Three in four charities experienced a drop in fundraising and donations in the past 12 months
In May 2023, Markel Direct ran a survey with 375 organisations from the third sector to learn more about the challenges they were facing.
Organisations who took part ranged from charities to community groups, and from heritage groups to small sports clubs.
From the data we wrote our first article ‘State of the UK Charity Sector in 2023’, which highlighted the key concerns and challenges the sector was experiencing.
In this blog we look more closely at charity fundraising and donations and the impact that any significant drop in fundraising could have on the UK society.
Charity reliance on fundraising
The reliance of non-profits on charity fundraising and donations cannot be understated, nor can the good that the monies raised does for society.
In recent years, the ways in which charities and fundraisers raise funds has changed. This has come on the back of the wider use of digital in society and the more recently, the effects of the Covid-19 pandemic.
Charities are vital to our social structure
UK charities raise and spend in the region of £40bn every year. This money is crucial to the health and wellbeing of many people, from those with physical or mental impairments, to the elderly, and even to some of the nation’s well-known sports stars.
Whatever the need, it is clear that charity help is vital to the UK’s social structure.
Our survey discovered that in the past 12 months, 75% of charities had experienced a drop in charity donations, with only 25% saying that they have seen a rise in donations.
To compound this drop, 76% the charities surveyed also said they had experienced a drop in public fundraising, with only 24% experiencing a rise in the same period.
If this trend continues over the next 12 to 24 months, without much rebalance of the figures, then that could mean a full five years of financial struggle for the third sector from the beginning of the pandemic in 2020.
What impact on the wider UK society could a sustained drop in fundraising have?
When we think of charities, we can be forgiven for thinking of the large national charities such as Cancer Research, Mind, MacMillan, et al. However, it is the small charities, many of whom serve their local communities, that many people rely on more for support.
Charities can only make a real difference to the wellbeing of those who need help because of your donations and fundraising efforts.
Funds come from a variety of sources including; collection tins, sports event fundraising, monthly direct debits, leaving charity gifts in a will, to name but a few.
Funds can also come from other sources, such as investments, government money, and businesses that charities run including high street shops.
Charities endeavour to spend money carefully so they can make the biggest difference possible with the resources they have.
Like any organisation, there are unavoidable costs that charities must pay, which also need to be covered from fundraising monies and charity donations.
These are similar to many private sector businesses and include: rental overheads, salaries, expenses, and utilities.
Charities missing out on much needed revenue
Our survey found that nearly 63% of the charities had experienced a loss in revenue in the past year, with 7% saying they were £5,000 or more down on the previous 12 months.
For a small charitable organisation, a loss of over £5,000 in fundraising and donations can have a hugely detrimental impact on the support the organisation can provide for those who need it in the charity’s locale.
Rising running costs combined with a lack of funds could prevent certain charities from opening their shops, plus potentially not having enough resources to stage fundraising events of their own. It could also mean that they are struggling to cover expenses for important resources such as petrol and catering facilities, which could significantly impact food deliveries to the elderly and disabled, and it could potentially close village halls and community groups.
All of these would also have a wider impact on the mental health of many people who rely on the charities for their social outing, or who volunteer in charity shops and at community groups.
Despite the amount donated to UK charities remaining very much the same year-on-year, it is becoming increasingly obvious that the smaller charities are those in the most need of fundraising help from the public.