The Dutch study, produced by Radboud University and the CBF, the Netherlands Fundraising Regulator, reflects on the experiences of over 300 charities in 2020 with a combined revenue of €2.47 billion. It reveals that while 28% of nonprofits grew their income from 2019 to 2020, the pandemic took its toll, with around half of the organisations in the study citing a loss of income.

On average, nonprofits experienced annual income loss of 6%, but there was a marked difference in the extent of the loss for large and small organisations. The smallest organisations (with up to €100,000 total annual income) lost an average 13.4% in annual revenue compared to a 0.3% loss for the largest organisations (with annual income of over €2 million).

The majority of large organisations (58%) were able to introduce new activities related to those impacted by the pandemic, to pivot what they do and offer services online. Organisations that were more dependent on income from events, corporate income, ticket sales and retail activities were more adversely affected.

The study also indicates that different causes fared better than others. On the whole, international aid organisations seem to have seen fewer negative consequences from COVID-19 than many others. Those working to protect nature and the environment received a relatively large amount of attention from donors in 2020, while organisations in the field of education, science and welfare had a much harder time of it.

More than 50% of organisations in the study reported difficulty in organising fundraising campaigns and events, while over a third cited a decline in one-off donations (37%). On the other hand, regular donors, have remained loyal and a vital source of income.

Of those organisations that reported an increase in donations, one third attribute this to an increase in regular giving (34%) and charitable bequests (33%).

Harmienke Kloeze, director of CBF, says:

“Donors make all the difference. It is great to see that their support helps charities to do their important work in these difficult times.”

See the full report here (in Dutch).

Image credit: Photo by Tim Roosjen on Unsplash

The Small Charities Coalition is conducting a survey to develop a better understanding of the impact of COVID-19 on small not-for-profit organisations and charities.

Initial findings reveal that 457 small charities responded in just over 24 hours. As well as just one in five saying they are providing a normal service level, 70% say they also expect to only be able to meet payroll costs for a maximum of six months without a support package from the government, while 30% expect to have to reduce staff hours or make redundancies as a result of the interruption.

And, with 49% having already lost funding, 43% have had to create additional policies and procedures to try and manage the situation.

Respondents have also had some key messages for the Department of Digital, Culture, Media & Sport (DCMS), which is responsible for charity policy, the Charity Commission, and for funders.

From DCMS, charities said they want to see greater awareness of the fact that small charities delivering grassroots services in their communities will struggle financially because they are unable to fundraise or deliver their services due to the crisis, as well as assurances that small charities will receive support, just as small businesses have been promised, particularly if funders have less money to distribute.

Respondents also asked the Charity Commission to help raise the profile of small charities to help them get support, and to relax some of its rules, including around reporting and accounting for the time being.

Pleas have also been issued to funders to continue their support, but to be more flexible over how money is distributed and how it can be used.

In an interview with Third Sector, Rita Chadha, chief executive of the Small Charities Coalition, said it had been a shock to discover so many small charities had already been forced to drop or alter some of their services and that her advice to charities was to honour their contractual agreements for the next couple of months and then to negotiate. If all charities stop making payments now, she warned, the system would take too great a knock.

“Charities need to think about the short term, medium term and long term. We’re going to come out of this at some point, so bear in mind what your charity is going to look like then,” she said.

To enable it to provide more support for small charities during the current crisis, the Small Charities Coalition has launched its own Crowdfunder appeal to raise funds to expand its helpdesk. Currently it can only run its helpdesk two days a week but has seen demand rise sharply over the last two months. In December 2019, it answered 58 enquiries, rising to 118 in January, and 232 in February. By mid March it had responded to over 200 requests for advice and information.

It will also use the money raised to help it purchase equipment to create webinars and learning resources for small charities, and to source where appropriate technical and legal opinions to help small charities meet some of the challenges arising from COVID-19.

Like so many other charities, we’re a relatively small nonprofit organisation with a big mission; the fight against urban poverty – loneliness and indifference. Here at HelsinkiMissio, we have an urgent need for funds, but there are many other community-based organisations who share this challenge. How can we make ourselves heard and achieve our funding goals?

We have a clear objective – to help citizens who are left alone. We know that neither Government not the city itself can solve the problem of loneliness. It is people that we need; friendships and companions for others in their time of need. Our answer has been to find volunteers that will help acheive that mission and to develop the concept of “social capital”.

We are a small nonprofit so we have to work hard to make sure our campaigns get noticed for the right reasons. This means striking a balance between getting people’s attention – encouraging them to donate, contribute and volunteer – without making them angry.  There is a fine line between engaging and upsetting people and that is tested every time when we develop a powerful campaign.

