Some charities, especially those that rely on events, have been badly hit by Covid. Fundraising has fallen off a cliff for some, others have responded by moving events online. Some are reassessing their fundraising strategies. And they should…Why?
For many people, wealth has increased since lockdown was first introduced. As a prospect researcher I watch wealth in Ireland. A headline that caught my attention in early July was “Surge in funds leads teachers’ credit union Comhar Linn to cap savings at €50,000”. First reaction, maybe I should have become a teacher afterall, second reaction, that is only one financial institution, whats the bigger picture? Comhar Linn is the credit union of the Irish National Teachers’ Organisation and had to introduce after experiencing an €18m surge in savings this year. But let’s broaden the net. Deposits from Irish resident households increased by €3.0 billion in April, the largest monthly increase in household deposits ever. I’ll repeat that – deposits from Irish resident households increased by €3billion in April 2020! The figure for April, May and June combined was €5.3billion, well up on the same period last year which was €2billion. The total for the first six months of 2020 was €6.3 billion.
Just a reminder. How much is a billion? There are 1,000 millions in a billion! HIgher earners, I guess no surprise, have saved more – as per a recent Central Bank Governor blog. Research has shown that households whose disposable income exceeds €850 a week do 38% of their spending in places such as restaurants and cultural venues, compared with 22% of spending in shutdown sectors by poorer households with disposable income of less than €250 a week. “A key question is what consumers will do with the savings that are currently being built up” wrote Gabriel Makhlouf. Could more end up as charitable donations. Could some become the basis for organised, planned philanthropy?
Values of estates from wills have shown no noticeable drops – as would be expected. Among the 150 or more €1m+ estates published since mid March there has been one estate valued at over €25m, one more over €10m and six more of €5m+. Will estate values drop in the future? They may, but the biggest driver is property values. According to the most recent Daft reports, the average listed price nationwide rose by 3.7% between April and May 2020 – a very large shift for just one month – but that was only partly offsetting the fall of 5.5% seen between March and April. Overall, sales prices in June are now 3.3% lower than the same month in 2019. Irish inheritors are often already independently wealthy, so a significant layer of additional wealth is becoming increasingly common, especially for middle and higher income families in Ireland.
There has been an increase in company closures and receiverships, but Irish owned companies continue to be sold for positive reasons, often making millionaires of their shareholders – sometimes the company founders, sometimes investors, often both. Ireland has many superb indigenous companies and they are still proving attractive to (mostly) larger overseas companies. Companies in insurance, wind energy, med-tech, IT and more have secured excellent prices. Some Irish companies are also buying overseas companies, confident of their futures. If you have donors who have recently sold a business, they potentially have significant liquid wealth which is much more relevant when it comes to the potential to donate.
In short, charities seeking to develop future income streams would do well to better consider a major gift fundraising approach and to review their privacy policies to ensure that undertaking prospect research is compatible and possible with any change in fundraising focus. Campaign Solutions can help.
Great article, Niall. Makes for interesting reading.
Hope you are well.
Belated thanks Orla re article, in good form and busy out which is great. Developing some ideas in the legacy space also, which I think will be interesting, was tryign to contact Mark, but haven;theard back as yet, might run the ideas past you at some stage if time permitted, Niall