As an organisation, how do you manage risk in your fundraising activities? Do you focus on financial or reputational risk, or both, or other things too? Do you keep going until you’ve eliminated every possible risk from your plans? If so, are your activities still worth doing by the end?
I recently popped along to the Arnolfini for the latest Bristol Fundraising Group talk about risk management in fundraising. The speaker was the excellent Ed Wyatt, an experienced Compliance Manager for multiple big charities and long-time fundraiser and trustee. Ed has kindly given us permission to share some key learning points here…
Conversations about risk in fundraising can be frustrating and unproductive. It can feel like natural risk-takers and risk-averse people are speaking entirely alien languages, and often the loudest voice in the room wins.
This can have several consequences:
Reviewing your current fundraising portfolio, and where you might find The Next Big Thing
In his talk, Ed demonstrated a simple way of reviewing your current fundraising portfolio and defining your activities using four categories:
Low risk, high reward activities are the obvious sweet spot to aim for. Most of your fundraising probably falls into this category already but, since everybody else is thinking the same thing, the growth potential or uniqueness of these activities may be limited.
Low risk, low reward activities might've been very easy to get approval for, but they may not be worth the effort. And in the unlikely event that you have any high risk, low reward activities, you should flag these up urgently. In both cases, terminating these activities could be a good way to free up capacity for something else.
That leaves high risk, high reward activities. Scary territory, but if you’re looking for The Next Big Thing in fundraising, you may need to creep beyond your comfort zone into this space.
To do this, first you need to define your organisation’s risk appetite (the blue line above) - the line you're willing to creep up to, but not cross. ‘High risk’ and ‘low risk’ are likely to mean very different things if you work for an international conservation charity with a history of provocative campaigning activities, compared to a local community library.
Your risk appetite should depend on the nature of your mission, your beneficiaries, your financial position and the characteristics of your existing fundraising activities. It’s crucial to avoid being guided by anybody’s personal judgement, even management and trustees – we recently explored this same topic in our blog about ethical fundraising policies.
It’s vital to remember that ‘high risk’ must never mean breaking the law, fundraising regulations, your internal guidelines, your ethical fundraising policy or your gift acceptance policy.
Identifying risks in new fundraising opportunities
Before you decide what level of risk you’re prepared to live with, you need to identify all possible risks associated with your activity or event. Ed suggested using your own ‘risk library’ of common categories that most risks fall into, for example:
This works best as an energetic debate, not a dreaded tick-box exercise for one person alone behind a desk. Try to ask a few different personality types to sit in a room together and discuss - both natural risk-takers and risk-averse people have a key role here. You need to create the right atmosphere and reassure people that there are no right or wrong answers at this stage.
This was illustrated nicely by a group exercise at the end of the talk. Ed asked us all to imagine we were the Fundraising Team at a local animal park, who had been approached by an events company with a new idea: a series of late-night parties at the animal park for 18-30 year olds. This would be a new and potentially lucrative audience for the charity, but hardly risk-free.
My group had five minutes to consider all possible risks, and came up with the following:
As you can probably guess, this was a light-hearted attempt at risk assessment. But Ed said that humour is a useful tool in real-life scenarios too. ‘Eaten by a bear’ might have been a joke, but it helps to highlight a real risk (injury inflicted by the resident animals) that the organisers of this event might otherwise have forgotten to flag up.
Discuss how to manage risks but decide what level of risk you’re ultimately comfortable with
When deciding what to do about each risk, use the Four Ts:
It’s crucial to adopt a varied approach. Tolerating everything would be reckless, but treating everything is likely to be exhausting and impractical. Transferring everything would be prohibitively expensive, and terminating everything would leave you with a vanilla fundraising activity, or no activity at all.
By taking ownership of your risks, and making sure they’re all within an acceptable level, you can move to a more Zen-like state with your fundraising. Most lucrative fundraising activities carry some level of risk, so you need to think back to your risk appetite (the blue line below) and decide what level of risk your organisation is prepared to accept given the circumstances:
Contrary to popular belief, compliance and risk management shouldn’t be about saying ‘no’ - it's more a case of ‘not like that’. Risk-free activities are rarely financially or commercially realistic, but that’s not an excuse for failing to take responsibility of the situation or control of your risks.
In other words, don’t let your participants get eaten by a bear, but don’t let compliance bears eat up all your good fundraising ideas either.
Huge thanks to Ed Wyatt for giving us permission to share his learning, including his diagrams, and introduce bears into the story for no particular reason.
I’m sure you saw Andy Murray’s maybe-retirement announcement recently, and the media reaction to it. It was hard to miss.
Aside from the sporting implications, his display of human emotion felt all-too-rare. Most sportspeople give little away beyond guarded responses and cliches, seemingly ever-suspicious of media intrusion and conscious of sponsor obligations. In the often male-dominated world of sport, real emotion and honesty are frequently still associated with weakness. Yet the media response to this fateful press conference in Melbourne was overwhelmingly positive.
I’m not a huge tennis fan, but I’m fascinated by the transformation in Andy Murray's public reputation. Back in his early days, he had a reputation for being surly, bland and seemingly mistrustful of the media. In return, he was firmly portrayed as a Scottish rather than a British sportsperson, not helped when he made his infamous “anyone but England” comments ahead of the football World Cup in 2006!
While much of this transformation is down to sporting success, his personality and honesty have played a part. He’s not afraid to stand up to perceived injustices and voice his views on difficult issues such as gender equality and Scottish independence. And following his recent openness about his physical and mental struggles with injury and pain, his public stock has never been higher.
Watching Andy Murray reminded me just how refreshing, disarming and impactful authentic honesty can be. This is an under-used tool in the charity sector.
Charities are often brilliant at holding up a mirror to society and making people notice and care about injustice. But are we always good enough at holding up a mirror to ourselves? And what holds us back?
When you’re short of time, it can feel easier to present a simple, sanitised version of yourself and your work. Crafting messages about your struggles and weaknesses feels like it must be done carefully. After years of negative media coverage about charities, it's natural to want to present yourself positively: we know exactly what we’re doing, and every penny we spend goes to plan.
