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How much cash do you have in your wallet?

November 3, 2015

 

How much cash do you have in your wallet?

 

Charities rely on that extra bit of cash. That’s what our fundraising is all about. We ask people to dispose of their disposable income with us.

 

Let me state a bit of the obvious here: people have 100% of their money to spend after taxes. Imagine that was a thick wad of cash in your wallet and you paid all your bills using it.

 

In general, that money would get siphoned off pretty quickly and not into the general economy, but back in the hands of a few major conglomerates -- mainly banks, but also corporations like Tesco and BP, etc. The biggest expenditure is on rent and mortgages (AKA payments to banks). You'd be handing most of your cash to men in suits, not to the little corner shop.

 

This is lost money. It doesn’t go back into the local economy. It doesn’t go to charities.

 

Here's where it gets interesting (or depressing, you decide):

 

According the Office of National Statistics in 2013:

  • 35% of households rented

  • 32% held mortgages

  • 33% owned their properties outright

But, they point out that "there has been a fall in the proportion of households with mortgages since 2006 (when 40% held mortgages) and a corresponding increase in the proportion renting (29% rented in 2006)."

 

Because less people can afford to buy a house these days, more people are renting and banks are reaping the benefits of this. And rent is again "lost money", it isn't an investment in the tenant's future or the local economy or charities. The bigger the increase in rent, the smaller the other segment gets. The pile of cash in my wallet that I’m free to spend anywhere I choose, gets smaller and smaller.

 

The group most likely to be affected by an increase in rent and the inability to get a mortgage is people under the age of 40. Now, if they look in their wallet and see they have considerably less cash available on a Friday night, what will they cut back on? Their charity donation or Hungry Howies?

 

I would argue that cheesy pizza bread will win every time.

 

As a sector, are we bearing this in mind when planning our next fundraising initiative? Because so much of our charity fundraising is aimed at this group.

 

Whereas there is another segment of the population who have seen their property investment growing.

 

The people who own their homes. The ones who bought them when they were cheap and are now seeing the reward. The people who have mortgages or own outright and they have that financial security. (And, who make me just a wee bit jealous because I’m still in the Hungry Howie segment.)

 

Stop targeting 20 year olds. Start targeting the people who have the money: 60 year olds.

 

For more on how to do this (i.e. stop asking them to skydive) see my post: Will you pass the charity challenge?

 

Who do you target in your fundraising?

 

Jonathan Cook | jonathan@insight-ful.co.uk | +44 (0)7921 250 211

Jonathan @Linkedin | Twitter @jonathan_m_cook

 

Photo credit: speedpropertybuyers.co.uk

 

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