CONSUMER ANALYSIS: Financial Supporters
Tax Deduction Benefit Attracts Donors
NPOs are generally reliant on a mix of government grants, corporate and individual donations. The amount of donations received from corporate and individual donors is not as consistent and fluctuates according to external environment factors. For instance, they were greatly affected by the prevailing tax-deduction rate and philanthropic movement. When Singapore celebrated its Golden Jubilee in 2015, the tax deduction rate was increased to 300%. There was a stark increase in tax-deductible donations by 24 per cent. This can also be attributed to the ‘Care & Share @ SG50’ movement by Community Chest, where government matched donations raised dollar-for-dollar.
SATA was approved as an Institution of Public Character (IPC) from 2019 to 2022. As an approved IPC, it is allowed to solicit funds from the public to pursue its worthy causes. Donors tend to be more drawn to IPCs as they can support a good cause and are entitled to tax-deductions for their donations. This is evident when SATA had received 10 times more donations in 2019 when it transited to IPC as compared to 2018.
Increased Adoption of Digital Donation
The younger generation is characterized by their use of technology to get information and almost 88% of them use social media channels. They are more technologically-savvy and tend to be more attracted to donating online due to its convenience. Online giving platforms such as Giving.sg made it easier for them to contribute because of how safe, simple and trusted it is, and how it makes giving opportunities across 600 charities and 14 causes accessible. The platform collected a total of $93.4 million in 2020, which was more than double the $35.8 million collected in 2019. The surge in online donation is due to factors such as increased donations from the younger generation, the $600 Solidarity Payment given to each adult Singaporean in April last year, as well as the waiver of the transaction fee on some online donation platforms. The waiver of the transaction fee encouraged more people to donate as it means that charities receive the full amount of the donations.
Emerging Trend in Fundraising: Rise of Virtual Events
With the COVID-19 pandemic causing severe social disruption and economic downturn, NPOs in Singapore have been facing difficulties in getting physical donations, such as through fundraisers. Many had to cancel or postpone fundraising events planned for the year, leading to a decline in donations. Charities under the Arts & Heritage, Disability, Community, Children & Youth, and Social Service causes were hardest hit, with some observing a drop of as much as 80 per cent in donations. As a result of COVID-19 restrictions, many organisations have leveraged digital transformation tools and turned to the online space to ease the impact on their fund-raising and to remain competitive.
Virtual events are emerging as stand-out approaches for charities to target new audiences and personalize fundraising experiences. Participants engage with a campaign on their own time, while still supporting the cause they care about and doing so in a way that helps them keep fit and improves their health. Virtual events not only cater to those with demanding schedules or those in hard-to-reach locations, but also serve as a way to reach new audiences — specifically, Millennial and Gen Z donors. These tech-savvy generations might prefer to take part in an event virtually and can even participate via game streaming platforms. For example, online gamers can livestream their game and offer viewers the option to donate to the gamers’ cause of choice.
Among the online fund-raisers, virtual races and virtual charity dinners are becoming increasingly popular. For example, NUS had organised a virtual run Jan this year where runners paid a fee to participate and had two weeks to clock a certain distance. The event raised more than half a million. St John’s Home for Elderly Persons organised a virtual charity dinner in October last year and raised more than $320,000 from the event, where donors bought gourmet meals delivered to their homes and watched a virtual performance. HCA Hospice Care promoted birthday fund-raisers in July last year by encouraging donors to ask their family and friends to donate to HCA Hospice Care, instead of giving birthday gifts to them. It raised close to $30,000 through the initiative.
OPPORTUNITY: Rising Popularity in Virtual Fundraising
As mentioned in ‘Consumer Analysis’, virtual fundraising is gaining traction due to Covid-19 and is here to stay. As digital transformation takes full effect, NPOs unwilling to adapt to these technological times and instead rely on traditional styles of giving will struggle, while NPOs embracing change with open arms and voluntarily diversifying their fundraising opportunities will win. By reimagining traditional in-person events to include virtual events, it presents an opportunity for NPOs to maximize their fundraising efforts as well as attract new lifetime donors.