In a typical year, charity retail shops take £1.4bn in revenue. However, an eye-opening report carried out by Charity Benchmarks revealed charity retail income took a massive hit last year due to lockdown restrictions.
In quarter two of 2020, when the first lockdowns commenced in the UK and Ireland, year-on-year retail income dropped by over 90%. Nonetheless, after the first lockdown ended, retail income bounced back immediately, and in quarter three, the year-on-year drop was 35%.
Overall, 15 charity organisations took part in the survey for this report. For those in the survey, in the first quarter of 2020, retail income was higher than in 2019 (£78m v £71m).
However, in the second quarter, when shops were closed, it fell dramatically to £5m, compared to £93m in 2019.
In quarter three, when there was a relaxation of lockdown rules, retail income was £64m, compared to £99m in 2019.
Sue Ryder, which has 450 shops in the UK, is losing £2m a month and has had to close 39 branches permanently. A spokesperson for the organisation shared their concerns on the matter recently: “We are experiencing a very concerning drop in funds which is clearly not sustainable in the long term.”
Figures show Barnardo’s is losing £8,000 a month from its 665 shops. David Longmore, the charity’s head of retail operations, highlighted the negative impact the pandemic has on the organisation; “The November and current lockdowns have come at times that are normally very busy for us, and have significantly impacted our ability to generate much-needed income to support vulnerable children and young people.”
As income fell, so too did spend. Face-to-face recruitment and events across fundraising were the biggest drivers of this drop.
Also, in quarter two of 2020, over 50% of fundraising staff were furloughed at the organisations which participated in Charity Benchmarks report
However, decreasing spending did not make up for the massive drop in income for participants, so net income also fell.
Alex McDowell, head of public fundraising at RNIB, spoke at a webinar discussing the report and emphasised on the importance of data to the charity sector, just like the data provided in Charity Benchmarks report.
McDowell said: “What we have here is really hard quantifiable data. It can really highlight the issues across the sector of Covid-19 or other external or environmental or legislative change in the future.”
He added: “RNIB are able to use data to make decisions about where their organisation can improve or where they have unique opportunities and strengths”.
McDowell’s comments on the importance of data to his own organisation and the industry as a whole highlights the direction non-profit organisations need to be looking in when planning out their road to recovery over the coming years. As he mentions, better quality data will help non-profit organisations identify future opportunities, something all charities should be looking for at this time.