Covid impact could see text donations fall next year, PSA warns

Melanie May | 17 August 2020 | News

Charity text donations could fall in 2021-2022 as people tighten their belts after a spike in giving during the pandemic, and as the economic crisis takes hold.
According to its Annual Market Review, the Phone-paid Services Authority expects charity donations by premium SMS to be slightly higher in 2020–2021, partly due to Covid-19, which has seen new fundraising events and campaigns introduced, such as BBC’s Big Night In, and partly again because of the seasonality of major telethon events.
However, it warns, the spike in donations seen in response to Covid-19 during Q1 2020–2021 may have a displacement effect with households then cutting back on donations in 2021-2022, while the impact of the economic crisis on households’ incomes may also mean consumers are less willing or able to donate later in the year, when larger telethons are held.
The Phone-paid Services Authority’s Annual Market Review covers the UK phone-paid services market for 2019–2020, with data up until March this year, with an overview of the size of the market, and a look at the key market drivers, and the outlook for the market until 2022–2023.
It draws upon a survey of 9601 consumers conducted between March and April 2020, as well as in-depth interviews with executives in senior positions across 17 organisations in the phone-paid services industry.
Overall, it shows that consumers spent £646.1 million on phone-paid services in 2019–2020 in the UK, up 2.4% year-on-year). £40.1 million of this was raised by charities via premium SMS – a drop of 19.2% on the previous year.
This drop was largely due to the biannual nature of telethon fundraising events such as Red Nose Day. However, charity donations actually increased compared to 2017–2018, up by £2.6 million (7%) due to the introduction of a higher spend cap per donation in late 2018, from £20 to £30.
According to PSA, raising the donation cap addressed the risk for telethon organisers of individuals being constrained to make smaller donation via premium SMS than through credit cards, and incentivised telethon organisers to promote both payment methods equally.
The more-active promotion of premium SMS as a donation channel during telethon events has, it says, also raised consumer awareness of the use of premium SMS for donating outside of telethons.
Overall, the consumer survey suggests that 52% of the UK population aged 16 or above used at least one phone-paid service in 2019–2020, with the key drivers, including convenience, affordability and impulse purchasing, remaining largely unchanged compared with last year.

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