[I had these conversations between late ‘22 and early ‘23 before most charities' ‘23/’24 budgets had kicked-in. It was these budgets that generally introduced a new reality of constrained fundraising investment as a result of the cost of living crisis and the inflation that caused it. It would be interesting to refresh these insights now that the impact of inflation is becoming clearer.]
With inflation approaching a generationally unprecedented 10%, I decided to repeat the Fundraising Directors’ pulse I’d taken pre-pandemic in the autumn of ‘19.
Back then, just before the pandemic hit, I spoke to 60+ Fundraising Directors and there was, despite the general acknowledgement of stagnant or incremental growth, a sense of optimism.
Being a Fundraising Director was a tough gig, and things needed to change, but many were ready to take more risks to diversify income and there was an openness and enthusiasm to explore bolder avenues to growth.
Post-Covid, and with more talk of a cost of living crisis I was curious about how confident Fundraising Directors were feeling. Unsurprisingly, I heard a slightly different story. So two years after those first conversations this is what I heard…
CONFIDENCE!
An unexpected degree of near and medium term confidence
Fundraising Director’s are natural optimists.
Post pandemic chutzpah! ‘We’ve weathered these storms before… don’t panic!’
Income has generally survived the end of the pandemic.
BUT ….. Has the worst hit? Costs are going up, can fundraised income keep pace?
CONCERNED, BUT NOT WORRIED
There’s uncertainty and, consequently, an undertone of realism
It’s still early days.
Caution is entering financial conversations.
Recessions help identify the most loyal supporters.
Staff recruitment is getting harder, but it’s a mixed picture - digital is particularly challenging.
People want to give: faith in philanthropy of UK people & of charity’s supporters & committed supporters will continue to give regardless
BUT ….. Things have moved on and the financial crisis has gotten worse.
GROWTH IS STILL POSSIBLE
There’s still an appetite & ambition for growth (same as 2020)
Investment: Growth from appropriate investment in fundraising - the right balance of investment & contribution
Income saviours: Growth from ‘fundraising saviours’, e.g. legacies
Diversity of income: High performers in a downturn, e.g. retail
Opportunities: There are always opps in a crisis, e.g. untapped high value audiences.
BUT ….. In a flat market, growth will only come from buying market share.
4. GETTING THE BASICS WRONG IS NO LONGER AN OPTION
There is untapped growth potential from putting in the right foundations
Building the right data foundations
Digital competence is no longer optional
Right people with the right skills
Squeezing growth from existing ‘tried & trusted’ fundraising streams Internal deficiencies can be overcome, e.g. ageing databases
BUT ….. Will the world have moved on by the time you’ve built the foundations? The foundations are a moving baseline.
GREATEST THREAT TO GROWTH IS CHARITIES THEMSELVES
Charities are their own worst enemies
Investment: Getting the investment wrong
Governance: Poor decision-making
Agility: Lack of agility & ability to respond to changing circumstances
Culture: Being a fundraising organisation is no longer an option. Have we got the right culture to flourish and grow?
Engagement: Has the sector abandoned engagement? Has it been a victim of the pandemic? Have we learnt the lessons from the Olive Cooke debacle?
BUT ….. Are fundraisers in the best position to lead and drive change internally?
INNOVATION IS CRUCIAL TO WEATHERING THE STORM
Innovation underpins the optimism
Innovation is not a nice-to-have - it’s fundamental to delivering growth
Three horizons of innovation:
Getting the basics right: to deliver on the potential of putting in the right foundations
Expand or optimise current products & income streams: to refresh & optimise existing fundraising streams, squeeze income from them & accept NPD is a new normal
Transformation: create new income streams & tap into new audiences and markets
BUT ….. Innovation in fundraising is mostly focused on delivering income, not impact.
THE ROLE OF CHARITY NEEDS TO CHANGE
You will never generate enough income to deliver your charity’s mission.
Change is coming like it or not: Corporate competition & opportunity; audience impact choices; etc.
Charities need to deliver impact differently: Systems vs intervention approach; Convene & collaborate rather than go solo
This will require them to be different: Relinquish power; move on from vertical structures in an agile world
BUT ….. How do charities recognise the opportunity in this change and act upon it, so they control it rather than react to it?