I read TEN sector reports (so you don't have to)
A somewhat meta research project
Today’s article
Happy Tuesday you legends!
Caroline here.
To ease myself back into work following my annual August holiday, I listened to a couple of episodes of the Fundraising Everywhere podcast.
Not only are Fundraising Everywhere providers of the most comprehensive, inclusive and entertaining fundraising training out there (please get yourself a membership if you don’t already have one), but they are the kindest, most warm-hearted and impressively capable people (probably) on the planet.
This episode with Andy King was a particular joy – probably because Andy very much exists in my ‘please-think-long-term-and-don’t-set-ridiculously-high-targets’ fundraising echo chamber.
Andy reminded me of what it is to be a leader in the For Impact sector (I’m a trustee now so next-level adulting is especially important) and also said something which stopped me in my tracks;
“Fundraising is a science”
Not a new idea by any stretch, but for some reason, at that particular moment, the statement resonated and I was inspired.
Back in the early days of summer, I’d had an idea inspired by Richard Sved’s curation of a whole host of sector reports on his site, 3rd Sector Mission Control.
I thought it would be fun to go through each report, summarise the main points from each and then look at them as a collective, in order to:
draw out themes and trends
highlight (with the collective data serving as evidence) challenges and opportunities
make suggestions for what we as fundraisers and charity leaders should do in response
I wondered if doing this would be a helpful thing for Nest Egg readers too, so (at the time of starting this back at the tail-end of August 2024) with a few days still to go before I was officially back at work, I finally dedicated the time.
And, not gonna lie, I still hadn’t cleaned the oven (still languising at the top of my ‘holiday’ to do list) and welcomed an excuse to procrastinate further over my most hated of domestic tasks.
Without further waffling, we hope that you find this rather meta ‘report on the reports’ useful.
Buckle up and enjoy.
Tony and Caroline
p.s. please give Andy King and Richard Sved a follow, a wave and some gratitude for the part they played in making this edition of the Nest Egg actually happen. They are two individuals who are very much worth your attention.
p.p.s I have now cleaned the oven.
I read TEN sector reports (so you don’t have to)
by Caroline Danks
Picture description: four large stacks of cream and white paper files lined up on a desk
The rules of engagement
Every experiment needs a set of guiding principles.
Here were mine:
I read the ten most recent reports from Richard’s list and have written and shared a short summary on each.
All reports included were released in the past 12 months (the oldest is from October 2023).
If the content of the report isn’t obvious from the title, I’ve included a short precis.
I actually read each report and didn’t ask AI assistant to do it for me.
I’ve read mostly general reports, not those which focus on a specific discipline or demographic and have focused my sharings on income generation related info only.
I’ve not included links to individual reports – the full list with links is available in this post (thank you once again Richard Sved for pulling these together!). There are two reports not included on Richard’s list, so I have added the links to these.
At the end, I’ve tried to summarise to main themes and trends - scroll down if you CBA with the detail (no shade if that’s you – we’re all busy people).
I definitely underestimated the amount of time this would take so it’s by no means perfect, there might be a typo or two.
Huge thanks to those of you who recognise the hours of work that go into stuff like this and who support us, either through being paid subscribers to The Nest Egg or by sharing and talking about our work on LinkedIn etc. It all helps enormously.
Obviously, the things I’ve included in each of my summaries were those which stood out to me personally: a high value fundraising specialist with 20 years’ experience, fundraising data nerd, white, middle class, hetero (ish), cis-woman. They are not necessarily the conclusions the authors of each report would have wished readers to have drawn.
It’s also worth mentioning that there may be an intended agenda or a particular audience targeted by the authors of these reports which might explain why some are very hopeful and others are more cautious.
Never forget that many of those in the business of collating and sharing data are doing it in part at least, to support readers (of course) and also the organisations they work for and ultimately, themselves too. There’s nothing wrong with this – it’s very much part of why we produced three annual Fundraising Benchmarking reports and why we’ll likely do it again and it’s useful to keep this in mind, especially where reports say contradictory things.
Ok. Coffee topped up? Let’s go…
The reports
1. Donor Pulse Report (Enthuse, Summer 2024)
“Our quarterly donor research report, Donor Pulse, continues to examine how fundraisers and supporters are reacting to major issues and the impact this is having on their behaviour towards charities.”
Things are slowly improving – people report feeling better off compared with two years ago.
A higher percentage of people are ‘intending to give’ to charity in the near future.
75% of the public have given to charity in the past 3 months (the authors note that only once since 2020 has this figure been higher)
Of these, the percentage is higher for younger donors (under 44) than it is for those aged 45 and over (WTF!!! This blew my mind…)
Younger donors also tend to support more charities than older donors do.
The London Marathon experienced a record breaking fundraising year.
Whilst trust in charities remains high, trust in traditional media is low, so when third parties cover charity stories, the public are less likely to have confidence in the content.
