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Even charities feel the downturn

A recent Charities Commission report found that one in four charities have seen a drop in donations in 2008 while one in 12 is experiencing severe financial trouble. It is easy to see why this is happening and it’s a sad fact of the current economic times. Consumers are simply being squashed from all directions: council tax, utility bills, increasingly useless exchange rates, and now, that festive wallet-killer we call Christmas. How can a consumer realistically be expected to give to charity at a time like this?

Likewise, charities have always operated on a knife-edge when it comes to finance. Even more than the public sector, spending on the maintenance of a charity organisation (apart from the big ones) is usually as minimal as possible. In philanthropy skimping and saving on costs means that more can go to the cause, which after all is what its all about.

While this is great in the good times, it’s exceptionally dangerous in the bad times. The ‘seat of the pants’ mindset, has created an industry that is hyper-sensitive to falling consumer spending. This is why the downturn is so dangerous for charities and why a report at the same time next year is liable to look a lot worse. As with the private sector, the ongoing crisis will undoubtedly see the end of many charities.

But danger, as I always say, tends to breed innovation, and some charities are really stepping up to the mark. The importance of new charity initiatives and creating new routes to donation cannot be overstated – donations are their lifeblood and flow must be maintained.

The 2008 saw some great new ideas come to the fore and this year should see even more donation innovation as charities do their best to stay afloat:

Give4Free for example, lets people shop and donate to UNICEF

Freerice.com lets you donate rice by getting quiz questions right

Valued at Oxfam let people donate unwanted valuable gifts like antiques

While it’s clear there is no panacea for charities’ problems, it’s a great sign that the world’s charity organisations aren’t going down without a fight. The more ways that charities can drive extra donations and give cash-strapped consumers opportunities to continue their support, the better chance they have of survival. After all, it seems that just rattling the old collection box, simply won’t work anymore

Comments: (3)

Paul Penrose
Paul Penrose - Finextra - London 19 January, 2009, 14:55Be the first to give this comment the thumbs up 0 likes

You forgot to mention the TARP fund for distressed banking executives

Albert Drouart
Albert Drouart - Digital River World Payments - Boston 20 January, 2009, 18:05Be the first to give this comment the thumbs up 0 likes

In the US market it is interesting what Obopay is doing with their product/service to facilitate donations.    They've created widgets that can be embedded in the major social networking sites allowing people to donate directly. 

Here's the Obopay link:  https://www.obopay.com/consumer/GetWidget.do

 

A Finextra member
A Finextra member 22 January, 2009, 17:58Be the first to give this comment the thumbs up 0 likes

Obopay looks like a great idea. There seem to be loads of excellent charity innovations turning up at the moment.

Thanks for the TARP comment Paul, everybody needs a bit of charity in times like these ;0)