The effect of the pandemic on charity fundraising
In many cases the Covid-19 pandemic has had a negative effect on charities’
finances and operations. Many charities will have experienced an increased
demand for their services, coupled with a loss of fundraising income.
Charities have not been able to hold their usual in-person fundraising
events or activities and, even though running virtual events has helped to
an extent to bridge the income gap in the charity sector, it is clear from
a Charities Aid Foundation report in October 2020 that many charities
suffered a big drop in donations in 2020.
Whilst there may be grants available from Government or grant making
charities to assist a charity’s finances, whether related to the impact of
Covid or other types of grant, their availability may depend in practice on
the particular nature and circumstances of each charity.
The Government is pursuing a “levelling up” agenda, but it appears from
research that there is unlikely to be enough funding directed at charities,
in particular because much of it will go to hard infrastructure projects
(e.g. roads and buildings) whilst ignoring social issues.
These negative effects on many charities have certainly been bad news, but
there was some good news. Whilst many charities lost out on donations, the
level of donations to the charity sector as a whole appears to have risen
significantly during the first half of 2020. Over the last few months it
seems that the level of donations has remained stable and, in the
circumstances, at a relatively good level. All being well, the second half
of 2021 should see continued stability in the level of donations. From
mid-April onwards, as Covid-19 restrictions are reducing, charity shops can
re-open, door to door, private site and street fundraising can resume and
in-person participation events can return, all of which will provide some
much-needed fundraising opportunities.
Many individuals have been able and have chosen to continue to make
substantial donations to the charity sector since the lockdown in March
2020. What factors may explain this:
(1) Some donors may be motivated by their awareness that charities have
suffered during the pandemic and that they need donations more than ever.
(2) Some individuals may be fortunate not to have suffered a loss of
earnings or savings during the pandemic, and so have been able to make
donations from their income or savings.
(3) Those in receipt of a reasonable level of income or with existing
savings have not had many opportunities to spend on travel, entertainment
or other things since March 2020, as they would normally have done. Their
outgoings fell from that date onwards and they were able to donate to
charities as easily as, if not more easily than, before March 2020.
Fundraising in the medium/long term
Going forward, what might charities do to tap into this potential source of
fundraising income from individual supporters?
Often individuals think of donations to charities in terms of lifetime
donations (as opposed to donations given in Wills), and of course the
thoughts outlined above only relate to donations from such donors. A
decision by such a “living donor” to give a donation usually means that
they then swiftly send a donation to a charity. The advantage of such
immediate income to a charity from a living donor during the pandemic is
obvious. However, whilst charities will be keen during the pandemic to
receive such immediate donations to preserve cash flow, it is also
necessary to think and plan for income in the longer term.
Legacy Income for charities
In the medium to long term, charities should not overlook another potential
source of donations, namely legacy income (i.e., a specific sum of money
left to the charity by its supporters under their Wills).
Supporters’ willingness to leave legacies to charities may well be greater
now than it was before March 2020.
The “target market” for legacy income should primarily be those who,
despite the negative financial impact of Covid-19, have the means to leave
a legacy to charity. Property prices and other investments have tended to
hold up quite well generally during the pandemic, and, if that remains the
case, it will promote the giving of substantial legacies under Wills, by
charity supporters, to provide a good source of funds for charities.
Furthermore, despite the pandemic there are still a large number of
individuals of all ages who are high earners (in employment or
self-employed) with substantial assets, and “baby boomers” with substantial
assets who are now retired or near retirement. In addition, demographic
changes affecting death rates are likely to drive up the level of legacy
incomes for charities.
Charity legacy document templates
Charity & Non-Profit
documents include sets of template wording to be included in a Will by a
supporter wishing to give a legacy to a charity. It is suggested that a
charity should recommend use of this wording to their charity supporters.
New Legacies Guidance Note
The new Guidance Note – Wording for Charity Legacies explains:
The potential for, and the ins and outs of, raising charity income
through supporters’ legacies given under their Wills.
The reasons why the charity should recommend to its supporters that
they use suitable legacy wording in their Wills.
The dangers of not using suitable wording, as highlighted by the recent
High Court case of Knipe. In that case, given the inadequate
legacy wording used in the Will in that case, the court had to consider
whether it would have to rule that the gift to the charities concerned
would fail, leaving them without a substantial donation.
Other charity fundraising documents
Many other template documents are available in the
Charity & Non-Profit
portfolio, relating to various means for charities and their supporters to
raise funds, including fundraising agreements, charity lotteries
(fundraising raffles), charity grants, gift aid, commercial participation
The contents of this Newsletter are for reference purposes only and do not constitute
legal advice. Independent legal advice should be sought in relation to any specific