Retail income in 2020 was dramatically hit by Covid-19, but charities were able to regain retail income when shops reopened, a report finds.
Charity Benchmarks Covid Impact Monitor compiled by Freestyle Marketing, a fundraising consultancy run by Allan Freeman, takes data from a total of 15 charities.
Participants included RNIB, Battersea, Oxfam and other household name charities. The research notes some limitations when it comes to the number of charities involved, as it is a relatively small sample.
Data is collected over a rolling quarterly analysis which compares the calendar quarter of 2020 with the corresponding quarter of 2019.
The report is based on data for quarter one to quarter three of 2020, January to September, and will be updated with quarter four data when the analysis is complete.
The research tracked £1.47bn of income in 2019 across four quarters and £912m in the first three quarters of 2020.
The report begins: “It’s difficult to talk about the past year without lapsing into cliché. As fundraisers, we’ve seen crisis, opportunity and innovation on a day-to-day basis.
“The way we worked – as individuals and teams – changed overnight. And probably forever. Amid this turmoil, it has been difficult to get a clear picture of the impact of Covid-19 on the fundraising sector as a whole.”
Dramatic impact on retail
Income dropped significantly in quarters two and three of 2020, but not all income streams were affected in the same way.
Charity retail income took an immediate hit when lockdown began. In quarter two, year-on-year retail income dropped by over 90%.
This is “by far the most dramatic impact shown in this report”.
Nonetheless, after the first lockdown ended, retail income bounced back immediately and in quarter three the year-on-year drop was 35%.
For those in the survey, in the first quarter of 2020 retail income was higher than 2019 (£78m v £71m).
However, in the second quarter, when shops were closed, it fell dramatically to £5m, compared to £93m in 2019.
In quarter three, when there was a relaxation of lockdown rules, retail income was £64m, compared to £99m in 2019.
Individuals 'sprang into action'
In quarter two individual donors “sprang into action” to support causes as an immediate response to the crisis, despite retail and events income near disappearing.
The report finds corporate giving also surged in the participant set, “although this was driven by a small number of very high gifts, so we should not assume that it shows a sector trend”.
Despite this, the gap between 2019 and 2020’s income widened as the year went on. As income fell so too did spend. Face-to-face recruitment and events across fundraising were the biggest drivers of this drop.
Decreasing spending did not make up for the drop in income for participants, so net income also fell.
Furlough and redundancy
In quarter two of 2020 over 50% of fundraising staff were furloughed at organisations which participated in this report.
Many of these staff were employed in retail, but this is still an extremely high number given that the national average furlough rate to June 30 for organisations with over 250 employees was 19%.
This number did reduce in quarter three as the national lockdown ended, “but it is likely to continue to vary as further lockdowns are implemented, shops are closed and furlough is extended further”.
The report states that conversations with charities were “on the whole were more positive than we might have expected” yet “a black cloud in the form of recession, unemployment and government funding cuts” hangs over the future.
Emergency appeals and funding
On emergency fundraising, the report says: “Emergency fundraising is, by its nature, entirely dependent on external factors. So year-on-year comparisons aren’t particularly useful and it is probably not surprising that income quadrupled compared to 2019. But that huge jump conceals a fascinating story.
“In previous years, this category sat almost entirely with overseas charities and was driven by the need for specific interventions in specific situations. But 2020 saw a range of domestic organisations launch ‘emergency’ appeals which covered both specific Covid-related work and the need to maintain funding in the face of the crisis.”
In the second quarter of 2020, there were more than 95,000 active emergency funding donors compared to around 29,000 the year prior.
‘The collective story we are telling is really important’
Alex McDowell, head of public fundraising at RNIB, spoke at a webinar discussing the report and encouraged delegates to get involved with the next wave of the benchmark project.
He said: “While the data is really valuable to individuals, actually the collective data and the collective story we are telling here I think is really important. It can really highlight the issues across the sector of Covid-19 or other external or environmental or legislative change in the future”.
He added: “What we have here is really hard quantifiable data alongside all the anecdotes which are really important too.”
McDowell said RNIB are able to use data to make decisions about where their organisation can improve or where they have unique opportunities and strengths.
“More participants means more data and more comparisons” which allows for even richer decision-making.
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