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HOW WILL THE CORONAVIRUS RECESSION CHANGE GIVING?

How can the last financial crisis provide insight into the recession in 2020?

 
 

Coronavirus has been tough for charities and - as the country recovers from the economic freeze of lockdown - we’re facing an unprecedented recession.

With widespread job losses across the country and less cash in circulation, raising funds will become more challenging. And that’s against a backdrop of increasing demand for the crucial services provided by the third sector.

It’s a time of drastic economic uncertainty for charities and voluntary organisations. But recession is nothing new, and we can look back to 2009 for insight into its effect on giving. 

In this post, we dive into CAF’s Impact of recession report, produced after the UK’s last recession, alongside new research into the impact of COVID-19, and discover some ways to improve fundraising in extremely difficult economic times.

Do people give less during a recession?

In short: yes. Our Impact of recession report found that the total amount of charitable giving fell during the last recession by 11% when compared with pre-recession rates.

Positively, despite the tough financial situation in 2008/9, over half of the UK adult population continued to donate to charity every month. However, it was the size of those donations that changed. People were still giving when they could, but the average amount per donation decreased during the recession.

What happened to giving so far during coronavirus?

The unique challenges presented by coronavirus have already affected the sector in two key ways: increased demand for services and a reduction in overall giving.

Our charitable giving coronavirus research across May 2020 found that charities experienced a sharp rise in demand for their services: one in three UK charities (35%) reported a spike in demand for their services because of the crisis, a significant increase from 26% a month earlier.

Despite the increase in demand, over half of the charities we interviewed reported a drop in donations. What’s more, half of all charities surveyed said they had sought or received some form of emergency grant funding to get them through the crisis - further outlining the challenges faced by the sector.

Graph to show impact of coronavirus on charities in 2020

How to fundraise during a recession

We know that for many donors, giving to charity goes beyond personal finances and as our research from 2009 shows, your supporters will continue to give as often and as much as they can.

This means charities must continue to ask their donors for support during an economic downturn. As part of this, it’s key to stay true to your charity’s mission statement and maintain your existing messaging. Like coronavirus, the recession will end, and you want to be top of mind with your donors when that happens.

During coronavirus, we’ve also seen how charities have utilised digital technologies to continue raising money, despite the restrictions imposed by lockdown. 

These technologies are often versatile and inexpensive, so they’ll prove invaluable for your charity when you can expect fewer donations. Whether you’re adopting new communication platforms like Zoom or Teams, investing in social media or taking your first steps into online fundraising, digital will be a key tool for charities during the recession.

Get more information on how to survive, adapt and thrive through coronavirus - and now into this recession. We’ve created guides, videos and interviews with charities to help you through these challenging times.

 

Alex Bennett works within the Charities Marketing team at CAF. He supports charities to take advantage of digital tools and works with CAF Donate, CAF's online donation platform. Find him on LinkedIn.

 

Survive. Adapt. Thrive.

Explore more actions to survive, tools to adapt and strategies to thrive during and after the Covid-19 crisis. Use the links below or get an overview of the resources available now

How are charities adapting to the crisis?

How charities are adapting to Covid-19

Susan Pinkney shares our research into the ways charities are innovating (3 min watch).

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How to collaborate with other charities

Collaborating with other charities

Michael Mapstone on why charities should consider working with others (5 min watch).

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Beth Clarke

Nailing and communicating your mission statement

Beth Clarke on how to get your mission across to donors (5 min watch).

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