Fundraising trends, challenges and opportunities for 2025

As we step into 2025, the charity sector is entering a year of significant change, shaped by economic pressures, rapidly evolving technology and shifting donor expectations. These dynamics call for us to adapt, innovate and find new ways to connect with supporters. The THINK team has come together to share predictions for the year ahead. From cost efficiency to AI innovations, crowdfunding to evolving donor behaviours, and workforce trends to digital diversification, this outlook offers a glimpse into the challenges and opportunities the sector is likely to face. Whether you’re looking for strategies to navigate these changes or inspiration for fresh ideas, we hope this collection of perspectives sparks conversations and action for the year to come.

Economic pressures and the drive for efficiency 

THINK’s Chief Executive Michelle Chambers: 

“The increase in the rate of employer’s NI puts the pressure on fundraising teams to raise more and/or find cost savings. Fundraising cannot grow without investment and so fundraisers will need to focus on cost efficiency to ensure every part of their expenditure budget is delivering value to the net financial contribution of their area. This focus on cost efficiency should play out across organisations as a whole, adopting this approach and mindset in fundraising should help to retain some level of investment for growth.“

One of the newest additions to our consultancy team, John Brady, agrees:

“In terms of costs and spends this will lead to a sharper focus on mailing lists, whether for appeals or events. AI tools to help fundraisers achieve this are becoming more affordable and accessible for charities of smaller sizes, not just the large. Such efficiencies are no bad thing as less mail going to people with less interest in responding that way is beneficial to the ‘common good’ and better for the environment, while still delivering income for charities.

Equally there will be more focus on existing donors and supporters rather than acquisition or, perhaps in some cases, with less acquisition. It’s not new and has been talked about for many years but with pressures on costs in general, and acquisition costs rising, it’s far more timely. Fundraising teams will look to develop and deepen relationships with existing supporters seeing an increased use of data analysis to assist with promoting different fundraising products to supporters and deepening the pool of potential medium to higher value donors. With such cost focus it is likely that there will be an increase in the use of the telephone to engage in meaningful conversations to deliver higher income whether through increased retention or increased donations through increased amounts or taking multiple lottery lines.”

Supporter experience and changing expectations 

THINK Senior Consultant Amanda Warhaftig: 

“We will continue to see demand for roles focusing on optimising the supporter experience, with increasing numbers of charities looking for better ways to cultivate long-term relationships with donors. Supporter experience professionals will be tasked with mapping and optimising the entire donor journey, from initial awareness and engagement to ongoing stewardship. This involves leveraging data analytics to understand donor preferences, identifying pain points and implementing strategies to enhance every interaction with supporters, from online donations to volunteer experiences.

“The supporter landscape is characterised by increasing diversity and evolving expectations. Digitally savvy donors are looking for personalised experiences, seamless online platforms and transparent communication. At the same time, vulnerable populations may require tailored support, accessible channels and personalised assistance. Charities need to strike a delicate balance, ensuring that their fundraising efforts are inclusive and accessible to all while meeting the evolving needs of their most engaged supporters. This will require a deep understanding of supporter motivations, empathy-driven communication and a commitment to continuous improvement based on data-driven insights.”

And THINK Senior Consultant Hannah Hyde identifies a similar trend in the arts sector:

“The arts fundraising landscape will have another rocky year as the increasing squeeze on budgets – due to ongoing uncertainty over Government funding and the rise in employer’s NIC – coupled with the ongoing ethical fundraising debates in corporate sponsorship, make income portfolios less stable. While news from the Scottish Government at the end of 2024 signalled an increase in budget for the creative industries in Scotland, and similarly additional funding for culture, heritage and sport in Wales’ draft 2025-2026 budget, the picture in England and Northern Ireland remains less clear. Crucial Levelling Up funds that were committed by the previous UK Government are now under review, and the outcome of this will set the tone for arts, culture and heritage fundraising in the year to come.

“Organisations which have relied heavily on both central and local government funding will need to prioritise diversifying their fundraising portfolios to underpin sustainability. New and innovative fundraising methods will be required alongside revised strategies that develop audience groups, identify new prospects and build diverse income streams for organisations that may be experiencing unprecedented instability.”

And Michelle adds:

“World events in 2024 have continued to demonstrate the narrowing of the lens through which many view the world. Many charities have met this shifting psyche with more locally orientated messaging and demonstration of impact; but this is much harder when service delivery isn’t in a particular place or if it operates in a different way, like medical research, overseas development and humanitarian aid etc. Fundraisers will need to work on the development of locally focused messaging, engaging relevant colleagues  in both fundraising – from community, regional and events – and service delivery in supporting this.”

Embracing innovation  

THINK Director Simon Dickson: 

“AI is on everybody’s lips and it is starting to have a big impact on fundraising. It is perhaps still more common in the mass market space but the US is leading the way with using AI in philanthropy. There’s big growth in using AI to both develop proposals and sift them. Both grantors and grant-seekers are taking advantage of new applications to write and evaluate proposals and it may well reach our shores soon. Beyond that, we are seeing AI used in prospect research (within charity databases and for ‘cold’ prospecting) and due diligence but the ethics of doing so are under the spotlight. We are even seeing it being used to develop case for support collateral and major donor communications.

“All of this is great, but it comes with challenges. Philanthropy is a people thing and based on relationships so while I see the use of AI growing further in this space, human touch is still needed and important.”

Ammina Hamed, another of our newest consultants, also highlights the importance of innovation in overcoming financial pressures:

“Innovation remains tough, particularly in the current climate. But diversifying income portfolios is essential. Tools like Canva and Wix allow charities to test ideas cost-effectively in real time. Empowering teams to bypass red tape is important and enables rapid, low-risk experimentation.