I don’t think it always has to be like this. Here are a few ways of showing your more honest side, and why it's worth the time and effort:
1. Show that your work is challenging and things don’t always go to plan
Many projects are complex to deliver. Talking about your setbacks gives people an insight into what your work is really like and makes them more emotionally invested. Think of the narrative of any good film or book - it's rarely plan sailing to the end, and the setbacks draw you into the story.
Great fundraising is often a response to adversity. For example, in 2014, Manchester Dogs' Home raised £1.2million in 48 hours after a devastating fire. Communities rally around organisations in times of crisis, particularly with the rise of crowdfunding. Hopefully you won't experience a disaster, but being honest and open about minor setbacks – for example if you experience a delay or issue with building work after a capital campaign – can help you to raise vital extra funds if needed.
2. Trusts and foundations reward honesty too
It’s not only public fundraising – honesty with funders usually pays too. With the precise focus on outputs and outcomes, we can often feel mortified if we're unable to deliver a project exactly as planned. However most funders are too experienced to expect everything to go as planned. If there's a hitch they’re usually on your side – they want things to go well too, and are often surprisingly willing to help.
I know one charity that's delivering a big six-figure project. They rely heavily on volunteers, but had struggled to find a good volunteer coordinator, and failed to achieve some outcomes as a result. Instead of disguising or finding excuses for this, they explained the situation honestly in their mid-project report. The funder’s response: how much would it cost to increase the hours of your volunteer coordinator post and pay a better salary to find the right person? A top-up grant of £10,000 was on its way a few weeks later.
3. Involve your supporters in decisions that affect them
I often see charities second-guessing how to communicate with their supporters. Would they prefer a monthly or quarterly newsletter? What types of story do they most want to hear about? Will they prefer Event A or Event B? Staff often have differing opinions, but rarely think about actually asking supporters.
Perhaps charities assume their supporters won’t appreciate the question – will they feel the charity should know the answer already, or simply not bother to respond? However, consulting your supporters on important decisions shows a willingness to learn and leads to better engagement and more reliable insights. The real honesty here is asking for advice, and admitting that you don't have all the answers.
4. Handling complaints well is worth its weight in gold
We all make mistakes sometimes, but it's too easy to respond with a weak excuse or with the defence that "we're just following our policy". Have you ever responded to a complaint with: “You know what, no excuses, we just got this wrong”?
Most supporters complain because they care, and want to give you a chance to get things right. They’re not trying to catch you out. They’ll usually understand if you made a mistake because, guess what, they also make mistakes sometimes. A well-written apology and honest explanation actually builds trust and appreciation for what you do - several times I've seen this not only salvage a relationship with a donor, but also lead to increased support.
5. Show the people and personality behind your work
Finally, being honest is also about showing what your work is really like – even if you look stressed, your desk is messy and your office is cramped! Showing the real you leads to empathy and familiarity more than judgement or criticism, in my experience.
In my first job in the sector, I ran a major student fundraising event. We frequently tried to post photos on social media of us sending out welcome packs, taking deliveries of T-shirts or welcoming new staff. Our fundraisers genuinely liked this – for some reason, most seemed to think we were running the event out of a broom cupboard, and were amazed that the charity had a ‘normal’ office! It helped people to get to know us and appreciate that we were a professional organisation doing a lot of work behind the scenes.
So thank you Andy Murray for the reminder about the power of honesty - and if you've got any other tips or stories about putting this into practice with your supporters or donors, we'd love a comment below!
For many charities and social enterprises in a tight financial position, it's the classic dilemma. You need to invest in fundraising, perhaps to replace dwindling income from other sources, but have less disposable cash than ever.
So building the case for investing in fundraising – whether that means a new staff member, hiring a consultant or increasing your marketing budget – isn’t easy. Particularly when it involves dealing with management or trustees who may know less about fundraising than you, and are naturally risk averse.
If you were asked to put together a robust and convincing case for investing in fundraising, where would you start? How would you address people’s concerns? Here are our top tips:
1. Show how fundraising success would boost your overall mission
When I'm working with an organisation on their fundraising strategy, I initially ask two questions: Why have you decided to focus on fundraising? What do you hope to achieve through successful fundraising?
Many organisations set ambitious goals for their project work, but fail to show the same fundraising ambition. But the two things are inextricably linked – if you’re trying to double the number of people you help, or move into a new region, you'll likely need a step-change in fundraising.
So try to make people focus on how much more the organisation could achieve if it raised more money. You’ll stand a better chance of convincing management and trustees to make the investment needed.
2. Educate people about your current fundraising efforts
I’ve worked with organisations whose CEO or trustees have been genuinely surprised by how much they’re raising in certain areas, or completely oblivious about simple blockages that are holding back fundraising. However, people will make better long-term decisions about fundraising if they understand this properly.
Inspire confidence in your future plans by emphasising which areas are already proving successful, and which ones have the potential for a drastic improvement with a little more investment.
3. Show the long-term financial return…
Investing in fundraising never yields an immediate return. Encourage trustees and management to consider the bigger picture by modelling your return on investment (i.e. how many pounds you raise per pound spent) over 3-5 years.
Fortunately, there’s a way to do this that doesn’t involve plucking figures out of thin air. Check out the excellent Gimme Gimme Gimme guide by nfpSynergy, which outlines 12 different types of fundraising and provides average return on investment figures (based on a sector-wide survey) for each. You can then adjust these benchmark figures slightly, depending on where your own fundraising is stronger or weaker. While this guide is several years old, it still provides the most up-to-date figures that we're aware of.
If you’re investing in an area of fundraising for the first time, assume a more conservative return on investment in the first year while you get things up and running, gradually increasing over several years.
4. …but don’t make promises you can’t keep
If you’re persuading your organisation to take the plunge and invest in fundraising, it’s tempting to promise the world. But over-ambitious projections will only cause disappointment and financial problems later.
If you’ve taken a methodical approach to forecasting return on investment (see above), stand firm and don’t allow other people to push you to unrealistic levels. Don't just say what is necessary to win their support.
In my experience, many organisations confuse fundraising targets with project budgets. Just because your projects and running expenses will cost £150,000 next financial year, you can’t necessarily expect to raise £150,000. That’s a bit like assuming you'll come home to a full fridge, just because you’re hungry.