Because we are small, our fundraising budget is limited. Online and social activity is important, but ultimately our work is about people. We need partners to work with and that has meant drawing in some pro bono agencies (in the fields of advertising, film production, media and a printing house). These relationships don’t grow overnight. They are long term partnerships, which are driven by a shared goal of fighting urban poverty.  Our partners are genuinely motivated and inspired by the success that we can and have achieved together.

So, how can you punch above your weight in fundraising? My advice is to:

– Build relationships with partners that will really get behind your organisation’s mission and help you grow. As a small organisation with limited resources, we need partnerships that will not only deliver funds, but that can help us learn and develop. Media and fundraising are changing rapidly and it can be hard to keep up. Learning continuously is important.

– Offer supporters a range of ways to engage with the charity and to get involved with your work. We have about 90 professionals on our staff, but we rely heavily on volunteers and not just for service delivery. We are now looking at how we can give those volunteers a bigger role in fundraising and campaigning. After all, the more people we have, the more impact we can make.

– Be brave with your communications. Have the courage to deliver campaigns that break the mould and risk provoking a response. Emotional reactions are essential if you are to get through to your target group and encourage them to donate.

– Take good care of your leads. Make sure you have a process in place for converting one-off donors and others to become longer-term supporters.

– Really focus on fundraising. Many small organisations don’t prioritise investing in fundraising or allocating fundraising responsibilities to specific staff or board members. All too often, fundraising is added on to other job descriptions, where the post holder might not have any fundraising knowledge or skills. A good fundraiser is one of the best investments you could make, and will make a great return.

And don’t forget to recognise your assets and the advantages of being a smaller charity. People in the community will often feel closely connected to the cause and can see the impact of your work. Rather than being perceived as a global corporate-like machine, as is the case with some larger NGOs, your supporters are likely to have a far better understanding of what you do and how you work. This is a great asset – do what you can to build on this high level of engagement with supporters.

About Kristiina Backberg 
Kristiina Backberg is Head of Communications at HelsinkiMissio in Finland. She is responsible for running the charity’s communications and fundraising campaigns, working towards the goal of fighting against urban poverty, which is mainly seen as loneliness and indifference. Founded in 1883, the charity is an expert and forerunner in co-ordinated volunteering (involving seniors, young people, families with children and people with special needs). It also provides non-cost professional help for seniors and young people. It has 90 employed professionals and over 700 active volunteers.

[Fundraising Europe] Having worked in the sector for many years, what are the most notable changes to fundraising in Sweden in recent years?
[Charlotte Rydh] We have a strong fundraising market in Sweden and that continues to grow. Donations to our member charities (who raise around 90% of NGO voluntary income in the nation) have increased over the past year. But, although we’ve seen growth in absolute terms, this is at a lower rate than the increases to people’s salaries or expenditure on goods. So there is more room for growth.

What’s really interesting is how much the sector has developed in recent years. Although I’ve been working in the sector for over twenty years, my last role (at AFS Intercultural Programs) was less fundraising-focused. I’ve now come back to the profession at a time when it is particularly evident just how much and how quickly the sector has developed.

15 years ago there were few fundraisers. Now, it is a profession and people realise that you need to know how to do it. Of course, there have been changes to the methods that charities use for fundraising, but we’ve also seen more of a divide emerging between the largest and smaller fundraising charities.

Here, it is certainly the case that the large NGOs and biggest charities seem to be growing much faster. In Sweden, there are just 20 charities that generate around three quarters of all funds raised, amounting to about 674,000,000 Euros.

What is driving this change?
This divide between large and small charities does seem to be getting bigger and there are several factors at play here. This is partly down to the growth of some really big charities and NGOs, but this is also because many smaller charities are now starting to fundraise for the first time.

Growth in NGOs is often accelerated because they share their learning and development across the organisation and internationally.  As for smaller charities, up until recently they typically hadn’t asked the public for funds. Instead, they relied on getting grants from government authorities. But – as competition gets tighter for those funds and with statutory cuts – that is now changing.

We’re now discussing what that means for FRII and how we can better support these smaller charities with their fundraising.

What do the public think? How do they perceive charities and NGOs in Sweden?
Once a year, we measure general trust in charitable organisations. On the whole, trust is pretty stable; around 77% of people have a positive opinion of charities and NGOs. Research shows that women, as well as highly educated and top earners, are more trusting than other groups.

But it’s really important that we keep a close eye on this. We’re all too aware that even one isolated incident of fraud or bad fundraising can have quite a devastating and long term negative impact on the brand.

Despite relatively stable trust measures, we have seen some uncertainty among supporters and they ask more questions than they did in previous years. Does the money they give actually reach beneficiaries? Are charities using money as efficiently as they could be? What is the impact of their work and are they using charitable reserves appropriately?

This uncertainty was particularly noticeable around 18 months ago during the refugee crisis, when there was so much engagement in the cause, but the public felt that charities and government weren’t moving fast enough. They took matters into their own hands and raised large sums of money off their own back.

