We take a look at the trends expected to define fundraising in 2021 and examine potential challenges the charity sector might face this year
To suggest that 2020 was a challenging year for charities is something of an understatement. But 2020 proved that the charity sector is versatile and resilient.
COVID-19 plunged the economy into recession, which has historically led to a decrease in donations. A recent study from Enthuse, however, suggests donations in the UK increased during the first lockdown.
Social restrictions created an absence of in-person events, which are essential for generating resources, but charities were quick to embrace virtual events and fundraising.
And relationships with donors can be difficult to maintain in the digital world, but organisations reached for Zoom and other video conferencing services with enthusiasm and determination.
Charities have adopted creative and innovative solutions for day-to-day operations and have met fundraising challenges head-on. But 2021 comes with new difficulties, as charities continue to navigate the ‘new normal’. The only certainty at present is that the future is uncertain.
Here are some of our thoughts on the trends that are set to define the fundraising landscape in 2021.
In-person fundraising events have traditionally provided a vital source of revenue for many charities. Events raise resources, allow charities to engage with supporters, and form an essential element in building and growing personal relationships.
In-person events were largely absent throughout the second half of 2020, which had a significant impact on fundraising. But charities have adapted to meet the ‘new normal’. The absence of in-person events has led to an explosion in virtual events. Charity Digital expects that trend to continue throughout 2021.
Virtual events offer myriad benefits for charities. They limit costs and increase the pool for participation. Charities do not need to hire venues, pay for catering, or cover many of the administrative costs of in-person events. Effective virtual events demand only a strong message, an engaged audience, and enthusiastic participants.
Virtual conferences allow people to attend from the comfort of their own home. Charities can therefore overcome geographical limitations. Virtual conferences can engage speakers, sponsors, and supporters who otherwise may have been unable to join. Attendees do not have to book flights, other forms of travel, hotel rooms, or any other necessities. All they have to do is turn on their computers, which offers the additional benefit of limiting carbon emissions.
Hybrid events were popular in 2020 and that popularity will accelerate in 2021, as more organisations get to grips with the technology. Hybrid events combine smaller in-person events with an online audience, balancing the best aspects of physical and virtual events. They are a great way of navigating the complexities of social distancing restrictions, while maintaining the personal element that can sometimes be absent for solely virtual events.
COVID-19 restrictions are not going to disappear overnight, even with the promise of the vaccine. The restrictions will likely ease progressively, which will dictate the limitations of any event. In the first months of 2021, we may see hybrid events with small groups that conform to social restrictions. As the year progresses, more people may attend in-person, but it seems likely that all charities will offer a virtual element, building on lessons learnt in 2020.
The brave new world will be digital. Digital fundraising campaigns offer many of the same advantages as virtual and hybrid events. They are simple and cost-efficient, which is what the market demands in 2021.
Short auctions and prize draws, for example, do not require much time and only a moderate amount of labour. Pledge drives and crowd-funding require only small administration costs, circumventing the usual expenditure associated with fundraising campaigns. And small, efficient changes on a charity’s website, such as the introduction of a donation button, can offer the simplest method for fundraising with little effort.
Text-to-donate proved popular in 2020. Recent figures suggest that 84% of the UK’s population now owns a smartphone. It therefore seems likely that text-to-donate will continue to grow in popularity in 2021. Text-to-donate offers the simplest journey possible, making donation easy and convenient, with no forms and no fuss.
Online fundraising allows charities to focus more on impact while still raising vital revenue. They were increasingly adopted in 2020. We believe online fundraisers will become even more widespread in 2021.
According to the Global Trends in Giving Survey, 80% of all donations were made digitally. This number will increase in 2021. It is therefore important that charities approach potential supporters on their own turf. Various social media platforms offers an essential opportunity for direct fundraising.
Social media platforms will receive renewed attention from charities in 2021. Charities will likely focus on the ‘classic’ platforms, such as Facebook, Instagram, and Twitter. But they may adapt how they use those platforms. 2021 may be the year charities take full advantage of social media’s video options, such as livestreaming and the ‘stories’ features.
All of the biggest social media platforms now offer some permutation of the ‘stories’ feature, though they all adopt different names. Options that use videos rather than text allow charities to appeal more directly to audiences, circumventing the text-heavy social media offerings that require lots of maintenance and can be rather cumbersome. The main benefit of video options is the immediacy and intimacy, both of which charities should seek to harness. Livestreaming and stories show supporters the charity’s direct impact with the simple click of a button.
The emphasis on video may lead to renewed attention for under-utilised social media platforms. Snapchat and TikTok have become big players, for example, but many organisations struggle to take full advantage of their potential.
Charities in 2021 should renew focus on these video-dependent platforms for many of the beneficial reasons mentioned above.
The brave new world will also be nimble. Charities will continue to find new avenues and approaches to meet the economic and logistical demands of COVID-19. The climate will remain uncertain. The best way to account for uncertainty is versatility.
Digital companies are working overtime to meet the demands of the new normal. Charities will need to keep their fingers firmly on the digital pulse in 2021. The best new digital offerings will help charities stay in-touch with developments, adopt cost- and labour-efficient forms of fundraising, and remain engaged with supporters.
The importance of compliance
Compliance with COVID-19 regulations was one of the most obvious challenges in 2020 and it will remain an important challenge in 2021. Charities will need to comply with the latest restrictions while maintaining day-to-day operations and important fundraising efforts. That will demand an element of discipline and practical knowledge of the latest legislation. 2021 will present many of the challenges that charities experienced in 2020.
The effect of the economy
The other core issue facing the charity sector is the economic fallout from COVID-19. The world has entered a global recession and the UK has suffered particular detriment. Estimates from the OECD suggest the UK’s GDP will shrink by more than 10% in 2020, which will be the deepest recession since records began.
Recessions tend to have a negative impact on donations. But COVID-19 is not a recession. It is a crisis. And strangely, for the charity sector, that might come as welcome news.
Analysis in the US suggests that donations increase during moments of crises, such as during the two world wars and the great depression. As mentioned earlier, an early study from Enthuse seems to confirm that analysis, suggesting that levels of giving actually rose during the first UK lockdown.
This will come as welcome news. Charities should remain cautious, though. People will continue to give during recessions and crises, but they tend to focus their donations. They give to favourite charities and favourite causes. They also give to those who are most impacted by the crisis.
Charities can thus continue effectively fundraising by working hard to remain visible and ensuring that they demonstrate the value of their services.
The future can be bright
The trends of 2021 reflect the need for charities to remain virtual, visible, and versatile. 2020 created the new normal. 2021 will see charities finding their feet in it. They will likely continue to depend on digital, building on the successes of 2020. They will continue to remain visible. And they will remain versatile, meeting the challenges as and when they arise.