Economic downturn doesn’t mean drop in income

Professional Fundraising

July 2008

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Fundraisers should not use the economic downturn as an excuse for a fall in fundraised income.

This is the message to come out of recent research by nfpSynergy that found that while charity income growth may slow or become static, it is unlikely to drop.

The research, which examines the financial history of 56 of the UK’s leading fundraising charities since 1980, found that economic fluctuations do impact upon charity income levels with individual voluntary income growing or falling almost in sync with the amount of disposable income held by the public, which on average occurred 10 months after any rise or fall in GDP growth. There was a further lag of seven months before the positive or negative impact on charities’ overall income peaked.

“The voluntary sector as a whole should be robust enough to weather well, having continued to grow over the last 30 years, through thick and thin,” said Jonathan Baker, researcher at nfpSynergy. “In previous recessions of the early 1980s and early 1990s, the sector income growth slowed and almost stopped, but was never negative.

“Our message is: don’t accept defeat but be cautious. Charities still have time to create a resilient action plan to protect themselves against income volatility before the onset of any possible reaction.”

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