Sad news to hear of another charity needing to cut staff in response to a financial squeeze, however necessary. Third Sector reported that the RAF Benevolent Fund was cutting more than a fifth of its workforce.
In itself, it’s not unusual news these days. But it's sadder when the response is "across the board" cuts that, on the face of it, seem to be dismantling a rather successful fundraising operation – one that has delivered 50 per cent growth in five years. And it’s not the first time a sizable charity has cut its fundraising without understanding the consequences.
The potentially difficult dynamic between a fundraising director and a chief executive has been explored elsewhere: the pressure on income felt by both, the former feeling the chief executive doesn't get it or is unsupportive; the latter worrying the fundraising director might not be up to the job. Fundraisers can feel under-valued as a profession, or even as a specialist skill-set. A degree of professionalism rubs up against a voluntary ethos for a start. Anyone can ask for money, right? Anyone can write a letter? Just think how many people feel they should edit a fundraising appeal letter. And fundraisers dumb things down, don’t they? It’s distressing that, even within the sector, fundraising is seen as the amateur cousin of "proper" marketing. But it can become self-fulfilling.
The trouble is, there’s nowhere else to learn fundraising than working for a charity, whether inside the organisation or for an agency. Unlike other necessary specialisms such as personnel management or accountancy, it’s not an easy thing to buy in from other sectors and the lack of investment in professional development in fundraising means there’s a shortage of fundraisers at senior levels. It’s a bit of a catch-22.
So what happens? Well, when fundraising is under-valued as a specialism, and then when there’s a shortage, charity leaders imagine the answer lies in the private sector and they go looking for "real" marketing experience. Sometimes insultingly so. One charity advertised for a fundraising director – not that they called it that – with the encouragement that "you will come from the corporate sector". Sometimes, it works and is very good. There’s much to learn from different experiences and disciplines, if eyes are open to the differences, and some companies are renowned for their marketing training programmes. But sometimes, it’s disastrous.
And here’s the first culture shock to be aware of. It might seem blindingly obvious, but private sector marketing generally has an advertising mindset. Why are charities seduced by this? That dangerous word: awareness. Brand awareness is low. Get the message out, people will get it and money will come, won’t it?
It doesn’t work that way. Think about it. The job of commercial advertising is to generate a desire for something you don’t even know you wanted and to influence a purchasing decision at a point of sale. Online or otherwise, you know you’re going to buy it. The question is which make, size or colour, extra bells or not, and for what price?
Apply that advertising approach to charities and what happens? Absolutely nothing. Because there is no point of sale, there is no shop where people go when they wake up in the morning with the urge to give and the determination to find a charity to give to. You’ve just spent a lot of money on beautiful awareness ads.
This is where integrated campaigns come in, of course. Good fundraising provides the point of sale in the same breath, saying how to respond to the call to action. Advertising can and does boost direct response, if done well. But it’s rare, and advertising without response costs a lot of money.
The other culture shock to be aware of is altogether different, and tends to hit when a chief executive or finance director comes out of the public sector with their service delivery experience. There, you get a budget, you manage it and you know you have to use it or lose it. Underspend, and you won’t get it next year. And if you need to balance books, all you can do is cut costs. Applied to a charity, this is the first instinct when income is down. Cut costs. Big ticket budgets can always trim; overheads and staff costs, across the board. And fundraising.
Except that charities do not start the year with a full budget to spend down. They start at zero and with everything to raise. They need to spend money to raise it. Fundraising is not dead weight cost, but generates income. Cut fundraising cost and be sure you know what income you’re cutting with it. A public sector mentality that cuts across the board can snuff out the investment and long-term view on return needed to ensure a stable fundraising platform.
I’ve never played the balloon game yet where the fundraiser wasn’t the last in the basket. Throw them out and you’ll last only as long as your reserves and last monthly donor. Keep them to the end and, however bad, there’s a chance of rising from the ashes. It might be an unpalatable truth for some, but surprisingly enough, charities tend to be kept afloat by their fundraising income.
The Institute of Fundraising is developing a Future Leaders programme, and I’d say it’s something every charity should get behind.
Matthew Sherrington is a consultant in fundraising and strategic communications. Follow him on Twitter