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Barry Gower: Why do charity fundraisers act like subsistence farmers?

Third Sector, 17 March 2009

Barry Gower, managing director, Gift Aid Recovery Consultants

Managing director, Gift Aid Recovery Consultants

Fundraisers should adopt sustainable practices - which means making decisions on business rather than emotional grounds.

Consider old-fashioned subsistence farming: farmers grow only enough food to feed their families.

Instead of looking at the long-term effect on the fields or the environment, or taking into account other factors such as crop rotation or soil management and improved yields, farmers stay loyal to their fields without any consideration for managing the resources themselves.

This is generally a self-defeating strategy and the farmer eventually has to move on.

Sustainable farming means the ability of a farm to produce food indefinitely, without causing severe or irreversible damage to an ecosystem. As a result, yields are high, profits are made from surplus harvest and these can be ploughed back into the enterprise.

Many charities demonstrate an approach to their fundraising that is reminiscent of subsistence farming: they do the same things year after year, with no real review of those that are producing surpluses, and they don't look at the effects on their donors or their donors' commitment.

Research shows that many donors will stay loyal, but how does this translate into money? If these donors will never represent any substantial income, and perhaps give even less in the recession, shouldn't you look at whether it really is worth ploughing the same furrow?

Charities rarely think of themselves as businesses, but they are.

There is no such thing as a charity, only businesses that have charitable status. As such, they need to be run as businesses, with such elements as targets, plans, budgets and emergency action plans, as well as marketing, finance, administration, HR and production.

But they can't afford emotion. To keep doing something because "that's the way we have always done it", or to embrace a new option simply because the founder or patron suggests it, not only flies in the face of good business principles - it is also sets up dangerous precedents. Charities must ensure they assess everything they do in terms of business practices as well as charitable objects.

If you don't give the business the attention it deserves, you will be in the same position as the subsistence farmer who does not employ prudent ground management - the crops will not come through. And in harsh economic times, you may find you have to get out your own begging bowl.

5 MORE THINGS ...

Major donors will remain committed to supporting charitable causes, with some likely to donate more during the recession, according to Philanthropy UK. Its newsletter said donors were being more cautious, but they were not panicking or withdrawing support.

The combined fundraising income of the 300 largest charities in the UK was £4.7bn in 2006/07, according to the Charity Market Monitor 2008. This showed a real annual growth of only 1.2 per cent.

The report, which analyses figures gathered by Caritasdata, said nearly a third of the largest 300 charities had experienced a fall in fundraising income compared with the previous year.

High-level donors continue to drive the UK gift economy, according to UK Giving 2008, published by the NCVO and the Charities Aid Foundation. Only one in 12 donors gave more than £100, but these accounted for more than half of the total amount donated in 2007/08.

Philanthropist John Studzinski told fundraisers at last year's Raising Funds from the Rich conference that major donors and foundations would cut back on grants during the recession.

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