Ultimately, to avoid going hungry, you either need to make time to cook (i.e. ringfence existing staff time for fundraising) or buy something ready to eat (i.e. pay someone else to do the work). Your fundraising projections must be based on what you put in, not what you need to get out.
5. Emphasise the risk of not investing, to balance up the risk equation
For risk-averse trustees, certain questions weigh heavy on the mind. What if we recruit a new fundraiser and they’re not up to the job? What if we spend more on fundraising but fail to generate more income?
These are legitimate questions, but only part of the picture. Over the years, I’ve seen few organisations invest in fundraising and regret it, but plenty pay the price for standing still.
Income can disappear remarkably quickly, for instance if you lose a statutory contract or a major event flops, but can take years to build up. So asking ‘what might happen if we don’t invest in fundraising?’ is equally important.
It's helpful to highlight fundraising opportunities that you’re currently not able to capitalise on, or looming threats that you need to plan ahead for. This is about human sustainability too – if staff have been working extended hours to cover gaps in capacity, it’s vital to emphasise the human cost if this were to continue.
6. Choose the best way to present your business case
Building your case can take a long time, but you might get just an hour of people’s time and attention to win them over. So finding the right format is crucial – should it be a presentation or a written report? Should you provide all the information on the spot, or ask people to read something in advance and come with questions?
There’s no right or wrong answer. It depends on what you’re personally most comfortable with, and how your audience typically like to receive information (your CEO or Chair could offer some insight here). Don’t offer to do a long presentation if you’re not very good at them and think you’ll struggle to get the key information across. Don’t spend ages writing a long report if you know people are unlikely to read it.
Some final tips for presenting things in the right way:
“Have you got a good template for developing our fundraising strategy?”
This is one of the most common questions we're asked, but one that we don’t have a very helpful answer for. Which is another way of saying that our stock answer is “No”.
There’s a very deliberate reason for this. A fundraising strategy template puts the emphasis on writing – it fuels the common myth that your fundraising strategy can be written by someone in isolation, with just a handy structure to help pull out and shape the information in their head. But I’ve seen plenty of beautifully written fundraising strategies that ended up in the bin or a dusty drawer within six months.
Writing isn’t the most important part of creating a fundraising strategy – it’s talking. To create a really good strategy, first you need to assemble the key people who understand your organisation and your previous fundraising efforts. Then you need to discuss your key opportunities and challenges, and make difficult decisions about how to use your limited resources.
This is why, instead of a fundraising strategy template, we have a series of exercises and processes that we can help you work through to arrive at some key decisions and conclusions. Yes, we can ultimately help you to write up those decisions and conclusions in a structured way, but – cheesy as it sounds – our emphasis is on the journey as much as the destination.
Of course, just saying "No, you can't have a template - go away and do loads of work instead" feels a bit mean. So here are a few reasons why developing your strategy needs to be a collaborative process, and what to focus on:
No one person has all the right answers
Even in a very small organisation, it takes more than one person to create a great fundraising strategy. You’ll benefit from involving your wider fundraising team, project staff, trustees, even key volunteers, supporters or donors. Often these people won’t have the right answers either, but they can ask the right questions to help you get there. Sometimes they’ll even have the wrong answers, but a successful strategy relies on bringing them along for the journey (more on that shortly).
Of course, involving lots of people in the process can feel unnerving – what if certain voices dominate the discussion, or nobody has anything to say and there’s an awkward silence?
When we support an organisation to develop their strategy, we work through a series of processes and structured exercises to help everybody contribute objectively to piecing everything together. This includes:
You need to debate, make and document difficult decisions
Some organisations mistakenly think that creating a fundraising strategy involves listing out all the conceivable types of fundraising you could do, with an action plan and an income target for every area.
The big issue here is assuming that you have the resources to do everything, and that all types of fundraising are equally valuable. For smaller organisations, this usually results in spreading yourself too thin, and doing many things badly rather than a few things well. Even for bigger organisations with capacity to try everything, it still ignores the reality that spending twice as long on Activity A might be better than doing equal amounts of A and B.
So Challenge #1: Making Difficult Decisions. If we focus on an individual giving programme rather than trying to do an annual event too, can we expect a better return? Do we need to prioritise some quick wins from trusts and foundations in Year 1 to safeguard our key service activities, before we try to tackle corporate fundraising?
It takes more than one person to answer these questions – you need a collaborative process, built on the processes and exercises described above.
That still leaves Challenge #2: Documenting Difficult Decisions. What if you’ve decided to discount a type of fundraising that some of your staff enjoy and have good previous experience with? What if a new trustee joins tomorrow who loves major donor fundraising, and can’t understand why you’re not doing it?
A good fundraising strategy doesn’t just explain what decisions you’ve made, but why. Crucially, this applies just as much to the things you don't do. There are plenty of legitimate reasons for deciding not to do certain types of fundraising – for example we don’t have the right expertise, the organisation isn’t ready, it’s too risky. Documenting these choices builds confidence in your strategy, and makes it less likely that people will challenge it in the near future.
Fundraising success depends on the whole organisation
Successful fundraising requires a lot more than a good fundraising team – management need to know how to support your efforts and set realistic targets, project staff need to provide the right information to help you write convincing proposals and report back on grants, and you’ll need cooperation and a joined-up message across your social media, newsletter and at events.
However, all staff are busy and they’re not going to drop everything to prioritise fundraising, particularly if they don’t understand the significance. So taking a collaborative approach to developing your fundraising strategy – and involving the wider team – helps people to appreciate any challenges that are blocking successful fundraising, and the often small things they can do to make a big difference.
Creating a fundraising strategy is a dynamic and different process for every organisation
We’ve successfully helped dozens of charities and social enterprises to create their fundraising strategy, but it’s never been exactly the same process twice.
Depending on your focus and circumstances, you’ll need to do bespoke bits of extra work. This could include anything from analysing why you keep losing out to similar organisations for key grants, segmenting your database to analyse how many people are donating at different levels, or creating an ethical fundraising policy to help you decide when to accept – or reject – donations from companies.
