It is by now well-rehearsed that the headlines trumpeting annual increases in the amount of money being donated to charity have been masking a decline in the number of people giving. This hollowing out of the civic core should be a grave concern to any charity that either does not have a well-established programme of giving from ultra-high net worth donors (one of the only segments of the market that seems to be generating absolute growth in donations) or that will not have solved the problem for which it was established within the foreseeable future. In other words, this decline in donor numbers is a problem for “the 99%” of charities. But what’s behind the drop in donor numbers?
It seems clear to me that the decline in giving is not down to a decline in generosity. Indeed, we’ve seen an extraordinary response to recent emergencies – following the tragic fire at Grenfell Towers, and more recently in response to the outbreak of COVID-19 and the war in Ukraine. So what gives?
One simple explanation is that there is a lot less asking – especially of mass market donors – taking place than before. Tighter data protection rules have shifted the default away from charities being to contact most donors, and the decline in the ability for charities to contact donors by telephone has been particularly pronounced. Not being able to ring donors to invite them to make a regular gift or to upgrade their existing donation (especially important in this period of severe inflation) has had a knock-on effect of rendering many previously fruitful recruitment channels unprofitable, which has in turn driven many suppliers out of the market, increasing pressure further.
The impact of these changes has been undeniable: comparing the volume of contacts by channel in the 2013 FRSB Annual Complaints Return with the 2021-22 report from Fundraising Regulator shows that the volume of fundraising contacts by telephone, addressed direct mail and door-to-door fundraising had declined by 84%, 67%, and 58%, respectively. That’s over 172m fewer invitations each year for a donor to further her relationship with a charity.
And we know from research that the majority of people ultimately give in response to an ask (the most oft-cited figure I’ve seen is that 80% of gifts are in direct response to an ask), so it’s not surprising that with fewer people being nudged to give by fundraisers, we’re seeing fewer people following through on their generous intentions.
At the same time that charities have been able to ask less, I think often those asks have started to become less compelling. As charities have (rightly) become more professional and, through consolidation, bigger and less closely connected to local communities, it makes it easier for narratives about charities being too big and “corporate” (and, by implication, not a worthy recipient of donations) to take hold, which puts a damper on giving.
I also think that, over time, many people have become increasingly disconnected from the local institutions (Scouts, churches, village organisations, etc.) that used to attract donations. In many ways, giving begets giving (the behaviour of giving reinforces an identity of “being a giver,” which in turn encourages more giving), so it stands to reason that if fewer people are developing the reflexive “muscle memory” of giving, this will have a knock-on effect in the future.
And crucially, I don’t think charities have done enough to make giving more attractive to those donors who have not already developed the habit of giving regularly to charity. Charities want donors to make long-term, unrestricted “set it and forget it” commitments, but that is clearly not the most emotionally fulfilling way for donors to give, and charities have struggled to develop new and rewarding donor experiences.
So how can charities respond? I think the current environment demands that fundraisers leverage new skills (in addition to the essentials like data analysis and emotional storytelling that will always be critical). In an environment where contacting donors was cheap, legal and easy, fundraisers could focus on maximising the efficiency of their portfolios and capturing market share. Now we need to focus on driving effectiveness: how do we “grow the pie” by creating offers that inspire new audiences to support our organisations? And how do we convincing finance directors and boards – that rarely include a trustee with fundraising experience – of the need to invest in fundraising, including trying new approaches that may not yield success?
The heartening news is that the public remains generous and keen to help create a better world: it’s up to fundraisers to show them the way.