Large traditional fundraising charities 'must change the way they work'

A fundraising expert tells a closed session of the International Fundraising Congress that beneficiaries must be given more power if such charities are to survive

Large charities fuelled by traditional fundraising will disappear in the near future if they do not fundamentally change the way they operate, a fundraising expert has told a closed meeting of top-level fundraisers.

At the gathering of fundraising leaders at the International Fundraising Congress in the Netherlands on Friday, which was conducted under the Chatham House Rule, the speaker warned that charities, particularly large international development organisations, had to transform themselves and give more power directly to beneficiaries to survive.

They said smaller, more agile organisations were better suited to adapt.

"Civil society organisations need to change dramatically because the world is changing," they said, warning that environmental problems such as climate change and population growth, the rise of extreme right-wing politics and the growth of technology such as direct-giving platforms were all poised to disrupt how large charities worked.

"If we want to stay relevant we can do that only by transforming ourselves and, crucially, we don’t have enough good leaders in our sector," the speaker said.

They accused sector leaders of complacency in this area, saying they had "little appetite for transformative change".

Rather than transform themselves, the speaker said, charities preferred to "play around the fringes", conducting governance reforms that fundamentally failed to address the issue.

They said that a survey conducted 18 months ago of 26 of the 30 biggest international aid organisations had found that 65 per cent were planning or currently conducting governance reform, and most conducted such reform every two to five years, a response they described as "shocking".

"My reading is that most of these organisations will slowly fade away – they are very big, they are very resilient, but they will become increasingly irrelevant," the speaker said.

Most of the international charities the speaker looked at had federated structures, where each country office had a position in the global organisation.

One delegate said this structure always led to one country being seen as "the biggest player" – usually Germany, the UK or the US – giving them more of a voice than newer country offices in the so-called global south.

The speaker agreed, saying power sat "where the money is" and was "nowhere near the beneficiary".

But the speaker said that recently founded civil society organisations, particularly those that harnessed technology allowing them to connect the donor directly to the cause, had very different power structures, in which power was focused at a local level and a global level, rather than at national level and with the more developed countries of the global north.

"So the question is are we courageous enough to learn from these guys and find out how the digital world allows us to organise in a way that gives only people we want to help the power to say how we give that help?" the speaker said.

"We need to move from representative democracy boards to direct democracy for beneficiaries."

They called for charities to have controlling mechanisms, such as a traditional board, to oversee paid staff and ensure rules were followed, but said they should hand all decision-making power on programmes to beneficiaries.

The speaker compared larger charities to oil tankers, whereas small charities and newer organisations were like speedboats, they said.

"Changing a multibillion-dollar organisation is like turning a tanker – it takes ages," they said.

Instead, they said, large charities should be willing to give funding to smaller "speedboat" organisations or projects to allow them to try out innovative new programme ideas.

"Try it out with 20 speedboats, knowing that 10 or 12 of them will sink," the speaker said. "That is the risk of trying out new things. But if one third succeed you might have a new tanker or fleet of speedboats in the making, which keeps the organisation afloat in the future."

They said there was an "enormous reluctance to let go of power" among older charities, but "the good news is if they don’t shift power voluntarily someone will do it for them, so we are in times where power shifts whether you like it or not".

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