If you involve a broader range of people in developing your fundraising strategy, you have more chance of identifying any weak spots where you need to do extra work, then getting everyone on board to fix them.
This is another reason why a fundraising strategy template is misleading – because it implies that every organisation can just work through the same content, whereas in reality everyone’s circumstances are different.
For more info on how we help organisations to develop their fundraising strategy, click here.
Alternatively, check out our fundraising strategy training courses and free resources.
One of the first rules of trusts fundraising is that relationships are crucial – but forming them can feel harder than ever.
This is the inevitable result of an ultra-competitive climate. With so many funders inundated by interest, they’re taking steps to minimise the number of applications they receive, and the time they spend communicating with applicants.
As a result, many fundraisers scratching their heads by the lack of feedback, the requests for no unsolicited applications, and cryptic guidance notes. Sometimes it feels like funders and fundraisers are barely speaking the same language – but with more understanding on both sides, there’d be less wasted time all round.
We recently launched a new one-day trusts fundraising course – and, in response to the widespread confusion and frustration out there, we included a ‘What funders say, what they mean and what to do about it’ segment.
Having gathered feedback from loads of charities and social enterprises, and compared it to our own experience, we’ve developed a list of five frustrating things that funders say, and what you can do about it:
1. We don’t fund core / running / salary costs
The funder’s point of view: personally I think that charities need to invest in being strong, well-run organisations more than ever, despite the media obsession with things like management and admin costs. Sadly, funders are often more drawn to shiny, tangible projects. There are legitimate reasons for this: funders have their own charitable objectives and wish to demonstrate impact for what they give, and projects often feel cleaner, simpler to understand and more likely to produce short-term results.
However, it’s easy to misunderstand what funders mean when they say they don’t fund core or salary costs. Often, they mean they won’t fund these costs as stand-alone items, or don’t want to pay to simply keep people in jobs. It doesn’t necessarily mean they won’t fund core or salary costs as a part of a project, if packaged well.
How to respond:
2. We only fund new ideas and activities
The funder’s point of view: a bit like magpies, funders are often attracted to shiny things – that means new, exciting and innovative projects. This can be infuriating, particularly if you’re seeking funding for a project that you know works and is needed more than ever. It’s often driven by concerns about sustainability – funders don’t want to feel relied upon to keep supporting the same work year on year, or may feel that it’s better value for money to make a smaller contribution to test a pilot project that can then be scaled up.
How to respond:
3. We don’t fund work which is a statutory responsibility
The funder’s point of view: this is something I find very frustrating, particularly at a time when an increasing number of activities are seemingly being abandoned by statutory services. However, many funders simply don’t want to feel that they’re just picking up the slack for government spending cuts, or don’t recognise how what you’re doing is different – particularly in areas like residential care, housing and employment support.
Applying for direct replacement funding is a bit like going on a date and talking about your ex-partner the whole time – if you make a funder feel like you’re only interested in them to replace something you used to have, don’t expect them to feel special and excited about partnering up with you.
How to respond:
4. We don’t accept unsolicited applications
The funder’s point of view: in the current climate, many funders are inundated by applications, lots of which are poor quality or don’t meet their priorities. As a result, they choose projects based on personal recommendations or their own research. This helps them to make better use of their limited resources.
How to respond:
5. We don’t enter into discussions about funding in advance or provide feedback
The funder’s point of view: again, this is often driven by a lack of resources. Funders prefer to dedicate time to the organisations they’re funding. Also, feedback can be contentious – perhaps they used to provide it, but often got a negative reaction. Finally, they may simply have nothing meaningful to tell you, if they couldn't find any fault with your project but had to make a tough decision between several organisations they liked.
How to respond:
To learn more about how to build relationships with funders, write compelling applications and develop a successful trusts fundraising programme, click here to check out our training courses.
I had a lovely trusts and foundations blog planned for this week. I really did. But it’s going on hold for a few weeks, because I’ve been bitten by the World Cup bug.
I’ve been a football fan since around 1994 (more on that later). However, for perhaps the first time, I didn’t feel too excited during the build-up to this World Cup. A combination of England’s seemingly bleak prospects and the questionable ethics of hosting the tournament in Russia left me feeling a bit underwhelmed.
Then the first ball was kicked and I've been captivated again - from the novelty of catching a few minutes of Portugal v Morocco at lunchtime to the joys of watching flamboyant surprise packages like Mexico and Senegal, and of course the typical emotional rollercoaster of an England game.
Amid the drama and entertainment, there are also a few handy lessons to be learned by fundraisers and charities:
Pride and motivation go a long way
Hands up if you predicted that Russia would be the top goalscorers and best entertainers so far?
Going into the tournament, there was a general sense that Russia had picked an incredibly bad time to assemble a weak squad. Nobody – including many Russian pundits – was talking about how far they could progress, only hoping that they wouldn’t embarrass the host nation.
In their first game, Russia put five past Saudi Arabia, before a stylish 3-1 win over Egypt on Tuesday. A seemingly ordinary team have thrived in the spotlight and been transformed in front of thousands of partisan home fans.
You probably can't find thousands of Russians to cheer on your fundraising team (and it might be a bit distracting anyway). But creating the right circumstances for people to thrive, and feel confident and comfortable in their work, is just as important as having skilled staff. If you can do more to make your team feel proud of their work, motivated to do a great job and clear about the end goal, they might be able to achieve more than you expect.
You can also punch above your weight if you play to your strengths and develop a clear plan
Russia aren’t the only team to raise eyebrows so far. Mexico secured a famous 1-0 victory over Germany, while Iceland claimed their latest scalp with a gutsy 1-1 draw with Argentina.
These two performances had something in common – both teams worked incredibly hard as a unit and had a clear gameplan, focused on playing to their own strengths and exploiting the weaknesses of their opponent.
This is also the key principle of a good fundraising strategy. You don’t need to be brilliant at everything to raise the money you need – just identify a few things that you do well, create a clear plan for maximising your return in those areas, and explain to everyone how they can play a part in getting it done.
Appropriately enough, this week is Small Charity Week – so an ideal time to celebrate the power of punching above your weight.
