New report explores how charities are responding to the cost of living crisis

According to the Office of National Statistics, around 46% of adults are finding it difficult to afford their rent or mortgage payments due to the increased cost of living. As a result, 63% are spending less on non-essentials, including charity donations.

A new report by Ensleigh Insurance explores how the cost-of-living crisis is impacting fundraising and the ability to recruit and retain staff. It also analyses what charities are doing to overcome these challenges.

The findings

307 charities took part in Endsleigh’s survey. Here are the key findings.

Finances under pressures

Charities reported that their finances were under pressure across all areas of the UK. At just under 65%, the north of England and the Midlands have been hardest hit, followed by the South at 58%.

Notably, 45% of respondents said they are in a worse financial position now than they were during the pandemic, and 43% fear their organisation is at risk of closure due to ongoing financial pressures.

Social media marketing and technology are a priority

The report found that charities are responding to financial challenges by increasing their social media marketing activity and utilising innovative technologies to engage younger donors.

Let’s look at these two areas in a little more detail.

Social media marketing

According to the Donor Pulse Summer Edition, the age groups feeling the financial squeeze most are Gen X and Baby Boomers. The picture looks slightly different for the under 40’s, with 28% of Gen Z saying they are unaffected, or are better off financially, as do 30% of millennials.

To target this group, 31% of Endsleigh’s survey respondents said they’ve doubled down on their social media marketing efforts in the last 12 months. While 30% have partnered with social media influencers to raise awareness and boost donations.

Use of technology

The survey also found that charities are experimenting with new technologies to engage Gen Z and millennials.

58% of charities said they’ve used the metaverse, Augmented Reality, VR, or online games to encourage donations in the past year.  

They’re also using tech to make it easier for people to donate. Online payments, facial recognition, and fingerprint scanning technology are now widely used by the charities surveyed, with 63% adopting one or more of the technologies over the last 12 months.

Recruitment

The report also looks at the sector’s recruitment and staffing issues.

Of those surveyed, 45% reported increased staff turnover and 55% said employees had been forced out of the sector in search of better-paid employment in other industries.

To fill the gaps, 29% said they are increasing their use of automation and AI.

Alison Meckiffe, chief executive of Endsleigh Insurance, said of the report, ‘The cost-of-living crisis has put even more pressure on charities, social enterprises, and not-for-profit organisations. While the report highlights the financial threat many organisations face, it also highlights the resilience of the industry, with many identifying ways to evolve their business model to continue to support those most in need.

You can read the full report here.

 Need a tech-savvy fundraiser to help you navigate the cost-of-living crisis? We can help. Give us a call on 0203 750 3111 to talk tactics.

The state of charitable giving by FTSE 100 firms

The UK’s largest listed companies donated the same amount to charity in 2022 as they did in 2016 despite almost trebling their pre-tax profits, according to new research by the Charities Aid Foundation (CAF).

The organisation’s Corporate Giving by the FTSE 100 report* found that FTSE 100 firms gave £1.85bn to charities last year. This matches the amount donated in 2016 and is significantly less than the £2.51 billion they gave a decade ago.

Taking increases in inflation into account, this represents a decline of 17% in real terms.

If the FTSE 100 companies had continued to donate the same proportion of pre-tax profits as they did in 2016, the charity sector would have received an additional £3.74 billion of funding.

Having endured a pandemic, cost-of-living, and energy crises, as well as rising inflation, this is a significant amount of funding charities have missed out on.

The good news

Donations may be down, but it’s not all doom and gloom. There were some positive findings from the report. For instance:

• 42 of the 100 companies increased their donations, resulting in £542.4m in the charity pot. This represents an average increase of £12.9m per company.

• The number of FTSE 100 brands that continued to donate while making pre-tax losses climbed from six to 10 between 2016 and 2022.

• The figures suggest that a culture of corporate giving is embedded more widely across the FTSE 100 than ever before, with the top 10 corporate donors accounting for the smallest ever proportion of the overall sum given. In 2022, the ‘top ten’ accounted for 62.5% of the £1.85 billion gifted, compared to 68.3% in 2016.

Giving by sector

So, which sectors are leading the way in corporate giving?

Despite accounting for just five of the FTSE 100 companies, the healthcare sector provided £409.9m (22.2%) of total corporate giving - considerably more than any other sector.

