In 2023, a staggering 72% of the world’s population supported others through donations. However, despite this, as many as 40% of nonprofits have reported a drop in funding over the past 12 months.

This has resulted in many charities finding themselves in a financially perilous position and struggling to bring in enough funding.

In order to remedy this, charities must consider innovating their fundraising methods and their donations process to bring traditional ways of giving into the twenty-first century.

What the modern-day donor looks like

In order to rethink how donations work, charities first need to rethink what the modern-day donor looks like. Because the sooner they start to engage with them, the sooner they’ll gain their trust for the long-term.

Research from Give.org shows us that current donation processes aren’t working. More than 45% of Gen Zers say they haven’t been asked to donate, compared with just 3.8% of boomers who said the same. This signals a major shift in how donations need to work today – with younger donors expecting charities to come to them.

While a separate study found that three-quarters of large charities have noticed a “significant increase” in digital donations since 2020. With almost half (48%) of consumers saying they primarily donated through digital channels.

Reacting to these changing habits is especially important for charities when 42% of potential donors across all ages say they don’t have the financial resources to donate. Recessions, inflation and an inconsistent job market have all led to a more cost-conscious donor, and charities need to become flexible to that.

Further, in addition to money, another thing donors lack is trust. With 12% of potential donors not trusting charities enough to donate to them. This isn’t helped by the inefficiencies attached to traditional processes. For instance, once third-party and distribution fees, costs for processing and recording donations, and creating and sending tax receipts are collated, around 35% of donations end up not going to the charity.

Fortunately, there are ways for charities to strategize, and even digitise, to ensure they are reaching  donors. But they can’t do it alone, and they must partner with businesses to not just to guarantee the longevity of their causes, but their organisation too.

A winning partnership to boost donations

Today, more sophisticated donation methods are needed than the physical donations box and businesses can be the ones to unlock them. For instance, micro donations are just one innovation disrupting the status quo – used by names such as Klarna and McDonald’s, and being further advanced by innovative companies such as Worldcoo.

Micro donations mean that when consumers make a card purchase, they are  asked if they want to round their payment up to the nearest pound/euro, with the difference going to charity. Despite the donation being typically lower than a standalone one, this method feels more natural to shoppers and caters for the 64% of donors who would welcome flexibility to change the amount and cadence of their donations.

What’s more, through the ability of these donations to piggyback on millions of purchases that are happening every second across the globe means it has strength in numbers. The tally climbs even higher too by avoiding the common and costly inefficiencies that come with traditional methods. Plus, they are also eligible for tax deductions in many countries, with the digitalisation fast-tracking tax certificate claims.

This ‘digital donation box’ is a vital avenue for charities. Admittedly though, it relies as much on digital capability as anything else. And with funding and digital infrastructure limited, charities must take the opportunity to partner with digitised organisations; ones used to reaching consumers at the point of purchase.

Glovo is one such company and in 2022 it saw more than €500,000 donated by users via its app to support relief efforts across multiple campaigns, including Ukraine, Syria and Turkey. This followed the creation of over 20 donation categories in-app to bring relief and aid in response to crisis situations. The result was a sweet spot of purpose, choice and convenience for the everyday consumer.

For charities, partnering with businesses can take their fundraising efforts even further by allowing them to stay in-step with changing donor habits. Whereas for businesses, this partnership is an opportunity to strengthen their brand reputation and do some good.

Partnership holds the key to future donations

Neither charities nor tech companies can reinvent how donations work by themselves. But together they can forge an impactful partnership that sends an authentic message to potential donors. What’s more, retailers such as supermarket chains should also be looking to forge these partnerships to take the future of donations even further.

With worldwide retail e-commerce sales estimated to exceed $6.3 (€5.8)trillion this year, imagine that each included a micro transaction of just one cent – that’s a total of $63 (€58) billion.

This is a mutually beneficial partnership that ensures charities are modernising and businesses are committing to a social cause. And it is only natural that it relies on the concept at the heart of charity – that by working together, we stand to make a bigger, better impact.

Sébastien Pellion is Head of Social Impact & Sustainability of Glovo.