Charities should stop trying to please trusts and foundations and instead be open about the real costs of running their organisations, according to Cathy Pharoah, professor of charity funding at Cass Business School.
Pharoah told an audience of delegates at the Institute of Fundraising’s Trust Fundraising Conference in London yesterday that as less government funding had become available, charities had become increasingly timid in asking for support with their core costs, with many concerned about irritating funders.
She said some charities would find themselves having to close because of debilitating running costs, unless they became more ambitious in the amounts they were seeking, rather than asking only for how much they thought funders were prepared to give.
"Charities should stop trying to please funders and quoting only those costs they think funders will accept or keep trying to cut the coat according to the cloth," she said. "They need to be honest about what their real costs are, otherwise they will not be sustainable in the long term. They should not try to second-guess what they think funders want to hear, but tell them what they need to hear."
She said there was still a lack of clarity among charities about what constituted core costs, which she said included staff, premises and essential equipment.
Foundations, she said, were increasingly aware that they could not expect to be "the icing on the cake" in the funding landscape, merely adding value to charities that received core support elsewhere.
She said that charities needed to ensure that their core costs were as efficient as possible – for example, by making the best use of resources and forming partnerships to share costs.