83% of those surveyed believed that charities should receive support from government.
A survey of 37 trusts and foundations – “This new insight report examines how foundations navigated the 12-month period of 2022–23”
This report was set against a context of polycrisis – Covid, Ukraine and the cost of living.
The demand for the services provided by charities has increased, as have costs.
Giving has not kept pace.
Foundations saw higher levels of applications for larger amounts of money.
They also saw an increase in the diversity of the types of groups applying, with more grassroots community groups seeking funds.
Foundations have responded in a variety of ways, from tightening criteria to ensure strategic focus (recognising that they simply can’t meet the demands of previously more open programmes), focusing support on existing grantholders, shifting from project funding to core funding, using their endowments to provide more funding.
Many have decided to close immediately (Lankelly Chase) or after a period of a few years (Albert Hunt) and others are pausing their grantmaking to re-evaluate how they want to operate (Tudor Trust, Henry Smith)*
More trusts report divesting in things like arms and fossil fuels and choosing a more responsible, environmentally focused portfolio. They recognise that short term, this may not yield the same results.
*Jo Jeffery covers this topic more recently in her report ‘On Golden Ponds’ – essential reading if you do trust fundraising or you have a team member that does.
World Giving Index 2024, Global Trends in Generosity (CAF 2024)
145,000 people surveyed across 140 countries.
Across the world, 73% of people gave money, time, or helped a stranger last year.
The UK came 22 out of 145 countries and our position on the list has been trending downwards for the past decade.
35% gave money to a good cause – this reflects a general upwards trend since 2017.
I’m not sure what to take from this report. All I can think of is that as the world makes progress, Britain goes in the opposite direction and I’m blaming Brexit, 100% a monumentally crap decision.
This report serves up a stark message about the ever-increasing wealth gap in the sector between very large and very small charities.
“85 per cent of all charitable income in England and Wales goes to just 4 per cent of registered charities.”
“The largest 16 registered charities in England and Wales have a larger combined income than the 160,000 charities with an annual income under £1 million.”
“Income for the small charity sector has declined by £4.6 billion, compared with an overall increase in funding of £4.5 billion for larger charities.”
There is public support for increased government funding for small, grassroots charities.
People trust smaller, community based organisations over larger charities.
National charities have a monopoly on public sector contracts (probably because they can deliver more cheaply and because they have the resources in place to bid in the first place).
“Grassroots organisations are often started by a member of a local community to meet a specific need within that area. Because of this, they are perfectly placed to build person-centred relationships informed by the local context in which they operate, which are key to breaking cycles of disadvantage. They can make true and lasting change in communities through these relationships.
Our new polling shows that grassroots organisations are already trusted by the communities they serve. Now there is an opportunity for private and public funders, and key decision-makers, to also realise the importance and impact of grassroots organisations.”
Donor Pulse (Enthuse, Spring 2024)
There’s a gap between the young and old - 74% 18 – 44 year old have donated to charity in the past three months compared with 69% of the 45+ age group.
26% of the public have given to three or more charities (across a three-month period).
Downbeat national mood and lack of trust in politics can impact overall lack of trust across all institutions including charities.
44% are likely to participate in a fundraising event – strong response across all age groups. Socialising and having fun was the most important factor in people’s decision to participate.
Christmas 2023 – another year of crisis? (Open, March 2024)
A survey of 104 charities in January 2024 to understand how recent, multiple and ending crises have impacted (if at all) on winter campaigns – specifically individual giving.
The most successful channel was warm email, followed by warm mail, followed by cold mail (cold email is obviously illegal).
Acquiring new donors is challenging.
Email is working!
Lack of internal resource was cited as the biggest challenge to meeting targets.
Charity Pulse Report (Enthuse, February 2024)
Enthuse’s annual research project with charities, asking them about how fundraising has been in the past year and what they see coming up in 2024.
55% of charities maintained or increased their income in 2023, small and large charities fared best with 58% maintaining or increasing income with medium sized charities ‘most hard pressed’ (52%).
Support for or avoidance of political issues feels like a fine path to tread.
Events are seen as the area for where most growth is possible. Providing memorable experiences is important, especially when people perhaps have less disposable income than they used to.
Only 5% of charities are using AI to personalise donor journeys, with 9% trialling it.
Use of QR codes is growing (up 11% from last year with 59% of charities actively using them) with TikTok (29% actively using) and podcasts (24% actively using) on the up.
The Road Ahead 2024, Opportunities and challenges for the voluntary sector (NCVO January 2024)
‘Our annual report on the changing landscape for NCVO members and voluntary sector organisations’
The report aims to identify, explore and help explain the external forces, issues and trends that are shaping our sector and help organisations understand how they may impact the work of voluntary organisations in the coming year.
Political change represents an opportunity to reset the relationship between charities and government. It will be important for charities to build relationships with new MP’s.
