Cause for concern: Cost-of-living impact on charities and causes, plus how they can fight back!
Residents of the UK have less disposable income today than they had two years ago. Average household disposable income fell by 2.2% in the financial year of 22/23 and by a further 0.8% in 23/24.(1) While this has a profound impact on communities, businesses and services, it also has a significant impact on charities and good causes which serve or support them – coined the cost-of-giving crisis. In early 2024 we surveyed a portion of small UK good causes to assess the impact the cost-of-living crisis had on their funding in 2023. These causes, covering education, sport, community, religion, animal welfare and more, have provided insight into their financial concerns for the year to come, and how the reduction in donations and volunteer numbers is expected to be felt even harder, while running costs and demand for services increase. Here we’ll take a closer look at the results from the survey and advise how smaller grassroots charities and causes can reduce some of the cost of fundraising, and make it easier for donors to contribute when they have less money to spare.
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86% of surveyed causes have seen a negative impact on their income in 2023 due to the cost of living crisis
More than 2/3 of our surveyed causes had on average less than 100 strong community of donors/volunteers/social followers and an annual fundraising income of less than £20,000. With a small number of supporters and donors, such causes are more vulnerable to the effects of the ‘cost-of-giving crisis’ on their income.
A similar number feel that the impact is even more significant during the past financial year than previous, with more than 40% feeling things had gotten a lot worse for them in 2023, and presenting risk to their charity or cause’ survival.
The biggest challenge for these causes is managing increased running costs while funds raised and volunteer numbers decrease.
For these smaller causes, a reduction in income and volunteer numbers are the most common impact felt from the crisis. General running costs and energy prices present the key need for funding, so that they can stay in operation and meet the increasing demand for services. Lighting and heating for a scout hut, refreshments and supplies for a community centre – running costs are often the biggest draw on cause income. More than 60% of the causes surveyed were worried about cashflow.
Grants and high value donations are the primary source of funding
With a small supporter network, these causes are looking to grants to plug the funding gaps. The limitation of this funding is that it is restricted and challenging to obtain, often requiring investment of time and money into application and pitching. Relying on high value, one-off funding, or from a limited pool of donors presents a lot of risk, and heightens the impact of such economic changes. The cost of fundraising events and the man power required sees this stream’s value reduced, too. These micro donations are also unrestricted, with 62% of causes considering unrestricted income to be very important to them, suggesting the popularity of grants more out of necessity than practicality.
Causes recognise the value of community funding
While some of the causes surveyed stated the benefits of less work for a small organisation in securing a small pool of larger donors vs recruiting a large number of small donors, the majority saw the greater value and security of this approach in light of the current crisis.
The fight back through low cost fundraisers and high frequency micro donations
The survey results conveyed the following themes:
- 2023 was harder due to the cost-of-living crisis resulting in reduced income and volunteers.
- The biggest concerns are increased running costs.
- Support network of less than 100 individuals, raising typically under 20k a year.
- Reliance on grants / large donations.
- See value in wider network giving a smaller amount.
For such smaller causes, low cost fundraising initiatives and supporter recruitment drives are an ideal solution. But there still lies the issue of unearthing donors, who even if contributing small amounts, simply don’t have the disposable income they previously had. So, what about fundraising through online shopping?
Is fundraising through online shopping effective during the cost of giving crisis?
It may seem logical that a reduction in disposable income has resulted in a reduction in online spending, but actually, this isn’t the case. In fact, having dipped in 2022, UK ecommerce sales saw a 4.8% growth in 2023(2) and this is expected to increase in 2024. As further evidence of this, there was a 12% increase in sales, and therefore donations raised, via easyfundraising in 2023 vs the preceding year. A desire to spend less on the fuel / travel costs to go to the high street, movie downloads over trips to the cinema and a greater willingness for individuals to do their weekly food shop online to avoid impulse buys and stick to budget, have driven customers online despite the economic challenges. Clothing, shoes, movies and groceries amongst the leading categories for spend in 2023(3) – all of which are well served by the roster of easyfundraising retailers offering free donations.
easyfundraising can help reduce the cost of fundraising for charities, increase their supporter network and overcome the difficult donation ask
We know that local communities (and potential supporters) are continuing to shop online, and they can be collecting a free micro donation for a good cause every time they do so. No additional cost, overcoming the need for any additional disposable income. A reduction in time and resources required to run a fundraiser or to even maintain a cause’s own online giving platform, plus support to grow the all important supporter network at no additional cost - with easy to use, ready-made resources. All easyfundraising causes get:
- Free-to-access pre-made flyers, social content and more
- Coaching service
- Easy to use mobile app and donation reminder
- Simple to administer cause profiles, regular donation reporting and direct payment
With over £5m raised in 2023 alone, easyfundraising is the ultimate low cost fundraiser, giving causes across the UK the support and income to reduce the impact of the cost-of-giving crisis.
Download the full survey report
Read the full survey report and share it with your organisation, committee or supporter network. The report gives full insight into the survey and respondents in an easy to digest format. If you have any further questions about the research or the easyfundraising platform, please contact us at marketing@easyfundraising.org.uk.