Weather the Cost of Living Storm

In this blog, I’ll explore the challenges facing charities and how behavioural science and clever marketing can help to weather the storm. 

Challenges facing the charity sector 

Increasing Costs. Just like the rest of us, charities are facing soaring energy bills as well as increasing operational costs, forcing them to stretch and manage their budgets more dynamically than ever before. 

Increased Demand. Charities are reporting huge increases in demand for their services and anticipate further increases in demand as the cost of living continues to soar. 

Decrease in donations. Nearly 90% of people intend to cut back on their discretionary spending this year, and recent polling reveals that 60% have already cut back on charitable donations over the past 6 months. 

Decrease in donation value. Forecasts and modelling by Pro Bono Economics highlights the impact of inflation on donation value. A direct debit of £20 set up in 2017 is estimated to be worth £14.90 in 2024, whilst a 3-year £100,000 grant awarded in 2022 will be worth only £88,300 in 2024. 

It’s not all doom and gloom

People still have money! Spending in restaurants, bars and clubs is on the up, compared to this time last year, and 61% of people are still planning a 2023 holiday.

People can and will dig deep in times of need. Last year, the U.K. public responded to the war in Ukraine by raising £100 million in just 4 days. That’s the equivalent of £1m per hour! And more recently, £60 million was raised in just 1 week of the DEC Turkey-Syria Earthquake Appeal being launched. This just goes to show that we’re still capable of giving, even when it feels like we don’t have much to give. 

The future is bright! Last year, despite soaring costs and smaller budgets, 64% of charities were able to maintain or even increase their fundraising income. Charities are also becoming more comfortable with digital channels and 55% of charity leaders believe there will be more opportunities to use digital to fundraise in 2023. Moreover, half of charity leaders say that younger generations are feeling more positive about charities these days, which is even more promising for the use of digital fundraising approaches.

So what can charities do to weather the storm?

Embrace Digital

One in three adults are more likely to donate to a charity if they accept online donations. Whilst young people are most likely to make their donations online rather than offline, online donations are not limited to younger generations, with nearly half of donations from over 65 year olds being made online. So focusing efforts on digital is crucial but also more cost-effective than traditional fundraising approaches. 

Make Digital Donations EAST

EAST is a simple and effective framework for behaviour change. It stands for Easy, Attractive, Social, and Timely. For digital campaigns to be successful, you need to ensure that giving is easy, attractive, social and timely. 

Make Giving Easy

Review your site through the eyes of a user:

• Is it easy to understand what your charity does, why someone should donate, and the impact of your work?
• Is it easy to donate, or does the donor have to click through multiple menu options before getting to the donation form? 
• Give users plenty of options, but don’t overcomplicate it. For example, notice how Christian Aid presents multiple ways of donating and suggests different amounts of donations but still keeps it simple and clear?

Make Giving Attractive

This is all about gaining your audience’s attention and using rewards effectively. 

Attract your audience’s attention by connecting with them on a personal level:

• Personalise any comms to your audience by using their name or any other relevant information you have about them (e.g. if you’re a pet charity, do you know their pet’s names? Can you address your comms to their pets?)
• Think about the audience, and how you can adjust the ‘messenger’ accordingly. People respond more to messages sent by someone they know or a relevant person rather than someone less familiar. Again if you’re a pet charity, you could make your message stand out by signing emails from an animal rather than a human.
• One study found that employees of a company were more likely to donate one day’s salary when they received a personal email from the CEO of their company alongside branded sweets from the charity, compared with receiving a generic email asking them to donate. When we receive something (sweets), we often feel compelled to give back (donations), so consider how you can ‘reward’ your donors.

A word of warning on attracting attention…

• Avoid sharing sad stories about your beneficiaries - these often spark emotions of sympathy and then helplessness rather than encouraging donating behaviours. Instead, share stories of the impact that your work has had on beneficiaries and use images of one beneficiary or family rather than a group of beneficiaries. Studies show that those feelings of warmth and positivity when we witness a good act improving another person’s welfare result in higher charitable giving!

Make Giving Social

Whether we like to admit it or not, humans are quite sheep-like and love to follow the herd.

You can encourage new donors to your charity by highlighting how others are donating. I’m not just talking about getting your donors to share on social media (although you should still encourage that). Here are some more unique ideas:

• When presenting suggested donation amounts, provide 3 defaults, with the middle option being the average/most common donation amount. To the left, a smaller amount and to the right, a larger. Most will go for the average donation, and some will want to donate more than the average person and will donate higher. Very few will be tempted to donate below average.

• Have you turned on Facebook Birthday Fundraising? If not, why not? You can encourage your followers to ask for donations to their favourite charity on their birthday instead of receiving gifts. Plus, if you personalise your comms well, you can reach out to your donors via email in the run-up to their birthday to let them know how others can donate on their birthday. 

Make Giving Timely

Did you know that almost half of all online donations are made on Sundays, Mondays and Tuesdays? 

People are also more likely to give in December (‘tis the season!) than in January. 

And as we discovered earlier, people are more than willing to give in response to crises or significant events. 

Consider the following timely actions for your charity:

• Find and target key moments relevant to your cause and when people are most likely to be moved to give. Partner with businesses to offer a Give as You Earn Scheme (GAYE), enabling people to give before tax, increasing their donation amount and reducing the cost to them. 
• People are more likely to agree to donate future amounts of money than to give money away today. Two ways that you can work with this insight are:
  • Encouraging donations through wills
  • Asking regular donors to agree to a donation increase in some months’ time rather than from today. This is a great way to protect your donation income against rising inflation!

Key Takeaways 

Taking the time to understand what attracts donors and invest in your digital fundraising strategy can help you to weather these stormy periods. Three key things to keep in mind:

• People still have money they’re willing to put towards supporting a good cause - it’s just about figuring out how to turn their intention into action. 
• Consider utilising small tweaks such as personalising your comms and reviewing how user-friendly your website and donations process are. 
• Plan for the future by encouraging people to commit to future donations now.

My biggest and final piece of advice to you is this: before rolling out lots of new changes to your approach, pick one and test it. Blanket changes could yield great results, but you won’t know which technique garnered the most impact unless you run tests as you go - the insights of which can then be used to inform other areas of your business and marketing decision-making. 

Thinking about how you can implement these techniques? Our behavioural science experts would love to have a chat with your charity to learn more about your cause and how we can support your goals. 

This blog was originally published via the Drum on the 24th of February, 2023.

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