Economic difficulty will continue with public services squeezed, inflation and interest rates likely to remain high (or high enough to make running costs expensive)
There will be heightened pressure on charities delivering public sector contracts, with potential negative knock-on effects for people reliant on essential public services (which we’re now seeing play out – anyone who has kept abreast of the news of late will have seen the impact on the Hospice sector by way of example).
Campaigning and knowing how you plan to tackle issues which tend to play out on social media (i.e. culture wars) will be important.
Lots of things are changing and quickly, rising demand for services, the need to provide more flexible volunteering opportunities, AI, misinformation and deepfake technology, the climate crisis*.
In 2021, public donations totalled £26.5bn. This represents a decrease of 14% from 2020** Some trusts and foundations are increasing their total giving to compensate, but is this sustainable and / or is it making charities over-reliant on them?
The same numbers of people are giving larger amounts.
Legacy giving is growing.
*The full report provides especially helpful information on how to use AI to your benefit and also on how to divest to support the swifter elimination of fossil fuels from our world – worth your time if these issues speak to you.
**Many more recent data sets point to an uptick in public giving.
State of the Sector 2024 (New Philanthropy Capital, February 2024)
“A robust, sampled, phone survey of charity leaders run by NPC. We also asked a similar set of questions to the public, including people who use charity services”.
The value of public sector contracts has reduced – only 25% have been uplifted in line with inflation.
On average, sector leaders reported that funding received through contracts covered only 2/3 of the actual cost of delivery.
This means that essential public services are at risk (again, see Hospices…)
The majority of the public are not convinced that government support for charities is going where it’s most needed.
Only a small minority of the public think that charities are too political (15%). Charities are probably being a bit too risk averse.
Leaders are making less time for strategic planning, reflection and for updating their vision / mission (probably because they’re scrabbling around for funds and living somewhat hand to mouth). Very few see the climate crisis as a ‘priority’. Long term thinking is not happening as much as it used to be.
UK Civil Society Almanac (NCVO, October 2023)
Larger organisations are receiving an increasing share of sector income.
Total income dipped by 6% for the first time in a decade (though income figures cited were from 2020/21). The impact on smaller organisations was closer to 11%.
There’s a decline in the number of small to medium sized organisations, but an increase in the number of micro-organisations.
Income from the public decreased by 14% (again, more up to date figures point to an uptick).
Government grants have plateaued over the last decade and have fallen as a proportion of total income. In 2020/21 there was an increase in funding from central government, but this was only really applicable to the largest charities as local authorities were not awarded the same increase.
Trends and reflections
Overall, there were reasons to feel good, reasons to feel a bit sick and a couple of surprises.
Here’s my (very unscientific) summary:
Reasons to feel good!
Inflation is reducing and household budgets are overall less pressured. Great for charities with individual giving as part of their funding mix.
Big and (some) small charities are still enjoying growth.
Our fears around ‘being too political’ are unsubstantiated, opening opportunities for campaigning about the issues which might actually move the needle.
Trusts and Foundations are responding to prescient issues.
People want to do fundraising events – especially those which enable socialising and fun!
Legacy income is growing.
Reasons to make a pillow fort and hide away with a packet of biscuits
The holy-clusterfuck of increasing demand, higher costs and reduced funding is still a thing. The longer it goes on, the deeper the hole we’re in.
Essential public services are at risk because of long term reduction in government investment. This quote from ‘The Road Ahead, NCVO’:
“Central government grants to Local authorities were cut by 40% in real terms between 2009 and 2019”
Charities most at risk are medium sized organisation with high reliance on government contracts.
The growth in income for the very largest charities is not necessarily delivering the best outcomes for local communities.
New business across all areas of fundraising hard. Developing new streams of income from scratch will be harder than ever.
Living hand to mouth means less time for strategic planning and increases the likelihood of being in a state of long term crisis management, which is not good for anyone.
Surprises
Before reading all these reports, I’d assumed that the general public had lumped us into the category of ‘untrustworthy and irrelevant, along with mainstream media and most of the members of the former Tory government). But the public seem to have our backs. There’s a desire to see more government support for charities (especially small charities working in under-served areas). The new Labour government means we might actually get more support than we had previously – time will tell.
Likewise, the news that charities are more worried about ‘being seen to be too political’ than they should be, is hopefully a permission slip to go and make some noise about the things which truly matter. Don’t let a few shouty bigots on Facebook put you off your important work.
The generosity of the younger generation. The reporting in Enthuse’s Donor Pulse reports blew my mind. I’d assumed that younger people simply didn’t have the resources and that most charities were being propped up by boomers. Apparently not. Much to reflect upon and unpack here.
You made it! Well done.
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Thank you so much for this Caroline - as always a really interesting & thought provoking read. I think the thing that stands out for me most is how much the themes that emerge from these reports mirror/reinforce what I hear from the charities (mostly small) I work with about their current challenges and experiences.