The Impact Of Recession On Charity Donations

BradYoung04 By BradYoung04, 20th Jun 2013 | Follow this author | RSS Feed | Short URL
Posted in Wikinut>Money>Charity

Over the last few years charities have seen a decline in donations. The drop in 2012 was a staggering 20%. But why are people giving less? Economic experts suggest that it is due to the global recession that has been holding us all in its grip. Although there has been a slight uplift in donations received year on year during this rather tough time, it is still low.
But what is the real impact of the drop in donations and how are charities coping to survive?

Charities Closing Down…

Times are really tough after the recession has erased most of the high-street; charities have started to put up the closing down signs as well. Just imagine running a business where you rely to get money through generosity, and the only thing people get out of it is that warm feeling that they have helped! Well most businesses would not survive for too long. Charities have been doing quite well over the years, with people donating as much as they could afford. However, with people out of work, on less money and spending less in general – it isn’t shocking that generosity would get a rather big hit.
Well it is that bad that 1 in 6 charities believe that they might have to close their doors for ever. This is not just down to the drop in donations but also due to the rise in their daily costs. Some charities reported that they haven’t seen a drop in revenue, however their spending increased dramatically. They have seen a sharp rise in fuel cost, food cost and grants they normally relied on are disappearing rapidly.
Another blow to charities could be if governments around the world, who are trying to claw back on their bulging deficits, cut those rather attractive tax reliefs on donations. I am with you; some people might not have the charitable cause in mind when they make large donations, which are then deducted from their tax (or businesses tax). But at the end of the day – it has been a large income stream for charities. Plus if those wealthier donors are not getting any benefit out of it – they might be the first to cut back on their generosity!
Smaller charities are feeling the pressure most, mainly because they are, in most cases, not known on a national level, and rely on local donations. They are spiraling into big losses, and eating into their savings. But exactly those charities that are nested within our local communities are the ones that make the biggest, most apparent impact. Why? Because they are next door and we can see what is being done with our money, providing that needed social care, education, and helping the most vulnerable in these tougher times.
So with things being rather gloomy and the recession not seeming to be going anywhere soon what tactics are there that charities can use to survive?

How Can Charities Survive?

Charities will have to find alternative ways to finance their good cause. Some have already gotten the hint and have switched from relying on people’s generosity to actually changing tactics and getting people involved in different ways. A lot of charities will have to ask themselves this question “Is it really all about money?”
Here some of some of the “new age” fundraising ideas:
• Mobile, Apps and widgets – Yes we are still talking charity! A new movement across charities that want to survive is giving supporters transparency. All of us who ever gave money will have thought “so what does happen with my donation? How is it used!” well now with the newest apps and widgets charities will be giving you a live update on exactly that – in the hope that people feel more involved and will continue giving because they will receive evidence on how their donation made a difference

• Don’t give your money – give your skills – Some charities are stepping away from asking people to part with their money. Instead they are asking for people to donate their skills. The idea works on the basis that for example a retired gardener might donate a couple of hours of his gardening skills – and the person receiving the service will donate price they would pay to the charity. This not only an alternative fundraising way – but could make people play an active part in their local community.

• Gaming is the new generosity – The newest idea in trying to gain more funds is getting people into gaming. A cancer charity has built a gaming website where people can play free and paid-for games and donate at the same time. This tactic is trying to tap into a new demographic that normally don’t actively donate. They are hoping by challenging the competitive human nature people will start getting more involved.

New Tactics

Of course there are already established tactics that have been driving charity donations, which can be now re-prioritized by charities such as crowd sourcing, which is similar to skills exchange. It has been used to fund-raise start-up companies. Another powerful tactic that has been picked up by charities now is social media. This allows them to contact people on a whole new level, in their social space. People have moved increasingly online – this means charities will have to move with time as well and take a good look at what other mainstream (profit making) businesses are doing to reach their customers (or donors).


Charity Donations, Recession, Social Media

Meet the author

author avatar BradYoung04
I am a MBA grad who can transform your business. Follow me for straight talking insights into running successful businesses in a fast paced world. I am always working or surfing in the Californian sun

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