What can charities and face to face fundraisers expect in 2023?
It’s fair to say that charity fundraisers already have a pretty challenging job, but with the likes of rising inflation, a disengaged public and the remnants of covid still hanging around, 2022 wasn’t exactly the ideal year.
So many assumed that our return from the pandemic would be back to business, but our new normal is far from what we were accustomed to BC (Before Covid).
In the upcoming year, there are plenty of ominous warnings from our beloved media about a downward trajectory, but anyone who’s anyone in the third sector knows we can’t afford to just down tools and stop trying.
Raising money for charity and getting bums on seats for charity fundraisers jobs is more important than ever.
The fact is that fundraisers for charity will have to do what they’ve always done: get our heads down and adapt. As the sector has already shown in heaps and buckets, we’re an innovative and passionate bunch who know that the good fight is worth fighting for.
Let’s look at some facts and figures on 21-2022, as well as what charity bosses have to say to give insight on how 2023 might look.
"The first half of 2022 has shown a resilient performance, with income continuing to grow even on the previous two years.
There are some continued trends from the disruption of the pandemic, but also signs where behaviours (from charities and donors) have reverted back to tried and tested methods of old.”
- Executive summary, Wood for Trees
Charities by numbers
The number of charities in England and Wales actually increased by 604 between March 2021 - 22. As of March 2022 there were 170,383 charities in operation.
Of those, just 60% of applicants passed the Charity Commission’s registration requirements, showing the larger intent to make change by fledgling charities than initially thought.
Most charities are considered ‘small’ and according to some data, account for up to 96% of the charitable sector, making up just 4% of overall income and 5% of spending.
In 2020, two thirds of this smaller collective partnered with other charities to meet their objectives compared to less than half doing the same thing in 2017.
Volunteer data
In 2022, there were just over 928k charity trustees and 5,937,381 (wonderful) volunteers giving their time and talent to registered charities across England and Wales.
Much as that sounds inspirational, the number of people in the UK volunteering formally (through a voluntary organisation of some kind) in 2020-2021 was 16.3m, showing a significant drop. In the same NVCO report, it showed half of UK adults volunteered their time to help others at least once in the previous year.
Most likely to volunteer with a charity are women aged 65-74 from middle class backgrounds.
Comparably, the number of young people aged 16+ who volunteered at least once a month in 2020-21 fell from 23% to 17% and of those volunteering at least once a year fell by 7% to 30%.
A third of charities had decreased access to volunteers throughout the pandemic, which can easily be attributed to lockdowns.
Overall, volunteers are most motivated by a sense of community and willingness to protect others.
Tragedy inspires people to step forward, demonstrated beautifully by the UN who confirmed that hundreds of thousands of new volunteers had registered across the world for Red Cross in response to the covid pandemic, including 48,000 from Holland and 60,000 in Italy.
Fundraising methods
The charity sector know that thinking outside the box is essential, with 70% planning to find new methods to invigorate giving.
As usual, there’s a continued reliance on ‘human based’ fundraising - including face to face fundraising that Charity Link specialises in. This represents a large proportion of the sectors income.
Although digital fundraising clearly has appeal, just a quarter of charities report they have the resource and knowledge to make digital fundraising work properly for them. In fact, only 41% are increasing their push for online fundraising.
In January 2023, Third Sector editor Andy Ricketts and senior multimedia reporter Lucinda Rouse interviewed Chief Executive of the Directory of Social Change Deborah Allcock Tyler in the Third Sector podcast.
Debora emphasises the need to remember the purpose of charities and why they’re so essential to society as a whole.
She also points out that if you track data over time, you can see how fundraising goes up and down and actually very often you find there isn’t that much of a correlation between economic situation and how much money people give.
“The sector always struggles for funding and it’s always battling with the government to get it’s voice heard.
Although that’s definitely harder now (there’s no question about that) we’ve already got the skills and tools and ability…because we’ve been doing that for years.
Vision and hope are the most important things we need to keep hanging on to.”
- Deborah Allcock Tyler, CEO Diretory of Social Change
Charity fundraisers data
When fundraisers are told constantly that there isn’t enough money, there’s a temptation to stop asking which can become a self-fulfilled prophecy.
The other thing is that charities do is ask for less – which again is completely nonsensical. We should (and need to!) keep asking!
Ask for as much as you need and in fact even ask for more if you can!
If you don’t ask, you don’t get.
As for the fundraisers themselves, it seems that looking ahead diversity will be a hot topic.
It’s come to light that charity workforces have a serious imbalance of male to female workers at 33% - 67% retrospectively. They also tend to be older than people working in the private sector.
Black Asian and minority ethnic employee numbers are at just 9%, particularly when compared to other business sectors and has not increased for several years.
According to the Charity Digital Skills report in 2021, there will be more priority placed on diversity with nearly 60% working towards a better representation within their organisations.
Charity donors
There has been some evidence to say that some individuals are giving less over the last couple of years which is not surprising. Donors are feeling the pinch with many downgrading their donations, especially one off gives. But regular donations have remained fairly steady.
And the public are generous if you ask them.
It’s easy to be intimidated into not asking under the guise that people are under pressure and can’t be asked for money. But when you think about the private sector, can you think of a time where they hesitate to ask for money and push you to buy things?
Read more about how to deal with cost of living objections
Remember the purpose of your cause: Charity saves lives and what could be more important than that?!
