Since 2008, the Charity Finance Group (CFG), the Institute of Fundraising and PwC have been tracking how charities have been coping with the impact of changes to the external environment; from reviewing the strategies and plans that charities had in order to remain sustainable and meet rising levels of demand in the economic downturn, to looking at the top priorities for the next government in the run up to the last two general elections.
The results from this year’s Managing in the New Normal reflect what has been a particularly difficult time for both the sector as a whole, and many individual organisations. The intense media spotlight, political pressure and public interest into fundraising practice specifically has undoubtedly impacted on charities. It will continue to do so in the longer term, as we see changes to fundraising rules, a new system for fundraising regulation and an increased emphasis on governance, leadership and culture embedded over the next few months.
The findings we got from this year’s survey were striking, with 83% of charities maintained that public trust around fundraising practices was the biggest challenge for the sector as it looks to the public for support.
Widespread efforts to improve practice
When asked about the steps charities had taken in response to these challenges, the majority of respondents reported improving their practice over the past year. The most common actions were ‘reviewing consent statements on donation forms’, ‘improving internal compliance’ and ‘improving ways in which donors and supporters can manage their communication preferences’.
This is encouraging – it shows that charities are taking things seriously. We have observed an incredible amount of activity from our members over the last year as they have taken significant steps to review their fundraising practices to better reflect the preferences of their supporters.
It also shows that adhering to high and accepted standards is important to those working in the sector, with two thirds of our survey respondents saying they were motivated to make changes either to ‘adhere to best practice’ (46%) or because of ‘expectations from donors’ (19%). A third of respondents said they had increased the level of trustee involvement in fundraising oversight and about one in four charities were reviewing their relationships with third parties.
As well as responding to the challenges of the past year our results show that those issues that have consistently trended in this series have not gone away. This isn’t surprising – the political and economic backdrop hasn’t massively changed, and neither has the important role that charities play in providing vital services to their beneficiaries.
High demand for services – and funding
The overall context for charities continues to be one of high demand, and financial pressures: 65% say that demand for services has increased over the last year, while a concerning 25% say that they do not have the resources to meet the demand they are facing. In this context, the importance of fundraising is even greater and the need to raise money is vital for the causes and people charities work for.
Improved donor retention levels
Importantly, the research also shows that the public who support our causes are continuing to do so: donor retention levels over the last year are up, and donor attrition levels are down. This may be unexpected to some, but it reflects the continuous and generous desire of the British public to make the world a better place through their support for charitable work here and abroad.
Resilience and optimism
This report has come to represent much more than the economic health of the sector; it now reflects the general morale of charities and the how they view the relationship they have with their supporters, donors and the general public. Charities remain in a resilient and optimistic mood (58%) and it is hugely reassuring that our members have taken swift action to review and improve fundraising practices while their supporters continue to support the causes they care about in growing numbers.
There is certainly more to do, but one of the central messages of this year’s report is that the sector has set itself firmly on the right course to rebuild public trust and confidence by embracing the need for change.
Ceri Edwards is Director of Policy and Communications at the Institute of Fundraising
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