The power of a shared cause and dream
Even in the modern day of mega-rich football club owners and eye-wateringly big TV deals, it's still the fans that really light up any World Cup. I love the atmosphere and the colour, and seeing the passion of people who travel thousands of miles to watch their team. How many other events inspire people to give up their jobs and sell their possessions so they can be there?
Football fans are united by a sense of shared identity and a collective dream - and charities can tap into a similar feeling. People don’t support your cause because of who you are, or what you’re doing, but why you’re doing it. If you can articulate a clear vision, people will remember you and feel inspired to support your work – whether you’re trying to cure cancer, end child cruelty or make your local area a safer and better place.
Be willing to embrace change
A big talking point at this World Cup has been the introduction of VAR (Video Assistant Referees). In an attempt to reduce refereeing mistakes, certain key decisions are now referred to professional referees in a TV studio, who can review the incident from multiple angles and recommend that a referee overturns their decision.
VAR was first trialled in the UK during cup competitions last season, and was widely ridiculed. It caused long delays in play, confusion for fans in the stadium and on TV, and still got many decisions wrong. However, the system has quickly improved – while still not perfect, it’s already resulted in many correct decisions about penalties and goals at the World Cup, and is gradually being accepted as a positive development in the game.
The lesson is clear – when you try to make changes, particularly involving new technology, you’ll often face teething problems and encounter resistance. For charities, this often comes from donors, staff and trustees.
Trying to introduce a new CRM, run your first crowdfunding campaign or dabble in virtual reality technology is unlikely to be a pain-free experience. But people may change their views quicker than you expect, and you'll benefit from taking the time to iron out problems. In 6-12 months, you'll probably be glad you pushed through the change.
Tastes change over time
While I’ve been rapidly sucked into this World Cup, I haven’t always been a football fan. My first distant World Cup memories are from USA 1994, but they're not good memories. Apparently I came home from school, turned on the TV to watch my usual cartoon, found it'd been cancelled for the football, and threw a tantrum.
My parents like to remind me that I spent the next few hours sulking and cursing “stupid football”. I’m not sure what happened next, but by Euro 1996 I was a total convert, screaming the house down as we thrashed the Netherlands 4-1 at Wembley – one of my favourite football memories.
People’s tastes and circumstances change over time, and fundraisers need to stay on top of that. A student volunteer might not be in a position to donate to your work now, but may feel totally differently after five years in their graduate job. Your major donor might gradually lose interest in Project A, but start to really value the impact of Project B over time. Event trends come and go out of fashion, often leaving you scratching your head.
That’s why it’s so important to keep building genuine relationships with your supporters, recording what you learn from conversations about their interests, and developing personalised asks to match. This will help you develop a more engaged supporter base, and ultimately raise more money for your work.
But that's a job for tomorrow. Tonight you need to get home in time for Argentina v Croatia at 7pm - it's going to be a cracking game.
In the world of fundraising, I can't think of a more anticipated and talked-about date than 25 May 2018. It feels like the countdown to the General Data Protection Regulation (GDPR) coming into place has been going on forever, but now we're barely two weeks away from the big day.
Don't worry - this isn't another blog telling you how to get ready for GDPR. There are plenty of them already. I'm interested in the longer-term view - how could public fundraising fundamentally change as a result of the introduction of GDPR, and what should charities be doing now to stay ahead of the curve?
A friend of mine, who works in fundraising compliance at one of the big charities, set me the challenge of writing a blog about 'Public Fundraising 2.0' in the brave new world after GDPR. So I've dusted off my crystal ball and shared a few ideas...
Successful charities will focus on better relationships with fewer donors
There's no getting away from it - opt-in consent will make it harder to capture usable donor data and mean fewer contacts on your database. Gone are the days of adding big batches of contacts to your newsletter list gathered through business card drops, event contact lists and via your supporters' own fundraising efforts (arguably many of these methods weren't compliant pre-GDPR anyway, but many charities are only now clarifying their obligations in relation to existing Privacy and Electronic Communications Regulations (PECR)).
It's easy to see reduced data capture and fewer contacts as 'A Bad Thing'. After all, the traditional donor pyramid approach is very clear - capture enough new contacts at the bottom end and do a few clever things to nurture them, and you'll eventually have more high-value donors and legacy givers at the other end:
Although this approach is often accused of being outdated and fundamentally flawed, I think it has its merits (but that's a topic for another day). However, there's no doubt it's been working pretty badly for most charities. There's too much focus on quantity over quality - why keep building a database of passive contacts who rarely or never engage with your charity, when you're not investing in the capacity to communicate with people on a personal level or the analytics to evaluate what approaches are actually working?
Soon you'll find it much harder to build up your mailing list - or maybe you won't even have much of a mailing list at all, if you've been seeking fresh consent for GDPR - so you may as well start focusing on quality instead.
This means taking the time to use the data you have to personalise your communications as much as possible and segment your contact list more intelligently, making your mailings more relevant and targeted. You're only allowed to store personal data that you use anyway - so if you're collecting it, you ought to be acting on it.
Smaller charities may finally unlock the potential of major donors and legacy fundraising
A smaller contact list means two things - more time to focus on the supporters you do have, and fewer opportunities to get things wrong.
Retaining donors will become even more important, so charities have to be able to delight and inspire their donors. This should mean better thank you letters, more personalised follow-ups after events, and CEOs and trustees dedicating more time to meeting and cultivating high-value prospects.
Major donor fundraising and legacy fundraising have long been undervalued by smaller charities, who are often put off by the lead time and initial legwork involved. Now this might start to seem like a more obvious route, as high-volume individual giving starts to feel like a more difficult and less profitable pipe dream. If smaller charities start to realise the benefits of investing more time (and senior management time) in cultivating donors, I suspect we'll start to see an increased focus on major donor and legacy fundraising.
The value and popularity of communication channels will gradually change
If you do still want to focus on mass marketing, you may need to reconsider which channels work best. The high bar set for the level of consent you need means that email marketing could become a fading force - mailing lists are shrinking, people unsubscribe at the touch of a button, and emails are increasingly being caught in intelligent spam filters.
