Navigating emerging trends and innovations
When we talk about charities as businesses, we are talking about the commercial means and not the charitable ends.
After all, whether charities trade more or less, grow or shrink is not the measure of success. The measure of success is whether they are advancing their charitable cause. After all, many charities believe that they are in the business of doing themselves out of a job, by tackling the underlying cause that prompted them into existence in the first place.
But how they do this is entirely open to being informed and inspired by learning from the for-profit world and the trends towards charities operating in business-like ways are on the rise. Here are some of the key trends and innovations that are shaping this emerging landscape for non-profit action.
1. Entrepreneurial Approaches to Fundraising
Charities are adopting entrepreneurial methods to diversify and enhance their funding streams. Beyond traditional donations, they are exploring avenues such as social enterprises, impact investing, and partnerships with for-profit businesses. These strategies not only generate revenue but also foster long-term financial sustainability.
Example: Charitable social enterprises
Rowan Alba was founded in 2005 and supports some of the most vulnerable people affected by homelessness in Edinburgh, many with complex, long term issues such as poor mental health, and drug and alcohol abuse. Following pro bono support from a major financial institution, the charity created a new investment vehicle to attract community shares that it could use to purchase and renovate a new home for their beneficiaries in the heart of the city.
2. Technology and digital transformation
The digital era has ushered in a wave of technological advancements that charities are harnessing to streamline operations, enhance outreach, and optimise fundraising efforts. From data analytics and artificial intelligence to blockchain technology, charities are leveraging innovations to amplify their impact and improve efficiency.
Example: Blockchain for transparent donations
Blockchain technology is being employed to enhance transparency in donations. Charities such as RNLI are using blockchain for crypto currency donations or to create tamper-proof donation ledgers, providing donors with real-time visibility into how their contributions are utilized.
3. Impact measurement and accountability
Modern donors are increasingly focused on impact. Charities are responding by adopting rigorous impact measurement frameworks to demonstrate the effectiveness of their programmes. Embracing accountability not only builds trust with donors but also contributes to organisational learning and improvement.
Example: Social return on investment (SROI)
Encouraged by the emergence of legislation in the UK on social value, which brings in a recognition of the wider impact that can be achieved through public service commissioning, a wide range of charities and social enterprises have taken up SROI methodologies to put a number on the social and environmental value created by their activities. This approach goes beyond traditional financial metrics, exploring the public benefits of what a charity does, such as cost prevention for taxpayers, providing a wider understanding of the charity's impact.
4. Strategic partnerships and collaborations
The future of charities involves breaking down silos and fostering collaborative approaches. Charities are forming strategic partnerships with other non-profits, businesses, and governmental agencies to pool resources, share expertise, and tackle complex issues collectively.
Example: Cross-sector collaboration
Charities are partnering with businesses to address social and environmental challenges. These collaborations bring together the strengths of both sectors, fostering innovation and creating holistic solutions. One example is the way in which the NHS in Wales responded to the COVID-19 pandemic by working in direct partnership with non-profits and businesses to promote effective responses for health and safety in the community and at work.
5. Innovative marketing and branding
Charities are recognising the importance of effective marketing and branding to engage donors and stakeholders. Creative storytelling, visually compelling campaigns, and innovative use of social media are becoming integral to raising awareness and mobilizing support.
Example: Digital storytelling
The Bridge programme run by Lightful has supported a wide range of charities in fields such as gender equality and climate action to build their digital capability to tell their story and to raise funds. Leveraging multimedia, storytelling, and user-generated content, the fundraising campaigns that charities create through the programme are successful because they find a compelling narrative that resonates with audiences.
6. Inclusive leadership
The leadership landscape is evolving and with more of an emphasis on the literacy of leaders in relation to the values of diversity, equity and inclusion, charities ought to be well placed to contribute. It is not that all charities are up to scratch on this, but it is good to recognise that there are excellent examples of charities recognising the value of lived experience in developing leadership talent.
Example: Learning on inclusive leadership
Team Margot is a charity set up to tackle the added challenges that patients of the Global Majority, including children, face when they need stem cell, bone marrow, or organ transplants, compared to Caucasian patients. They can face waits of twice the time of others. In 2022, a team of skilled volunteers from Barclays came together to research strategic options for the charity to address this. The project was a success and the team from Barclays, all aspiring leaders, came away with their own learning on the way in which society can put up barriers to equal access for people from different racial backgrounds.
7. Globalisation of Philanthropy
The future of charities is increasingly global. In the acronyms we use so frequently in the sector, the NGOs (non-governmental organisations) are becoming the INGOs (international NGOs). But there is a good reason behind this. With the rise of digital platforms and interconnectedness, charities are expanding their reach beyond local and national boundaries. Global collaborations and crowdfunding initiatives allow charities to access a broader donor base and address global challenges. It is possible to set up global non-profits now in ways that are far simpler than in years before.
Example: Crowdfunding across borders
Charities working on global issues of environment and development have been at the forefront of running international fundraising campaigns for donations, such as around disaster relief. But the same approach has also been picked up at the most local of levels. One of the success stories of community action over the last decade in the UK has been the use of crowdfunding platforms to raise equity capital in the form of community shares. Glenwyvis Distillery is an inspiring community-owned whisky co-operative established in Dingwall in the north of Scotland and raised community shares from 3,000 people, who ranged from those in town through to supporters from Europe and North America.
As these trends and opportunities take shape, the intersection of business principles and social impact becomes more profound. Even so, the evolving landscape presents both challenges and opportunities for charities. It seems credible to suggest that the most successful non-profits of tomorrow will be open, porous organisations, confident still in the distinctive identity of their own values and purpose. They will be charities that are able to adapt, innovate and learn from the best of what they see elsewhere.
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