How is the cost-of-living crisis affecting fundraising?

Talking about fundraising in the cost-of-living crisis has become a challenge for charities over recent months, as inflation increased and financial pressure worsened for donors and beneficiaries alike. With demand for services rising during times of crisis, charities had to find a way to keep their fundraising steady and sensitively ask their donors for their continued support. 

However, the outlook is mixed when it comes to how the cost-of-living crisis is affecting fundraising in 2023. The ​Spring Donor Pulse report, from ​donations, ​fundraising and events platform Enthuse, found that three in five (59%) people are feeling worse off than they were six months ago, yet this is a slight decrease on the previous quarter, where 63% of people said the same. 

Unfortunately, though the number of people feeling worse off has declined, 60% of donors are still finding it harder to give to charity than they were six months ago, a number which has stayed consistent with the previous quarter.  

Indeed, the report also found that the number of people donating to charity dropped from 75% to 71% over the last three months. This is the lowest percentage of people giving since September 2021 and is five percentage points lower than the same time in 2022. The decrease was also felt across the Christmas giving period, which usually sees donations rise.  

“While the general economic picture is slightly brighter, it is still not being felt in people’s pockets,” explains Enthuse. “For charities, this means it’s important to provide donors with a range of donation options to make it easy for them to give.” 

While inflation is starting to fall, the continuation of the cost-of-living crisis remains uncertain. Below, we explore more of the key giving trends outlined in the report that charities should take note of when fundraising.  

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Donations remain steady among higher income households 

While the decrease in donations was experienced across all age groups, surveyed households with the lowest income were hit the hardest. Donations from households with income below £60,000 reduced by up to 6 percentage points between Winter 2022 and Spring 2023.  

For households earning more than £60,000, donations have remained steady, with four in five donating to charity.  

“For charities, this means it is worth considering how they are targeting higher income households and high net worth individuals whose giving is not affected by the cost of living,” suggests the report.  

Will regular donations stabilise? 

While the volume of donations have become less certain during the cost-of-living crisis, regular donations have stayed consistent over the last three months, with more than a quarter of donors saying they give regularly (28%). 

However, the report suggests that this statistic belies a high level of churn with similar numbers of donors saying they will increase or decrease their donations. One in seven regular donors said they plan to either cancel or decrease their regular donation, while 18% are considering increasing how much they give.  

The consistency of regular donations overall suggests that charities are being successful in signing up new regular donors, says the report.  

Younger donors are changing their giving habits 

The Spring Donor Pulse report shows that charities still have work to do when it comes to engaging younger donors.

Around three in ten (29%) of donors under 40 say they are planning to increase how much they donate to charity, while the same proportion say they are either to cancel or decrease their regular giving.  

For donors over the age of 55, however, there is minimal change, suggesting that they are “settled on their charities to support and comfortable with the amount they are giving”.  

“Gen X is also worth charities looking closely at, as this age group has a large number of people intending to increase their donations,” the report added.