How’s donor behaviour changing during the cost-of-living crisis?

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In July 2022, then Wood for Trees MD, Jon Kelly, joined Gillian Egan, Senior Planner at DTV Group, in a webinar to share insights and trends that indicate how donor behaviour has been changing over the last year.

DTV Group commissioned two annual YouGov surveys, each with over 2,000 participants, to uncover audience insights for charities surrounding changing donor behaviour. The key outcome of the 2021 survey was that cash donors are undervalued and there are multiple reasons to fall back in love with them.

Why? For starters, one-off donors made up 27% of the UK population (a higher proportion than regular givers). Plus, 68% said they were likely to make a one-off donation in the next 12 months and they’re also more likely than regular giving only donors to support charities in other ways, such as signing online petitions and taking part in fundraising events.

Not only that, but cash givers are also just as likely to leave a gift in their will as regular giving only donors. Read more about cash donors and the results of the survey here.

Revisiting the survey a year on, the team at DTV Group wanted to learn if people were still giving to Covid related causes and if the cost-of-living increases were changing giving patterns. Here are some findings from Gillian, comparing 2022 to 2021…

5 ways donor behaviour is changing during the cost-of-living crisis

1. Changes to donor demographics

As of May 2022, compared to the last year’s results, the survey revealed the number of non-direct donors fell from 70% of the UK population in 2021 down to 61%.

However, it was noted this could be down to excluding emergency appeals from the definition of a ‘direct donation’, due to anticipating the huge success of Ukraine emergency appeals potentially skewing overall results.

Of all direct donors, regular and one-off givers dropped 5% to 26%, along with cash only donors moving down 4% to 23%. Regular givers only, however, remained the same at 12%.

But when comparing direct donor segments, there’s actually less difference to note and the proportions looks similar to the year before. There’s also not much change in the demographics of all donor types. Typically, direct donors have a slight female bias (56%) and tend to be older – 47% are over 55.

2. A shift in donor behaviours

The research showed people have changed how they use social media compared to the last year. In particular, Facebook use has dropped by 5% to 73%, with Twitter – or X as it is now known – use also down 4% to 38% within the UK population. This may partly account for the 10% reduction to just 20% of respondents saying they’d seen charity appeals via social media in the last year.

Conversely, 7% more people said they’d responded to TV adverts, with 4% more responding to newspaper adverts.

When asked if they’d given more or less than usual in the last year, 48% of participants said there was no difference to their giving behaviour (up 8% on 2021) and only 9% said they gave a lot less, compared to 18% last year.

Similarly to 2021, one in four said they donated more than usual in the last 12 months. However, their reasons to give have changed. Strong reasons last year were Covid related, often due to some people having more disposable income during national lockdowns. People are still giving for this reason but it’s down considerably (13%, down from 37%) and the main reason having given more than usual was to help provide aid during the Ukraine war.

Conversely, one in four (instead of one in three in 2021) donated less than usual. This appears to be impacted by the current UK economy. Feelings of uncertainty remain, increasing from 29% to 44% – before relating to Covid but now due to cost-of-living and financial instability.

This shift from donating to Covid-related appeals to the Ukraine emergency is evident with what causes respondents said they’ve donated to in the last 12 months. Health and medical causes have also dropped from 44% to 35% for regular giving and 44% to 29% for one-off donations but humanitarian causes are up to 49% from 25%.

Finally, two in three donors said they had donated to an appeal within the last six months, which remains unchanged from 2021. This suggests that where people feel they’re able to give, they very much still are.

3. Changes in donation values

Another change in the survey responses was the value of donations. Whilst the most common one-off gift continues to be £10, the second most common gift was £20 – an amount that’s changed considerably from the second most offered donation of £5 last year. There’s also a very generous one in 10 who said they’d usually give over £50.

Overall, there are fewer people giving up to £50 per year (36% down to 31%) but there’s a huge increase in higher-value giving between £100-500 – up to 27% from 3% in 2021.

Again, this increase in annual gift levels could partly be explained by the exclusion of emergency donations from the definition of a ‘direct donation to a charity appeal’ – no longer including people who’d only given to an emergency appeal may have increased the average gift from direct one-off donors.

Of those who give regularly as well as donate on a one-off basis, 59% give between £50-500 and one in seven give more than £500 per year – what a generous bunch!

4. Concerns about the cost-of-living crisis

The survey also showed one in three people hadn’t given in the last six months due to having less disposable income.

Worryingly, 45% are working full-time and 58% are parents – likely feeling the squeeze during the cost-of-living crisis. One in 10 say they’re likely to reduce giving over the next year and the main reason why is uncertainty over future finances.

Out of all respondents, 44% said they’re likely to reduce what they give and one in four said it’ll be by a lot (out of direct donors, 49% said they’ll likely reduce donations and one in five think this will be by a lot). However, this can be viewed two ways – one in two will reduce their giving but one in two won’t.

Half of those who’ll reduce donations give up to £50 per year and one in three who are expecting to increase their giving are already giving more than £200 per year (but this is only 3% of people).

Those who are expecting to donate less have already begun to rein back and those who expect to donate more already have been – these trends are already in practice.

5. The state of the sector

To complement the survey results, Jon stepped in to share statistics and trends from Wood for Trees’ charity reporting and benchmarking platform, InsightHub, which mirrors some of the survey findings and continues to show the importance and value of cash giving – albeit with some negative effects in recent months.

Top level results show charity income was up 9% in 2021 compared to 2020, which is the highest it’s been in five years – and in 2022, this trend continues to grow.

We also found the boost in one-off donations during 2020 continued during 2021 – 50% higher than what we saw in the previous three years. So far in 2022, it’s down 25% but is still up on previous years. We believe this is being tampered by the current financial environment and people struggling to give. Although, cash value still remains high.

Recruitment of one-off donors saw a huge increase of 34% in 2021, with a 24% increase in active donors, but so far in 2022 this is down, meaning there’s a slight decline in file size and an increasing number of lapses.

The three-year value of one-off donors is around £80 and there are signs this is increasing dramatically as the year one value for 2020 recruits is already nearly at £80. Similarly, we’ve seen some signs of decreased giving as per the survey results but there are still positive indications people are giving where and how they feel able to.

Since the webinar we’ve updated results with the full half year data to end of June 2022. This shows further impact of the cost-of-living crisis with cash giving (value and volume) being affected, but again they’re still up on pre-pandemic figures.

What does this all mean?

One thing to remember when considering these audience insights for charities and deciphering what they mean is they’re a snapshot of a moment in time. In May2022, the cost-of-living crisis and Ukraine emergency were fresh and front of mind for many.

Although half of direct donors expect to decrease their donations, half also expect to maintain or increase giving and there’s some evidence that annual donation values are rising. Plus, among those who intend to reduce their giving, they’re still taking action and supporting charities in other ways.

People haven’t become uncharitable; many just aren’t in a position to give financially right now but are prepared to help alternatively.

There are more challenging times ahead but also opportunities. Don’t be afraid to ask, or continue to ask, for one-off and regular gifts – make appeals tangible and specific. Keep supporters involved, engaged and active, and suggest they help in other ways – they haven’t lost interest.

Watch the webinar replay here for the full breakdown on current trends and statistics from the survey, plus discover donor segmentations.

You can find out more on these figures, uncover additional audience insights for charities, and much more, by requesting a free copy of the State of the Sector Report January-June 2022 here.

Alternatively, you can also find our other State of the Sector reports here.