Britain, battered by cuts in the National Health Service and education, has been transformed from a nation of shopkeepers into a nation of local fundraisers – and the big charities don’t like it very much.
This is the view of Save the Children’s director of marketing, John Kingston, who has witnessed his charity losing 9m in jobs and projects because of a sharp decline in income during the past year. Furthermore, he believes that most of his competition comes from the plethora of local cause charities which have sprung up in recent years.
According to the National Council for Voluntary Organisations (NCVO), 13 per cent fewer people gave to charity in December last year, and 11 per cent in January this year.
Charities are being pressed from every side. Last week, the RSPCA was reminded by the Charity Commission that it could not campaign against activities, such as vivisection, which are considered to benefit mankind. Exclusion from this field essentially reduces the charity’s role to concern with animal welfare.
Oxfam, one of the country’s most successful agencies, has just announced aid cuts and at least 50 job losses, to make up a 5.6m shortfall in its 1995/96 income.
The Royal National Lifeboat Institution, which receives about 70 per cent of its income from legacies, has seen such donations drop by about 10 per cent during the past two years. The stagnant property market and increasing need for the elderly to tap into their own savings means the decline in legacies is likely to continue.
And just to top things off, last November’s Budget cost charities dear when the Inland Revenue cut tax relief. This little-publicised fiscal tweak means that any fundraising undertaken with the co-operation of businesses are in danger of being taxed.
Save the Children’s Kingston says charities are having to rethink their marketing strategies: “We are operating in a rapidly changing market and we are having to change with it. Not only are we competing for a disposable pound, we are also having to react to the intense competition created by the profusion of local causes. It is amazing that people will raise money for a local hospital, which is part of the NHS,” says Kingston.
Larger charities, according to Kingston, which normally rely on legacies or overseas crises such as Rwanda or Bosnia to sustain giving levels, are facing the greatest marketing challenge.
“The only way forward for charities is to build a constituency of support around their particular brand. In other words, our charity has to build a constituency of support from people who are concerned about children.
“The environmental and pressure groups have led the way in this field. For example, you believe in the work that Amnesty does, so you belong to Amnesty,” says Kingston.
Director of marketing communications at Barnardo’s Charles Holden says the charity sector is undergoing a “substantial metamorphosis” and that charities are having to face the fact that the general level of philanthropy is down compared with the “feel-good” times of ten or 15 years ago.
Holden believes charities and the corporate sector are facing the same issues: “We are constantly having to look at what the market is about, who our customers are and whether we are meeting their needs.
“People are becoming less enthusiastic about dropping coins in tins and we are having to understand more about what the public might want from its relationship with a charity,” he says.
Few of the larger charities have pointed a finger directly at the National Lottery as the instigator of their woes, preferring to blame the general economic climate.
An exception is Oxfam’s deputy director John Whitaker. Unlike other charities, Oxfam relies heavily on its retail outlets in which, according to Whitaker, it has been unable to raise prices for three years.
“No one can tell me that if you take 2bn out the pockets of consumers each year this will not have an effect on other areas. Casual giving is under great pressure, as is the retail trade generally – which is a double whammy for us because we rely on both,” says Whitaker.
Whitaker refuses to believe that donor fatigue has anything to do with the downturn, citing record takings during the Rwandan and Bosnian crises.
But therein lies the key to the issue. The public may dig deep during a time of crisis, but there has to be more to keep them loyal to the Oxfam brand.
By contrast, the RNLI, although it has problems with legacies, is witnessing an increase in fundraising income because it represents a cause rather than an organisation. It has its crucial constituency of support that charities like Oxfam and Save the Children are going to have to find.