The Road Ahead for Fundraising
Last week, the National Council for Voluntary Organisation released their annual Road Ahead report, which warns that charities “must rethink traditional approaches and embrace new models of operations” over the next year, as reported in Third Sector.
Talking about the year ahead, the report refers to 2025 as “the year of the ‘big squeeze’”. The report recommends that where possible; charities don’t just rely on one income stream.
The sector is at a pivotal moment, where organisations need to adapt in response to an increasingly tough market. It has never been more important for charities to diversify their income to future proof their organisation.
At GOOD, we work with charities and not-for-profits of all sizes to drive income. Sharing three key ways organisations can innovate and diversify income for the year ahead and beyond:
1. Prioritise integration
Our recent research report, The Integration Effect, proved that integration is critical for charities to achieve real, sustained income growth. The extensive report shows that at a time when donor competition is fierce, charities can no longer afford to treat brand and fundraising as separate entities.
The report uncovered that charities that integrate brand and fundraising experience a 0.4% uplift income. Whilst this figure initially sounds small, this was equivalent to £32m from the 58 charities whose data we analysed for the research. Across the sector there will be millions more waiting to be unlocked.
Building consideration in the wider market is the key. This mid-point is part of the marketing funnel is directly impacted by both the work of brand and direct response fundraising activity. By integrating across teams, you have the opportunity to increase awareness and consideration to give whilst also increasing engagement and donations.
2. Focus on Mid Value
We live in an economic climate that is constantly in flux. However, one trend that isn’t going away is that there are less people giving more. According to Wood For Trees’ 2024 State of the Sector report, high value income in H1 of 2024 was up 78% in comparison to one off donations which decreased by 4% YoY. This is also echoed in the CAF 2024 report that shows the volume of UK donors is down, but average gifts are on the rise.
In difficult times, pivoting to pursue higher value opportunities can unlock much needed additional funds. CAF’s 2024 report shows that the wealthiest areas of the country donate the least to charity (as a percentage of wealth). And this mirrors a trend that whilst wealth for the top 1% earners has grown in last decade, the percentage donating to charity hasn’t.
There is an untapped audience of potential wealthier donors that have propensity to give, but haven’t taken the step to do so. This is the moment to consider how you pivot your strategy to tap into that audience.
3. The power of cross selling
It is much easier and cost effective to retain your audience, than to bring in a new one. This isn’t to say acquisition isn’t important, but in a difficult climate nurturing the audience you have, who have already proven to care for your cause, could be a direct line to increased income and high ROI.
Therefore, this year is the moment to optimise the potential of your existing portfolio with a smart cross sell strategy. Organisations want to avoid falling into the trap of siloed fundraising teams focusing on their specific supporters they want to recruit, often at the expense of other asks or they double up on asks – leaving supporters feeling overwhelmed and bombarded.
Pivoting to an audience led approach, rather than a product led approach, will allow your charity to provide the right ask for the right people, engage them more in your work and cause and hopefully lead to a better life time value from individual supporters.
If you’d like to discuss an upcoming fundraising project, please get in touch with Lucy Martin, lucy.martin@goodagency.co.uk
