Sector trends

Is cash still king for charities?

The move towards a cashless society has been accelerated by the coronavirus pandemic. But where does that leave charities, and are they ready to meet the challenge?

Pro Bono Economics estimates that the losses suffered by UK charities will be at around £4.3bn for the three months from March, so clearly there is a sense of urgency. In person, fundraising has all but entirely stopped, while major events that typically boosted many charities’ coffers are suspended for the foreseeable future. 

It’s not surprising, then, that a growing number of charities are looking at how they can not only maintain but also enhance and expand their online and cashless channels. This would go towards making up for some of the shortfall, as well as provide new ways of opening up fundraising streams once ‘normality’ returns.

“We’ve seen charities reacting quickly to this change,” says Howard Lake, founder of the online resource and community UK Fundraising. “There is huge change happening, but there are challenges, not least the impact on all charities of the virus – so while cashless giving is growing, that alone will not solve the crisis.” 

And it remains the case that cash collection is the most popular way to donate – 53% of people give cash to charities (CAF – Charities Aid Foundation – UK Giving Report 2019) – but the sector is seeing a concerted move away from cash. Research has shown that in 2018 – 2019, online giving grew by 5.5% (Blackbaud Europe). At the same time, the overall trend shows cash donations falling by 2% (£200m) a year. But there’s a long way to go; even now, only 19% of giving is online via web and mobile, and this rate may accelerate as the impact of the pandemic is felt in months and years to come.

Tap and go

Sophie Brightwell, community and events manger of Christian Aid Week, says the pandemic has brought about a huge shift in how her charity operates, as digital channels come to the fore. “Previously we’ve taken small amounts online, but during this year’s Christian Aid Week, we got £500,000 [digitally], which is unprecedented.”

Brightwell explains that while the bulk of donations are in cash, the strict rules on how that is reported can create an admin burden for volunteers. As a result, she has spearheaded greater exploration of cashless channels to improve efficiency and compliance.

Culture-wise we’re seeing more demand for cash-free options from our volunteers compared to a couple of years ago. Now there’s a challenge around choosing suppliers as there are so many in the market

Lucy Putt
Senior marketing manager at RNLI

“While we were exploring contactless devices, we did a lot of testing and learning about what worked for us, and although our volunteers often ask for a device for street collections, that setting doesn’t work well for us,” she says.  

In fact, she points out: “The best settings are big events, where people are expecting to give, and know who they are making the donation through. Contactless becomes useful there because they can transform a fiver from their back pocket into a £20 or £30 donation.”

Lucy Putt agrees. As senior marketing manager at the RNLI, she has tested different cash-free methods of donation for several years. “That uptake is being accelerated by coronavirus – we’re seeing far higher demands from our fundraisers for options that don’t require handling of cash, and the cultural shift towards using contactless payments is something that we want to be able to offer our volunteers and supporters.” 

Public tastes

Certainly, there is little doubt that public habits are changing. “Eighteen months ago, I was collecting on a bridge in central London and 30% of people said they didn’t have any cash on them,” says Rebecca Mauger, director of fundraising at St John Ambulance (SJA).

Contactless and cashless collection goes some way to addressing that, she says. But adopting and investing in new technology remains challenging in the current climate. “That’s because it’s not that cheap, the costs can vary and you need to be able to invest in new tech and afford the fee, as well as using them,” says Mauger.

Putt has a similar concern. “Integrating the technology so we can quickly deploy units where they need to be and track how much income they’re driving is one of the main barriers we’re up against,” she says.

“Contactless units can be expensive to move around, the governance and security of units is a challenge, and integrating the data in a way that we can report on is challenging. Culture-wise we’re seeing more demand for cash-free options from our volunteers compared to a couple of years ago. Now there’s a challenge around choosing suppliers as there are so many in the market.”

The proliferation of payment methods, such as Apple Pay and PayPal, is an issue for charities, says Adam Bryan, director of partnerships and innovation at the Institute of Fundraising (IoF). “But it’s key for charities to build relationships with donors, and digital giving really helps with that, as does social media. Charities need to make sure they have the right back-end systems to accept all these payments. The data they provide should help them better understand who is giving, why, how and when.”

Investing for the future

Many new tools are emerging to help that effort. NatWest has introduced Payit , an Open Banking solution designed to improve efficiency of online collection, giving greater assurance over security, and driving down donation failure when those intending to give end up dropping out. Mauger, Putt, Brightwell and Bryan represent a new breed of fundraising directors who see the inherent advantages of cashless collection: lower costs, more straightforward reporting and compliance, and the priceless advantage of a whole new slew of data generated via online giving.

The level of understanding around this is growing at the top levels of charities. “It’s certainly true that there are many ‘digital natives’ who are working at charities and rising up the ranks,” says Lake. “Charities, certainly the larger ones, now know much better who their audiences and stakeholders are, and as a result have been moving towards a cashless approach. However, at the same time, cheques and cash remain popular.” 

As for the future, Brightwell believes Christian Aid – and others – must be open to new ways of working. “I wouldn’t say that in five years’ time cash will be dead, but cashless fundraising will continue to rise. The age issue is important. Because volunteers tend to be older, we will probably remain a bit behind – so contactless in shops equals totally normal, while cashless in fundraising means new and exciting. I expect it will continue to lag behind, but cashless is definitely the way it’s going.”

Bryan from the IoF says, “Good fundraising is about connecting donors and beneficiaries and creating impact however it’s done, across whatever platforms. If charities are trusted, people will give, and if it’s easier to give, going cashless represents more of an opportunity than a threat.”

For more information on how Payit can help charities to collect donations, please contact your NatWest relationship manager or visit the Payit campaign page .

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