Not-for-profits and corporations require expert guidance to navigate the perfect storm of economic and societal factors buffeting Australia’s fundraising sector.
That’s the key finding from the Research Fundraising and Donor Insight Survey - conducted by Sydney-based full-service media agency Media Precinct - which drilled into the economic factors, and other key issues impacting donors and the charity industry.
During August and September 2023, Media Precinct dove deep to survey more than 500 charity donors and corporate partners. The agency overlaid these findings with economic data plus insights and analysis from its considerable marketing and media IP for the report that reveals a stressed charity sector, but one where opportunities lurk with the threats.
Media Precinct CEO Glenda Wynyard says the study’s major take-out is Australia’s challenged economy is contributing to a shrinking of the nation’s charity donor pool at a time when there has never been so many charities and charitable events vying for donors’ attention.
“The economy is the fundraising sector’s largest competitor but also its greatest opportunity,” Ms Wynyard says. “Consumer and business confidence are at their lowest ebb since the 1980s. The cost of housing and living have surged, while household savings have dropped since COVID-19.
“Our research shows these difficult economic conditions act as a brake on individual and business donation activity. But on the other hand, they are the very conditions that give rise to a greater need and relevance for charities.”
The study found many individuals continue to give to charity, but they are consolidating their donations, with 60% of donors only giving to one or two causes a year. While the donor pool is stagnant, there has been a flood in the number of charities, rising 25% from 48,000 to just under 60,000 in just two years to 2021.
However, the cost-of-living crisis is acting as a barrier to attracting much-needed new donors, with 74% of non-donors citing inflation as their main barrier to giving. Donors are also more demanding of their charities these days and expect transparency and regular updates showing tangible outcomes from their hard-earned dollars.
To add to these stresses Australians are working more and volunteering less so to maintain the delivery of programs, charities will have to create new paid positions to fill the volunteer gap, Ms Wynyard says.
“Fundraising is now more important than ever but charities need to work harder than ever to raise those funds. They need to invest in their brand over just asking for money. Understanding your donor audience is critical to this, both to leverage quick wins and future opportunities.”
Greater collaboration between marketing and fundraising teams is crucial to create more effective campaigns that put the donor at the centre, she says.
“Charities need to be investing in both above and below-the-line activities to build brand awareness and drive fundraising. In an increasingly crowded market, it's crucial to differentiate yourself and appeal to the right audiences authentically and with high frequency.”
Charities can’t rely on the impact of their cause to build long-term donors.
“To effectively engage with your audience, focus on also understanding their behaviours and motivations while highlighting how your cause helps the community is a key motivating factor. Successful charities take time to identify the right audience, using research and data to also understand their needs and desires.”
She cites Movember and Beyond Blue as a couple of success stories - relative newcomers that have quickly built considerable brand awareness that incites behaviour change by using an audience-centric approach, largely via social engagement.
“Top-performing charities like these understand their place in the market and the value they provide, as well as who and where their audiences are.”
For charities partnering with corporations, the study found having strongly aligned business objectives is the key to enduring success.
It also found corporates want charities to provide face-to-face engagement activities for their staff, such as workplace giving and volunteering opportunities, to engender a visceral connection with the cause.
The charities who are able to keep a corporate partner past the initial two-year mark will likely keep them long-term, Ms Wynyard says.
“Corporations aren’t asking for the moon from their charity partners and often less is more but charities must do the basics right to have a successful corporate marriage, such as:
• Identify organisations with alignment and/or shared objectives
• Demonstrate impact or success
• Provide valuable staff engagement opportunities
• Invest in individual relationships.”
Charities often under-resource fundraising and marketing in favour of their core business and all the admin and logistics that come with that, and this makes it difficult to channel funding into building awareness that is so critical in today’s climate, she says.
“Media Precinct is a not-for-profit specialist that fills these gaps. Our deep, research-driven understanding of audiences gives us the rich insights to build highly-tailored strategies that achieve optimal outcomes for charities.”
