Rainy Day Savings To Impact on Charity Giving
8 March 2012 at 10:53 am
New research which reveals Australians are saving their money for a ‘rainy day’ and spending less is likely to have an impact on a charity’s ability to fundraise, according to the Fundraising Institute of Australia.
The study, by the Australian National Retailers Association (ANRA), surveyed 1000 people and shows that more than 70 per cent of Australians have a savings target and are choosing to sacrifice spending on discretionary items to achieve it.
Retailers say this is a trend which is now “entrenched behaviour” and unlikely to change until significant drops in the cash rate are instituted by the Reserve Bank of Australia.
ANRA chief executive Margy Osmond said that despite continuing positive signs in the country’s economy like job security and wages growth, people continue to count their pennies.
“The survey found a third of us are putting money aside only ‘when we can”, 20 per cent were saving a set amount each month and 11 per cent were determined to pay down debt – which paints a poor picture for the retail sector in the coming months,” Osmond said.
The report also states that more than half of those (60 per cent) who are willing to spend only do so if they can bag a bargain.
“We have a nation of shoppers who have retreated from retail therapy, which is threatening the health of the retail sector. The number of overall bargain hunters has increased since last year from 48 per cent to 50 per cent,” Osmond said.
“To add to the retail woes of the savings boom, few respondents were close to meeting savings targets. Almost two-thirds of respondents with a savings plan considered they had a ‘fair bit’ yet to save, or were ‘nowhere near’ their savings goal.”
Meanwhile FIA chief executive Rob Edwards has warned that the new figures will have a “significant impact” on charities.
He says that, generally speaking, any reduction in disposable income will affect charities’ ability to fundraise.
“The need for charity services becomes counter cyclical,” Edwards said. “The demand for charity work goes up but it’s difficult for them to raise funds.”
However, Edwards says that charities won’t see the impact immediately. “It will be a slow-burn for charities, but donations have been flat for a year or so,” he said. “Charities are already fighting for the dollar.”
Edwards says that charities are now looking to find different ways to fundraise and that the increase of “challenge events” are seeing charities engage with a younger demographic.
“Traditionally it has been older people who give to charity, but charities need to appeal to younger givers,” he said.
“New media and mobile apps make a considerable difference in raising funds for events,” Edwards said. “But like any organisation, fundraisers need to be offering what’s relevant to the needs of the market.”