The New World of Fundraising
22nd June by Tobin Aldrich
Over a year into the Covid crisis the future that all of us face is still very uncertain. What do we know about the long term implications of the pandemic on the non-profit sector and for fundraising specifically?
There is much we don’t know - how long the crisis will last and what condition our societies will be at the end of it is just the beginning of our ignorance. All we can do is to look at what has happened so far and try to identify what look like trends that might last.
All world economies have taken huge damage and government debt has reached unprecedented levels. What that means long term is well beyond my expertise, indeed I doubt that anyone really knows. How long can you just keep on inventing new money until the whole thing just comes crashing down?
But we can assume that this mess will need to be dealt with somehow and taxpayers will end up paying for it. So there will be less money presumably available for other things like giving.
So far all the evidence is that giving has held up pretty well in most key fundraising markets worldwide. Losses in income from fundraising that hasn’t happened has been made up by more giving in the channels that have been available.
This is explicable by the fact that the impact of the crisis has been hugely unequal. Older and wealthier people have, on the whole, done just fine in this crisis. The pain has been inflicted mostly on the young and working class. The core donor demographics of most non-profits in most countries have, economically at least, prospered.
Who pays the bills for the pandemic then, and when, will have the biggest impact on future fundraising and the size of the total pie to be distributed.
Irrespective of how much the total amount of giving will be post-pandemic, there will definitely be major changes in how much goes to what sort of cause. We can already see major winners and losers amongst non-profits from the crisis. There was a very wide range of responses to the crisis by organisations and some definitely failed the test it set. Whether by stopping all fundraising, furloughing (the wrong) staff or simply by a paralysis of decision making, many non-profits including big and surprising ones made mistakes that will come back to haunt them.
By contrast, many charities have seen the crisis create new and unexpected opportunities. NHS charities are an obvious example but also a wide range of organisations including causes focusing on food poverty, young people, mental health, homelessness, domestic violence and many others who have made themselves relevant in the crisis have seen an influx of money and new supporters. For these organisations they have a, perhaps once only, chance to turn this short term attention into long term and sustainable support.
We don’t know what the longer term implications of this crisis will be on the economy but it can’t be anything good. All that debt will have to be repaid and somehow I don’t think it’s going to be the billionaires who pay it. We can expect rising taxes and more pressure on the incomes of working people. That will impact on the amounts most people can give to charity. But again, there will be winners and losers.
So tentatively, what can we expect the major changes to the fundraising environment for charities to be in the next few years? Some trends I think are clear:
Donors have given to new and different causes during this crisis. We will see what the long term effects of this are, but it is likely that NHS charities for example can expect to see increasing levels of support in years to come, whilst other causes may suffer. Probably existing trends towards more localised giving and away from some causes such as disability will be strengthened.
New forms of fundraising
Covid has again accelerated existing trends in fundraising methods. It has, at long last, propelled digital giving into the mainstream and no charity can now not have digital at the heart of its individual giving programme. But making a digitally based programme work is not straightforward and requires an integration of marketing and fundraising to a level that many charities struggle with. Not to mention the skills and systems needed to develop programmes generating long term values.
Virtual events are here to stay and are a real alternative to physical events with hybrids of actual and virtual events likely to be the norm rather than the exception in the future. Charities are waking up to the fundraising opportunities within gaming communities, although many fundraising teams remain 100% gamer free environments which inhibits take up.
There’s quite a lot of interest in new technologies, non-fungible tokens for instance but hype is currently running ahead of practical applications.
Some old forms dying but not all
Physical cash giving is dead, near enough. To no one’s great dismay. Although it is worth thinking about a campaign to collect all that redundant cash sitting in people’s homes. Print channels such as direct mail on the other hand aren’t dead yet and actually had a bit of an uplift in the past year. As many charities are moving away from direct mail programmes there may be some modest opportunities for organisations which can build niche offers here.
New communication methods
The biggest change from Covid in communication approaches was that the video call has become the norm. This hasn’t yet really been taken up systematically by charities. While talking to major donors by Zoom or Teams has become common, the opportunities to use video in communications with supporters more widely have yet to be really taken up. Some charities who have done this have reported remarkable results.
Importance of legacies
Charities really didn’t need to be reminded about the importance of legacies but the last year has provided any reinforcement that was needed. Delays to probate caused many charities with large legacy incomes significant cash flow issues, emphasising how this money cannot simply be take for granted. But much more positively, many nonprofits saw significant increases in legacy enquires and conversations about this form of giving. With overall legacies forecast to grow significantly and many people who will leave legacies still to decide who they will give to, there is enormous opportunity here.
How organisations work
More broadly, this crisis will almost certainly cause profound and long-last changes in how all organisations work. Charities will be no exception. The days of staff in the office 5 days a week, 9 to 5 are well and truly over. Lots of organisations will be trialling various approaches to managing hybrids of office and remote based working, and this will be create opportunities and challenges. Organisations have learned how to be more flexible and more responsive during the crisis and it will be interesting to see how much of that change lasts. Many services that have moved to remote delivery may never revert back to face to face. Others will, but again a mixture of delivery methods may be the norm for charity services of all kinds.
One consequence of the crisis we can be absolutely sure of is that demand and requirement for charity services will only go on increasing. The sector is truly never more needed and donors will appreciate that. Whatever the economic environment or other pressures, people will continue to support charities with their money and time. But whether they will be supporting the same charities as before March 2020, or in the same ways are entirely different questions.
If you’d like to know more about how AAW can help support your strategic thinking over the next crucial few months contact Tobin at email@example.com.