INSTITUTE OF FUNDRAISING: Reporting the true cost of fundraising is a wise step

Lindsay Boswell, chief executive of the Institute of Fundraising

Whenever anyone starts talking to me about benchmarking, I really struggle to concentrate and stop my mind wandering. I can't help it. Even my spell check doesn't like the word and temptingly asks me if I want to ignore it. But when you say fundraising league tables, or what is an acceptable amount for fundraising to cost, then I become really interested.

Perhaps it is just me, but somehow benchmarking hides the importance behind this subject.

Against a backdrop of total lack of knowledge and understanding among the general public about the realities of fundraising, we have all worked hard to make our fundraising costs appear as low as reasonably possible.

Within our accounting procedures we have been allowed to bend and twist aspects of core cost to try to get down to some imaginary figure where fundraising actually doesn't cost anything at all. But why? Simply because it is unacceptable to our donors to fund salaries and offices and training and so on.

We have taken the human wish of wanting to make the biggest difference with a contribution, and then fit the way we present our fundraising around this. In doing so we have perpetuated the myth. High-profile TV fundraising events that claim that their fundraising costs nothing when they say all your money goes straight to the causes play a role in creating this atmosphere.

But attitudes are changing. We have found that many fundraising charities are now prepared to conform to an agreed template for working out the true cost of fundraising and to have this performance measured, "benchmarked", against other charities of a similar size and cause.

Importantly, by using management accounts and not the published accounts, more accurate figures can be reached and the results make very interesting reading. Henley Management Centre is carrying out this work for the Institute.

But the real conversation to be had isn't just about what does your fundraising cost, but what difference you make with the money raised.

For this reason, we are in discussions with Charities Aid Foundation to place the results of this work onto its donation-friendly web site.

By talking openly about fundraising, we will develop the courage to speak to our supporters about investing in new income streams and the complex work that is a modern major charity.

- If you want more information about the Henley project, then email: policy@institute-of-fundraising.org.uk.

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