What do donors demand from charities?

Charities are not impervious to the current era of consumer scepticism. From a political environment of ‘fake news’ to high-profile charity scandals involving household names, the public is ever-more cynical in its attitudes towards established organisations, including charities.

In 2016 the Charity Commission released its report into the public’s falling levels of trust and confidence in charities. This was due to “critical media coverage of charity practices, distrust about how charities spend donations, and a lack of knowledge among the public about where their donations go.”

It’s not surprising that donors expect charities to spend wisely and demonstrate impact. The changing face of the UK’s wealthiest donors is also leading to a change in donor expectations when it comes to businesses practices and innovation.

The Sunday Times Rich List in 2017/18 is now dominated by the self-made rather than those who inherited their wealth, as it was two decades ago. These new philanthropists have built wealth through successful business ownership or business investment. As such these individuals have different expectations of charities, and of giving.

In a survey of wealthy donors 87% said that sound business and operational practices of a charity helped to determine which to support. 62% also expected full financial disclosure. In a recent publication “Charities in a Dynamic World”, Cass Business School acknowledges that “Many charities have ‘products’ that are ageing. They need to innovate for the future”.

This drive for innovation, good governance and transparency driven by a new breed of philanthropists, is echoed in the wider commercial sector.  Over the last five years innovation has seen commerce redefined by the digital revolution and gig-economy. Those organisations that have thrived have done so through innovation and measured risk-taking.

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Donors are now demanding the same ethos of innovation from charities. Unlike commerce however, the risk profile of this innovation must be very carefully balanced. As Amy Brettell, Head of Charities and Social Organisations at Zurich says, “risk should not be feared - if understood and managed correctly it can create great opportunities and breed innovation.

Risk-awareness is vital in the giving sector. Charities owe donors an impeccable level of care and diligence in their financial dealings. That’s Citizen Heart’s mission - to enable charities to enjoy the rewards of innovation.

We understand the delicate relationship between donors, fundraising, investment, and risk and enable charities to demonstrate innovation within their financial strategies.

If you want to explore strategies that answer donor demands for innovation why not get in touch, or read more?