The recession has brought mixed blessings to global development charity Oxfam, which has reported a rise in its sales of second-hand clothing and goods alongside a fall in donations.
While the organisation benefited from an increase in total revenues to £318m, this was largely due to a £27m jump in grants from governments and bodies such as the UN. Oxfam receives half its income in this way and the rise was the result of specific disasters and emergencies, such as the Haiti earthquake and Pakistan floods.
Results from the high street are more variable, with consumers keen to take advantage of the second-hand clothes it offers but less willing to donate from their own wardrobes, as they cut back on buying new garments.
Oxfam is therefore in the unenviable position of having sold much of its stock and is now struggling to replenish it. Short of another natural disaster, which no one wants, the charity could face a drop in its donations, in terms of both cash and goods.
The challenges are a far cry from those faced by the Oxford Committee for Famine Relief, which was founded in 1942 to mitigate the Allied blockade of Axis-occupied Greece. Vast numbers of people in the developing world now rely on the projects its runs.
What strategy should Oxfam adopt to ensure the money keeps rolling in? We asked Annette King, chief executive of OgilvyOne London, who has ActionAid UK among her clients, and Sharon Johnson, strategy partner and head of ethical agency Good (Beta).
Oxfam income sources
Donations: -3%
Retail sales: +2%
Year ending March 2010 Source: Oxfam
Diagnosis: Two industry experts advise how Oxfam can better make its case
ANNETTE KING, chief executive, OgilvyOne London
People aren't bringing goods into Oxfam shops like they used to. The recession has been blamed, but I always see these mini-crises as an opportunity.
People will always donate for major disasters. Oxfam's problem is getting donations to help it do its daily bread-and-butter work. In a recession, getting people to donate via monthly direct debits is going to be difficult. This is where the shops come in.
They are popular with bargain-hunters, but rely on a regular supply of quality stock. Yet people aren't bringing stuff in because they're not buying new things.
There's a different way of looking at this, however. The nation's homes are full of billions of pounds-worth of unwanted items. Most people can't be bothered to sell them via eBay, so they gather dust and are eventually thrown out.
Oxfam has to convince people that their lives will be better without all this unwanted stuff. Anyone who's had a proper clearout will know how good you feel after decluttering.
Remedy
- Position Oxfam as the place to declutter your life. It can take all those unwanted clothes, CDs and nick-nacks, give them a good home and raise money for a good cause.
- Put the emphasis on quality rather than quantity. If people perceive Oxfam shops as just being full of junk, they're less likely to donate.
- Leverage the trust the Oxfam brand engenders. Demonstrate that donations will go to the cause. Be transparent about the costs and how the monies raised are used.
- Make it easier to donate by setting up regular collections. Use direct mail to recruit committed supporters as collectors and brand ambassadors.
SHARON JOHNSON, strategy partner and head of Good (Beta)
Last month Oxfam announced reduced donations income and a modest increase in second-hand goods sales (no surprise on either count). It relies on ordinary people for half of its income, so how can Oxfam stand out from the crowd of equally worthy charities appealing to businesses and individuals?
I love Oxfam for many reasons, but two stand out. First, it has always been driven by compassion. Second, it has demonstrated its ability to act innovatively. For these reasons, Oxfam is trusted by Brits who are happy to give money to work in far-flung places.
Nowadays, though, public concern is aligned locally. The urgency is to address what we see - the UK's homelessness, joblessness and community conflict.
It's a lot harder to interest the public in long-term development overseas. Oxfam emergency appeals succeed because there is a visible result. Development is slow, complex and made confusing by the silos in the anti-poverty movement. Policy-oriented language and impossible goals fail to resonate.
Remedy
- Programmatic diversity is great, but ongoing fundraising needs a centre of gravity. One big message creates brand resonance, such as Oxfam's vital work in impoverished UK communities.
- Oxfam needs a wide audience of ordinary working people interested in alleviating suffering and improving life.
- Leverage the Oxfam brand's properties to reach local audiences. Break down the silos between marketing, policy, retail and community engagement.
- Oxfam's 750 shop windows could carry messages beyond the price of a coat. Programmes such as Oxjam provide a captive audience, open to messages beyond social activism.