How will the charity sector fare in 2024?

It is an understatement to say charities have been stretched in the past few years. Challenges have arrived each year, in new forms, each with new trials and new difficulties. Each challenge has led to an increased demand for services – and charities have strived to meet it. 

 

But, as ever, the charity sector has remained strong and stayed resilient. The Enthuse ‘Charity Pulse Report 2024’ shows that more than half of charities (55%) saw income stay the same or increase, even in the midst of the cost-of-living crisis. The report also shows that trust in charities endures, with 88% of respondents rating trust in their charity as eight out of ten or higher.

 

In this article, we review the Enthuse report in detail, looking back over a challenging but ultimately rewarding 2023 and looking forward to an exciting and cautiously optimistic 2024.

 

DOWNLOAD THE FULL REPORT HERE

 

 

Overcoming the challenges of 2023

 

The cost-of-living crisis seemed to define 2023. We saw the cost of everyday goods and services rise faster than incomes, leading to a decrease in disposable income. Charities talked about a ‘cost-of-giving’ crisis, but, as the report shows, that was not as widespread as originally feared.

 

While more than a third (35%) of charities saw a drop in income in 2023, a similar percentage (31%) maintained their income levels. And, interestingly, a quarter (24%) of charities actually saw fundraising income increase during the course of the year.

 

Rising income levels might be explained by one form of ‘inverse giving’, a phenomenon neatly explained by fundraising expert Tim Sarrantonio: “In times of economic recession…there is an inverse reaction by donors to be more generous… when you might see prices going up.”

 

Another form of inverse giving hit headlines in 2023. As covered in the previous two issues of the Donor Pulse series, ‘inverse giving’ can also reference situations in which people donate to causes that may have been unfairly criticised via traditional or social media.

 

The most prominent example of inverse giving revolves around the Royal National Lifeboat Institution (RNLI), who experienced a record fundraising year in 2022 despite facing criticism from some areas of the media. The RNLI said it was “overwhelmed” by support after its life-saving operations in the English Channel faced criticism by Nigel Farage and many others.

 

In 2023, charities were increasingly drawn into the political arena, an area that good causes will want to try and navigate carefully. Consider, for example, that two thirds (66%) of charities surveyed in the Enthuse report say supporters expect them to steer clear of politics. However, 58% of charities increasingly feel that they must stand up for minority groups. That puts charities in a tough position, as many will feel they need to enter political discussions to support their communities.

 

Overall, 2023 was a year in which charities proved financially resilient, achieved high trust levels[4] , and started to navigate core concerns around politics. It was a year in which many charities overcame general pessimism and paved the way for a cautiously optimistic 2024.

 

DOWNLOAD THE FULL REPORT HERE

 

 

 

Embracing the optimism of 2024

 

It’s tough to make predictions in an unpredictable world. But there is reason for optimism in 2024, with improved economic projections, potential tax cuts on the horizon, and the likelihood of more disposable income. Charities seem to agree, showing particular optimism around fundraising.

 

More than two in five (44%) charities feel very or fairly optimistic about fundraising in 2024, according to Enthuse. Interestingly, the level of fundraising optimism for 2024 seems to correlate directly to charity size. Nearly half (48%) of large charities are fairly or very optimistic, followed by 44% of medium-sized charities and 38% of small charities.

 

It’s worth noting however, that there remains some uncertainty in the sector, with 23% of charities feeling neither optimistic or pessimistic. Perhaps the shadow of the cost-of-giving crisis looms, with 52% of charities citing the public’s lack of disposable income as a reason for caution around fundraising in 2024.

 

In spite of this, charities seemed particularly optimistic about areas of fundraising. The most notable was events, with more than half (53%) of charities predicting events as a growth area. In fact, nearly four in five (78%) respondents said they were planning events such as bake-offs and pub quizzes, and a net of 70% suggested they planned to fundraise with mass participation events.

 

The potential of events is obvious. The recent Enthuse Mass Events report highlighted, for example, that nearly nine out of ten (86%) people donate to mass event participants when asked. That’s a massive number of conversions, which could lead to substantial returns for charities.

 

The top reason for optimism belonged to digital. Nearly two-thirds (63%) of respondents believed that increasing opportunities to make use of digital channels is a primary cause for optimism – and many charities seem eager to pursue the opportunities. Developing a social strategy is a core aim, cited by 63% of respondents, while nearly a quarter (24%) are looking at podcasts.

 

You can find out more from the full Charity Pulse report here.