Emerging donor trends from a Covid-19 Special Report

Last week, we brought you our Lockdown 2.0 predictions for the media market in the remainder of 2020. This week, the recently published Covid-19 special report on UK giving from the Charities Aid Foundation has offered a chance to take stock of how Covid-19 has affected donor behaviour. Whilst the numerical results of the report have been disputed by other research bodies in the charity industry, the behavioural trends identified have been received with less scepticism. We have pulled out three such trends from the report that resonate with our own analysis into donor behaviour, and offered three resulting recommendations for fundraising.

A relatively small group of donors have given significantly more during the crisis

Whilst the exact income figures for giving in 2020 remain subject to debate, there does seem to be consensus that any potential increases in giving will have been driven by a small group of people giving significantly more. This is consistent with our own demographic analysis into the impact of the pandemic on people’s financial outlook. Older generations with fewer financial dependencies have been less affected, while younger generations with children and mortgages who are reliant on a salary for income have been decidedly more anxious about their future, and have been more cautious when it comes to charitable giving.

Cashless donations increased markedly

Social distancing saw giving via digital platforms like apps and websites increase significantly. Cash on the other hand, historically the most popular form of giving, declined dramatically in March and April and has remained at low levels compared to other years, alongside giving goods to charity.

Trust in charities has increased

Trust in charities has increased to levels not seen for several years. In August 2020, 56% of people agreed that they consider charities trustworthy, up from 50% in 2019 and 48% in 2018.

 We believe that these findings have three main implications for fundraising:

1. There is a financially secure and committed group of donors who will support the causes they care about even during the most challenging of times.

This findings of this paper suggest that during challenging times, those who are able to will dig deep to support the causes they care about, answering the call for increased support with increased generosity. It is therefore critical that charities continue to make the case for support to their donors during such times.

In last week’s mailer we spoke of an opportunity to do just that. We predicted that the new lockdown measures will see a return to the ‘home first’ media mix that we saw earlier this year. Online retail demand will likely surge over the coming weeks due to the restrictions, and we expect TV budgets to be disproportionately spent in November to allow retailers to fulfil demand in time for Christmas. If this happens, it would lead to the tantalising combination of increased audiences and reduced rates in December that we saw during the first lockdown. This would provide an opportunity for charities to access cheaper media at a critical time in the fundraising calendar.

2. The trend towards digital giving has leapt forward.

In our recent Five Barriers to Giving whitepaper, we identified ‘the act of giving’ as a key barrier for fundraisers to lower. It is crucial that charities keep pace with their donors’ preferred methods of payment, and make the donation journey as smooth as possible. 2020 has accelerated the slow decline of cash in favour of contactless and digital payment; not only is cash less convenient, it is now also seen as unhygienic. Charities must respond to this shift in preference, and ensure they are offering contactless ways to give wherever possible.

3. Evidence of impact improves trust.

Another barrier to giving that we identified in our paper was that people often see no evidence of any progress being made with their gift. They part with their money and hear very little back about what happened with it, and so are wary of giving again. 2020 has been a year of positive stories about charities and the work that they do. This reminder of the tangible benefits of giving directly increases feelings of trust, as people feel their money is being spent appropriately. This underlines the importance of communicating with donors about the impact that their gift has made, so that they feel they are making a difference.

It will be some time before the Covid-19 crisis abates, and some time further still until its impact is fully understood. However, the emerging trends contain learnings that can be put into practice now. Those audiences who have been less affected by the crisis have shown admirable generosity and willingness to support the causes they care about, so continue to make the case for support to these audiences. The digitisation of giving has been accelerated by the pandemic, so the development of robust digital fundraising programmes should be a priority. Finally, remember to update your donors on your work, telling them about the impact that their gift has made.

By Will Richardson, Senior Strategist