DONATE
show image

Warning for charity chuggers as more people carry less cash

As many as 8 per cent of people in the UK never carry any cash – a figure that rises to 15 per cent among 25 to 34-year-olds, according to new data from YouGov and the Cabinet Office-backed National Funding Scheme charity.

This rise, from a cashless population of around 5 per cent in 2013, has prompted a warning to charities that rely on cash donations that they must switch to digital giving if they don’t want to lose out.

“We’re seeing a huge change in the amount of cash people hold and that affects charities that are trying to attract donors, particularly younger donors,” National Funding Scheme founder and trustee William Makower told NS Tech.

“Younger ones are holding less and less cash over time and charities need to adapt to that.”

Not coincidentally, the National Funding Scheme, via its DONATE brand, offers a range of digital giving tools, focused on mobile. This includes SMS campaigns and a web payments platform.

What makes it different, Makower said, is that it’s a charity, so its fees are low, and because it doesn’t focus on SMS giving, average donations on its web app stand at around £70.

It also eschews the sponsorship model that made names for the likes of JustGiving.

DONATE says it sees Gift Aid add-on rates at around 65 per cent, compared to SMS platforms that get about 15 per cent, because it’s all web-based so doesn’t require switching platforms or a drawn out text chat.

Criticisms

The service is “free” to join, with charities charged percentage of each donation to cover payment processing. Larger charities pay an additional fee once they’ve raised a certain amount.

The platform is today being used by the likes of the Freud Museum London and Help for Heroes, after initially rolling out to arts and cultural institutions only.

But the National Funding Scheme has not been without its critics.

Arts Professional did some number crunching that found the fees for charities were not all that they were made out to be: “Since 2014 the NFS has been stating that ‘donors can be reassured that the full value of their donation in these circumstances is being passed on to their chosen charity’, and that the NFS will take only ‘a minor share’ of any eligible Gift Aid collected on an arts charity’s behalf.

“But that ‘minor’ share is revealed in the small print to comprise 45% of the Gift Aid being recovered,” the piece explains.

Indeed, the organisation has been running for three years but has only seen £525,000 raised to date, which could reflect charities have not been quick to take up the offer.

“There’s a lot of innovation in this space but it takes time for these things to get off the ground,” Makower said, when asked about the rather modest funding sum.

Whether you choose DONATE or not, it’s true that if you’re looking to raise cash, you may need to look beyond the bucket.