Reading tea leaves, #10: wake up and smell the coffee - Starbucks has

By: 

Cheryl Chapman

Managing Editor, Philanthropy UK

Tracking the impact of the recession on giving...

As ever, there was good news and bad news from the world of surveys this fortnight. But the one clear message from all of them is that new thinking is needed.

Managing in a Downturn, a collaboration between the Institute of Fundraising, the Charity Finance Directors' Group and accountancy firm PricewaterhouseCoopers, is the second in a series of six-monthly surveys monitoring charity finance directors’ perceptions on how they feel the recession will affect them.

The findings show broad agreement that the experience of the six months since December 2008 was worse than expected and charities’ expectations of the impact of the recession in the next 12 months are worse than they were in December 2008 by at least 50%.

An area of particular concern is that charities have not made significant improvements to the manner in which they manage their financial affairs.  One point made by the organisations behind the survey is that “charities are in a position to make the most of the opportunities which will arise”.

And that will call for innovation. 

Innovation can lead to cost reductions through the creation of new processes and systems, and revenue generation through new products and services. 

Business Week has just issued a report on the same topic in ‘Recession the Mother of Innovation’.

Starbucks  – the iconic coffee brand – showed an appetite for innovation this week with a pilot rebrand of three of its 16,000 outlets in its home town of Seattle. The idea is to create a more bohemian, neighbourhood feel with a strong connection to its local community.

An innovative response to the growing sense of community the recession is instilling in us all.

Emma Turner of Barclays Wealth also referred this week to a ‘community response’ – this time from the wealthy in the UK and US. In launching their ‘good news’ survey, ‘Tomorrow’s Philanthropist’, which revealed that around 75% of those surveyed had not reduced their contributions to charity, while more than one in four had increased their giving in the last 18 months, Turner says: “In some ways, the recession and its knock-on effects have galvanised the attitudes and approaches taken by wealthy donors, who are in a bullish mood to not only carry on giving, but make an even bigger impact in the future."

Another genuinely philanthropic, innovative and community response to the recession was reported this week at a coffee shop in Missouri.

A drive-through customer at the Steamin’ Bean offered to pay for the drink of the customer behind her as her “good deed of the day”. The gesture snow-balled and expanded to other businesses across Missouri in a matter of days.

It shows that people will give if an idea engages and involves them.  Take ‘online social network giving’, another innovative community-based giving vehicle. In the last six months donations through them have soared.

Since January 2009, more than $5m (£3m) has been donated to charity through the Causes application created for Facebook and MySpace, doubling the total raised in the past two years.

And we reported in Reading tea leaves #7 that the value of charity donations given through online auction website eBay had tripled in the past year, with donations from eBay sellers in the UK soaring from £40,000 a month to £120,000 a month in the year to April.

So the message is clear – fresh thinking around ideas that involve and engage donors will help organisations survive through the recession. This might even be as simple as saying ‘thank you’ to donors – believe it or not many charities have not even got that far in their thinking!