How can third sector organisations thrive during a cost of living crisis?

Third Sector Promotion GWD

When economic conditions are harsh, donations are often the first expenses to be cut. But opportunities – such as partnering with business and embracing tech – can help guide charities through tough times

The harsh economic climate represents a significant challenge for the third sector. Millions of people are having their incomes squeezed by rising inflation, potentially making it more difficult for charities to secure donations. That increasing pressure is impacting charities, which have to make tough decisions and compete with other charities for the same slice of a diminishing pie. 

The net result is that many charity sector organisations report facing the familiar task of doing more with less. That problem comprises multiple challenges, but two, in particular, are key to ensuring that charities can thrive, even during economic downturns. 

The first is winning people’s attention. By increasing awareness of their organisation and causes, charities will likely motivate more people to donate and inspire others to volunteer their valuable time and talent. In turn, charities can utilise increased resources and drum up more donations, volunteers and media coverage. 

The second is diversifying funding sources. More than ever, charities mustn’t be over-reliant on a small handful of donors. Of course, most charities face the same challenge, so innovative thinking is the order of the day. 


The power of two

Across industry sectors, we’re seeing organisations come together to pool their resources and take advantage of complementary skillsets and experience. It’s a commonly travelled path in the marketing world, in particular, where brands often work together to reach new audiences, while sharing budgets, creative ideation and marketing strategies. 

For charities, the current challenges mean that a partnership with a private sector organisation could be an effective way to amplify its message, boost brand awareness and, ultimately, increase revenues. 

Ben Widdows, managing director at GWD, which helps third sector organisations and socially-minded businesses transition to digital systems, outlines some of the key benefits charities can leverage with a private sector-third sector partnership: 

“The sharing of resources is significant for charities. A future-thinking business may lend employees as volunteers, or donate technology and materials. Collaboration means you can complete projects more quickly, and make stronger connections with local communities. 

“Upskilling is another area where charities in an effective partnership will improve. This can help in several areas; for example, charities can plug their digital skills gap through skills shares, training and support from businesses. And through fundraising partnerships, charities and companies will improve their data. 

“The range is significant, from employee wellbeing measures to donation habits. Charities and businesses stand to gain clarity on the interests of their audience, and the ability to segment data through the business demographics.”


Shared value

Widdows points out that any business looking at a potential tie-in with a charity will consider what it can gain from a partnership. That might be increasing the visibility of its brand in a local or broader community, improving employee engagement by working with a popular cause, or looking to tap into new consumer groups. 

Whatever the aims of the charity and business, it is essential there are some shared aims and values to guide the partnership. A tie-in without some commonalities and mutual goals will quickly fail as the two parties move in different directions, potentially harming both brands. It means the initial discovery phase and vetting process are vital for charities. 

“Find out what they need and be value-aligned,” says Widdows. “Hone in on the values and interests of a private sector organisation, and think about how they can be leveraged to create a truly mutually beneficial relationship.

“For example, a financial services organisation may not align themselves with animal welfare, but show interest in financial management support for families. Look for a business that shows similarity with your values – what's their culture, and what are the management team interested in? Consider whether a business or industry has a reputation to manage that would gain from alignment with your cause.”

There are plenty of examples of big charities working with well-known business brands; the Next partnership with Parkinson’s UK has been a huge success, with the retailer launching several collections with 100% of profits going to the charity organisation. 

But smaller charities shouldn’t be dissuaded. The key, says Widdows, is starting small and illustrating value. “This is going to reduce complexity in the beginning. Look at how your charity can build trust and engagement through pilot initiatives and time-limited activities. These will really help to prove your worth as a valuable partner.

“Be bold with potential partners and show them the benefits of working with charities, whether that’s employee satisfaction, CSR targets, or long-term sustainability. If you have data you can share that illustrates this - even better.”


Bridging the digital gap

One of the main challenges faced by the third sector is keeping pace with the digital transformation taking place in the private sector and wider society. The pandemic went some way to bridging the digital gap, forcing charities to adopt online tools and platforms, but there is still work to do. 

It is also true that it is an uphill struggle to attract the best technical talent to work in the third sector, with charities often unable to match benefits packages offered by businesses. So, teaming up with companies is an excellent opportunity to benefit from enterprise tech skills and experience in the private sector. 

Charity-business partnerships are finding great success with tech-based giving, whether that’s on a regular or one-off basis. A legacy of the pandemic is a move towards a cashless society, as well as a significant proportion of people maintaining a certain amount of social distancing. 

This was a challenge faced by the annual Toy Appeal & Giving Tree in 2020, which is run by Communicorp UK’s regional radio stations, in partnership with retail owners LandSec. With footfall in indoor spaces reduced drastically and multiple safety measures in place, the partnership turned to GWD, which produced bespoke digital giving stations for three retail locations, all designed with immersive screens and animations to catch the attention of the public. 

In 22 days, the Toy Appeal Donation Stations collected more than £20,000 in contactless donations, making it possible for the charities to deliver 5,800 toys to children across the UK. In the three years that GWD’s Donation Stations have been used as part of the Toy Appeal & Giving Tree, the public generously gave additional donations of almost £50,000. 

“Pivoting to contactless donations allowed the partners and charities to continue collecting donations, albeit more safely via cashless giving. Today, the cash-free donor is always going to be ready to be approached, and partnerships like these will continue using fundraising devices to ensure they can keep supporting their chosen charities,” says Widdows. 


Being led by the data

Widdows says access to customer data is also key to boosting revenues and tapping into new donors. 

“When charities move to regular and one-off digital giving through contactless or online donations, the data and insights allow them to connect better with their supporters. Both parties will know more about supporter habits, and preferences in giving - from the causes they select, to the real-time donation amounts that digital fundraising platforms and devices will monitor daily.”

Widdows says a comprehensive database of supporter info and donation habits will enable charities to remain relevant and sustainable. Being data-led means charities can tailor donation experiences for their supporters and build campaigns more likely to resonate with their target demographics. 

“Match your tech to your audience. People will gravitate to an unattended device if nudged – and often feel happier to give, in relative privacy, avoiding judgement on value or affordability. The tech acts as a fundraising guide, empowering supporters to make their own decisions on giving.”


Learn more about the Donation Station by GWD

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