Increasing expenditure on a charity’s brand only has a "modest impact" on fundraising success, compared with spending more money on fundraising itself, according to a new report.
Great Fundraising and Brands: Help or Hindrance?, published today by research agency the Philanthropy Centre and commissioned by ACA Philanthropy and Fundraising, says that spending on a charity’s brand is most effective when it is used to support fundraising.
The Philanthropy Centre’s chief executive, Adrian Sargeant, who co-authored the report with fellow academic Harriet Day, warned that too many charities use their brand as "an object of vanity" while failing to understand that spending more on fundraising will ultimately bring in more money.
For the report, the Philanthropy Centre carried out a detailed qualitative study to identify how brands are managed by organisations that have achieved outstanding levels of fundraising growth and how branding could be leveraged to boost fundraising performance.
It also examined the financial data of 30 UK charities over the past 10 years.
It discovered that fundraising expenditure alone could account for 87 per cent of a change in income, whereas spending on brand accounted only for an additional 1 per cent.
"We found that increasing brand expenditure has only a relatively modest impact on fundraising success while increasing expenditure on fundraising is massively impactful," a statement accompanying the report said.
But the statement added that, though spending on brand for its own sake did not help fundraising, there were some situations in which it could make an impact.
"In successful organisations we studied, we found that brand was frequently positioned as the servant of fundraising," the statement said.
"Great fundraising brands were there to drive great fundraising growth."
The report says the strongest brands for fundraising were more likely to focus on the charity’s purpose, proposition, personality and passion.
Sargeant said: "In too many non-profits, the brand is an object of vanity. It attracts hugely more attention from a board because it’s perceived to be strategic and consequential for the organisation’s reputation. Fundraising, by contrast, lacks the glamour afforded the brand and can be perceived by a board as a purely tactical pursuit – a necessary evil that can be conducted by others."
He said the report showed the folly of such an approach if the organisation hoped to increase its income enough to make its vision a reality.