NZ's cashless society forcing charities to adapt online

Source: 1News

Kiwi charities are being forced to either adapt or lose revenue, as New Zealand becomes an increasingly cashless society.

Two years of Covid-19 lockdowns had put big dents in the incomes of some charities.

By Jessica Swan

A recent Fundraising Institute of New Zealand (FINZ) survey indicated 44 per cent of charities had seen reduced income from street appeals over the past three years, and this year 45 per cent are not doing this type of outreach.

While many are adopting new strategies, FINZ executive director Michelle Berriman said many donors had already been lost forever.

“The psychology of generosity and seeing your dollar physically go to a charity is very different from paying via your bank, the challenge for our sector is to understand new ways to capture the essences of giving that ‘makes you feel good’.”

Accentuated by the loss of cheques, Berriman saw some of the most loyal donors cut down on cash gifts or give up altogether.

She explained there was already additional pressure on the system as fewer households were donating to charities.

“Those who do continue to give, give more, but the pool of donors is shrinking, and the cashless society conundrum is unlikely to improve that situation.”

The Reserve Bank of New Zealand (RBNZ) was working on a cash system redesign and also recognised the potential risk of a weakened charity sector.

In a statement, RBNZ said: “As people carry less cash about, impromptu donations from street collections begin to fall. This reduces the resources available to charities, and impacts on their ability to perform their important function.”

Globally, the RBNZ said, there was a growing trend away from cash and towards bank cards and online payments. This was all part of the feedback loop, which meant as fewer people use cash, it was harder for people to get cash, leading to a “downward spiral”.

Blind Low Vision NZ was one of many Kiwi charities affected. Fundraising manager Bernadette Murphy said adapting had been a “slow transition”.

She said many older donors were frustrated by the move away from cheques and not being able to send cash in the mail, and required help to give online, or over the phone.

However, the organisation was now using our cashless society as a chance to explore new trends, such as QR codes and digital wallets.

“People are very comfortable with these giving methods due to QR Covid-19 scanning and the need for vaccine passes.”

This year, Blind Low Vision NZ transitioned from a street collection focus to a digital focus. The hope was this would help mitigate the impact of a cashless society on key fundraising activities.

“Hybrid fundraising events, social media engagement, influencers and email campaigns have become the new practice. Content which is highly personalised and algorithm targeted, is now paramount," Murphy said.

Berriman agreed online alternatives were important, but for some low-resourced small charities, they were too expensive and out-of-reach.

However, with good communication with donors, she said many charities were finding their feet.

“We see organisations that directly reach out to their existing supporters who have traditionally donated with cash or cheques, thanking them again for their support and working with them on how they can support in the future, are having the greatest success in adjusting to change.”