None of us are in any doubt about the severity of the situation we’re in as the cost of living crisis escalates. With the UK’s inflation and energy costs never higher, and still rising, people – and charities – are understandably worried.
With many more people set to struggle, even households with an annual income as much as £45,000 will feel the pinch over the coming months according to Chancellor Nadhim Zahawi. Charities then are going to see a huge increase in demand for their services, whilst at the same time battling significant financial issues of their own.
Retaining supporters will be central to ensuring vital income keeps flowing. At the moment, feedback from members of the Chase Index – our supporter loyalty benchmarking programme with 30+ charities – reveals some concerns and considerations.
Firstly, smaller donations are dropping off with fewer being made. However mid-value supporters are so far proving more resilient with some even giving more. While this is something charities have been reporting for several years, the cost of living crisis is accelerating the gradual decline in smaller donations. And while mid-value giving is currently going some way to offset what’s happening with smaller donations, these givers are also likely to be impacted as time goes on.
Looking at how charities are faring with acquisition and retention currently, retention is proving something of a mixed bag. Some charities are doing very well here with supporter bases that are proving resilient, while others find it more difficult. Charities across the board however agree that acquisition is difficult and is also becoming increasingly expensive.
While these may not be new trends, we’re seeing them strengthen as the cost-of-living crisis affects the majority of people’s finances. As bank balances diminish, not only are charities reporting that it is getting harder to attract new supporters, but at the same time, existing donors are finding it harder to continue giving, so the pool of supporters is shrinking.
What all of this means, in a nutshell, is that measuring supporter loyalty is more important than ever. We know from our own research that charities with higher loyalty scores have stronger retention. And we’re all aware that when people feel loyalty, whether it’s to a cause or a brand, they tend to stick around for longer, and support or buy more, more often than those who don’t feel that way.
This all points to a need to focus on existing supporters. To understand their loyalty, as well as which parts of your supporter base perhaps have lower loyalty. And to take action to measure and grow the three key building blocks of loyalty – commitment, satisfaction, and trust – to help keep them all on board.
If acquisition is difficult, this might be the time to shift the balance – to reduce some of the riskier, more expensive activity and focus those resources on your existing warm supporters. If money is growing tighter, reactivating supporters once they’ve stopped giving will also get tougher, so the best place to focus efforts is on growing loyalty. It may be that some won’t be able to support you as much financially – or at all – as outgoings rise, but if they feel warm towards your charity and engaged with its work, they’ll also feel more commitment, satisfaction, and trust towards it. And this means there’s a good chance they’ll step up that support when they can.
So, communicate that impact! Keep in touch, show supporters what their donations are achieving, and let them know why it’s so important. People need to know the value of their support – and the value of your work. If talking about the cost-of-living crisis makes the case for support stronger for your charity, your cause, and your mission, then it absolutely should be presented as part of why the work your charity does is important. But as always, authenticity in messaging is key.
There are also many ways someone can support a charity that aren’t financial, from campaigning to volunteering. With a bit of lateral thinking, even giving approaches can be adapted to be more affordable without impacting beneficiaries.
None of this may be new but it’s all going to be more relevant than ever for inspiring and deepening those tangible measures of loyalty – commitment, satisfaction, and trust – over the coming months. Focus here, and the impact on income and retention will be clear.
And if you’d like to know more about how to grow commitment, satisfaction, and trust among your supporters, do get in touch.