Charities live in an economically turbulent world these days and developing sustainable and resilient income strategies has never been more important. There is no doubt that the current underlying economic uncertainty in the UK as Europe heads towards a ‘hard’ Brexit has had a detrimental impact on donor behaviour and charities have to learn to live in these uncertain times. This discussion piece sets out some key ways in which charities can ensure they are able to continue their good work in these turbulent times.
Understanding the Economic Context
Second, charities should monitor the economic situation and its potential impact on donors. For instance, a recession might reduce donors’ disposable income and, as a result, the frequency or regularity of donations. Charities must grasp these changes, and plan accordingly, by making strategies that are responsive to the economic conditions – volatile, unpredictable and ever-shifting – and to many donors’ tight finances.
Adapting Fundraising Messages
It makes a difference in how charities speak to donors that, in an economic downturn, they can realistically promote small gifts: because of the economy, fundraising messaging can help remind supporters that charities appreciate small gifts. Because of the economy, messages should also point out the tangible nature of a gift: every dollar or pound will actually make a difference. This isn’t just empathy – it also reinforces that donors’ gifts are making a difference.
Focusing on Regular Giving
Requesting more regular, smaller donations can be more practicable for donors during times of economic hardship. Direct debits and other recurring-donation schemes allow charities to receive a steady income but can be more manageable for donors, especially if promoted as a long-term, sustainable means of giving.
Engaging with Loyal Donors
Loyal donors are charities’ greatest asset, especially in a recession. Therefore, it is vital to be clear and open with your support base, keeping them updated about the charity’s work and the challenges they are facing. Personalised communication with these donors would help bolster the relationship and encourage them to stay with the charity.
Transparency and Building Trust
Transparency – ensuring that donors know exactly how their money will be used – can be of great importance. Charities can do this by publishing detailed information about their finances and their project outcomes, and by explaining what impact donations have had. Transparency can help build trust, and this can be important when encouraging donors to continue giving even if they are facing economic hardships.
Diversifying Fundraising Activities
It is good to broaden your fundraising activity to help buffer against the risk of economic uncertainty, for example looking at other types of fundraising events, applying for grants, approaching corporate sponsorship, or developing merchandise sales. A diverse fundraising portfolio may help you have many different income streams, thereby reducing reliance on any single source.
Harnessing Online Fundraising in an Unstable Economy
Digital platforms can be a cost-effective and efficient way to raise funds, reaching a huge audience with only a modest budget for social media promotions, email campaigns and online fundraising events. Digital is also agile as you can adapt your approach at speed, using real-time feedback and donor behaviour analytics.
As the world wobbles economically, charities are seeing the internet as a lifeline for fundraising, with the power of digital increasingly pulling donations when other routes are closed.
So, how can charities utilise the digital world to boost fundraising while maintaining financial stability in order to withstand the uncertainty of the economy?
Maximising Digital Platforms for Wider Reach
A key step is to understand exactly where digital can take people. The first is sheer scale. Social media platforms such as Facebook, Twitter, Instagram and LinkedIn can take you to audiences with tremendous breadth and diversity. They allow charities to tell their story to people they would otherwise never reach. They permit peer-to-peer dissemination that stretches the reach of fundraising campaigns far beyond a campaign’s own networks.
Engaging Content Creation
Content is king. Charities need to create content that is informative, interesting and moving, so that it has a real impact on the recipient – this could be a charity in Zambia or a donor in Manchester. Content should include success stories, testimonials from beneficiaries, videos, infographics, and anything else that will engage and encourage interaction. Good content will in turn encourage sharing.
Leveraging Digital Fundraising Tools
Happily, there are several digital tools to help break down the barrier to fundraising: crowdfunding sites such as JustGiving or GoFundMe make it simple for charities to set up campaigns, with real-time tracking and reporting on progress. And for supporters who want to donate, adding donate buttons to websites and social media pages makes the process simple.
Using a Nonprofit CRM for Effective Fundraising
These digital days, the use of a nonprofit CRM (Customer Relationship Management) system is pivotal for charities looking to enhance their fundraising strategies. A charity CRM is a comprehensive tool that aids in the effective management of donor relationships, campaign tracking, and the analysis of fundraising efforts.