About The Research Fundraising and Donor Insight Survey
· The Research Fundraising and Donor Insight Survey drilled into the economic factors, and other key issues impacting donors and the charity industry, conducted by Media Precinct
· During August and September 2023, Media Precinct surveyed 266 donors and 245 corporate partners
· The agency overlaid survey findings with economic data plus insights and analysis from its considerable marketing and media IP to compile a report that reveals a stressed charity sector, but one where charities and corporations can leverage opportunities with the right marketing and media guidance and expertise.
Key findings from The Research Fundraising and Donor Insight Survey
· Australia’s challenged economy is contributing to a shrinking of the nation’s charity donor pool at a time when there has never been so many charities and charitable events vying for donors’ attention
· Individuals continue to give to charity, but they are consolidating their donations, with 60% of donors only giving to one or two causes a year
· The number of charities rose 25%, from 48,000 to just under 60,000 between 2019 and 2021
· The cost-of-living crisis is a barrier to attracting much-needed new donors, with 74% of non-donors citing inflation as their main barrier to giving
· 20% of donors say they are likely to reduce the amount they give
· 16% of donors indicated they would increase their donations in the next year
· 74% of the 30-44 age bracket donated in the last 24 months, the lowest among all the age groups
· 52% of millennials and Generation Z are prepared to donate to international aid and emergency causes, compared to just 30% of 45-plus
· Donors now expect more transparency and regular updates from charities, showing tangible outcomes from their donations
· While the economy is the fundraising sector’s largest competitor, it is also its greatest opportunity because the conditions lead to charities’ greater need and relevance
· Charities must work harder now than ever before to raise funds
· In an increasingly crowded market charities need to differentiate themselves and
engage their audience with an authentic value proposition
· It is key for charities to know their audience and understand its behaviours and motivations
· The charities that perform best understand their place in the market and the value they provide, as well as who and where their audiences are
· Charity events succeed when charities understand their value against their audiences' expectations
· Charities typically don’t perceive fundraising and marketing as core functions within their business and tend to under-resource them
· Corporates place a high value on opportunities for their staff to have face-to-face engagement with their charity partners
· Charities that have or do the following tend to develop long-standing, fruitful relationships with corporate partners:
o Have strong alignment and shared objectives
o Demonstrate impact or success
o Provide valuable staff engagement opportunities
o Invest in individual relationships
· Administration and employees account for 93.6% of charity expenses
· Yet, 56% of donors want no more than 30% of their donation to go towards administration expenses, creating significant funding challenges, especially for small to medium organisations
· Small charities have minimal brand recognition and tend to be more localised
· 84% of charities that close down and 73% of charities that merge are classified as small between, $50,000 and $250,000 in total revenue
· Australians are working more and numbers choosing not to work are down, reducing people's availability to volunteer
· 50% of charities operate with no paid staff
· Volunteer numbers dropped to 3.2 million from 3.4 million during 2020, with 596,000 volunteers lost since 2018
· To maintain the delivery of programs, charities will have to create new paid positions to fill the volunteer gap
· Overall, charity expenses are set to increase meaning fundraising will be needed more now than ever
52% of corporates are unwilling to fund capacity building in their partner charities, yet employee expenses make up to 57% of charity expenses.
· Media Precinct is a fiercely independent full-service media and content agency, where media and creative work seamlessly under one roof
· Founded in 2012 with three staff working out of a converted townhouse in the heart of Sydney, Media Precinct is now a 50-strong team that shares a deep understanding of humans, driven by a passion for research, data and technology
· Using its unique blend of media, digital, research and creative expertise, Media Precinct elevates brands’ visibility and understanding of customers they have and should have
· The agency passionately supports social causes and works with many clients in not-for-profit and cause-driven organisations in several sectors
· Its expertise in understanding audiences through research and building strategies based on these insights enables an approach uniquely tailored to the fundraising and charity space
· Media Precinct is a member of thenetworkone group, a powerful hive of over 200 independent agencies that span the globe. It supports this network with local intelligence for global brands, as well as gaining access to leading global research, insights and people.
Glenda Wynyard, Managing Director & Strategist
Phone: 0410 736 785
Brittany Adams, Fundraising Strategist
Phone: 0423 201 406