COVID-19 has cost the world dearly – both in lives lost and inflation creeping into most economies, aggravated by Russia’s senseless invasion of Ukraine, resulting in soaring fuel and food prices.
The UK has enjoyed minimal inflation for years, but this is now on track to reach 11%. How is this all affecting giving by UK donors?
It’s important to separate UK donors that support overseas organisations into their two main categories: individuals and grant-making trusts.
Quite a bit of recent research has been done on individual donors. Over fifties-focused UK magazine, Saga, conducted a survey among 2 400 customers and reported in their May edition that they had found that 81% have donated to a good cause in the past month and 94% had done so in the past year.
However, the Charities Aid Foundation (CAF) Giving Report 2021, advised that 14% (one in seven) individual donors said that they would reduce their charitable giving due to the rise in living costs.
While it’s a little early to see an accurate picture of how inflation is affecting giving, 17 of 25 UK-based organisations consulted for this post, reported that they were managing to retain their loyal donors but were struggling to recruit new ones. The other seven (small and relatively new – under five years) are experiencing a substantial drop in donations from individuals.
Maintaining sound donor relationships is more important than ever. Donors consulted reported that they dislike organisations with high running costs (particularly those who pay for TV adverts), never hearing from the charity (as all UK-based non-profits are known) unless they want money from them and, above all, they hate ‘chuggers’ (fundraisers accosting them on the street).
As donor trusts give away money earned on investments, it’s still too early to have a clear picture on how inflation will affect their giving but it’s likely to be a mixed one. Those that invest without risk will have increased income as inflation is driving up interest rates, while those whose money managers are more open to risk are likely to invest in shares that both do well and lose badly. The general feeling is that, as it all evens out, trusts are likely to have more to donate than they have had over the past five years. Also, as the severity of COVID-19 relaxes (although there is a high incidence of the virus in the UK but, being the BA4 and BA5 Omicron variants, it’s not as serious or life-threatening as the original strains), more donor trusts are starting to give outside of the UK again. Many paused giving abroad during the early and worst stages of the pandemic to both support local charities and the National Health Service (NHS).
Fundraising from all UK donors is going to remain challenging over the next year or two, making it more important than ever for global non-profits and universities seeking British support to ensure that they are run in a squeaky clean and highly professional manner and to nurture existing donor partners. Remember, they don’t owe our organisations anything. It’s their right to continue funding – or not.
Fundraising from the UK 