What is it?
We've reached the end of our fifth Paradigm Shift on the future of funding. To help wrap everything up we've collated a series of 'so whats' to act as both short term forecasts and start points for innovation.
We're not going to shy away from the reality that the next few years are going to be hard. As innovators you have two choice: you can batten down the hatches and try to ride out the storm, or you can choose to stay open, involved, and active in innovation in order to emerge stronger and ready for what's next.
Because when the storm ends (and it will end), the funding landscape may look a whole lot different.
“I like the cover," he said. "Don't Panic. It's the first helpful or intelligible thing anybody's said to me all day.”
Douglas Adams, The Hitchhiker's Guide to the Galaxy
The next 2-3 years are going to be tough for everyone
By 2023 fuel costs for some households may have quintupled (or more) from where they were in 2021 and more than 50% of UK households could be in fuel poverty by Christmas 2022. Inflation is forecast to hit 18% next year, whilst the government is currently more focused on its own popularity contest than fixing the cost of living crisis. We’ve lost precious time to put in meaningful policies and levies to save lives this winter.
Civil unrest could be on the rise
Police forces are preparing for increased social unrest in the coming months. From people refusing to pay bills, to protests about the cost of living.
"We need to keep people fed. We need to keep them warm. If we get this wrong right now, then we get to the point where we start to risk civil unrest. When breadwinners cannot provide, anger brews and civil unrest brews - and I do not think we are very far off." - Martin Lewis
Standing still is going to cost more
The cost of doing business and simply standing still is going up. And up. And up. And up. Businesses and public spaces do not benefit from the fuel cap. Those warm spaces the government is relying on to keep people alive during winter may be forced to close their doors as they can’t afford to keep the lights on. Literally.
Your services are likely to be in more demand, but the cost of providing these is increasing.
Supporting your teams
In June this year the Living Wage Foundation reported that over 14% of charity sector jobs pay below the living wage. As the cost of living continues to increase, as employers how do you best support your people? Increased salaries mean additional costs in an environment where fundraising is expected to face significant challenges.
Plan for the worst now
Income might be holding up at the moment, supported by legacies and partnerships, but previously bankable products like sponsorship, mass participation, lottery and gaming are struggling. With rising costs, services teams are going to need you to raise more just to stand still. Plan and prepare for the worst, and then plan again.
Invest in innovation
We know from previous recessions that charities that disinvested in fundraising performed worst in the long term. Ensure your innovation foundation is strong. Build on your supporter relationships. Invest in engagement and storytelling. Keep thinking about the future, not just firefighting what’s in front of you. Because this crisis will pass. So be ready to step into the new landscape when markets recover. By building the foundation for post-crisis growth now, you’ll remain competitive in recovery.
Don’t be afraid to fail and fail fast
Don’t be afraid to fail, just fail fast and cheaply. Innovation can not exist in an environment where ideas and theory can not be tested. If you fail to innovate you will eventually fail to thrive.
Data data data
Utilise every touchpoint you have to gather insight about supporters and beneficiaries. Having as much live data as possible will help signal new patterns of behaviour.
Cash in on the decline
However, with the increased cost of living we’re seeing more and more people go back to old school, analogue savings and budgeting (cash, small change and envelopes) to help get through the crisis.
Contactless and digital is the new default for many
Only 37% of Gen Z carry cash. But you can still deliver in person collections through contactless technology. Don’t miss out on donors by limiting the payment mechanics.
You’re missing out on donations
By not accepting crypto you're missing out on potential income. Go in with your eyes open & weigh up the risks. Educate your trustees on the pros and cons. Do you research and put the right policies in place to manage anonymity, volatile markets and reputational risk.
Crypto donors need new journeys
Recognise that these new donors will probably want a whole new approach to thanking and engagement. Don’t try and force them into standard journeys.
Charity retail is having a moment
If you have bricks and mortar stores, make the most of them. From Gen Z trend setters looking for some 90s fashion, to shoppers looking for a bargain there are new customers keen to support your sites.
The e-commerce revolution has arrived
Consumers expect a seamless online experience, no matter the retailer. Invest and refresh your online shopping experience.
Corporates are questioning the value of charity partners
Be clear on your USP. Be human, be bold, be focused, be specific and showcase the value you bring. Great partnerships are built on mutual appreciation and trust.
Remember the 5 Ps
Purpose - Why have you come together? What’s the change you want to create? The impact your creating together needs to be scalable
Plan - You need a roadmap to put your action plan into place. It’s not enough to just do good. You need to show measurement and governance, underpinned by a plan
Platforms - Corporates have access to platforms, assets and customer bases. Think creatively about how you can leverage those platforms to deliver change e.g. swapping brands on a football shirt
People - Magic happens when people come with the right mindset. Your CEO could be your star player - get them involved. Culture can’t be underestimated - don’t slow down change with governance and risk management
Partnership - Co-create a shared ambition to deliver change. This needs to be a shared vision, not one led by either party.
Turn the tables on corporates
Move away from ‘charity’ partnerships and into business ones. Invite corporates to pitch on how they can contribute to solving your mission.
Untapped potential
Charities are sitting on billions of pounds of potential income by exploring and leveraging their assets, skills and capabilities to create new commercial innovations.. What makes your organisation unique? What skills do you have that could serve a new audience, market or problem? Where’s your opportunity to turn your mission into money?
New approaches to risk
New approaches to income generation require new thinking, new models and, probably most importantly, new approaches to risk management and governance. Risk needs to be approached differently and analysed differently. How can you support your key decision makers (your board and trustees) on this journey?
Getting the right talent on board
Entrepreneurial talent needs different models of incentivisation and management. Don’t suffocate great people or great ideas by forcing them through the mill of standard charity governance, risk and people processes.
Which hat do you want to wear?
Be clear on the role you want and need to play in commercial ventures. Finance trustees may want to be able to sit in on venture board meetings, but do they really need to? How much autonomy do you want to give? How can you build the right ecosystem to ensure owned ventures can thrive? There are multiple hats you and your organisation can wear. Be clear on which ones are and aren’t appropriate.
Invest in others
Invest in others to help scale their mission ventures. You could follow Crisis’ lead to build a venture studio to source, support and invest in ventures that align with your mission. Or you could partner with organisations like Zinc to spread the risk of investment through a fund.
Entrepreneurs want to work with you
Entrepreneurs are looking for partners and experts to help test, validate, grow and scale their startups. Charities have access to these knowledge and insight pools. Don’t fear working with entrepreneurs. They need and want your help.