The term ‘death of cash’ has been thrown around for many years, with some staunch believers predicting the end of physical currency for decades. The Covid-19 has for some, confirmed the end of cash, with online payments predominating and cash refusal becoming a common practice in many stores due to fears of bank notes transmitting the virus.
This opinion has a strong foundation of evidence - a 2020 publication by The Bank of England found that less cash was being used for transactions as a result of the pandemic, and the ATM provider, LINK, found that 50% of survey respondents said they use cash ‘less often’ than they did before the pandemic, with 72% confirming this behaviour continued in a survey done in the summer of 2021. Notably for charities, this decrease in cash usage extends to charitable giving, with the Charities Aid Foundation finding a “sustained increase in cashless giving since March 2020."
However, this is a nuanced issue that requires investigation beyond these basic facts, and it is important to note that this is a trend that has persisted for many years before the pandemic. Indeed, in 2019 The Bank of England found that “only 23% of all payments in 2019 were made using cash, down from close to 60% a decade earlier, as people increasingly turn to other methods to make transactions, such as debit cards and digital payments.”
Additionally, whilst the day to day use of cash may have declined, the Bank of England reports that the total value of banknotes in circulation has actually increased, a phenomenon that could be due to several factors; a shifting technological landscape, changing financial services, and low interest rates could all account for some of this demand. Historically, however, there are two factors that seem to correlate with shifts in demand for banknotes, exchange rate changes, and public opinion on the health of banks. There is evidence of increases in demand in response to changing exchange rates, for example, in response to the 2016 referendum which saw the UK set to leave the European Union, and the corresponding drop in the value of the British pound. A similar increase in demand was seen as a result of the 2008 crash when concerns about banks, and the economy as a whole, lead to people hold more cash.
There is a trust in physical banknotes that is not replicated when simply seeing numbers on a screen. Cash is easy to carry, widely accepted, reliable, and for the most part, anonymous. There might be trends away from cash, but this does not mean it is on its way out.
So, what does this all mean for charities? It is significant for charities that alongside the increase in online payments and decrease in cash comes the increase in mobile usage and mobile donation. There might not be a definitive answer, but it is clear that cash donations to charities are less common than they used to be, both as a result of the Covid-19 pandemic, and of the general trend away from cash usage. It might not be smart to toss out the collection buckets just yet, but there are cash free fundraising options that are definitely worth investing in. For example, some of Donr's favourite cashless options are contactless donations, text to donate solutions, QR codes, donate buttons, text based competitions or lotteries, and online giving pages. Understanding your supporters and the ways that they like to donate will help you to decide whether you shift to a more cashless donation model or not.
You can read more about our top 5 ways to refresh your fundraising strategy for this new era here, and gain some insight and inspiration into what you can do to ensure you are capturing as many potential donors as possible.