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The Language of Charitable Giving in the UK

The Charity Commission reported upon some key metrics in their Annual Report for 2022-2023 published on the 10th July 2023 and we've been mulling over the stats and comparing income generated as a sector to income we've seen result of campaigns we've had the privilege to be involved with across the UK.

Compared to 2021-2022, income generated by registered charities was up by £4.2 billion from £83.8 billion to £88 billion.

There are now 168,893 charities registered on the Charity Commission, with 8583 new registrations in 2022-2023, 578 more than the previous year.

However, the overall number of charities registered is slightly lower with 136 fewer than reported in 2021-2022, when the total was 169,029, in fact the number of registered charities has been above 169,000 for a number of years.

In 2019, over 168,000 charities raised regulated income of £79 billion, which means in 2022-2023 an additional £9 billion was brought in by a similar number of charitable organisations.

Of course, the lionshare of income generated goes to the top 20% of charities, but it is encouraging to see that despite the cost-of-living crisis, people are still prepared to give.

With our campaigns, we see people connect with fundraising appeals that have a strong reason 'why'. Demonstrating impact, whether it is a specific outcome or a collective achievement of 'good' is key. We always think in terms of the 3 R'smaking sure messages are 'Relatable, Rememberable and Re-tellable.'

We're also interested in understanding how businesses are involved with fundraising. Is the increase in income generated completely to do with how charities are fundraising? Or rather, a byproduct of the Social Value Act 2012? How is guidance updated on the 1st January 2021 shaping corporate giving?

First of all, what is ‘social value’?

It's helpful to explain what we're on about especially as the landscape is still evolving and any existing definitions have plenty of flexibility. This can be a good thing as metrics are not regimented, there isn't one clearly defined set of rules to follow. However, it also presents educational and operational challenges, and what we mean by that is understanding what corporate obligations are and getting our collective heads around the whole thing as a sector. There is a risk if we don't.

The UK government describes social value for organisations looking to win business as 'the positive legacy created through the performance of contracts'. Basically, you have to offer something back if you are going to obtain a tender, certainly and legally when it comes to successful public sector contracts.

It's also helpful to note the three categories of social value and how broad and sweeping they are:

  • Economic Well-being (stuff that makes us profitable, including jobs, a reduction of poverty and financial stability, that sort of thing).

  • Environmental Sustainability (anything that reduces negative impacts on our environment and improves overall environmental well-being).

  • Social Well-being (this is about the quality of our lives, so health, education, inclusive and connected communities, big broad objectives for better lives).

Now, the Social Value Act was introduced in 2012 and public bodies were asked to consider how the profit from the services they are commissioned for could improve the economic, social and environmental well-being of the area they operate in. The idea being social public money should be spent more meaningful and smarter way, going further and positively impacting the UK.

From 1st January 2021, those considerations and possibilities became more definite commitments with central government being required to go further than the Public Services (Social Value) Act 2012.

From 2021, if you are going to procure a major central government contract, then you must explicitly evaluate the social value this will have. Other contracts will also be looked upon favourably if Social Value is examined and we're due more legislation around procurement in the next year or so.

Furthermore, the update in 2021 links social value to other legislation, policies and initiatives, like the Equalities Act, the Civil Society Strategy, and principles around ‘decent work’ as well as the aims within the UN Sustainable Development Goals, (SDGs).

Entire EDI and ESG departments have been spawned in business as a result. EDI being Equality, Diversity and Inclusion and ESG being Environmental, Social and Governance, both measurable outputs under the wider concept of Social Value.

So what does that mean for income generation in the charity sector? Whilst the link exists, if companies do good things they get nice contracts, examples of consistent joined up thinking between charities and companies is not as obvious.

For example, if a company promotes writing Wills for it's workforce or pushes 'give as you earn' (otherwise known as payroll giving) schemes then this can be counted as Social Value. But there is a lot of education needed in order for charities and businesses to work together to facilitate collaborations which are so much more fruitful than getting a bunch of bankers to dig up some weeds in a Hospice garden.

Yes, corporate volunteer days can be nice and offer a box to be ticked for HR departments. But conversations need to be held between Social Value leads and Corporate Fundraisers to unlock much more potential.

The fact of the matter is that same old same old approaches to income generation will not wash in the future, or now. Individual's are being more picky and corporations are taking Social Value metrics into their own hands and deciding where to invest with a real risk of charities, the true champions of goodness in society, being left behind.

At Keepace, we're determined not to let that happen and will continue to run talks and workshops to make sure we're all on the same page and increases in donations are deliberate and not happy accidents.

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