InsightHub State of the Sector Snapshot – January 2021

Written by Managing Director, Jon Kelly

Following the release of our State of the Sector report last month, and our accompanying webinar, we have been delighted with the feedback received and that many people have been finding it really useful. And it was also good to see that despite the uncertainty of last year and the challenges the sector faced the overall income impact was better than might have been expected and there were also some positive signs for the future.

But I think one of the main things that stuck out to me was increased engagement through more traditional methods such as direct mail cash appeals, and also the uptick in community fundraising fuelled by the proliferation on virtual events (next month the Wood for Trees team are walking the Camino de Santiago across northern Spain – virtually of course!) Both activities saw income bounce back but more importantly (for the future) saw the number of active supporters grow quite considerably.

Our recent January update shows the trend continuing with income being down 6% on last January, although much of this is down to some significant high level giving, so other income streams a down a bit further. However the number of supporters is still growing, particularly for one-off donations and community fundraising.

So what is driving these changes. I believe this is a mixture of existing supporters finding alternative ways of giving, but also seeing and reaching new audiences, especially through the digital world. We have been seeing this in all our work across our clients and it is really important to understand the dynamics here so that you are ready to engage and these new audiences, understand who they are, what drove them to give and what will work for them going forward? Will they fit into your existing programmes or do you need to engage them in a different way. Get this right and you could be nurturing a whole new set of supporters to driving future lifetime value. Get it wrong and you could be missing a great opportunity to widen your support base. Too often we have seen a disconnect between supporter recruitment and retention resulting in lost audiences as new recruits are immediately dropped into existing programmes which may not suit them.

On the flip side to this it is important to ensure that these successes do not hide any negative consequences. We have also seen examples where existing core audiences have been left aside as charities have quickly adapted to new ways of giving. Looking at overall results may mask this so make sure you are looking at who is giving to your campaigns and how they are giving.

I have seen a lot of reports about increase in average value and the assumption that this means that people are giving more. In fact, what we have seen when looking deeper, is that the increase in average gifts is more down to a shift in the value distribution of gifts. People who were giving at lower values have stopped giving, and those that have started giving tend to be giving at higher values. It has been well reported that savings have gone up hugely over the last year as those in work have had little to spend their income on. Some of this money is also thankfully finding its way to charitable causes. Whereas those making smaller donations are the ones most affected financially by the pandemic and are therefore less able to give.

Now is the time to be mining your data for these valuable insights which will not only help you through the coming months but also help set you up to driving your programme forward as we hopefully emerge into brighter times.