In many ways, this is what civil society is all about; findings ways to meet a need and to enable people to help others. Usually that means using established channels, but sometimes people just want to do it themselves and this can be a good thing. We have to find ways of including engaged supporters in our fundraising.

After all, this is how many charities are formed. Typically, they have been started up by the public to meet a need and then developed to the point at which they need a more formal structure and become charities.

What are the implications of this for fundraising?
Government has very little interest in the sector at the moment – largely because things are going well. This means that there is very little regulation in Sweden for civil society. Instead, it is what we at FRII do that provides some sort of regulation, together with the work of the Swedish Fundraising Control, which provides a unique banking system for registered charities that is instantly recognisable to the public. So, we have to look ahead and be proactive, ensuring our guidance for the sector addresses the issues that the public might be concerned about.

There is a real need to offer a deeper level of engagement to supporters and to offer clear answers to supporters’ questions in our communications. not just in fundraising but all communications. We are well aware that if people don’t get the information they need, trust might fall and that would of course affect fundraising.

As fundraisers, we have a tendency to think that we communicate quite well with supporters, but it seems as if we are not always getting through. We also need to be aware of the way we talk, shifting our language from more salesy asks for funds to a focus on the donor and their opportunities to give. This means thinking about the words we use internally as much as externally. Inevitably, the way we talk within the organisation colours how we communicate externally. We need to get this right.

For smaller organisations, things can be different. Typically, they have a lot of engagement at a local level and they have a different set of challenges.

What are the challenges for smaller community-based charities?
The real challenge for these smaller charities, new to fundraising, is a lack of understanding of the need to have the right infrastructure and of the need to invest properly in setting that up and to find people that have the right skills to do it. Even though there has been huge growth in fundraising skills and expertise in recent years, recruiting experienced fundraisers and developing their skills is an ongoing challenge.

This is particularly prominent for smaller charities of course as larger NGOs have been doing this for much longer and they tend to have a better infrastructure in place. I see that there is a real need for FRII to provide more support for smaller charities as they adapt to becoming fundraising organisations.

What does the Swedish Fundraising Council do to support charities large and small?
A major part of what we do is delivering the Code of Quality; a resource that sets the bar for standards of governance, transparency, internal policies, financial issues and fundraising activities.

And when it comes to training and support for charities, traditionally we have worked with many of the bigger organisations. Times are changing and we are now keen to support the clusters of smaller charities working in similar fields, helping them get started with fundraising and providing more tailored support that responds to their specific challenges.

About Charlotte Rydh
Having started out in higher education, Charlotte first began fundraising professionally twenty years ago. While her focus has been primarily in major gifts, she has worked with a range of charitable causes, including healthcare, research, higher education, young people and the arts. She joined the Swedish Fundraising Council as its Secretary General in September 2016. Charlotte is also on the Board of EFA and its Certification Committee.

Facing Forward: how small and medium sized charities can adapt to survive aims to help CEOs or trustees of small charities plan for the future. It examines ten key trends likely to affect the future and provides steps for charities to follow to prepare for these changes, and improve their sustainability.

The seven steps:

1. Planning ahead

Regularly taking stock with staff and trustees, and seeking help if needed, will give charities the best chance of surviving and thriving. Too often smaller charities leave it too late and find their options diminished.

2. Understanding sustainability

Consider what sustainability means, in light of the charity’s mission. Ask: can we achieve the biggest impact for our clients/cause, given where we are now and the outlook ahead? The answer may point towards a different way of working, collaboration, or even closure if the charities’ resources could be better used elsewhere.

3. Matching income to activities

Undertake situational analysis to help you consider sustainable funding streams. Using a Mission/Money Matrix to segment activities can help assess different funding opportunities and see which will generate income and which will require ongoing subsidies.

4. Exploring new income streams

Identifying different options for funding work is critical. Different charities will have different strengths that each lend themselves to different funding options.. Effective and regular communication with existing and new audiences, emphasising the role, value and distinctiveness of what that charity offers will be key to realising new income opportunities.

5. Collaborating by choice

In many cases, charities will need to collaborate to achieve their mission. Charities will need to seek out appropriate partners but work hard to ensure they meet everyone’s needs and not be afraid to walk away if the risks and disadvantages are too high.

6. Digital capabilities

Digital development might make collaboration easier and can make smaller charities more effective and efficient. Taking advantage of this will require investment in digital capabilities. Free platforms and resources are widely available which can help those at an early stage of their digital development.

7. Sustaining staff

Every charity’s sustainability will depend on the wellbeing of the people who lead and work with it. In tough times, staff often find themselves over-stretched and at risk of burnout which presents significant risks to charities. Trustees need to be proactive about considering the wellbeing of staff and volunteers and use available resources to help them.

