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Does a recession have to foreshadow a drop in giving?

Economic recovery in the charitable sector will be significantly slower than in other sectors, so financial challenges will continue and the outlook remains uncertain. However, our role as fundraisers is to convince existing and potential donors that there has never been a more important time to put their hands in their pockets.

Encouragingly, evidence shows that people continue to give during a recession. During the last recession in 2008, broadly speaking, Trusts and Foundations continued giving at the same level, some even dipped into their capital in order to ensure that they could continue to support the UK charity sector. Additionally, off the back of COVID-19, many high-net worth individuals experienced an increase in their wealth during the pandemic , according to the BBC, more than 5 million people became millionaires across the world in 2020 and so maybe pre-disposed to increased giving. Without a doubt there is a moral imperative to keep supporting charities at a time such as this. They are an intrinsic part of society, part of the fabric of community and well-being.

However even though most charities say public support over the last 12 months has remained stable, the threat of a recession is a major concern. Household income pressures and a slower recovery of consumer spending are likely to result in an overall decline in the value of donations in 2022. Charities will therefore need to be more competitive, be clear about their aims and they will need to refresh the way they present their cases for support so that they tick as many boxes as possible.

I am a Trustee of a grant making trust and at our latest meeting, the Chairman opened the meeting reminding us of the great and increasing social needs and all the money we distributed had to have lasting public benefit. Each application was given huge scrutiny, especially the amount of income they spend on administration and fundraising and due to the increase in applications, the Administrator informed us that there would be no opportunity for feedback.

The impact of COVID-19 and beyond…

I would say that during COVID-19, lots of trusts closed to new applicants or changed their priorities to focus on emergency relief. However, trusts will now without doubt be looking at new issues such as sustained economic recovery and climate change.

The pandemic raised a number of questions about health inequality and now other inequalities are coming to the forefront which will effect who trusts give money to more than how much money they have to give away. I think the cost-of-living crisis will see emphasis on supporting people experiencing socioeconomic disadvantage – perhaps a renewed shift in priorities to frontline causes like foodbanks, but it’s quite early to tell. CDCF just launched a ‘Poverty Hurts’ appeal in response to the crisis, in the same way they launched a COVID recovery pot. Furthermore, charities can expect a decrease in the money that comes from the public sector.

It’s important to remember, it is not all bad news, there are some real opportunities, there is definitely an appetite for live work and free work. The pandemic has proven the importance of being with others as well as a need for creative activities to improve people’s mental health and inclusion after a period of social isolation.

How to make your fundraising campaigns stand out

Fundraising is so much more competitive now. Companies will cut back on their giving as soon as their budgets are squeezed and they will be thinking very hard about which charities they support. I anticipate that there will be a real focus on poverty and helping to alleviate the cost of living crisis. Charities need to be ready to respond to this new focus.

To really make a campaign stand out you need to understand how fundraising is changing and be sustainable, resilient and innovative.

For example, I noticed myself that after two years of lockdowns people came back to socialising with a re-invigorated appetite for attending events. A Gala that I organised in November 2021 was moved to a larger venue so there would be more room for people to spread out and guests were given the post-pandemic option of having fewer people at a larger table. However, the event was sold out, the place was packed and no-one requested a larger table or to reduce the number of guests on their table.  Consequently, we made more money than ever before.

My top five tips for fundraising in a recession

1. Re-visit your strategy – be realistic
2. Don’t sit on your laurels, widen your net and make the most of new opportunities that arise
3. Time to bring in some fresh blood, refresh the board/Development board
4. Build on the post pandemic appetite for events
5. Stay calm and avoid panic appeals

From fundraising strategy reviews, to strategic planning and mentoring advice, when I work with charities, I take the time to really understand your needs and to this end create results and lasting benefit which will help you to raise funds effectively.

If you think you’d benefit from a conversation, please email [email protected]