Lack of innovation in charity sector could restrict future growth
UK charities are in danger of missing out on growth opportunities due to a lack of innovation in the way they accept donations. According to new independent research commissioned by Barclays, 20% of charities in the UK do not have the facility to accept online donations, despite the majority of these charities (61%) being of the view that online donations will continue to increase over the next three years. For over 90% of charities, ease and convenience of transaction is the main perceived advantage for people donating online.
The report shows that as well as missing out on online business, over a third of charities (38%) are unable to accept donations via text, with a quarter of these (25%) saying it is not relevant for their charity or their target audience and 15% saying they haven’t even considered it. A further 16% say they just don’t have the time or technology to implement the facility.
Within the charity sector in general, offline donations still dominate across the board; 79% of donations are made this way with the highest number of charities accepting donations by cheque (95%) and cash (87%). However, the majority of UK charities (78%) think that the number of online donations will increase over the next three years, and encouragingly, of those charities which cannot currently accept donations online, one in four are in the process of introducing this facility.
Yet, 17% of charities surveyed think there will not be a change in the number of online donations over the next three years, which may be a result of 48% of them seeing a lack of a ‘computer savvy’ donor base as a major barrier. One in ten (11%) charities which do not currently accept online donations say there are too few potential donors to justify introducing the facility, while another one in ten (9%) say it is just too expensive to implement.
Of those charities which do accept online donations, it’s interesting to note the prominence of third party sites when processing donations, with 89% of charities receiving online donations doing so via this method. Over half of charities think that the next three years will see more people donating this way and it looks as though ease and convenience may be one of the driving factors in this. A third (33%), however, think there’ll either be no change or a decline in charities relying on third party websites, predominantly in order to cut out the middle man and to avoid paying fees.
Adrian Doran, Barclays’ Head of Corporate Banking in Northern Ireland, commented: “The rise of online across all business areas, including the charity sector, is very hard to ignore. Over the past few years, online charitable campaigns like the ‘ice bucket challenge’ for ALS, or the no make-up selfie in aid of Cancer Research have seen resounding benefits from online engagement. So it’s surprising to still see that a fifth of UK charities appear resistant, particularly as most are in agreement that online fundraising is the way forward and that their supporters are more likely to donate online.
“Those charities without the ability to process donations via text or online state it is because not everyone uses the internet or has access to a computer. While this may be the case for some now, more and more people are growing accustomed to online and this will only increase. Our research shows that around one in ten mobile device users are making mobile payments, highlighting how such new technology is already being adopted1. Enabling donations via text and online can also draw in younger donors who might not have given to charity before as our research also shows that 64% of 25-34 year olds predict that they will use mobile devices more regularly for m-commerce over the coming years1.
“The charity sector believes there will always be a place for traditional fundraising alongside online. However, organisations that fail to embrace online and mobile payments risk limiting their fundraising potential and could restrict future growth”.
When examining the manner in which different charity sectors approach innovation, those charities which function within arts, culture and religious arenas in particular are behind when it comes to accepting donations via text, with just over half (51%) equipped to do so, compared to 71% of those charities dedicated to health, rehabilitation and disability. However, when looking at the broader picture, receiving donations by cheque still dominates across all areas of focus.