With challenging economic times ahead, charities are more reliant than ever on stable income from monthly donations. However, is it likely that supporters will continue to give monthly donations to the same level moving forwards? We were asked the following question:
Will the average monthly donation fall with regular giving?
We’re all bored of hearing about how these are unprecedented times, but they really are! This makes it exceptionally difficult to plot a recovery, as we don’t have a blueprint from the past that we can follow.
Therefore, all we can do is look at the information that is available and estimate what is likely to happen from there.
Monthly Donations: The Negative Stuff
Let’s start by looking at the evidence which suggests that the current situation will have a negative impact on monthly donations.
Typically, economic uncertainty makes people less likely to make regular donations to charity. This is perfectly understandable, given that many people will have less disposable income and may be apprehensive about the future. Given that we have experienced the largest economic contraction in decades and expect slow growth moving forwards, one would expect that the economic conditions would have a significant impact on the number and size of monthly donations.
During the 2008 recession, Charities Aid Foundation found that both the number of people donating to charity and the monthly mean donation declined. Individual giving as a whole fell by 11%.
In March of this year, the rate of Direct Debit cancellations was 41% higher than in March 2019 at 3.09%. However, this was significantly lower than the highest ever rate, which was 4.33% during the 2008 recession.
Monthly Donations: The Positive Stuff
Now, let’s consider the evidence which suggests that the impact of the current situation on monthly donations may not be quite so bad.
The Coronavirus Pandemic has shown us the value of society coming together to tackle an issue. As a result, people who are financially secure are more likely to donate to charity now than they were before the pandemic.
The previously mentioned increase in Direct Debit cancellations was significant in March, but the figure returned to normal levels in April. This suggests that the high rate in March may have been due to the initial shock of coronavirus, but may not continue throughout the crisis.
What Should Charities Do?
On the balance of evidence, it seems likely that there will be some drop in the number and average amount of monthly donations. However, there is hope that this will not be catastrophic for charities.
If you have existing monthly donors, then thanking those who have continued to donate and explaining how their donation is helping is essential. If you have people giving regularly via text and you have collected marketing consent, then you can give them a call to say thank you.
If you don’t have existing monthly donors, then it is worth starting small and trying to encourage those supporters that are really engaged with what you are doing. Supporters recognise that charities are in delicate situations at the moment, so don’t be afraid to ask for support.
If you ran an appeal relating to the coronavirus pandemic, or you have another list of supporters you would like to approach to become monthly donors, then there is some advice on how to convert supporters in our answer to the question “How do you turn one-off ‘covid-19 appeal’ donors into regular givers?”
You can access our Recovery Hub here.