- Centralised Donor Data Management: A charity CRM serves as a central repository for all donor information, allowing charities to maintain detailed records of donor interactions, preferences, and donation history. This centralisation is crucial for personalised donor communication and targeted fundraising campaigns.
- Managing Fundraising Campaigns: Managing multiple fundraising campaigns and tracking their performance is much more time-consuming with a spreadsheet than a nonprofit CRM. Running a single fundraising campaign effectively involves keeping track of donor activity, setting and adjusting budgets, and making data-driven decisions. With the help of a nonprofit CRM, charities can make sense of the data and get a good sense of which campaigns work and which don’t, so that they can focus their efforts and resources strategically.
- Encouraging donor engagement: Nonprofit CRM systems enable charities to create customised messaging by segmenting customers based on their preferences and past donation amounts. As a result, charities can tailor outreach efforts, providing each donor with content that speaks more directly to them. This personalised engagement has the potential to drive greater donor retention and donation frequency.
- Batch-processing administrative tasks: An NGO CRM automates a good amount of the administrative tasks that go along with fundraising – tracking gifts, keeping tabs on donor interactions, and generating reports. This means that charities can spend more time on organisations’ strategy, and less time on administrative details.
Virtual Fundraising Events
The uncertainties around face-to-face events (either because of economic uncertainties or coming out of the pandemic) make virtual events a good alternative. Online auctions, virtual races, webinars, and live-streamed events can keep your supporters engaged and lower the costs associated with holding a face-to-face event. These virtual events not only keep you connected with your donors, but you may reach a far wider audience.
Personalisation and Targeting
Digital platforms help charities to tailor their messages and deliver them more effectively to specific donor groups. Data analytics can help them to understand what donors want, and why they behave the way they do, which allows charities to personalise their communications and appeals.
Integrating Xero for Charities with Your CRM
For instance, Xero, one of the best-known cloud-based accounting systems, includes charity-specific features. Xero for charities, integrated with a nonprofit CRM system, can create a unified workflow that helps both the finance function and fundraising.
- Unified Financial and Donor Data: By integrating Xero with a charity CRM, charities can have a unified view of their financial data alongside donor information. This integration allows for more accurate financial reporting, budgeting for fundraising campaigns, and tracking the financial impact of specific donor activities.
- Donation processing made easy: Xero paired with a nonprofit CRM makes it simple to keep track of donations and send donor acknowledgements. Donations appear in Xero as transactions, updating your accounts automatically and ensuring that your financials are always in compliance.
- Improved Reporting: Using data taken from both the CRM and Xero, charities can now develop reports that outline the financial health of the organisation, as well as an overview of their donors. This joined-up approach to reporting is invaluable in terms of future planning and helping to demonstrate accountability to your supporters.
- Optimised Operational Efficiency: Eliminates the need for staff to manually reenter data from the CRM into the accounting software, leading to potential errors and wasted time.For many charities, achieving this efficiency means reallocating resources to reaching what they care about most.
Building a Strong Online Community
Cultivating community online – by engaging with followers regularly, responding to them and prompting discussion – can be crucial to success, because a loyal online community acts as a powerful advocacy and support network, and thereby contributes to fundraising results.
Transparency and Building Trust
Transparency is important in the digital world. Donors need to hear, on a regular basis, about how funds are being used and what the impact of their donations is. Transparency in operations and outcomes creates an atmosphere of trust, which means that donors are more likely to continue giving to the charity even in difficult times.
The opportunities that digital presents for charities to support and scale their fundraising activities in uncertain economic times shouldn’t be underestimated. If charities can harness the power of the online world through compelling content, innovative digital events, or making use of digital fundraising technologies, they will be able to cast their net further into the donor pool and secure much-needed funds in these times of economic uncertainty. Doing this now sets up charities for continued fundraising success in the long run.
In conclusion, economic uncertainty necessitates charity organisations being flexible and creative in their fundraising approach. By understanding the economic context, modifying their communications, focusing on regular giving and using digital platforms, the charitable sector can adapt to the harsh economic conditions. Namely, having a trusting and transparent relationship with donors and diversifying the fundraising activities will ensure a constant flow of donations, making charity organisations resilient to the present economic climate. By having a thorough yet flexible plan, charities will be able to conquer all difficulties, whatever the economic context.
