The fundrais­ing cli­mate: a con­sumer con­fi­dence update

Written by
Andrew Papworth
July 23, 2014

The portents for the fundraising climate in the UK over the next year or so still seem pretty discouraging according to the latest GfK consumer confidence survey for June 2014.

Although all but one of the factors they measure are moving in the right direction, the exception is quite an important one. It is shown in the blue line in the chart on the top right recording the balance of positive and negative responses when informants were asked whether they expected their own financial position to improve in the next 12 months.

The good news is that the balance has been positive and on a rising trend between January and May this year. However, the bad news is that it suffered a quite sharp setback in June and that it has not yet returned to pre-recession levels. This is in marked contrast to their expectations for the British economy as a whole (shown by the red line). They are much more positive about this, they just don’t seem to believe that any of the benefits of economic growth will trickle down to them.

Why should this be? They presumably feel that prices are still likely outstrip earnings and that their hours of work and scope for overtime or bonuses will continue to be restricted. They may well fear that interest rates will soon be on the rise taking more money out of their disposable incomes in the form of mortgage and loan repayments. For those who are parents there are concerns about what lies in store for the coming generations and the possible need for the ‘bank of mum and dad’ to help them out. Whatever the reasons, it’s bad news for fundraisers because many people need to be sure that their own needs and those of their families are catered for before being willing to consider donating to strangers.

The second chart on the right – taken from the GfK data – confirms that, compared with pre-recession Britons, people are still in the mood to hang on to their money rather than spend it or save it or, dare I say, donate it. It shows the scale of the problem ­– first the red and blue lines must climb into positive ground and then they’ve got to keep rising for a while.

The trouble is that forthcoming events are likely to add to the uncertainty rather than build confidence. Almost a year of electioneering leading to one of the least predictable general elections for generations won’t help. Nor will the aftermath of the Scottish independence referendum and the forthcoming battles over membership of the European Union. There is also – although the politicians try to avoid the subject – a recognition that the country’s debt problems have by no means been solved and that more austerity is to come.

All in all, charities would be well advised to assume that fundraising will be tough for the foreseeable future and that whichever shade of government gets in next year government funds will be harder to come by. It follows that it would be wise to plan for reduced rather than growing budgets.

About the author: Andrew Papworth

Andrew Papworth

After a long career in advertising agencies, Andrew Papworth has been freelancing as an advertising and communications planner for about two decades.

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