The basic materials and consumer staples sectors, including mining firms Rio Tinto, Glencore, and high street brands such as Tesco, Sainsbury’s, and Unilever, were also among the most generous, contributing an average of 1.76% of pre-tax profits.

At the other end of the scale, the Consumer Discretionary and Industrials sectors, which includes brands such as B&M European Value Retail, JD Sports, and Smiths Group, provided just 9.3% of all giving.

‘More should be done’

Neil Heslop OBE, Chief Executive of the Charities Aid Foundation said of the findings: “The role of FTSE 100 businesses in leading a purposeful corporate culture is vital. More can and should be done, especially now as household incomes are squeezed, and charity finances are strained due to the cost-of-living crisis.

A resilient civil society requires charities, the private sector and government to all play a role.”

According to the report, the call for more to be done is echoed by consumers, with more than two-thirds (69%) believing businesses have an obligation to support the local communities in which they operate.

*The CAF report looks at global support given to charities by FTSE 100 companies in the form of voluntary cash and in-kind donations, matched employee funding, employee volunteering and management costs incurred.

On the hunt for a corporate fundraiser? We can help. Give us a call on 0203 750 3111 or email info@bamboofundraising.co.uk to find out how.

Proposed changes to inheritance tax could affect legacy income

Inheritance Tax (IHT) has been hitting the headlines recently, sparked by a group of Conservative MPs lobbying for its abolition. 

Jacob Rees-Mogg and Liz Truss are among 50 MPs who have written to the prime minister calling for IHT to be scrapped.

The campaign was spearheaded by former chancellor Nadhim Zahawi, who branded inheritance tax “morally wrong”.

As a result, the Conservative party is said to be considering making the scrapping of inheritance tax part of its manifesto pledge, in an attempt to shore up votes ahead of the 2025 general election.

While the proposed change is being welcomed by homeowners, charities are concerned about the effect it would have on legacy giving.  

Before we delve into the reasons why, let’s look at how charities benefit now.

The current state of play

Inheritance tax is a charge on the estate of a person that has died. An estate consists of their property, money, and possessions.

As things currently stand, people with an estate worth less than £325,000 don’t have to pay inheritance tax.

Anyone with an estate above that value is liable to pay 40% tax on the amount over the £325,000 threshold.

The current IHT framework incentivises legacy giving, as charitable gifts in wills are exempt from tax, effectively increasing the IHT allowance on supporters’ estates.

And, if someone donates more than 10% of their estate to charity, they benefit from a discounted IHT rate of 36% across the remainder of their estate.

Third sector concerns

Through its Remember A Charity campaign, the Chartered Institute of Fundraising is urging government and policymakers to consult with them to explore the impact it would have on charities.

The organisation is concerned that changes to the IHT framework could pose a risk to what has become one of the largest sources of voluntary income in the UK, raising £3.9bn annually.

Lucinda Frostick, Director of Remember A Charity said of the news, ‘Legacy giving has become a lifeline for thousands of charities and community-based organisations, building resilience and long-term income that has proved crucial in the current economic climate.”

While IHT impacts less than 4% of deaths, the impact of the gifts from those estates is considerable. They account for around one-quarter of all charitable estates and half of all legacy income donated.

Third sector response

Remember A Charity is taking the lead on a collaborative response to the Government. As Lucinda Frostick explains: ‘As a representative body for almost 200 charities that rely on legacy giving, we’ll be urging government and policymakers to consult with us, our partners, and the wider sector to explore the impact of any IHT changes on gifts in wills and ensure that legacy income will be protected.’

The organisation is working with the Chartered Institute of Fundraising and other sector bodies to build up a bank of evidence on the importance of the IHT to present to Sunak Rishi in the coming months.

Looking for a fundraiser to maximise your legacy income? We can help. Call us on 0203 750 3111 or email info@bamboofundraising.co.uk to get started.

New donor loyalty measurement service launched for small charities

Over a period of 10 years, ‘About Loyalty’, a specialist research-based consultancy for the non-profit sector, conducted the largest-ever research study into donor loyalty.

The study measured the loyalty and behaviour of donors across 30+ charities and 50,000 supporters.

The key findings:

A one-point increase in supporter loyalty over 3 years can lead to:

• ​20% more income

• 15% more donors continuing to give, and

• 9% more legacy pledges

The results go to show that proactively growing supporter loyalty (by improving the supporter experience), increases retention, legacy giving, and overall income.

You can download the full report here.

