Analysis

The Funding Commission’s big ideas

Fundraising | 4 Mar 2011

The Funding Commission wants to increase giving and put fundraising front-and-centre in a new world order. Co-chair Richard Gutch explains precisely what the Commission wants to happen.

The National Council for Voluntary Organisations (NCVO) set up the Funding Commission in February 2009 because of the sector’s concerns about funding.

It was already apparent that the decade of growth, driven in the main by public sector contracts but also by increased trading and giving, was coming to an end. What was less clear was that we were not just facing the prospect of two or three difficult years; we were about to experience a radical shift in the financial context within which civil society operates.

The Funding Commission’s brief was to help set a funding agenda for the sector for the next ten years. Its membership included my co-chair Fiona Ellis, interim director of Philanthropy UK, Paul Amadi, then chair of the Institute of Fundraising (IoF), and Dawn Austwick, chief executive, Esmee Fairbairn Foundation. Papers were commissioned from, among others, Beth Breeze and Joe Saxton, and interviews were conducted with ten directors of fundraising from a range of different sized charities. All these papers can be found, together with the full and summary report, on the Funding Commission website.

Increasing individual giving

The Commission identified individual giving as a potential growth area. There are going to be two million more older people by 2020 (older people give more than other age groups) and the baby boomer generation (the wealthiest generation there has ever been) is entering retirement and will eventually die. There are also more very rich people than ever before and the number of people giving a million pounds or more is increasing.

Over the past ten years efforts have concentrated on encouraging people to give and to volunteer, through initiatives like the Giving Campaign and incentives, such as gift aid. One of the main lessons from the Giving Campaign was the importance of involving charities from the outset. Some of the Commission’s interviewees felt there should also have been far greater involvement of fundraisers in the campaign and a greater focus on the mechanics of giving. The value of the work done by charities could have been promoted more strongly and the campaign should have continued for longer.

The consensus from those we spoke to was that the current priority was not to try to run another giving campaign, but rather to help charities get better at asking – without which many people will not give in the first place – and then to promote better engagement with those who give. We took it as given that all the efforts to improve the tax regime for giving were to be applauded and supported.

Challenges for fundraisers

Although there are about 21,500 fundraising staff in the top 500 charities and some 24,000 charities employing staff to fundraise as part of their role, not to mention the uncounted volunteer fundraisers, the IoF has fewer than 6,000 members and only 10 per cent of all fundraisers have completed the Institute’s Certificate in Fundraising Management. Evidence from our consultees suggests there is a shortage of training at the local level for certain types of fundraising e.g. approaches to individuals and to companies. The Funding Commission supports all the efforts being made by the IoF and others such as Skills – Third Sector to improve standards.

Sector attitudes towards fundraising are mixed. Within charities, we found that some fundraisers feel they can be viewed as ‘a necessary evil’ and alien by those involved in service delivery or campaigning. Externally, according to Charity Commission research on trust and confidence in charities, 50 per cent of people think that charities use dubious fundraising techniques. The Fundraising Standards Board is rightly keen to increase the number of charities (currently 1,300) that sign up to the ‘The Fundraising Promise’ and the IoF’s codes of fundraising practice.

There is also anecdotal evidence from our interviewees that many trustee boards of larger charities are reluctant to spend much time discussing their charity’s approach to fundraising, and are certainly very reluctant to get involved in fundraising themselves.

Theresa Lloyd is particularly critical of most charities’ failure to engage effectively with philanthropists. In her article, ‘Could the rich give more?’, she writes: ‘There are far too many organisations whose management of significant prospects and really major donors is inadequate – undertaken by inexperienced and junior staff, with no engagement by trustees or senior staff outside the fundraising team.… In other words the experience of giving is neither as fulfilling nor as much fun as it could and should be.’

Other challenges

Other challenges faced by all those involved in fundraising from the public include:

• Taking full advantage of new mechanisms for giving, such as the electronic change initiative developed by the Pennies Foundation
• Using social media to engage with younger people
• Developing local coalitions for fundraising
• Keeping up to date with innovative approaches.

Better Asking Campaign

The Funding Commission is proposing a Better Asking Campaign which would be planned in conjunction with IoF and CAF and others to ensure it complements the work of these bodies. The campaign should aim to increase the confidence and the competence of all those involved in asking for funds for charities, including trustees, chief executives, paid fundraisers, volunteer fundraisers and communications staff. It should work through existing agencies, rather than setting up new ones, but should inject new finance to help them scale up their activities.

The campaign will cost £10m – to be met by investment from the commercial sector (e.g. the financial services and communication industries) and other sources with appropriate government support, such as matched funding at a later stage in the campaign. By investing £10m in the Campaign the Commission believes the estimated £2.8bn currently spent on fundraising and publicity will be better spent and, as a result, the £11.3bn raised in 2007/08 could be increased in real terms to £20bn by 2020.

Activities and outcomes

The Campaign will provide support for:

• Training initiatives for trustees, chief executives and paid and volunteer fundraisers to enable better asking and better engagement
• Collective approaches to fundraising, working in conjunction with community foundations and taking full advantage of new initiatives like electronic rounding up and Localgiving
• Innovative approaches to fundraising, including sharing research, e.g. on donor motivation and the effectiveness of different approaches
• New ways of asking people to give, taking advantage of new mechanisms for giving
• Building the capacity of CSOs to engage with social media and technology and commissioning further research into how the potential of new developments in this field can be more fully exploited
• Initiatives to improve the way in which CSOs communicate their work and engage with those who support them
• Raising awareness of CSOs through media work around philanthropy
• Developing new, more open, measures for evaluating both the cost effectiveness and the success of different fundraising approaches.

The outcomes which the campaign is seeking to achieve are:

• More giving millions – through increased levels of philanthropy from high net-worth individuals
• More giving more – through current donors giving more effectively and increasing the size of their donations
• Millions giving more – through attracting new donors, especially younger people.

Richard Gutch was Secretary to the Funding Commission and is an associate with Prospectus.

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