Meanwhile, unaddressed mail requires much less in the way of consent - so while this is a blunt instrument and the precise opposite of a personalised approach, it's likely to become more popular. It won't become an effective tool overnight, but could start to look more attractive to charities struggling with email marketing. As a result, more cost-effective and creative approaches to unaddressed mail will start to emerge over time.
Social media fundraising will also finally start to take off. Successful charities will focus less on trying to capture email marketing consent from followers, and more on engaging with these people meaningfully within that platform. The new Facebook fundraising tools mean that people don't need to be on your mailing list or even visit your website to spontaneously donate. So why spend time on your dwindling mailing list when you could be mastering these tools or making sure you reply to every single follower quickly and personally?
These changes will happen gradually, so you'll need to keep your ear to the ground and not assume that what worked best yesterday will still be the best option tomorrow. Which brings me to...
Charities will have to collaborate more to make sense of a tricky new world
With the whole sector taking a battering for its fundraising methods, charities need to work together to find the best way forward.
Of course there's naturally competition between charities, but we'll all raise more if we help each other to win back the trust of an increasingly sceptical public and deal with the challenges of GDPR. Large charities have access to more supporters - and therefore more meaningful test data - than smaller charities. Charity A might be more experienced with a specific audience than Charity B. One of your fundraising campaigns may have backfired spectacularly in a way that other organisations could learn from.
Some fundraisers are already collaborating to great effect - the immensely useful Fundraising Chat group on Facebook has topped 6,000 helpful members, but that's the tip of the iceberg for the sector as a whole.
Choosing the right third party platforms will be vital
Your Data Protection compliance and data capture methods are only as good as the third party platforms you use - whether that's Facebook, Mailchimp, Justgiving or any other system.
With data security high on the news agenda, people are becoming more cautious about sharing their data online - so platforms that are trustworthy and creative in how they gather data will be worth their weight in gold. Choosing the cheapest option may be a false economy, and free platforms are often free for a reason.
I recently worked with a charity running their first ever crowdfunding campaign. Despite setting an achievable fundraising target, they knew a lot of work would be involved - so the true value of the campaign would come through the long-term value of the donor relationships they built, more than the short-term income.
They successfully hit their target, but their crowdfunding platform was tricky to use and hadn't given much thought to donor consent. As a result, the charity felt unable to add the donors to their database, or even email them again to seek consent. A different platform, even with higher fees, would've resulted in a much more valuable campaign.
More fundraising will become product-based, and maybe not really fundraising at all
Without a sizeable supporter database, we'll become more reliant on profitable one-off interactions than repeated asks - but maybe that's no bad thing.
With charities increasingly picking up the slack for spending cuts and social inequality, an increased number of appeals feels inevitable. But fundraising is arguably reaching saturation point in terms of how much it interrupts our daily lives - in the streets, at our doors, on TV and through our letterboxes.
One way to address this is to make fundraising a more welcome part of people's lives - through gamification, collaboration with retailers or social media stars, or events that are profitable based solely on selling people a good experience rather than capturing their data for long-term fundraising. This focuses on the product instead of the ask. It blurs the boundary between fundraising and broader income-generation, and sometimes isn't really fundraising at all.
We recently published this blog on the need for more non-disruptive fundraising, which is only going to become more important after the introduction of GDPR. Have a read now to get some inspiration if you haven't already.
If you were asked to create an ethical fundraising policy, what would you do and where would you start?
With the latest wave of bad news stories – especially the Presidents Club scandal, which saw charities scrambling to hand back donations – I’ve been contacted for advice by several organisations who, quite sensibly, want to avoid getting in a similar position themselves.
An ethical fundraising policy sets out what your organisation is willing to do and not do in relation to fundraising, based on some agreed ethical principles. This often includes (but shouldn't be limited to) when you may choose to reject a donation.
If this sounds like a straightforward exercise, it shouldn’t be. It goes without saying that ethics aren’t black and white, so putting together this policy must involve careful thought and reflection.
Here are six guiding principles to keep in mind if you're creating an ethical fundraising policy:
1. Start a conversation - don’t search for a template policy
A common mistake is to assign this task to one member of staff, and ask them to find an example policy that can be adapted quickly for your organisation.
However, creating an ethical fundraising policy goes right to the heart of your appetite for risk, your charitable objects and the areas of particular sensitivity for your cause. As such, it's crucial that trustees and senior management are involved.
This process should start with a conversation. This is arguably the most important stage, since you need to debate different scenarios and views, and arrive at a position that feels right for your organisation. This is usually a thought-provoking exercise that improves everybody’s understanding and appreciation of the complexities involved. If you treat creating the policy as a box-ticking exercise, you’ll miss out on this valuable development opportunity.
2. Take a broad view – don’t over-react to one event
It's common to be prompted into action by a single event, like a high-profile bad news story. This isn’t a problem as such, but you shouldn't let it skew your whole approach.
In the wake of the Presidents Club scandal, many charities are focused on whether they should accept (or return) certain donations. However, this is only part of the puzzle – your policy may need to cover the ethical standards you expect your suppliers to meet, how you check those standards, and how you interact with vulnerable donors.
It's helpful to start by making a list of all the circumstances and ethical dilemmas your charity needs to consider. This should be informed by the types of fundraising that you do and your existing risk assessment, as well as by external events.
3. Define your attitude towards risk – avoid making decisions that you’ll reverse later
Keeping everyone happy is rarely possible, as recent developments show. Many people were outraged that charities like GOSH had accepted donations from the Presidents Club, but others were reportedly angry when they considered handing them back.
There are no right or wrong answers, so you need to judge what feels appropriate for your organisation, anticipate how your supporters and beneficiaries might react, and be prepared to justify your decision. It's no good having a policy in place, then caving in as soon as you put it into practice and people object.
Defining your organisation’s attitude towards risk is essential – this is why trustees and management must be involved. Accepting some donations can be risky, but being totally risk-averse is a risk in itself – it can demoralise staff, or damage your financial position. This is inevitably a sensitive balancing act. It may be helpful to consult key donors and beneficiaries when creating your policy, to anticipate objections in advance.
