What are the main barriers to donations in 2023?

Fresh from tackling the COVID pandemic, charities are facing another tough year due to the cost-of-living crisis.  Already their finances were hit by lockdowns during the health crisis, with fundraising events postponed and cancelled while demand for their services rose sharply. 

But now they must tackle fresh concerns. The cost-of-living crisis is also impacting the housing market and therefore the amount of money charities can expect when estates are settled, and legacy gifts are distributed. Lender the Halifax predicts prices will fall by 8% over 2023, while consultancy Legacy Foresight predicts a 3% drop in legacy income over the next two years due to house price falls. 

Supporters are increasingly feeling the financial pressure as costs rise. Inflation is also reducing the value of their giving, increasing charities’ own costs and seeing a surge in demand from cash-strapped communities. Many fundraising challenges have already proved too much for several charities, and Sea Sanctuary, Nottingham Castle Trust, and Aspire Sussex are among those who have had to close their doors. 

However, there is hope. Research on the cost-of-giving crisis is mixed, demonstrating that while the volume of donations may be decreasing, there has been a sharp increase in average gift size and cumulative revenue.  

The Global Giving Indicators report from iRaiser found that the average online donation for single gifts in 2021 was £53. In 2022, the average online donation for single gifts had increased to £77.  

This demonstrates that there remains a big opportunity for charities to engage donors and help them donate to the organisations they support on their own terms.   

Donations will be needed more than ever to ensure charities can continue supporting their good causes. Here we outline some of the barriers to giving charities face and how they can be overcome.   

Absence of trust 

According to polling firm Ipsos’ Veracity Index 2022 half of people do not trust charity chief executives to tell the truth. In its annual survey of public trust, 18 professions score higher than charity leaders, including taxi drivers, lawyers and car mechanics.  

Clearly there is a lot of work to do among charities to ensure the public trusts them enough with their donations and ensure they are spent on projects that make a difference to people’s lives.  

Further evidence around public confidence in charities emerged in December 2022 in a Charity Commission report around transparency in the sector.  

The report contained the findings of focus groups and interviews with 125 people and revealed the precarious nature of their giving for charities. It found that they are less loyal to charities “per se” and instead “support causes”. The findings suggest donors are willing to move their giving to different charities if they feel their donations are not making enough of an impact. 

“Across the research, there was a strong sense that participants felt they owned their donations, particularly when financial donations were felt to have been ‘hard earned’,” added the report. 

Failure to demonstrate impact 

This Charity Commission report says the best way charities can overcome barriers around trust is to be transparent around the impact giving can achieve. 

Promoting the difference donations make can “help grow trust in charities by letting the public in and allowing them to feel they know and understand the charity”, says the regulator.  

This focus on demonstrating impact in engaging ways should include robust evaluation of the difference the charity is making to people’s lives, as well as information around income and spending. The regulator says that financial information and evidence of impact are “priorities” for the public when donating.  

However, research in 2023 by CRM software providers Blackbaud and marketing company Nepa found most donors do not know what difference their donation has made. Only 43% knew whether their giving had improved people’s lives. The report also urged charities to “demonstrate the impact that your supporter has made”. 

Fundraising platform iRaiser suggests that charities need to create a pitch in order to demonstrate their impact and engage regular donors. The pitch should include advantages for the donor, but more importantly, information on how the donation can help your cause, making sense of the donation by showing what precisely it provides e.g. one £10 donation pays for one particular service you deliver.  

“The donor needs to “visualize” their contribution,” iRaiser concludes. “Remember to mention them on your online donation form as well.”

Being too persistent 

Charities need to be aware of how supporters like to be contacted. A key barrier to giving for many charity supporters is whether they believe fundraisers are being too pushy in their requests for donations.  

A report by pollsters YouGov and media agency Kite Factory from 2020 found that just under two thirds (65%) of people said the “number one reason they were discouraged from financially supporting a charity was due to fundraisers being too persistent or intrusive. Two out of five said there felt such requests were “aggressive or inappropriate” at least once a month.  

Fundraising experts iRaiser warn that the drop-off for donors who sign up for regular donations when approached by charities in the street is significant, particularly in the first few months. Charities need to reassure these donors, welcome them, and offer them proof of the difference their donation is making. “If they wish to stop, offer them a lower donation amount or a temporary pause in their monthly commitment: this is often very effective,” iRaiser advises.  

 
“For donors who make regular donations through other channels (telemarketing, digital, mail), make sure to send them newsletters but as few donation campaigns as possible. You should remind them of the effectiveness of your actions on a regular basis but nothing more.” 

Charities should be especially aware of how regularly they make requests to older charity supporters. The YouGov and Kite Factory research found that a fifth of over 55s “claim it is not acceptable to ask for donations at all”.  

Failure to embrace digital 

Finding out how supporters like to be targeted, including frequency and whether they prefer information through the post, by email, or through social media are important nuggets of information for charities.  

Fundraisers who have invested in a robust digital customer relationship management (CRM) system have a distinct advantage. There are several discounted CRM deals for charities available via Charity Digital to help.  

Choosing the right fundraising platform can also provide vital analytics, such as how many people complete your donation process. A significant amount of drop off could show you that there are barriers on your donation page that you need to address to make it easier for donors to give.  

A failure to embrace digital in this way can be a significant barrier to managing giving. Digital technology helps us to more easily convert one-off donors into regular donors and reach a wider range of donors who prefer different ways of giving, such as online or via mobile. Almost half of consumers are donating to charity through digital channels, according to research from Barclays, so it is vital that we make it more convenient for them to do so.