In the midst of a drawn-out recession, fundraising challenges are often exacerbated. Susan Fogarty looks at how New Zealand nonprofits have coped during 2010 and how 2011 is shaping up.
In the midst of a drawn-out recession, fundraising challenges are often exacerbated. Susan Fogarty looks at how New Zealand nonprofits have coped during 2010 and how 2011 is shaping up.
The recession has tested nonprofits and fundraisers in the land of the long white cloud, with many reporting initial declines in giving or a drop off in regular donor numbers. But as the year steadied itself – the silver lining began to show.
Presbyterian Support communication and fundraising director, Lisa Wells, says “it’s been an extremely difficult year for fundraising in New Zealand, but our strategy to ‘stay the course’ and concentrate on areas in which we can retain and improve donations has proven to be the right one.”
Jim Datson, executive officer of the St John Central Region agrees. “Donors are becoming more discerning, so those with a strong case and good track record of finance management and accountability tended to fare better, with some enjoying a lift in support.”
Wells also senses optimism in the sector, noting that donated income increased by 16% while donor frequency was sustained with some donors giving at a higher level.
Brighter days ahead
This upswing is echoed by chief executive officer of the Bethlehem Foundation, Peter Wyatt, who believes they’re moving out of the recession, but they have worked harder for each dollar raised. “Giving to the foundation didn’t decrease despite some regular donors dropping away. We will stay tight and tough, needing innovation and to be specific in targeting.”
The silver lining is not a rainbow; reduced levels of funding from charitable and gaming trusts won’t return immediately and, as such, organisations need to be strategic. Wells agrees: “We recently purchased a new database and this has caused us to interrogate the data more usefully than we have done up to now.”
Law changes
Changes in legislation, including the introduction of payroll giving and recent tax changes are additional factors for fundraisers.
Fears payroll giving, introduced in 2009, would impact strongly on the sector have not been borne out. Wyatt says the effect of payroll giving has been “limited”. Managing director of FundraiseOnline, Nigel Sanderson, says payroll giving uptake has been slow – “internationally the trend has been this way over the last 20 years wherever it has been introduced.”
Not all fundraisers are sold on payroll giving. Wells believes “the anonymity of the donors is a problem as we have no way of providing feedback on the purposes to which their donations are put.”
For fundraisers, retaining a donor you have no connection with is challenging. Not knowing why the donor gives makes it difficult to form a program around their giving.
Other changes include the April 2009 adjustment to tax credit claims, which allow donors to claim back 33.3% of their total donation, or 33.3% of their taxable income (as opposed to a maximum of $500 before 2002, and $630 before 2009). Nonprofits are not yet feeling the flow-on effect, but believe donors will reassess their charitable giving once the recession has fully run its course.
Tax cuts offset rise in GST
Tax cuts came into effect on October 1, 2010, and most fundraisers agree it’s too early to predict what effect they will have. Many nonprofits are hopeful it will offset the 2.5% rise in GST. James Austin, chief executive officer of the Fundraising Institute of New Zealand (FINZ) says tax cuts should reassure organisations that donors can still give. “The average family will be $25 better off a week.” He believes organisations should be communicating with donors, assuring them the perception they will have less to spend isn’t correct.
Online giving – gathering pace
Other forms of giving seem less affected by the recession. Sanderson says nonprofits are getting the message about online capability. “We’ve noticed a real shift away from more traditional methods to some great new innovative donations online.”
FundraiseOnline has seen significant growth. “Our year on year comparative puts us well over 60% ahead of last year and we’re continuing to see large numbers of nonprofits signing up.” Sanderson believes attitudes of people towards online fundraising methods are changing, with people becoming more comfortable transacting online with trusted service providers.
Face-to-face takes steps forward
Face-to-face fundraising (F2F) is still relatively new in New Zealand, but in the last year it has taken significant steps forward. The Public Fundraising Regulatory Association (PFRA) is an incorporated society made up of nonprofits in New Zealand that conduct direct dialogue.
Community relations manager of the PFRA, Clementine Ludlow, says more nonprofits are signing up.
She considers it one of the most effective forms of fundraising. “With our new code of ethics encouraging transparency and stronger regulating procedures, we’re hoping to eliminate some of the challenges we’ve faced in the past.”
2011
Fundraisers agree that although the recession has almost run its course, they’ll need to remain wary; the lessons learnt still need to be put into practice for the coming year. Austin contends that the high quality of professional fundraisers in New Zealand has helped organisations ride the recession wave without too much damage.
While challenging, the last 18 months have also been an opportunity to take stock, manage funds better and direct services in more efficient ways. The fundraising machines that have survived the recession have become lean and mean, taking valuable lessons into 2011.
