The U and I in inclusion: Advancing payment services for charities post pandemic

The COVID-19 pandemic has been a global event, during which all countries, entities and individuals have been and continue to be affected. A quiet side effect of the COVID-19 pandemic was the acceleration of societies’ journey to digitisation. The digitisation of every realm of society has shifted our payments habits as we’ve reached for our screens over cash. In fact, the online shift within Banking has surpassed all predictions, with an estimated six million people (12 per cent of the UK’s adult population)[1] downloading a banking app for the first time one month into the first UK lockdown in 2020.

Whilst the seismic shift online was a definingly positive moment, it has also laid bare the disparity in digital payments services offerings, especially in the charitable sector.  In the first six months of 2020, £5.4 billion was donated to charity in the UK [2]; this figure illustrates the vastness of charitable transactions and the scale of need to support these critical transactions.

Supporting the charity sector

BCS Consulting works with financial services providers. Charities Aid Foundation Bank (CAF Bank), one of our clients within the charity banking sector, has provided some insight into the decline in use of cash and increase in digital donations during the first COVID-19 lockdown. According to research carried out in 2020 by CAF Bank’s parent charity, Charities Aid Foundation:

• Cash donations, normally the country’s most popular way of giving, saw a substantial decline between March 2020 (34%) and April 2020 (13%).  This remains at very low levels compared to previous years, reflecting halted charity tin collections, prize draws and other in-person cash transactions [3]
• The number of people giving via a website or app increased significantly over the same period (from 13% to 24%) and this remains at much higher levels than normal [4]
• 4 in 10 charities said they can accept donations through their own website and the same amount said they were set up to accept donations through other digital means such as online platforms [5]

It is very positive that many charities have managed to adapt and transform their operations, and this has enabled these organisations to be digitally included and continue their critical work, particularly during this time.

That said, the last statistic also shows that there are still charities which aren’t set up to support cashless donations. The effect of the crisis on the bottom line of many charities has been unprecedented. 1 in 10 have said they simply could not afford to buy the technology that would enable them to receive cashless donations [6]. It is critical that financial services firms are offering appropriate tailored and appropriately priced digital products for these organisations.

Almost 1 in 5 charities (18%) have stated that they see the COVID-19 pandemic as an opportunity to modernise and some had accelerated their plans to shift their fundraising towards online efforts[7]. Barclaycard[8] research has shown that charities in the UK may be missing out on more than £80m in donations each year by only accepting cash donations, as 4 in 10 people (42%) say they carry less cash now than they did 3 years ago. Therefore, whilst it may be difficult to adapt quickly, many argue that this digitalisation, is likely but a step on an inevitable path and one that will be ultimately beneficial for all parties in the long run. With the plethora of payments solutions on offer, do these cater for charities too?

Despite the monumental leap in digital innovation, there remain under-served organisations who haven’t been brought along on the digital journey; illustrated by the fact that a quarter of UK charities (over 40,000 organisations) are still not set up to receive online donations. There is a significant opportunity for financial services firms to look at their product offerings and challenge themselves to cater for such firms – providing cost-effective and robust solutions and accounting for the additional need for implementation support such organisations are likely to have.

What should be the focus?

In order to cater for this hugely important sector of society – a sector that aligns to any organisation’s Corporate Social Responsibility (CSR) or Responsible Business Initiative (RBI) programs – in our view, the following considerations are key:

• Service charities more actively – providing digital solutions as standard and at more competitive price points
• Support charities in adopting digital methods by enablement, education and good UI and design as well as implementation support
• Enhance risk models and KYC/screening tools to reduce population of charities that are treated as ‘high risk’ (fewer cash transactions means more visibility of payment flows and lower risk)
• Partner with innovative providers to provide value-adding services – multi-currency accounts, cross-border payments and API-driven functionality (such as HMRC integration for Gift-Aid)

BCS Consulting is well versed in defining and delivering strategic payment solutions for banks and payment providers. In addition, we have first-hand experience supporting charities, and charity platforms, in meeting their payment needs. More broadly, we can offer advisory and delivery services to support firms with their digital strategy and implementing digital solutions to respond to their customers’ needs.

[1]rsa-cashing-out.pdf (thersa.org)

[2]Source: CAF UK Giving & Covid-19 Special Report, October 2020

[3]Source: CAF UK Giving & Covid-19 Special Report, October 2020

[4]Source: CAF UK Giving & Covid-19 Special Report, October 2020

[5] Source: CAF Charity Pulse Survey, 2020

[6] Source: CAF Charity Pulse Survey, 2020

[7] Source: CAF Charity Pulse Survey, 2020

[8] Going, going gone! The advent of the “cashless society” worldwide and how UK-wide and NI-based charities are adapting | NICVA

UK Giving 2020 | Largest charity giving study in the UK | CAF (cafonline.org)