Challenges for small charities as big fish get bigger

One of the most comprehensive surveys of charitable giving has just been published and shows a picture of increasing donations being fought over by fewer and fewer charities.

The biennial Mintel survey shows overall charity income is up – the total annual income of charities grew by 48% between 2004 and 2009 whilst the average income per charity rose by 56%.

But, at the same time, the number of charities in operation has shrunk sharply – there are now 17,000 fewer charities than there were six years ago, according to Mintel who interviewed 2,000 people for the survey.

Swallowed up

It seems the extra money is mainly down to an increase in size of the major charities, those over £10m – the ones we’ve all heard of.

On the flip side, of course, this means that less money is going to smaller charities – and indeed some are unable to continue operating or are swallowed by the bigger charities.

The larger charities appear to have grown into leviathans, swallowing up the small fry or hoovering up all the available resources for themselves and starving their smaller competitors out of existence.

This is probably a little harsh on the bigger charities – some of whom are my clients and probably wouldn’t appreciate being compared to whales! But the analogy is apt, as while the large scale of the bigger charities will inevitably give them greater strength, the relative tiddlers have their advantages too.

Small but perfectly formed

One of the key issues for donors uncovered in the survey is the knowledge – or lack of it – of how the money is spent, particularly how much of their donation goes directly to the good work of the charities.

It’s no surprise then that those charities who have a trusted brand (and brand recognition is all about trust) are more easily able to persuade people to part with their money.

A small charity, without the marketing resource of a big name organisation, can’t expect to get anywhere near the same brand recognition. But what it has over the big fish is it’s agility.

Rather than focusing too much of their resources on measures like increasing brand recognition, smaller charities need to focus on starting, and then maintaining, direct relationships with individual donors.

They need to identify very specifically who is likely to donate to them, then look to engage with those people directly and as often as possible.

Giving more

Social media is a very good way of doing this. Whereas a major charity – even with its resources – may struggle to keep up with the thousands of people following them on Facebook, Twitter etc, a smaller charity will probably be in a better position to use social media as it should be used – for having conversations.

The smaller charity might have fewer people following it, but if they get a better, more personal experience – including telling them, and showing them, exactly where there money is going – then they are more likely to go on to be long-term and regular donors.

This is borne out by another recent survey by the Network for Good, which showed social media fared less well in getting donations from supporters than a branded donation section on a website. The reason? Probably because while donors are getting the messages and engagement needed to prompt them to give on the website, they are not getting it from social media. It’s not the platform – it’s how its being used, and smaller charities are often best placed to use it best.

The same applies in other forms of marketing – whether on the street or through the mail or in print – go after a smaller, more specific, group of donors and work hard to form a lasting relationship with all of them.

There’s plenty for smaller (and bigger) charities to be optimistic about – more than two thirds (68%) of adults have donated to charity in the last year and 83% plan to donate the same or more over the coming year.

So giving is on the up – and it’s up to the smaller charities to make sure they get their share.

  1. A key factor here is also the proportion of the charities income that comes from direct ‘consumer’ fundraising as opposed to grant income. This doesn’t undermine the point you make about smaller charities being squeezed but would shed more light on the market share angle you explore.

    Andy Pearson

  2. What’s up, just wanted to say, I enjoyed this blog post.

    It was helpful. Keep on posting!

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