Are the costs of raising voluntary income increasing for charities? If so, how have they changed? Are charities predicting future growth?
These were the some of the key questions behind Fundraising for Impact, a partnership project with PwC that we released this week.
These aren’t questions that we pulled out of thin air, they’re the ones fundraisers have been asking each other to see what the current fundraising landscape looks like and what it is likely to look like in the future, and those that will help inform future plans and strategies.
At a time when our sector has faced a number of recent challenges – including changes to fundraising regulation, the introduction of GDPR and a series of safeguarding crises – we hope it is valuable for charities to have this kind of benchmarking research to see how a snapshot of the sector is responding to the environment. We didn’t just want to focus on challenges, but also on how charities are preparing for the future – including their investment priorities and fundraising strategies. We know that it can be hard for fundraisers to put together business case and plans in isolation, and it can be helpful for some wider context to inform decisions which we hope this research provides.
What stands out from the research is that the costs of generating voluntary income have been rising in recent years and that these are expected to continue to rise in the future. Pinpointing exactly why this is the case isn’t straightforward, but an overwhelming majority of respondents highlighted the increasing costs of compliance, workforce costs and embedding new systems and technology into their organisations.
With the introduction of GDPR and other regulatory changes happening over the last few years, this shouldn’t shock us. Adjusting to a new regulatory environment takes time and it was always likely to affect charities strategic priorities in the short to medium term.
The good news though is that most charities are also bringing in more voluntary income. 67% of charities report that their voluntary income has increased over the last three years. It is encouraging that charities are also investing more in both existing and new fundraising programmes. Almost three quarters of charities have increased their level of investment which should help balance out rising costs.
Although, that’s not to say that there aren’t challenges. With approximately 8 in 10 charities in the report concerned about future uncertainty around the economy, charities cannot afford to be complacent.
But charities do seem to be taking positive steps towards ensuring that they have the strong foundations needed to deal with both expected and unexpected challenges in the future. In particular, it is interesting to find out that charities are putting innovation and collaboration at the heart of their fundraising.
However, for all the emphasis on innovation and new approaches, what really comes across strongly in the research is how much charities value positive supporter experiences and engagement.
Around 90% of respondents say finding new supporters and improving the experiences of existing current supporters are very important areas of investment. It suggests to me that a strong emotional connection between a charity’s cause and its supporters is still at the heart of what charities are all about and this has significant value beyond any simple return on investment.
As with any benchmarking report, the findings from this research are only a guide to how charities are responding to changes in the sector. Every charity will have different organisational priorities. What matters most is that charities are able to balance day to day challenges with a longer term strategy and vision for the future. We hope this report can help you with the journey ahead.
Download the Fundraising for Impact report