nfpResearch recently appeared at CharityComms’ Strategic Marketing Conference 2023, an event which made for an absolute treasure trove of insights into marketing and comms. Having received a lot of positive feedback around one of our resources, we thought that we’d share it in today’s blog to give you an idea of how you can evaluate the external factors that can impact your charity and mission.

It’s called a PESTLE analysis, and we’ve used its formula many times to monitor the landscape for a charity’s operations and to identify the trends and impactors that can bring about new challenges – or opportunities. 

What are the benefits to using a PESTLE Analysis?

A PESTLE analysis is an effective way to begin your strategy sessions, as it is a multifaceted approach which views the charity sphere in a holistic way. This type of reflection can form the basis for any kind of strategic work, and offers you an opportunity to:

• Identify Opportunities: A PESTLE analysis can help you identify potential opportunities to expand your reach, engage with new audiences, and better utilise technology. 
• Mitigate Risks: By identifying potential risks, such as changes in public sentiment or economic conditions, a charity can take steps to mitigate these risks and ensure long-term sustainability. 
• Plan Strategy: A PESTLE analysis should inform strategic planning process, informing mission, services, and operations. 
• Engage Stakeholders: A PESTLE analysis can help a charity to better understand the needs and priorities of its stakeholders, including donors, volunteers, and the communities it serves. 
• Evaluate Impact: By regularly conducting a PESTLE analysis, a charity can evaluate the impact of its programs and operations on the external environment and identify areas for improvement

How does it work? 

PESTLE is an acronym, standing for: Political, Economic, Sociocultural, Technological, Legal, and Environmental. An analysis should look at both the current status and future trends within these fields. Let’s break these down:

Political

This covers how the political landscape may affect your operations. Various governments may differ in their responsiveness to campaigning, meaning that the opportunities available to the sector can vary over time. Equally, political uncertainty and austerity measures can affect public trust and reduce the public’s willingness to engage with charities.

Economic

Economic outlook is obviously going to affect your fundraising potential, but can do so in ways that aren’t always immediately apparent. While in times of recession we see more of the public say that they won’t be able to support charities as much, taking into consideration impactors like changes to inheritance tax law can help you predict changes to your legacies income. 

Sociocultural

Changing demographics can have a huge impact on your ability to find supporters and volunteers. As many charities have found, we sometimes have the break the mould to reach the younger generations. We have to consider not only the avenues by which we reach different demographics, but also what their priorities are. The implications of the shift towards direct action, for example, need to be considered.

Technological

New technologies have caused a lot of disruption in the charity sector, particularly with regards to disintermediation. But technology carries with it a huge number of opportunities, such as the rise of AI which can be used to create efficiencies in content creation, and soon enough may find its way into just about every aspect of your operations. 

Legal

GDPR had a huge impact on fundraising, putting a lot onto charities’ plates to reformat how their data is collected and stored. We also recently saw the government restrict public protests, leaving many charities to wonder how their supporters might react. Being prepared for these shifts in legislation should be a vital part of strategy and can allow you to futureproof your organisation. 

Environmental

This is an obvious factor for charities working in spaces such as conservation, disaster relief, or international aid: but every charity needs to consider its own carbon footprint. Consider the public attitudes towards the environment, try to meet expectations, and communicate your successes effectively.

Overall, a PESTLE analysis can be a useful tool to better understand the landscape you're operating within. By identifying opportunities and challenges in the external environment, a charity can adapt its strategy and operations to ensure its long-term sustainability and effectiveness. We have all of this available as a downloadable resource below. If you would like to understand how nfpResearch could create a PESTLE analysis bespoke to your organisation, please get in touch on insight@nfpresearch.com