Donors rebound but charities urged to nurture them

The charity sector has shrugged off the effects of Covid-19 with significant growth in income and recruitment in the first half of this year, compared to last year, and is now even higher than before the pandemic struck.

So says the State of the Sector Report, published by Wood for Trees and using data taken from the agency’s InsightHub benchmarking suite but it also shows there is still work to be done.

It reveals charity income has risen by 7% over the past six months, with recruitment also up by around 58%, both largely driven by one-off donations which have increased dramatically since the start of the outbreak.

The report is a far cry from last year’s predictions of doom and gloom. Research among over 260 charitable organisations, conducted by Pro Bono Economics, showed that the UK sector was facing a funding shortfall of more than £10bn over the first six months of 2020, at a time when demand for their services was at breaking point. Charities expected income to fall by £6.7bn, while costs were forecast to rise by the equivalent of £3.4bn.

But the Wood for Trees study shows that as well as one-off donations, regular giving continues to be a resilient source of income for charities, which remains at similar levels to this time last year. However, other forms of giving, such as community fundraising and gaming, have been slightly down but are stable.

Increased use of digital methods and a resurgence in direct mail have proven to be the most successful channels to find new recruits. Recruitment by digital means has risen by almost 40%, while recruitment from direct mail is currently three times higher than in the first half of 2020.

There has also been a significant shift in supporter profiles this year. New recruits tend to be younger and less affluent, particularly for community fundraising and gaming. And, although overall typical supporters are still older and more affluent, this does indicate an emerging audience.

In addition, the ways in which these new supporters choose to be contacted seems to be changing. Community fundraisers mostly opt for email, whereas gamers tend to prefer SMS.

Increasing recruitment levels has meant the total number of active supporters has risen 2.5% higher than what was seen at the start of the pandemic. And, overall, their value is up.

But, as one-off donations continue to dominate, there is a note of caution as the new breed of community fundraisers are providing less value on average and cross-sell rates are down. These new supporters will need further nurturing and engagement.

Wood for Trees managing director Jon Kelly said: “Our six-month review of charity data shows promising results for the sector as overall income and supporter volumes continue to rise.

“However, we have yet to see the full impact of the changes seen in the ways of giving and types of supporters. This will require continuous monitoring to ensure charities can build from the positives and make the most of the opportunities presented to them.”