Crystal-ball gazing about funding has long been a big sector preoccupation, heightened in recent years by Dave’s hot air about the Big Society and recession (both double dips of it, George). Will the sector pick up where public services withdraw, or face cuts to grants, services and jobs? Will the public keep giving?
In that context, a few points of interest over the summer. First, that the top 100 charities are bucking the trend and have grown (the big getting bigger has been discernible for several years). Second, that the sector as a whole now gets more than half its money delivering services through contracts or directly to paying customers.
Then, from the US, a survey of non-profit marketers suggests that 84 per cent of them think their own messages are too difficult to remember, 76 per cent think their messages aren’t even relevant to their audience, yet 28 per cent of them say it’s not an organisational priority to sort that out. (Would the UK be different?)
Are these things related? Is there a fundamental cultural and messaging divide when it comes to commercial and contract income, and voluntary income? I think so, but do charities realise it? Perhaps there are some sub-contracting non-profits out there for whom the marketing message really isn’t a priority. But there’s something of a stampede among health, education and social service charities, desperate to diversify and grow their voluntary (and importantly, unrestricted) income, and needing a brand to make that possible. Why? Because an organisation geared to commercial contracts builds an identity and culture focused on cost-effectiveness, quality of service and value for money to win tenders. They tend to tell a story about the organisation more than those it serves, whatever people-centred values are buried within.
If that’s the side your bread is buttered, your fundraisers have a bunch of hurdles to jump. First, the general funds they raise needs to cover the unattractive bits like fundraising and overheads. That’s not exactly motivating for a fundraiser, never mind a donor. Second, once the best bits of your programme have been offered to restricted funders, there’s not much left to talk to other donors about apart from generalities. Try to build an inspiring and emotional case for support about the difference your money makes in that environment. Third, your organisation probably doesn’t care much for donors, whatever you say. Everything points the other way, to commercial considerations. Finally, the organisation’s tone is likely to be simply wrong – unemotional, business-like and cold.
Of course, it doesn’t have to be this way, the two are not mutually exclusive. What this highlights is the importance of recognising that different money needs different things. It highlights the importance of a brand story that works as organisational glue. And the importance of being smart with your organisational economy to be sure your restricted income isn’t stifling your opportunity to raise general funds.
So, a thought for any chief executive facing something like this scenario and wanting more voluntary income. Value your fundraisers. Money really doesn’t grow on trees, and the emotional really does trump "what you do" when it comes to giving. You can’t just demand more voluntary income without supporting them with the story, content and culture they need to deliver. Because they need to inspire supporters, not procurement administrators.
The charities growing most get it, and are growing both their contract and voluntary income. Enjoy your cake.
Matthew Sherrington is strategy director at The Good Agency