Chase Lite

During Small Charities Week, About Loyalty launched Chase Lite, a service designed for small charities, to help them measure, understand, and grow their supporter loyalty.

A reduced version of their Chase Index programme (aimed at large charities), Chase Lite enables small charities to measure key loyalty metrics such as:

• commitment to their cause

• satisfaction with their communications

• trust in them to deliver against their promises

Once signed up, charities can benchmark their performance against 40+ other small organisations to identify their strengths and highlight areas where their communications are not growing supporter loyalty.

On the back of it, About Loyalty (which specialises in helping charities grow supporter loyalty and income) can provide you with practical and targeted action to grow donor loyalty.

Chase Lite pilot

To prove the efficacy of the service, About Loyalty ran a pilot with five small charities, including International Nepal Fellowship (INF). 

Olly Du Croz, Marketing and Communications Manager at INF highlighted the charity’s struggles with supporter loyalty:

“Supporter loyalty is important for all charities, but it is even more essential for smaller charities where donor recruitment can feel like an even bigger uphill struggle. We strive to ensure supporter relationships are nurtured so that people feel cherished and valued, developing deeper and longer-lasting links with INF and the work our partners do in Nepal.”

Roger Lawson, director, and founder of About Loyalty, deemed the pilot a success, claiming that it’s proven that the science behind measuring loyalty is as effective for small charities as it is for big brand household names. 

“We’re passionate at About Loyalty in helping charities to grow their supporter experience. Our recent Chase Lite pilot demonstrated that there was a need for a simpler product aimed at the small but vital organisations to enable them to measure their supporter loyalty, grow that loyalty through practical help, and in turn increase income and the organisation’s stability for the long-term.”

Want to know more?

If you want to find out more about Chase Lite, check out About Loyalty’s free webinar, ‘small charities, BIG loyalty’. If you want to find out how Chase Lite can benefit your charity, register your interest on their website.

In the meantime, if you’re looking for a fundraiser to focus on supporter loyalty and retention, give us a call on 0203 750 3111 or email us at info@bamboofundraising.co.uk

New Charity Interns project offers internships for over-50’s

The number of people who are economically inactive has risen steeply since the beginning of the pandemic – largely driven by droves of over 50s quitting the workforce.

A new report from the Business, Energy and Industrial Strategy select committee blames the exodus on “ageist” organisations that have outdated policies and recruitment processes.

This rings true for Maya Bhose, Founder of Charity Interns – a project that will explore new routes into third sector employment for the over 50’s.

In an article in the ‘i paper’, Maya said, “at the age of 61, I am struggling to get a job. I have great skills, and I’ve held very senior roles in the commercial sector but still, somehow, I am struggling. In the past year, I have applied for over 40 jobs, and I have received just one interview. My CV hasn’t changed. My experience hasn’t changed. I am simply 61”.

Rather than accept the status quo, Maya turned her frustration into a solution. She continued, “the main motivation behind Charity Interns is to stop the waste of talent that is happening across all sectors and do something practical to make older people visible to employers, help them extend their careers, and allow charities to benefit from their skills, knowledge and unique perspectives.”

The project, which is being incubated by the NCVO, aims to help address the sector’s ongoing recruitment and skills shortage by tapping into the 50+ market - an often overlookedand under-utilised talent pool, while countering negative stereotypes around older workers.

The initial pilot programme will run for six months, from October 2023, and will see up to six candidates aged 50 and over, placed on a six-month paid internship with a charity.

The project will formally launch on 29 June 2023 with a live-streamed event. Internship applications for the pilot programme will also open on this date.

Opinion

Internships are generally seen as pathways for younger people to enter work or retrain. However, older workers also need supported routes into the sector. And there’s an abundance of over 50’s with relevant transferable skills and knowledge Looking for meaningful employment.

Charity Interns is a win-win.  It will enable over-50’s to gain valuable third-sector experience (without the worry of age being a barrier), and charities will fill vacancies and benefit from the sharing of ideas across co-generational teams.

Get involved!

The Alzheimer’s Society has been announced as the first of four internship partners. But Charity Interns is looking for three further organisations to take part.

To express your interest in hiring a skilled intern, or to find out more about the project,  visit the Charity Interns website or email maya@charityinterns.com.

Looking for a skilled fundraiser to complement your team? We can help. We’ve got talented candidates of every age looking for their next third-sector challenge. Contact us on 020 3750 3111 or info@bamboofundraising.co.uk to get started.