While this could prove to be fundraising’s toughest-ever year, charities that arm themselves with the right skills and support should continue to grow, says Louise Richards  

While uncertainty prevails about the economy, the future of funding and the future of charities themselves, charities remain optimistic by nature and many will be and are adapting to the new norm.
For all intents and purposes, 2012 looks like being one of the toughest years yet for the voluntary sector. The 2012 budget brought very little to cheer about: families will be left £500 a year worse off by the chancellor’s swingeing cuts to tax credits; pensioners have been hit by a ‘granny tax’; and unemployment, which has reached 2.67 million, is set to rise by another 100,000 this summer.

Battle scars

We’ve already seen some worrying statistics from a recent YouGov survey: 61 per cent of those questioned said a major obstacle that stops them from giving to charity is that they simply can’t afford it, confirming that the current sagging economy and high unemployment figures are putting a strain on public donations.

At the same time we’re seeing how public sector cuts and the effect of government policies on the most vulnerable in society are increasing demand for the frontline services provided by charities, who themselves are facing cuts to services and staffing.

Now, to make matters worse, the government’s plans to limit tax relief for philanthropists is likely cost charities hundreds of thousands, if not millions, of pounds.

In April, the fifth in a series of Managing in a Downturn reports was released. The report, produced by PwC, the Charity Finance Group and the IoF, comes a year on from the government’s Comprehensive Spending Review, where the chancellor announced public spending cuts of £81bn by 2014-15.

The report reveals that most charities have been negatively affected by the cuts and that there is continuing anxiety over most income streams. 93 per cent of fundraisers saying that the fundraising climate has got tougher in the past year, while 94 per cent expect it to get even tougher in the year ahead.

Pushing on

Yet interestingly fundraising is seen as the best way to fight out of economic difficulty by the majority of respondents, with roughly two-thirds planning to increase their current fundraising activity in the next year and the same number planning to expand into new areas.

In spite of the figures painting a rather gloomy picture, our report showed that there is still optimism among fundraisers, who had even identified some opportunities going forward. Only 12 per cent of those who stated that the fundraising climate had got tougher were very worried about the future, and 42 per cent were optimistic about the future of their charity.

Nevertheless, competition for donors’ cash is going to get even tougher, and charities will need to work harder for every pound raised. Charitable giving has remained fairly consistent over the past few years, but there are concerns that the current level of giving is unlikely to be maintained.
However there is no doubt that those charities that invest in fundraising are going to be far better placed to withstand the challenges facing them over the months ahead. Fundraising is about building good relationships with donors and presenting a compelling case which will inspire donors to support your cause.

Armed and ready

In the current environment, it is more important than ever to ensure fundraisers are armed with the skills and support they need to fundraise effectively and build donor loyalty. Fundraisers need to be at the top of their game, delivering maximum returns for their organisations. Investment in the right professional development can make the difference between success and failure.

Equally, success hinges on creating high levels of public trust and confidence. Accountability and transparency remain hugely important in promoting and securing trust.

Whatever the future holds, charities will continue to make a vital contribution to our communities and to society as a whole. Even in the best of conditions, securing funding remains a challenge. It is vital for individuals to keep on giving to their favourite causes, but at the same time charities themselves must innovate, be proactive and make the most of every opportunity.

Louise Richards is director of policy & campaigns at the Institute of Fundraising

This article first appeared in The Fundraiser, Issue 17, May 2012