So what have fundraisers been doing over the last 30 years?
It's based on a detailed analysis on the main trends in giving that uses the government's Living Costs and Food Survey (which used to be called the Family Expenditure Survey – FES).
The last thirty years have been a period of massive social, technological, political and economic change. And by taking a long-term look back in time we should be better placed to make plans for the current turbulent era and those yet to come.
The full paper (all 64 pages) can be downloaded here, but for those of you too busy to read it yourself, here are a few points that I think are worth highlighting:
The Millennium marked the end of a decline in the proportion of households giving to charity
Back in 1978, the number of households that gave (during a two-week survey period) to charity stood at 32%. It had fallen to 25% by 1999. Over the first eight years of the current decade it averaged at over 28%.
To my mind, that bounce back matches the explosion in face-to-face recruitment and is representative of all those young donors finding their way on to our databases.
Donations have increased
Donors are now giving almost three times as much as they did in 1978. But the rise in giving over the last twenty years only reflects the growth in GDP.
As a share of total spending, households give just 0.4% – the same as they did in 1988.
All the new charities that have been set up, the new fundraising techniques that have been introduced, the growth in regular giving (up from 36% in 1983 to 63% in 2008) and the impact of the web haven't had that much impact on how much people actually give.
Giving is largely recession-proof
This is something that a number of us who have lived through economic downturns have been highlighting for some time. It's good to see that the statistics support our opinion. As you'll see from this chart, even during the difficult times (marked in red and green), giving has remained strong:
I've posted before that recruitment and subsequent development of new donors can get rather tough when money is tight. Some analysis that I've seen has shown that more donors are just giving a single gift to a charity and simply not responding to subsequent appeals. I'm also hearing of some frightening rates of attrition regarding street fundraising.
And when I look to the future, even with these statistics in mind, I have some real concerns about what will happen over the next twelve months. The number of people who look likely to lose their jobs (particularly older women employed in the public sector) worries me and I will be amazed if we don't see an even more pronounced effect on recruitment. I just hope, that as in the past, our loyal donors will make up the shortfall. Whether they do is probably down to the actions that we take now. But more on that later.
Older donors are becoming even more important
The over 65s now account for 35% of all donations, compared to just 25% in 1978.
One area of particular interest that the report uncovers is the giving behaviour of baby boomers (the youngest tranche of this demographic group is highlighted in grey in the table) whom we first observe when they were in their early twenties and then track right through to their forties. As you'll see, participation grows as they age. That to me is rather good news. A number of people have questioned whether baby boomers will be as generous as their parents and grandparents. The trend indicates that they are (for more on this, please take a few minutes to read the comments to this post).
The richest 10% of households now account for 22% of total given (up from 16% in 1978). From 2003 to 2008, the top 50% of households (ranked by donation size) accounted for 92% of all giving. It should be noted that the largest donation observed in the 30 years of data is only £1,500 so it seems very likely that many high-value donors haven't found their way onto the survey. If they were included, the impact of the rich would be even more pronounced.
So what does this mean for those of us fundraising today?
First off, I think we can draw some comfort from the evidence that donors keep giving at times of economic hardship. Though the current recession is particularly tough, I'm confident most donors will remain true to form.
However, qualitative research undertaken by Bluefrog shows that when money becomes tight, donors are likely to focus their giving on favoured causes and organisations.
As a result, charities must concentrate on giving donors what they want – a real understanding of what their giving has achieved and a means of becoming part of the charity rather than just a a source of funds.
This is important for donors of all ages. An ongoing worry of mine is the possible impact a poor relationship might have on donors who are early in their giving lives. A large number of young people recruited on the street are currently cancelling their regular gifts shortly after sign-up. The response of many charities seems to be little more than hoping for the best and expecting the recruitment agency to replace the lost donors as part of a guarantee. Of course, this approach might be effective in the short-term, but what is the long-term impact on how that donor sees the charity when they enter the prime charitable stage of their lives?
Charities should also look at how they treat mid-value donors (those who give between £100 and £5,000). At Bluefrog we've seen that donors in this range respond best to charities who drop the mass marketing approach and concentrate on adding value through increasing relevence and personalisation. The result is a significant increase in income.
Finally, a robust win-back strategy should be developed for donors who lapse. If donors are lost, it doesn't have to be for ever. But winning back should not simply be handed over to a telephone agency. A real relationship is based on hearts and minds, not just repeatedly asking until someone says yes just so they can put down the phone.