A hybrid world of giving is now a permanent
Donors moved online during the pandemic. And it is safe to assume that this was driven by restrictions to in-person fundraising such as street appeals, door-to-door campaigns and indoor events.
The effect of the pandemic is clear from the data. In March 2020 one in ten (13%) donors gave via a website or app. (and 11% using a debit card but this figure jumped to 24% and 25% respectively by April 2020.
Unsurprisingly, younger donors were more likely to donate through an app or a website compared to older ones (38% of 25-34s vs 18% of over 65s). But there are indications that older donors adapted their giving behaviour during lockdown. Those aged 65+ who gave through a website or app increasing from 14% in 2019 to 18% in 2020.
As online giving increased, giving with notes and coins became rare. In 2019, more than half (51%) of respondents said they donated in cash. In 2020, this fell to 38%, slumping to 9% in May and June. There are good reasons to believe that during the pandemic digital giving made up for some of the loss in cash donations, but as restrictions were being lifted giving via a website or app was not sustained, dropping back to 14% in August 2021. At the same time cash donations remain subdued (18% in August 2021).
Levels of donations do not seem to have greatly suffered, mostly because the continuation of the trend in fewer donors giving more. But the wider question remains whether digital donations can fill the gap left by a sustained reduction in cash donations. And this is both in terms of how people engage with digital giving and how charities connect with donors.
Some good news on Gift Aid?
The move to digital giving could have spelled good news for Gift Aid use. Online donors are more likely to be prompted and make use of Gift Aid and services like SwiftAid are also working to make Gift Aid more automatic.
The report sheds some more light on this. While the amount of people making donations decreased, more reported making use of Gift Aid rising from 51% in 2018 to 53% in 2019 and 55% in 2020. By January 2021 this number reached 61%, the highest proportion recorded for UK Giving report to date.
UK charities are missing out on an estimated £564m of Gift Aid each year due to missed opportunities or processing errors, but despite the impact of the pandemic on fundraising, recent HRMC data indicates that Gift Aid income remained relatively constant at £1.38bn. The move towards digital giving could therefore have stabilised Gift Aid take-up.
Higher levels of giving tapering off
Charities put in huge efforts to pivot their fundraising at the onset of the crisis. Major virtual and televised fundraising efforts took place in the first half 2020. Individuals stepped up as well, notably Captain Tom Moore and his hugely success fundraising for NHS Together. The public responded generously, with donations rising in April 2020 along with the average monthly donation, which rose nearly £10 to £58.10 between March and April.
The question still remained whether these high levels of giving could be sustained. Unfortunately, the remainder of 2020 saw lower levels and a subdued festive giving period in November and December. This could be due to the economic impact on people’s ability to give and fewer fundraising opportunities due to restrictions. But this trend has continued into 2021.
The total amount increased in 2020, rising to £11.3 billion from £10.6 billion in 2019, despite a fall in the overall number of donors. Instead, the growth was driven by an increase in the average size of donation, up from £45.69 in 2019 to £53.52 in 2020. During the first half of 2021 an estimated £4.6 billion was donated. THis is lower than £5.4 billion of giving during the same period in 2020 and the trend towards fewer people giving more seems to have increased further. It is still to be seen whether we will see donor numbers stabilising or starting to decline. We must remember that there was already a concern about a decline in giving pre-pandemic.
Differences in the ability to give across age groups
The research provides some insights into how different cohorts have given during the pandemic. It shows pre-existing gaps in the levels of giving between demographics widening further. For example, the largest monthly gift (donated or sponsored) from donors aged 25-34 declined to £45 in 2020 (from £50 in 2019). This fell even more sharply for younger donors (16-24 year olds) from £46 to £29. At the same time, it increased for older donors, rising to £71 for those aged 55-64 (compared to £45 in 2019). And from £48 to £63 for those aged 65+.
While young adults were more likely to be furloughed during the pandemic, there are not currently signs of increased levels of deprivation among this cohort. Despite this, young adults aged 25-29 were the most worried age group about the impact of the pandemic on their work. It is possible that younger donors reduced their giving as they waited to see how the pandemic would impact them. The question is whether their giving will revert back to pre-pandemic levels.
This needs to be contextualised with more data on how younger groups are doing economically after the furlough scheme has ended. But this temporary widened gap could become more permanent over time which could be a worrying for charity fundraising. There may be an increased need to connect younger donors with a charity beyond donating money.
