Stephen Pidgeon: Go to the bean-counters and do a deal

Fundraisers should be saying no to demands for unearmarked funds and suggest they find better ways to express their accounts, says our columnist

Stephen Pidgeon
Stephen Pidgeon

A new paper about to emerge from the sector consultancy nfpSynergy describes the opportunities for fundraising that are open to smaller charities. It has a working title of Gimme, Gimme, Gimme and should be launched in the next couple of weeks.

Filling the hole

The report is a splendid piece that I recommend to every fundraiser beset by a chief executive or trustees running around demanding that fundraisers should immediately fill the hole left by other fast-disappearing income.

To quote from the report: "For many charities used to living on statutory, legacy or investment income, it can be hard to get used to the fact that fundraising is the only way out of the hole."

Certainly, finance directors can't bail them out. Without the status conferred on them by massive and dependable statutory and investment funds, many of them are turning out to be just bean-counters.

So my attention this week is on charity finance directors, although fundraisers are as much to blame as finance people for the imbalance of influence between those two functions in many charities. My specific beef is this business of 'unearmarked funds'. For years, individual fundraisers have been tasked with bringing in money that can be used for any purpose.

Yet I saw, a week or two ago, a brilliant new fundraising scheme by Action for Children. I put in my postcode and there, immediately, are small, local projects that need funding - a bespoke, two-seater swing for a disabled lad for £4,590, for instance.

As a donor, I can choose where my £50 will bring benefit. This follows the equally innovative My Projects scheme from Cancer Research UK, whereby I can chose which cancer I want to beat.

What happened to the insistence on unearmarked funds? I suppose fundraisers and finance folk sat down and did a deal. Unearmarked funds are normally used for fixed costs such as buildings, receptionists, fundraisers or cleaners. If such costs are instead allocated proportionately across all the charity's projects, the need for unearmarked funds is gone in a trice.

Bespoke accounts

This doesn't usually happen because it makes the cost of individual projects look too high and trustees and major donors don't like that. But finance directors could solve this simply by giving them a different set of accounts in which fixed costs are not re-allocated to individual projects. In the commercial world this happens all the time - accounts are prepared for different purposes and different audiences.

Fundraisers, take heart. Go to the bean-counters and do your deals. Say no to their demands for unearmarked funds - suggest they find better ways to express their accounts. Remember, it's you who pays their salaries.

Stephen Pidgeon is chair of Tangible and the Insitute of Fundraising's standards committee

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