The year was 2020 and the world was waking up to the infinite scream we now know as COVID-19.
At the time, when it was still new, there was a lot of fear (both healthy and not-so-healthy). How would we get through this? When would a vaccine come out? When would we get back to normalcy?
In the fundraising sector, there was a lot of uncertainty about how COVID would affect fundraising. Would people be unwilling to give? Should charities continue asking for money? Was it appropriate, given the scary new virus that changed the world as we knew it?
Many of you in the North American non-profit sector will clearly remember that there were many charities where donors didn’t just donate when asked, but they donated generously and excitedly. It was unprecedented, inspiring, and ultimately unsustainable.
Spurred on by conversations that I’ve had with people in the sector, as well as reports that I’ve read, I wanted to do some of my own analysis using Canadian charity tax return data (T3010) to see what happened to fundraising at charities in 2020 and how it compared to the year after.
I wanted to group charities based on two key factors:
- Did they experience at least a 10% increase in 2020 donation revenue vs. 2019? These would be considered pandemic ‘boomers’.
- Did they to any extent increase the total amount of money they spent compensating their full/part-time employees?
Have a look at the results below.
The really interesting thing here is that after I isolated the pandemic boomers, the charities that remained exhibited such a different pattern that it was clear I was dealing with organisations that had crashed during the pandemic.
In terms of the crashers, the really interesting thing is that the ones who had opted to increase wages in 2021 vs 2020 experienced an increase in donation revenues in 2021. Would they have experienced such an increase in donations without increasing wages? My hunch is they wouldn’t have.
In the case of the boomers, the really enticing result here is that despite starting out at virtually the same median revenue amount, after their boom, those who increased wages didn’t decrease by nearly as much as those who decreased employee wages. How about that?!
I want to leave you with what I hope is the obvious lesson from this post: pay your employees well. Those who got freaked out during the pandemic and thought they needed to scale back operations clearly suffered for it, revenue-wise.