Shifting the cultural dial with Philanthropy
According to the 2024 CAF report, there are 4 million fewer people giving than 5 years ago. The charity sector is an increasingly competitive market. Growing rates of inequality meaning that people aren’t able to give as much. Organisations are competing for attention from a smaller pool of donors.
This coupled with cuts in funding across the sector, for example with USAID, means there are increasingly bigger holes in charity funding.
But there is one area that currently offers huge headroom for growth:
High Value Giving.
High Value Giving/Major Gifts/Philanthropy, whatever you call it, allows an individual with a higher disposable income to deliver transformative impact to an organisation during a time when mass fundraising is contracting.
There is a much stronger culture of philanthropic giving in the US and Australia. UK has much lower rates of high net worth giving. But learning from other markets affords us tremendous growth potential in UK.
The recent CAF High Value Giving report estimates that UK millionaires are donating nearly £8b to charity. But the potential for high net worth giving could be up to £19.9b. This means an estimated £12b more going to good causes. For organisations to unlock this transformational potential, we need to create a culture change in philanthropic giving.
At GOOD, we work with charities and not-for-profits to help shift the cultural dial.
Here’s three things organisations can do now:
1. Understand your audience
Tailor your proposition to meet your audience’s mindset and motivation for giving will help grow your audience. For example, Climate change is top of the agenda for many philanthropists, with a 25% rise in philanthropic giving to climate change mitigation (compared to 8% rise in 2021). Beyond direct giving to climate charities, philanthropists are adding a climate lens to all giving. As an audience, they understand the relationship between different global issues well and organisations need to think about how they tailor their propositions to grow the audience.
2. Be loud & educate
The wealthiest in the country are giving a much smaller portion to charity than the general population, as uncovered in the recent CAF High Value Giving report. However, in research, many potential donors say they typically see low level cash asks from charities, which don’t encourage nor motivate them to give higher amounts.
We need to speak up more about the impact of high value donations to inspire greater levels of giving. Creating bespoke asks that give HV donors the opportunity to make a truly transformative impact on an organisation should become core focus.
3. Stay relevant
To keep high value giving relevant, organisations need to give prospects a variety of preferred methods of giving. Charities that present themselves as part of a coherent financial ecosystem, up to date with wealth management legislations will appear attractive. Those that innovate to allow new ways to give, and promoting direct and greater impact, will benefit most. A great example of this is that this summer, the Tate launched an endowment fund known as Tate Future Fund to secure its long-term future. This is an exciting step inspired by a US model that will enable high value givers to be part of current cultural moment.