The age-old aphorism that the rich get richer and the poor get poorer seems to now include charities.

A new breed of mega-charities are growing apace both in number and scale, with large international NGO brands based across European capital cities and large national charities outpacing their smaller rivals.

Income rises for large charities
Whilst small charities with an annual income of less than £1m have seen a drop in their income, the UK’s largest charities, with an income of over £10m per annum, are growing by some 3.7%, according to analysis by the National Council for Voluntary Organisations (NCVO). And on top of this, mega-charities in the £100m and over bracket have seen their income increase by a staggering 26%.

In the UK, the media has warned us that the public has a huge disquiet about fundraising, and the Fundraising Regulator along with the Information Commissioner’s Office (ICO), which is hard at work issuing rather extraordinary gutter-press style headlines, are combining to curtail fundraising; to the extent that some large charities are now predicting huge falls in income and, it must be said, a consequential massive increase in suffering by those they help.

What exactly is going on? And if the European press follows suite, attacking and undermining charity fundraising practices, what will happen?

Battle for funding
It appears that – on the whole – while people may be more sympathetic to small local charities, the public itself actually prefers to give to large national charities. Of course, bigger charities tend to deal with many of the world’s biggest issues, and they have the ability to fundraise on a larger scale and to be clear about the support they need. But, could this also be because the large national charities can clearly demonstrate their effectiveness and efficiency?

Large NGOs certainly have the resources to monitor and evaluate their work, and this is usually both fed back to their donors and internally to improve their work in the field. So, maybe it’s a matter of trust, in that the public trusts them to solve these large scale problems. This is exacerbated by national and EU government’s programme of contracting out services to large charities, which improves large charities’ advantages of scale.

Public perception
In my consultancy, we are often approached by people setting up their own charity whose overheads are going to be far higher than the larger charities (because they lack the economies of scale), whose ability to do the work is not grounded in experience, and whose knowledge of management is limited. This is not to say small charities are ineffective, just that the public may appreciate the reassurance of donating to better known, obviously well-managed charities.

The public may be seeing that Government has cut social services until they fall apart and individuals are driven to food banks. They then have a real opportunity to help people directly by supporting the larger charities.

If we take cancer as an example, we may all know someone affected by it, but would anyone give to our national health services hoping it will solve the problem? Of course not, we give to the biggest national cancer charities instead. Indeed, the popularity and effectiveness of charities in carrying out work that the state should have been doing may have made them a target for the UK’s new legislation on fundraising practise. But the fact is that that the public is responding well to the sector’s fundraising strategies.

Readdressing the balance
The upshot is that smaller charities may feel larger ones are starving them of funds, but there are many ways of levelling the playing field, particularly by using the internet and focusing on the smaller charities’ unique reasons to exist. Embracing professional fundraising and getting the ‘case for support’ right, both emotionally and intellectually is something the mega charities are very good at, but there is no reason why the smaller charities’ fundraising should not innovate to be even more effective and efficient in their income generation.

About John Baguley
John Baguley is Chair of the International Fundraising Consultancy, author of The Globalization of Non-Governmental Organisations, a Fellow of the Institute of Fundraising (IoF) and an international speaker on fundraising. He has also started First Fridays, Top Table and Wikifund. In 2017 John received a lifetime Contribution Award from the IoF.

According to the latest Civil Society Almanac, 2013/14 saw a 5.8% rise in the income of the charity sector as a whole in real terms on the previous year, to £43.8 billion (€54.8 bn), mainly as a result of increases in income from individuals, with donations up 7.7% at £7.2 billion(€9 bn).

The National Council for Voluntary Organisations (NCVO), author of the Almanac, has announced that charities with an annual income £10m–£100m saw income growth of 3.7%, while those in categories below £1m experienced an income fall (£100,000–£1m: -0.7%, £10,000–£100,000: -1.7%, <£10,000, -3.6%).

The total income of those charities in the £100m+ category grew 26% – this was driven partly by increases in their income but also by an increase in the size of the category as a whole with a notable number of charities exceeding the £100m threshold for the first time.

The figures, based on analysis of charities’ accounts as submitted to the Charity Commission, also reveal that Government grants to the sector, at £2.8 billion (€3.5 bn), are less than half the level they were ten years prior in 2003/4.

The Almanac also contains analysis of government volunteering statistics, which uncovers a sharp rise in youth volunteering.

Sir Stuart Etherington, chief executive of NCVO, said:

“Charities of all sizes make an immense difference to our society and our world every day. We should be pleased that some of Britain’s most well-known and influential charities are continuing to grow and thrive.

“However, while we should remember that each charity’s circumstances will differ, these figures do underline our concern that small and medium-sized charities are struggling in particular at the moment.”