4. Make it relevant to your cause – don’t be over-simplistic
When defining whether to accept or reject donations from individuals and companies, you may be tempted to start by creating a list of 'no go' areas, like if they are linked to alcohol, drugs, gambling or pornography.
Unfortunately, the world isn't that simple - household name companies sell alcoholic products, and established publishing companies produce pornographic magazines. If you're not careful, you could find yourself turning away a lot of donations!
You need to be more specific and mindful of your cause and charitable aims. It's not about what staff or trustees personally think is ethically correct, but whether a donation might damage your mission or beneficiaries. An animal welfare charity might be reluctant to accept a donation from a cosmetics company, but happy to do so from an alcohol brand - whereas an addiction charity might take the opposite view.
5. Include specific processes and procedures - not just general guidelines
Your policy should not only set out your position, but explain how to action it - for example, do you subject donations over a certain amount to more rigorous background checks? What do those checks involve? How do you go about reporting serious incidents?
This will help staff to put your policy into action, and also show anybody reading it that you're serious about fundraising ethically, rather than just treating it as a tickbox exercise.
6. Make your policy part of the bigger picture - don't see it as enough in isolation
It's tempting to sign off your ethical fundraising policy and assume it's 'job done' - but in reality, this is an ongoing commitment and part of a larger compliance picture.
Your policy shouldn't just sit in an obscure corner of your shared drive. It must be an ongoing reference point that's displayed clearly for staff to refer to when needed, and part of induction processes for staff and volunteers. Fundraisers should feel able to raise any concerns or discuss situations they feel unsure about. Management and trustees should review your policy periodically, in response to changing fundraising practices, issues affecting the sector, and changes to your own fundraising portfolio and risk assessment.
Aside from creating an ethical fundraising policy, you may also want to, for example, review your Data Protection compliance ahead of the arrival of GDPR, ensure your trustees are aware of their legal fundraising duties as set out in the Charity Commission's CC20 document, or produce a short supporter promise outlining your commitment to good fundraising (I've always liked this example from Mind).
It’s tempting to think that the recent fundraising crisis came out of nowhere – that public resentment was just whipped up by the media and a few horror stories – but the reality is different.
Frustration and dissatisfaction had actually been simmering away for a long time. In 2016, nfpSynergy reported that the charity sector had one of the lowest complaint rates across seven sectors, but the highest level of people wanting to complain but not doing so. Given that the other sectors included pensions, mortgages and broadband providers, that’s a sobering statistic.
So why have people been growing increasingly unhappy with charities? Specific cases of bad practice haven’t helped, but I think there’s a broader issue.
Most of our public fundraising methods seem to rely on interrupting – rather than complementing – our everyday lives. We get stopped in the street. People knock on our doors. Charity appeals pop up on TV and through our letterboxes.
In a world marred by spending cuts and growing inequality, this may feel inevitable. More and more people are being denied happy and healthy lives, and charities are stepping in to pick up the slack. Desperate times call for desperate measures, and if these fundraising methods work and people have the money to donate, what’s the problem?
Unfortunately, many fundraising methods seem incompatible with a changing society. Digital technology has given people an unprecedented level of choice and flexibility. We stream music that we want to listen to, instead of sitting through songs we don’t like on the radio. We watch our favourite programmes on catch up TV, rather than 'seeing what’s on'.
We increasingly live in our own bubble where we do things on our own terms. So when we perceive that we’re being interrupted unnecessarily – whether by a company, a charity or an individual – we often feel harassed or angry.
So street, door-to-door and television fundraising – while hugely successful financially, particularly for household name charities – are often negative experiences for the public, stirring up feelings of pressure and guilt.
I’m not saying that 'traditional' forms of fundraising are fundamentally wrong, or that negative media coverage is always justified. However, in these tough times, many charities need to raise increasing amounts from the public to keep supporting their beneficiaries. For this to be sustainable, we need to be more creative and varied in our fundraising efforts.
A popular buzzword today is ‘disruption’ – the concept (originating in Silicon Valley) of smaller companies unseating market leaders in an industry with an innovative or simpler solution. But when it comes to fundraising, perhaps the most effective form of ‘disruption' is actually to be as non-disruptive as possible.
We need to find more ways to fundraise that fit in with or add value to people’s lives, rather than interrupting them.
I’ve seen a few great examples recently – and while many are being implemented by large charities, there’s plenty that the whole sector can learn:
1. Rounding up in shops
Recently, staff in my local Tesco in Bristol were fundraising for Diabetes UK and the British Heart Foundation. To support their efforts, Tesco added a prompt to their self-service machines asking customers to make a small donation to round up their bills:
Over about a month, I must have donated ten times (I’m not a very strategic shopper, and Tesco is a one-minute walk around the corner). Never more than 10p – but with so many customers and transactions, you can imagine how this small but frequent giving can add up.
While this did involve adding an extra screen to the self-service process, I could choose to donate or decline within two seconds. It didn’t feel obtrusive at all, and there was no awkwardness in saying no. Many people will have supported two charities that they might not have thought of giving to before.
Smaller charities may find it near-impossible to forge a partnership with a major supermarket. However that doesn’t stop you approaching local shops or restaurants about a similar arrangement, or applying to supermarket community schemes like Waitrose’s green token scheme. You can also look at joining nationwide schemes like Pennies.
2. Good old-fashioned community fundraising
Community fundraising is brilliant because it performs a social function as well as raising money. It's something positive to do and provides an opportunity to meet new people, which can be really important for some.
While most people immediately think of the Macmillan Coffee Morning – which raises almost £30million annually – personally I love Mind’s Crafternoon fundraiser. This promotes mental health and mindfulness, while encouraging people to come together and focus on making something.
Any charity – no matter what size – can design an attractive community fundraising idea for their own supporters, whether that means a database of a thousand people or a small group of friends and family.
The key is to develop your idea in consultation with your target audience, start small, gather feedback and gradually scale it up. Ultimately, community fundraising works best when it's led by volunteers, with minimal input and support from paid staff.
3. Social media collaboration
Building an audience for fundraising is tough for smaller charities, so getting a leg-up makes a huge difference.