Fundraisers should never ever be embarrassed to ask for money to help people or animals or the environment.
Instead they should go out unapologetically and with pride to tell people about their causes. Something like:
‘We have this incredibly important project that’s helping homeless people, or dealing with young people with severe mental illness issues or refugees from war torn countries.. this is massively important work, please can you help us to help these people – how can you help us?”
- Deborah Allcock Taylor, CEO Directory of Social Change
In terms of donor demographics, there's a continued shift, showing movement towards a younger audience, as well as those who are financially struggling.
The Donor Pulse Spring Report for 2022 from Enthuse intelligence, shows that charities are appealing to newer audiences, widening the potential donor base. Millennials and Gen Z are those giving to the largest variety of charities with 86% saying it is easy to give to charity.
However, 36% claimed they would donate more if it were easier to do so.
Nearly half of the public now feel confident about attending fundraising events, which again indicates opportunity moving forward.
Income and expenses
Income and expenditure is not straightforward because of the huge variations in both parts.
While regular donations from the public have remained fairly steady, we know that companies have given less. Trusts and foundations have provided more as they dipped into reserves to cover shortfalls.
It may surprise many to learn that in 2022, overall income was up 6% compared to the first half of 2021. However, much of this growth came from the high value giving attributed to Ukraine war donations in March.
The cost of living crisis has also meant an increase in random community fundraising which have also created spikes in donations.
Charitable organisations who rely on government contracts have certainly felt the squeeze, but not for the reason that most would think.
Government contracts that charities obtain don’t actually come from central government, they come from local authorities. When local authority budgets are tightened, charities often need to renegotiate terms which usually means they get less than initially agreed.
Learn more about the cost of living crisis and its impact on UK charities
Recruitment
Another factor that influences income is the labour shortage across the UK. This has created a fundraising gap which requires immediate attention from those in recruiting. Because of the smaller pool of potential recruits vs the increase in jobs, we’re seeing an increase in fundraiser attrition which directly impact on charitable income.
According to a particularly bleak IBIS World report ‘Charities in the UK industry trends (2017-2022)’, a quarter of charities lost 40% or more of their income in 2020, translating as a whopping £10BN hit on the sector.
A growing number of charities were dependent on their reserves to continue operating at the same level in 2022. More than half said that generating income and being financially stable was in the top three challenges.
Register of Charities Sector Overview - Charity Commission, January 23
According to the register of charities statistics year to date 17th January, the charity sector had an income of £76,932,602,900 and their expenditure was £74,162,338,803.
That means they were able to retain £2,770,264,097 across the board, which will no doubt be used to try to replenish spent reserves and meet the increasing demand for services.
91% of charities in England and Wales said that they experienced negative impact from COVID19.
Service industry was the most affected at 85% and general financial position 72%, both figures reflecting the probable shortfalls of the retention amount.
What charities think will happen in 2023
So what can be made of all that’s happened? Can we predict the upcoming year?
The aforementioned IBIS World report says:
“The industry's revenue is forecast to decline at a compound annual rate of 4.2% over the five years through 2022-23 to £49 billion.
Weak consumer confidence and disposable incomes have contributed to a deterioration in voluntary donations. EU granted funding has been gradually reduced following the EU referendum in 2016-17.
Furthermore, some of the largest operators in the industry were prevented from applying for government funding due to a series of scandals, which have shocked confidence in the operations of charitable organisations”
According to a Charity Commission survey from 2021, charity leaders aren’t happy about the immediate future, with 64% feeling negatively about available support from the government.
The same survey found that just over a third of charities expected to generate less income from fundraising and donations in 2022 with 62% expecting a threat to their financial security in 2023.
Longer term, the majority of charities felt their position would be in the same or a better position overall.
Unsurprisingly given the current, three quarters of charity bosses said that demand for their organisations services increased over the first year of the pandemic A whopping 86% expected that demand to continue rising.
In the CAF Charity Landscape Report, meeting that demand is claimed to be the sectors second biggest challenges of 2023 just behind finding the finances to support that.
That said, 81% of those quizzed expected a brighter future for their own organisation, while half doubt the overall survival of the charity sector.
Included in the future is the pressing need to reduce emissions and meet ongoing climate targets. Just 14% of charities regularly report their own emissions with the vast majority (84%) having no net zero objective signaling further trouble ahead.
There’s no doubt that the whole of the third sector has been hit hard by the multitude of changes seen over the past 3 years. There’s been much upheaval and shortage as charities rush to adapt and try to preserve what little resource they have left.
But charities have faced the tough economy before and must rise to the challenge again. Those who are now focusing on the long game will invariably do better at weathering the storm.
Although recruitment and retention has become harder, income is staying fairly steady. People continue to give where they can. It goes without saying that a strong workforce of fundraisers will be instrumental in arriving alive on the other side. Whatever that looks like.
Fundraisers should talk about new challenges their charity is facing and acknowledging the pain of the cost of living crisis when it comes up.
Those that want to give will dig deep if they feel motivated to do so. Face to face fundraisers must remember that the small amount of money per week that they’re asking for are almost never going to represent the make or break and so they should definitely keep asking!
If you’re thinking about a bold new challenge and want to work for the best, why not give the Charity Link recruitment team a call? We’re always on the look out for those who want to make a difference, enjoy talking to people and can rise to the challenge.
Our Award Winning training means that no prior experience is necessary – we know that we can turn anyone into a profitable fundraiser if they have the right personality and mindset!
