at the end of the financial year, and will want to maintain the relationships they have with charity partners. 

It suggests charities should look to companies in sectors that have grown during the pandemic, such as pharmaceuticals, online retail of essential goods, ecommerce, technology and software. 

“Recession will not have an equal impact on all parts of society, and we will need to look particularly towards those who can afford to give, and supporting those who are less well-off,” the report says.

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