Help Your Charity Thrive In A Cost Of Living Crisis

The Cost of Giving Crisis

Wow the news is depressing at the moment. As we enter a cost of living crisis in the UK, I’ve been reflecting on how charities will likely face a ‘cost of giving’ crisis. This is a time when a significant number of people pull back on their usual giving habits because they’re feeling anxious about their ability to survive the rising living costs. For charities that rely heavily on donations, this has the potential to be catastrophic. But it doesn’t have to be – there’s still time to help your charity thrive in a cost of living crisis.

We’re entering a perfect storm. At a time when demand for the services of many charities will increase (due to increased poverty), charities will face rising costs, and a reduced number of donations. At the same time, inflation means that in real terms money doesn’t stretch as far so donations are actually worth less. It feels like a treble whammy on the charity sector.

How to Survive the Cost of Living Crisis

So what should we do to survive? Cut costs?

Yes. Cutting costs is sensible. But be careful about which costs you’re cutting. More often than not when we enter a recession, the first thing an organisation does to cut costs and save money is cut back on their marketing. Is this wise? No. Big fat no.

There is so much evidence to show that when we enter a recession, the brands that don’t cut back on marketing are the ones that come out the other side better off. Famously the cereal brand, Kelloggs, grew it’s profits by 30% when it doubled it’s marketing spend during the Great Depression.  Okay, I hear you, there aren’t many charities that are going to be in a position to double their marketing spend (and if they did, the public would probably have something to say about it). But my point is that analysis from other recessions indicates that brands who invest in marketing win the long game, whilst brands that cut their marketing for short term survival, end up worse off.

Whilst not specific to the charity sector, there’s a lot we can take from Peter Field’s analysis of data from the 2008 recession. He says:

“We know that cutting advertising budgets – and Share Of Voice – during a recession is a risky strategy. It may provide some short-term relief to profitability (because costs are cut), but the subsequent loss of market share that follows will be extremely difficult and expensive to regain during the recovery. Thus, the long-term impact on profitability will be highly damaging and it is better to take the short-term profitability hit to maintain SOV and defend the brand.”

Source: Peter Field, 2020, Advertising in a recession – long, short or dark

Keep Talking

So, whilst increasing the marketing budget feels about as likely as Elvis appearing in your living room,  charities should definitely be careful, and where possible resist the urge to cut marketing budgets in their entirety.

You see, when you scale back your marketing you reduce your visibility.

When people don’t see you, they won’t think of you.

If people don’t think of you, they won’t support you.

So you need to talk to your supporters and your potential supporters.

“But we’ve got no money”!!!! Alright, I hear you. And there I was having a whinge about the media – it’s not exactly been rainbows and unicorns in this blog post so far. So here’s the useful bit to help your charity thrive in a cost of living crisis:

5 Tips To Help Your Charity Thrive In A Cost Of Living Crisis

1.Keep existing donors loyal

It’s far cheaper to maintain a relationship with an existing donor than to acquire new donors. So your loyalty programme should be your bread and butter.

Make them feel like a someone. Simple things help – personalise messages to them, show them gratitude with regular thank you messages and keep them informed about how their money is being used.

You will of course (I’m afraid) lose some donors over the coming months. The key is that you don’t lose your relationship with those donors. And the secret of course, is being prepared for people cancelling their donations. Make sure you’ve got a win-back plan in place. This might include options for less frequent giving (better they give some times than not at all), lower level giving (better they give something than nothing) or non-financial giving (this could in fact be more valuable to you than a regular donation). More on this last point in a minute.

2.Build trust

We all know that people are less trusting of charities than they used to be. It’s down to us to change that. Transparency is absolutely key. Be honest – where does the money go? How do your donations stretch as far as they possibly can? How do you make your internal processes efficient so that money doesn’t get sucked up by unnecessary costs? Make all of this information public. Demonstrate how you’re protecting resources. Talk openly and honestly about how you make every penny count.

3.Make your acquisition programme efficient

Distinguish between the necessary and the wasteful. I’ve done lots of digital marketing audits for charities, and often money is being unintentionally wasted through inefficient advertising set-ups, poor channel selections, or misguided investment. Make sure your set up is as tight as.

Think about what you’re trying to achieve and who you’re trying to reach. Select the most cost efficient marketing channels to help you get there. It doesn’t have to be expensive.

When it comes to advertising, when competition drops, prices drop. So it’s likely that others will be cutting spend. If you can hang in there, you’ll probably find that you can get more bang for your buck compared to current market rates.

Think about who you’re targeting. Don’t waste money on people who are unlikely to convert. Target those who are likely to have an affinity with your cause, and who have been least hurt by the cost of living crisis.

Use story-telling to make them feel something. Remember that people give with their hearts, not their heads.

4.Encourage non-financial giving

I’m not saying that you shouldn’t ask for money. (You should. You need it). But give people the option to give in other ways (perhaps as a retargeting campaign for non-converters).

Volunteers can provide your charity with skills and time which often amount to a higher value than monetary donations. It also opens up a new line of communication for you, helping you to build relationships.

It might be that people give their views to you (rather than their time) helping you to shape the future direction of the charity. Make it easy for people to give you their views.

And think long term – people who have engaged with you or volunteered for your charity will have a deeper connection with your cause, so will be more likely to donate financially in the future.

5.Make it easy to give

This one’s important. And so often overlooked. We live in an online world. People are busy. You want people to give? Money or otherwise. You’ve got to make it easy.

Optimise your online donation journey – once you’ve got people to that donation page, you want as few as possible dropping off. Test your donation journey. Identify any pain points. Rectify them. Measure the impact of your changes by monitoring your conversion rates. Repeat.

If people do drop off (and some will), make sure you’ve got an abandon basket plan in place so that you can tempt back those who were just interrupted and then forgot to finish what they’d started.

The Secret

So that’s it. Don’t overcomplicate it. The secret sauce is in the preparation. Making sure you’ve got the right plans, the right set up, and where necessary, the right automations in place to not only survive, but potentially even thrive. Then when the landscape changes, adapt with it.

Need some help? Feel free to get in touch.