Trends in charity fundraising

We have written quite a lot over the last couple of years about the impacts of the pandemic on fundraising, and grant funding in particular.

So why are we writing about this again?

In short, because the situation remains volatile and there is a new, major factor at play that is changing the landscape again; the rapidly accelerating cost of living crisis.

General inflationary pressures, rising energy bills and a possible economic downturn all appear to bode ill for charities in the short to medium term. “Fixed” costs are rising (particularly for those that have buildings to heat and maintain), there is pressure for salary rises and it is likely that the economic context will create downward pressure on individual and grant giving, at least for a while.

Grant funding

As we have written previously, during the pandemic grant makers stepped up to the task of saving the sector through increased giving and offering significant flexibility to grant holders. But this means they have less to give now as they recoup the “overspending” of the last couple of years and the economic situation will almost certainly mean that many will be experiencing poorer returns on their investments/endowments.

Moreover, it appears that there has been a substantial increase in the number of applications. For example, we recently heard from the Paul Hamlyn Foundation that demand for their Arts Access and Participation Fund is particularly high at the moment. Since re-opening for applications at the end of October 2020 they have received over 390 applications, a 50% increase on the same period pre-Covid. In addition, they have received over 480 requests for an enquiry call from organisations interested in applying. This is in the context of them aiming to make around 40 grants per year across the United Kingdom. They are stressing that “we have limited resources and are only able to support the applications that present the strongest and closest fit with our guidelines”.

This does not appear to be an isolated case from what we hear around the sector.

The response from most significant grant makers appears to be to narrow down the focus of their grant making. Many have had temporary closures both to take a breather from giving while their investments replenish the funds they have available and to reshape their strategies. In every case we have seen, criteria have either narrowed or remained broadly the same. No-one has widened their criteria as far as we can tell - apart from continuing to offer more core funding alongside (or even instead of) project grants, as they did during the pandemic; something many charities facing cost pressures will welcome.

What can charities do in the face of this increased competition for, and decreased availability of, grant funding? In our view, the answer is not simply to increase the numbers of applications. This will only result in more applications being submitted that do not fit funding criteria well; wasting everyone’s time and resources in the process. It is better, in our view, to focus on writing really high quality applications and on finding the funders that best match your charity; time spent researching prospects is really worthwhile at any time, and particularly now.

Individual giving

Similar pressures are also being felt in the area of individual giving. The cost of living crisis is forcing people to tighten their belts and in many cases the result is that they are giving less to charity.

Overall, it’s a mixed picture with some campaigns continuing to yield very good and improving results, while others have been disappointing. There are some signs that it is the small, ah hoc donations that are suffering most, with donors concentrating their remaining giving budget on a few, carefully chosen causes.

The trick appears to be, as ever, to ensure that your charity/campaign stands out from the crowd (you need a really clear and compelling pitch) and it is vital to target your communications (fundraising or otherwise) at audiences who are likely to identify with your cause.

While supporter engagement is always, to some extent, going to be a bit of a numbers game, when you have limited resources you want to maximise the reach of your communications for whom your cause resonates. Think about which demographics best match your most likely supporters and what communications channels are most likely to reach them and keep their attention. Work hard to maintain engagement with those who do respond. Build trust by doing what you promise to do and be seen to value all contributions, not just donations - including volunteering, spreading the message and so on - supporters who are loyal often change how they contribute; a volunteer or message spreader can become a donor in time.

Overall, it looks like tough times ahead for charities and fundraisers; increasing costs, increasing demand and reducing availability of funding is never a comfortable combination. But you can come through it if you don’t panic, sharpen your focus and concentrate on high quality fundraising practice rather than a scatter gun approach.

If you would like to know more about the services we offer or to discuss your fundraising needs further please contact us at julian@almondtreeconsulting.co.uk.