How can charities adapt to the decline in individual giving?

Increasingly, charities have to diversify their products to compete in the charity market. 

They may be able to attract new sponsors by launching low-cost and low-commitment options that require a monthly gift, combined with an opt-in service that delivers updates and upgrade asks to their inboxes. These types of cost options give charities a chance to build relationships of trust, and grow their networks, to be upgraded when economic conditions improve. 

Furthermore, low-commitment products may also see charities build a new customer base, especially busy professionals (particularly young ones), who simply want to donate and not be involved in attending events, receiving newsletters or constant calls to upgrade. This is particularly important as a recent report by the Charities Aid Foundation charts a decline in giving by the young – the over 60′s now account for 52 per cent of donations, up from 35 per cent 30 years ago.  However, we should also accept the reality that not everyone will want to give more or indeed subscribe to a monthly/quarterly gift.

When I was a telephone fundraiser, the majority of respondents complained about how often they were asked to commit to monthly giving, which often requires the recipient to receive lots of communication from the organisation and is an amount that they cannot afford.

Another option that is specifically relevant to small organisations would be to consider merging with similar charities, or merging with organisations that exist to serve a particular group (elderly, homeless etc) but could incorporate different operations that deliver different programmes. This would have several benefits: it would develop capacity, allow for diversification, but also eliminate competition from a) the individual giving market, and b) the grants market. In some instances it may also be possible to cut back office costs and reduce the administration-to-programming ratio. This should, of course, be approached with caution and should include all stakeholders in the decision making process, so as to mitigate the risk of alienating staff, patrons, supporters, trustees and the public. 

For organisations that do not want to merge then they should consider joint ventures, which come in a variety of different ways. Organisations could pool resources and create a new charity to act as a subsidiary (which is particularly relevant for large international federated structures) or they could simply collaborate closer on pieces of work; something which is increasingly being requested by large donors. Alternatively, some could just submit joint applications to funders for a specific piece of work. 

The civil society sector is becoming an increasingly crowded market and fundraising will continue to be a challenge unless charities approach the situation innovatively and with an open mind.

As this is my last blog of 2012, I’d like to take this opportunity to wish all my readers a happy Christmas and all the best for the New Year.