I’ve always loved this example of how the popular Humans of New York photoblog raised over $100,000 in less than an hour, by combining a powerful ask for a local cause with an inspiring story. Founder Brandon Stanton had already built a huge audience that enjoyed glimpsing other people’s lives and hearing their stories, so appealing for help was a logical next step.
Winning the trust of an audience that are already passionate about something, and making a related ask on the platform they already use, is another great way of weaving fundraising into the fabric of everyday life.
Building a relationship with - for example - a blogger or YouTube star isn’t easy, but might be a better bet than approaching major companies, particularly if there’s a reason why they’d support your cause. Try looking out for rising stars and make contact with them before they hit the big time.
Ever been through Stockholm Airport and seen these charity arcade machines?
I love this for two reasons. Firstly, it takes something that’s already popular and adds a fundraising twist. If people like arcade machines in airports, why wouldn’t they love using them for a good cause?
Secondly, this is a brilliant example of the gamification of fundraising. This increasing trend uses games, challenges and adventures to give people an added incentive to support a cause – and it really works.
You’ll probably struggle to get arcade machines placed in major airports. However, you can still use this as inspiration: can you ‘gamify’ any of your existing fundraising efforts, or add a fundraising twist to something your local supporters already enjoy doing?
5. Making donating easy
When people decide they want to donate to you – no matter how or where – it’s not the end of the story. The physical act of donating has to be intuitive and convenient – if it’s too complicated, you’ll lose donors.
As technology moves on, people expect the organisations they interact with to keep pace. The use of contactless cards is booming – contactless payments now account for a third of all card purchases, up from 10% just two years ago. Cash is a fading force, and charities are losing out by still relying too much on it – by as much as £80million per year, according to this report.
It’s worth exploring options now for taking card and contactless payments, as the cost and barriers to entry will continue to come down for smaller charities. Also, make sure your donation and registration forms (both online and paper) are as simple as possible.
In a tough financial climate, charities are looking to cast their net more widely for financial support. This can include asking the general public, wealthy individuals and companies.
All these routes can deliver good results in the right circumstances, but it’s important to remember that trusts and foundations still offer one unique advantage: unlike everyone else, they exist solely to give away money.
The question is: are you doing enough to get it? Even if you think your charity’s best long-term income prospects lie elsewhere, it’s likely that grant funding will provide vital oxygen while you wait for your corporate, major donor or legacy fundraising to bear fruit.
There’s a big difference between securing a few grants and having a truly successful trusts and foundations programme. Focusing on a handful of friendly long-term funders might have a high success rate but it'll yield a limited amount of money. And it leaves you very vulnerable: if one funder decides to stop giving, a key project or even your whole organisation could be at risk.
Committing to a strategic, carefully-researched and well-resourced trusts and foundations fundraising programme could be your passport to financial security, even if it involves stepping out of your comfort zone.
We think there are five key components to ensure you have in place. If you’re looking to build a trusts and foundations programme from scratch, or make sure that your existing programme delivers great results, here are the five areas to get right:
1. Map out your funding needs
What do you need to raise money for anyway? Making a list of all your distinct funding needs will give vital context to your fundraising efforts, and help you to make the most of your limited time.
List all your different funding needs – including for project work, capital needs and organisational development. For each funding need, estimate the minimum and ideal amount needed – for instance, £30,000 would allow us to run this project at its current capacity, but £50,000 is what we ideally require to reach everyone in need. This also helps you to demonstrate the impact that successful fundraising could have on your work to your trustees and management.
Give each funding need a priority rating (e.g. low, medium or high) – this will help you to focus your efforts in the next stages below.
2. Thoroughly research funding prospects
There’s a vast amount of useful information about funders in the public domain. Use a database like Trustfunding or Funding Central to help your research – they’re worth the licence fees. Sometimes your local Community Voluntary Service (CVS) can arrange for you to access these databases for free.
Create a big old spreadsheet to record key information for each funder – including their name, areas of interest, how and when you must apply, average grant size, and similar charities they’ve supported previously. This will help you to decide which of your funding needs are the best fit for that funder, how much to apply for, and a priority level (e.g. low, medium, high). You should factor in which funders you already have a relationship with, to make use of your staff and trustee networks.
This process helps you not only to decide which funders to focus on first, but also to quantify the overall potential of trusts fundraising for your charity. If there are loads of excellent funding prospects out there, you might want to dedicate more short-term time to writing applications.
3. Prepare convincing template applications
We strongly recommend that you avoid jumping straight into specific applications, and first spend some time ensuring that you have all the necessary information available to create a convincing ‘case for support’ for each priority funding need.
This should include a summary of the issue you’re trying to address, what your solution looks like, how much it costs, how you’ll measure success, and why you’re the best organisation to do it. Gathering relevant research and statistics, data and testimonials from your beneficiaries, and endorsements from independent experts will strengthen your case.
Creating strong, reusable content will save you time in the long run, and enable you to respond more quickly to last-minute grant opportunities. It’s also vital to be able to describe your work on your own terms, rather than purely in response to funders’ questions and criteria. This helps you to identify and address any weaknesses or gaps in your projects, ahead of those vital deadlines.
4. Submitting those all-important applications
If you’ve spent time researching funders and developing template applications, this stage should now be more straightforward.
Work through your funding prospects in priority and/or deadline order, adapting your template content to fit each funder’s areas of interest and application criteria. Always read any guidance from the funder, as they often make it very clear what they’re looking for and expect you to follow this advice. Plan carefully for deadlines to make sure you don’t miss them, and always include a well-written and personalised cover letter.
For more tips on writing strong applications, check out our ‘Ten trusts & foundations mistakes to avoid’ helpsheet.
5. Don't forget about robust record-keeping
Organisation and attention to detail are essential for trusts fundraising – you need to keep track of every application you make, the date you submitted it, what the outcome was, and any feedback from the funder.
This will enable you to chase up funding decisions at the right time, make a note of when you can re-apply, and use any feedback received to improve your application next time. It’s also vital that you keep on top of thanking funders and meeting any reporting requirements related to your grant.
A good CRM (database) is often well worth the investment in the long run, as it allows you to store and analyse information better. However, there’s no reason why a well-maintained spreadsheet can’t work for smaller charities, at least initially.
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