There are also differences emerging in how different cohorts get involved with charitable activities. Surveyed respondents aged 16-24 listed ‘buying an ethical product’ as their third most common way (38%) to get involved in 2020. This behaviour did not make it into the top three for any other cohorts. And UK Giving data for 2019 showed that on average 29% of respondents said that they bought an ethical product in the last year. This comes amid a discussion on whether donors buying purpose-branded products could see it as part of their overall giving behaviour. At least for younger cohorts, this could be the case already.
No major changes to cause preferences – but concerning new gaps
The causes that donors choose to support has not changed dramatically during the pandemic – but some have lost out. Animal welfare remained the most popular cause (with 27% of donors who said they have donated to charity in past four weeks). This was followed by support for children and young people (24%) and medical research (22%). But the downward trend in support for medical research has continued (down from 25% in 2019). And a more significant drop took place for disability causes (down from 14% in 2019 to 10% in 2020).
There were also some changes. Over a third (35%) said they made at least one change to their giving habits, with donating to charities supporting the NHS being most commonly reported (13%). This reflected increased awareness of the work that these charities do during the pandemic and focussed fundraising efforts. Throughout 2020 those aged 65+ became more likely to donate to overseas aid charities (20% compared to an average of 15%) and the average donation to this cause increased to £37 -up from £20 in 2020. This could be combination of individuals supporting tackling Covid-19 as a global crisis, but also hearing about how the recent aid cuts have impacted aid charities around the world. CAF has championed the voice of smaller aid charities by supporting the Small But Mighty Campaign and is proud to support the Go Give One campaign of the WHO Foundation to help vaccinate the world.
What does it all mean?
One of the main concerns for charities will be on how to adapt to a hybrid world of cash and digital fundraising. We have seen a pattern of charities recognising the increased importance of digital, including for service delivery and fundraising. Two in five say they are also cutting back on their cash-based fundraising compared to pre-pandemic activity. The picture is mixed across the sector, with around three in 10 charities (28%) saying digital approaches have been an effective substitute for in-person fundraising, and a similar figure (31%) saying the opposite.
This might not be a concern for larger charities who will be able to pivot, re-balance resources and combine in-person and online fundraising activities to adjust to changes in donor behaviour. Although this might not apply across the board, as income from largest mass participation charity events nearly halved in 2020 due to lockdown restrictions.
But a potential 'digital divide' might impede smaller charities to capitalise on the wider move to digital. Our previous research showed that one in ten charities cannot afford the technology needed to adapt to the new fundraising environment. Towards the end of 2020 we asked charities about whether a drive towards online fundraising had been accelerated. Half (53%) agreed there is a need to shift to an online fundraising approach, but 62% could not actually conduct any online fundraising at the moment themselves.
The local presence and activity of charities will be essential to helping the ‘Levelling Up’ agenda. Smaller organisations in particular are the backbone of communities. But if they have a harder time adjusting to new realities, their impact will be diminished. The Government and other funders have invested in charity digital transformation and upskilling in the past. But greater investment is needed, particularly in the infrastructure that underpins the sector.
Funding for upskilling and digital transformation could come from many of the funds linked to the ‘levelling up’ agenda. This would require a broader definition of ‘levelling up’. CAF also found that investing in the charity resilience can be transformative. Giving charities the time and ability to tap into new resources increases the quality of their services and impact in the long-run, and make it more likely that they survive the next crisis.
We could see a charity landscape emerging from the pandemic where giving is not fundamentally down but more concentrated on the top. In Scotland for example, 9% of charities already account for 90% of sector income. But we also know from the NCVO Almanac data that pre-pandemic the ‘income decreased for micro, small and medium-sized organisations, but grew for bigger organisations’ in 2018/19. In addition, ‘over half (£30.6bn) of the sector’s income was generated by major and super-major voluntary organisations – those with an income over £10m. Their share of the sector’s income has almost continuously grown from 38% in 2000/01 to 55% in 2018/19’.
Another big question is whether people’s ability to give is evenly shared across society, and what impact the pandemic might have on this. Giving has not significantly declined, but the trend of fewer people giving more has continued. In particular, older donors have expanded their giving while younger ones reduced theirs. Despite this, whilst older donors are also increasingly making use of digital channels to donate, their engagement with digital remains significantly behind younger groups. Charities will need to take note of this.
The public has shown massive support for charities and their work. Trust in charities peaked at 60% in January 2021 and remained at high levels. At the same time, we also found that one in 20 people also said that they had stopped a regular payment to charity because of financial concerns. Charities will have to continue to make the case for support and monitor what the pandemic will mean for their individual supporter groups.
The data presented in the report is based on monthly online interviews throughout 2020, and includes more recent polling in 2021 as restrictions began to lift (c. 22,000 interviews in total).
