The past few years have proven to be a huge challenge for fundraisers, who have had to work against a backdrop of media scrutiny and greater competition. Will 2019 be any lighter on the chaos? Becky Slack explores.
Fewer people are giving to charity but they are also donating more. This was the result of CAF’s UK Giving 2018 report, which reported a sector income of £10.3 billion, up from £9.7 billion the previous year. The figures also pushed the nation up five places to sixth in CAF’s 2018 World Giving Index.
“This is down to the incredible work of the fundraising community who inspire people to give and connect with the causes they care about,” a spokesperson for the Institute of Fundraising said at the time.
Finally – a positive story for fundraisers who, over recent years, have battled against a volatile economy, continued austerity measures, media scrutiny and much greater competition. Will 2018 be remembered more favourably than others? And what could 2019 have in store?
Time to wave goodbye to cash?
While traditional forms of donating remain popular for now – for example, cash remains the most common way of giving money to charity, with over half (55%) making gifts in this way – charities are mindful that this is likely to change and are taking steps to adapt.
For instance, UK Finance’s 2018 report, UK Payment Markets, showed that contactless payments have increased by 97%, meaning for the first time in the UK, payments by debit card are more common than cash. Charities are paying attention to this with Teenage Cancer Trust, Sue Ryder Care, Mary’s Meals, Blue Cross and the Barbican among those who have begun to use contactless technologies within their fundraising.
Spitalfields Music is another. Since June, it has been using contactless to collect donations at its performances. “We found it difficult to find a supplier at first,” explains the charity’s director of O development, Dominic Haddock.
“Lots of pilots had been set up a year or two ago, which hadn’t yet been reviewed and understood, and some companies were waiting for this analysis before bringing on new partners. We found ourselves stuck in the middle with nowhere to go. Then luckily, we found Good Box.
“We adjust the amount to be taken depending on the type of event we are holding, and we make an announcement at the start of the performance so that people know to expect it. Donors seem to be really enjoying it. For many of them, it’s the first time they’ve used it, so they find it quite fun.”
However, he reminds charities that the lack of data collection provided by contactless means this is a facility to “replace a bucket rather than develop a new giving programme”.
Overall, the charity sector is still grappling with new and digital technologies. Hindered by a lack of skills and confidence, adoption of digital tools and platforms is lower than most organisations would like. Salesforce’s 2018 Nonprofit Trends Report, which looked at charities in the UK, North America and Australasia, found that while 60% use social engagement platforms for fundraising, only a third use “community platforms to connect stakeholders and marketing automation systems to foster personalised journeys”.
However, that looks set to change in the coming months and years: “While only 5% of non-profits have AI capabilities, that figure is forecasted to skyrocket by 361% over the next two years. The prevalence of constituent-facing mobile apps is poised to rise by 174% within the same time period, and the use of marketing automation is set to double”, the report said.
Digital is also playing an important role within charity retail. A trend that has continued from last year, there has been a large increase in online sales of goods via third-party websites with charities experiencing an 18% increase in this income year-on-year. However, this was tempered by a large decrease in sales through charities’ own websites of almost a third, meaning that overall online sales have increased by 2%.
The Charity Retail Association (CRA) confirmed that charities are feeling positive about the role digital plays within their retail businesses, with 89% expecting their online sales to grow in 2018/19 and none predicting a drop.
“Charity retailers are becoming more proficient in selecting which donated items to put online and using more expertise in displaying them. Retailers have realised that it can be valuable to list niche items online, so they are more likely to reach their target audience,” Matt Kelcher, head of Public Affairs and Research at the CRA says.
On the high street, the picture is also one of confidence. While the number of charity shops fell by 119 in the first six months of 2018, according to figures from the Local Data Company, this does not necessarily mean they are experiencing difficulties.
“Some charity chains are opening new stores, others are closing some outlets to consolidate their position. Shop closures are not necessarily a sign of problems, particularly as the charity retail sector is outperforming the commercial retail sector on high street as a whole,” Kelcher says.
Time consuming, complicated, and in many cases, expensive to implement, the new General Data Protection Regulation (GDPR) implemented this year pushed data collection and data management to the top of many fundraising agendas. Ensuring compliance with the rules has not been an easy process for many organisations, particularly those such as Cats Protection, which have complex organisational structures.
“Much like everyone else, GDPR has been our main challenge for 2018. For us it was especially difficult as we have over 250 branches and adoption centres. We’ve managed to tackle the challenge head on through a GDPR working group, which involved a lot of our digital fundraising manager’s expertise and a specialised email project team to support our branches.”
While it is still very early days, it would appear that the hard work is paying off. The ICO pointed to its recent audit of eight large charities, which showed “a great deal of positives as well as areas that can be improved upon”, while the Fundraising Regulator said: “We’ve been particularly impressed with the proactive and progressive way in which the sector has risen to the challenges posed by GDPR.”
However, this does not mean the sector can rest on its laurels. More data regulation is on the horizon in the form of the EU ePrivacy Regulation, the draft of which is scheduled for 2019. It will update regulation around electronic direct marketing, including social media, and will deal with important issues such as confidentiality of information, treatment of traffic data, spam and cookies.
The Fundraising Regulator has confirmed it will be producing guidance to help charities prepare for any changes they may need to make as a result of the new regulation.
In addition to GDPR, 2018 saw a complete overhaul of the Code of Fundraising Practice by the Fundraising Regulator and a new, updated version being published for consultation.
Multiple changes over the years had made the Code complex, unwieldy and in places unnecessarily repetitive, so the revamp aims to simplify things. The new version was open to consultation during the latter part of 2018. Following this will be a full and technical legal review, with the new code scheduled for publication in March 2019.
This year also saw the Regulator bedding in, with its second birthday, the collection of 94% of its target levy, and an increased number of small charities engaging with it. Its profile in the wider world also increased, said a spokesperson: “For the year 2017 to 2018, we answered 1,325 enquiries, received nearly web 180,000 visitors and over 5,000 newsletter subscribers, while FPS has received over 20,000 suppressions.”
Elsewhere, the Charity Commission launched a new statement of strategic intent, which includes an enhanced focus on ensuring charities live up to their purpose and the high expectations of the public.
“Charities should fundraise responsibly in order to pay the generous public the respect it deserves. Our guidance for trustees is clear that decisions around raising funds should consider a charity’s best interests and not be at odds with its values," Sarah Atkinson, director of policy, planning and communications says.
Diversity in fundraising
The increased focus on diversity within the workplace was embraced by the fundraising community in 2018.
The Institute of Fundraising has been leading the charge on this front – beginning with the foundation of an equality, diversity and inclusion panel; the launch of an access fund to support fundraisers from minority backgrounds to attend Convention, and the publication of a Manifesto for Change, which has set out how the Institute aims to become an exemplary employer as well as how it can support the fundraising profession to be the same. Expect much more focus on this through 2019.