“Building a strong commercial arm and offering unique products or service to target audiences has become essential for charities looking to future-proof and diversify their income streams. Social ventures operating under charity brands have demonstrated growing success, reflecting the rise in the popularity of social enterprise. Exploring ways to generate income from products and services beyond traditional fundraising methods is likely to become a major focus for charities in 2025. By embracing innovation and commercial strategies, the sector can navigate current challenges and invest in sustainable growth for the years ahead.”

Shifting donor demographics and behaviours

Senior Consultant Emma O’Reilly points to two significant trends:

“Upcoming changes to inheritance tax in 2026 and 2027 will inevitably drive further growth in high-value charitable bequests, building on the rising trend we’ve already been seeing. In 2021-22, donations over £1 million hit a record £1.1 billion, up from £850 million the previous year. These tax changes, announced in the autumn budget, will likely encourage more people to include charities in their wills to reduce the tax burden on their estates. As people become more aware of how they can leave a lasting impact while managing their finances, legacy giving will become an even more important source of income for charities. To take advantage, charities need to focus on promoting legacy giving and maintaining strong, transparent relationships with supporters, showing clearly how these gifts are used to make a difference.”

“Younger donors will play an even bigger role in charitable giving in 2025. Insights from multiple recent studies show that donors aged 18-34 are already giving more than older age groups, and this trend will continue to grow as younger generations become increasingly motivated to support causes issues that align strongly with their values and – climate change, mental health and social justice all notable examples. In 2025, charities that successfully engage with this demographic will likely see the biggest gains in individual giving. Fundraising strategies that favour digital platforms, interactive campaigns and clear, measurable results from their contributions will resonate well with these younger audiences. Storytelling that highlights transparency and impact will be key to building trust and loyalty among this group.”

THINK’s Managing Director Matt Smith has got his eye on crowdfunding as a trend:

“The return of crowdfunding will be a big story to watch in 2025. Prior to the pandemic, online tools like GoFundMe and Crowdfunder were becoming popular but seemed to take a pause as charities focused on other ways to give during the cost-of-living crisis. With the focus now back on transparency and donors wanting to see their direct impact, expect to see online crowdfunding campaigns come back to the fore. We are already noticing strong winter crowdfunding campaigns from animal welfare, heritage and educational causes – and are predicting that small/medium-sized organisations turn to online crowdfunding platforms to meet specific funding needs.

“The immediacy and transparency of crowdfunders are particularly attractive for younger donors who want to see the impact of their donations and who want to give smaller donations to many causes.”

The digital shift and diversification 

THINK Consultant Becky Steeden highlights the sector’s need to adapt to rapid changes in the digital landscape:

“For years, the charity sector has warned about over-reliance on Meta platforms, especially Facebook. There’s been some movement towards diversification in the last couple of years, particularly since charities have invested more in TikTok. But 2025 may be the year that we’re forced as a sector to take diversification away from Meta and reallocation of digital marketing budgets seriously.

“After withdrawing fundraising tools from European markets in 2024, Meta has now dropped another bombshell on charities. Its new policy change (which some charities were alerted to just before Christmas and others are just hearing about now), which limits the ability to effectively reach supporters and optimise for lower-funnel conversions, could create huge challenges.

“And it’s not just Meta. The digital landscape is – as ever – shifting fast. Many charities have already left Twitter/X as the platform continues to unravel, with some testing alternatives like Bluesky. Meanwhile, the threat of a TikTok ban in the US in the coming days could fundamentally reshape the platform as we know it now. Add to that Google’s AI-driven search results, which are driving down website traffic and sparking concerns about the accuracy of health-related information, and you can see why 2025 is shaping up to be another year of big change.

“But here’s the good news: there’s opportunity in change. Charities that are willing to adapt and test new platforms will be better positioned to weather these challenges. Diversification isn’t just about reducing risk; it’s about opening doors to new ways of reaching and inspiring supporters.”

Data-driven decision making

Vicky Harries, our Research Product Manager, presses the importance of investing in research and analytics to optimise fundraising strategies:

“As charities are facing increasing economic pressures, changing supporter behaviour and expectation and the demand for actionable insight, there is a growing need to optimise fundraising strategies, improve donor retention and measure impact effectively. Larger charities are leveraging advanced analytics, CRM systems and AI to refine campaigns and enhance supporter engagement. In an increasingly competitive environment, those investing in research are gaining a competitive advantage.”

Evolving workforce dynamics

Jo McGuinness, our Recruitment Manager, highlights the changing expectations of candidates in the sector:

“Candidates will continue to place more value in organisational culture, values and wider benefits such as flexibility than ever before. Where organisations don’t demonstrate cultural alignment and living their values, we will continue to see churn within the sector, with candidates becoming less afraid to leave a role in a short time if it’s not right for them.

“More organisations are paying attention to the details that make a difference to candidates during selection, so 2025 might be the year we see may more ‘candidate centric’ selection processes where sharing questions and offering flexibility is the norm.”

Our outlook is that 2025 will be another year of adaptation and resilience for the charity sector. Economic pressures and technological advancements will require charities to innovate and work smarter, while shifting donor demographics and digital disruptions will call for bold, proactive strategies. But at the heart of these challenges lies an opportunity: to deepen connections with supporters, diversify income streams, and leverage data and technology to drive impact. What are your predictions for the year ahead? We’d love to hear your thoughts.

If your organisation could benefit from strategic guidance or a critical friend, in adapting to these emerging trends, we’d love to support you. Get in touch with us to explore how we can help you achieve your goals in 2025 and beyond – email us at info@thinkcs.org; you can also find us on LinkedIn.

In the meantime, we wish you a very happy New Year. 

The THINK team
January 2025