Growth is on a downward trend for growth in the sector with the percentage of nonprofits seeing their income increase dropping for the fourth consecutive year, according to Blackbaud research.
Now in its fifth year, Blackbaud’s The Status of UK Fundraising Report provides a view of fundraising in 2022 through a survey of 1,000 charity professionals along with insight for charities looking to benchmark their performance.
Among those surveyed, 32% said their organisation’s income had decreased in the last 12 months, although this is down from 40% the previous pandemic year of 2021.
Reasons for income rise & fall
Where there was a decrease in income, the pandemic was the main driver, followed by organisations not being adequately resourced to grow income, existing supporters giving less, the previous year’s income being boosted by exceptional or unplanned activity, and organisations not having enough people with the right skills.
The main drivers given for income growth were receiving exceptional gifts (38%) and receiving more income due to the pandemic (35%). 25% however said doing new and different activity was a driver, and 23% said an increase in donors was also a driver.
Post-pandemic, grants, trusts and foundations, and individual giving are all contributing more now, while event fundraising and community giving are contributing less than pre-pandemic times.
Optimism in being able to deliver services and thrive is also decreasing. In 2021, 83% said they were optimistic that their organisation will be able to deliver services in the next 12-18 months, dropping to 77% in 2022. Last year, 60% of organisations were optimistic they would thrive, and this has now fallen to 48%.
Overall, the economic situation is the main concern for UK nonprofits, while recruiting and retaining fundraising talent is also becoming more challenging. While in 2020 17% said this was an issue, 42% now see it is one of the main challenges facing the sector in the next 3 years.
Some good news
Despite the declining income figures, 31% of organisations reported that they had exceeded their fundraising targets, a slight rise from 2021’s figure of 29%, and 25% said they just met it, up from 21%. Almost a quarter (23%) said they failed to reach it.
29% of those surveyed also say they are gaining more supporters than they are losing, and 48% say supporter numbers remain consistent. Only 15% of organisations say they are losing more supporters than they are gaining.
More than half now say they are investing in technology, with the 32% reporting an income increase among them. Two-thirds (67%) now say they understand how technology can help, however only 35% believe they are getting the most out of it.
The report notes that charities that are fully utilising technology are more collaborative, more likely to be digitally mature, are committed to ESG, and are gaining more supporters than they are losing.