Charities Face Tough Times in the Post Coronavirus Era

In general, charities struggle to raise funds. Now, after the coronavirus lockdown, charities and non-profits will have even more of a tough time raising funds. Most charities at one time or another have struggled to find donations. Statistics kept over the past 50 years show charitable donations from citizens has been steadily declining. Many factors contribute to this, but the fact remains, without appropriate funding for charitable causes, many charities will fail to survive in the post-pandemic “new normal” era.

During the pandemic, charities and non-profits have been hit from both sides. On one hand, they’re working overtime to mobilize and help those in need. On the other, they’re feeling the pinch of an economy on the brink of recession. As a result, their donation funds plummet, while people need them more.

Furthermore, the enforced coronavirus lockdown has stifled fundraising efforts from both businesses and the public at large. Charitable gifts from corporations are predicted to be hit hard as those donations are often tied to company performance. On the general public side, where about 25 million-plus people are unemployed, charities can expect to see a decline in out-of-pocket donations as well. That hurts because individuals account for 80% of all charitable giving (https://www.Give.org)

It’s not only the out-of-pocket donations that suffer. The money raised at fundraisers and events has disappeared because of social distancing “laws.” The pandemic has fundamentally disrupted the ability to run events and fundraisers, so charities are losing out on the 56% of donors who attend fundraising events regularly (Double the Donation).

Unfortunately for charities, the coronavirus lockdown and the devastation of the once-booming economy are not the only reasons they’re having trouble raising funds. Scammers have already flooded the market with phony fundraising campaigns for emergency response and support efforts, further muddying the water of legitimate, trustworthy charities.

Trust is already an issue for most charities, as fewer than one-in-five adults say they “highly trust” charities (Give.org). A Give.org study found 73% of respondents say it is very important to trust a charity before giving. Charities can establish trust by communicating more often with the public about key achievements and milestones. A vast majority of donors (83%) say, sharing accomplishments (44%) and third-party endorsements (39%) are good signs that a charity is trustworthy.

Building trust through transparency and accountability is a must for a charity’s stability and longevity. Donors want to be involved and keep track of where their donation goes and how it helps. Survey data shows, after a fundraising effort, 59.8% of participants want to know how much total money was raised, while another 44.5% want to know how the funds raised will be used (Institute of Fundraising). Simply sending out a quarterly financial report or a few key examples of how the dollars were spent can make a big impact in earning public trust.

A good tactic for charities today is to treat their donors like shareholders in your non-profit charity venture. Keep them well informed about what’s happening at their favorite charity. Send them personal text messages when you receive their donation. Keep them in the loop with impact stories and reports through email and direct mail. Segment your database by distinguishing criteria, so you know who you’re communicating with. You don’t want to write a hand-written Thank You note to a Millennial and send a Thanks email to a Boomer.

Personally connecting with your donors creates transparency and accountability and will keep them more involved. And that’s good since 79% of people who are involved with a charity or nonprofit also donate to that organization. Almost half of donors (46%) give money regularly to a primary charitable organization, while another 27% regularly give money to a secondary organization (Gallup).

While the effects of the coronavirus lockdown are still unknown, 80.5% of charities anticipate that their 2020 revenue will be lower than expected (Give.org). However, recent history tells us charitable giving will worsen over the next two years. The economic downturn of 2008 resulted in one of the worst year-over-year declines in charitable giving since the late 1960s. Total giving in 2008 fell by 3.7% and continued through 2009 when it dropped another 8.3%. It wasn’t until 2010, when charities felt a slight increase of 1.3% that spilled over into 2011, which saw about a 1% increase (Stanford University Study).

The news is not all bad for the future of charitable giving. Americans are resilient and their generosity has shone through during tough economic times before. After the 2008 recession, philanthropy bounced back at a much faster rate than experts predicted (CCS Fundraising). Some poverty-based charities even thrived, as their needed services increased.

So, as some charities struggle to weather the coronavirus storm and wait for businesses to open and people to get back to their lives, it’s more important than ever to stay in touch with your donor base. Give them an update about how you’re surviving the times and ask if anyone needs service. Start a conversation and answer some questions. Send updates with success stories, achievements and plans for the future. Nearly 60% of younger generations agree that seeing the impact of their donation significantly affects their decision to give (Blackbaud Institute).

Creating a personal connection with your donor base, while being completely transparent, will allow charities to overcome the pandemic and the uncertain times ahead. When donors feel their gift has a direct impact on improving a cause they believe in, they feel empowered. So, share specific results and case studies about what their gifts support. Give donors confidence by providing them information about what donations are used for and show them what your efforts are accomplishing as a result of their donations. Building a community of support through relevant communication and results-based reporting can go a long way to not only increasing your donors, but keeping your current ones.