A glance at this year’s headlines would suggest that fundraising agencies are in terminal decline. In January, the telephone agency Listen, which has raised more than £250m for charities over the past 10 years, signed a company voluntary arrangement to help it manage debts of more than £650,000.
Then, in March, the 16-year-old giant of door-to-door, Home Fundraising, went into administration, resulting in the loss of about 1,000 jobs.
The following month, the telephone agency NTT Fundraising was bought out by its managers after going into voluntary administration. So is this the end of the agency model, or simply the emergence of a new, leaner structure?
Natalie Bailey, one of the directors behind the buy-out at NTT, believes that the problems agencies have faced have come about because they have been too slow to adjust to market changes. "We have to look at where we think the market is going so that we are valuable as a supplier, offering what clients need rather than hoping they need what we offer," she says.
Away from donations
Before 2015, NTT’s income was driven purely by fundraising calls from its call
centre. But after the fundraising crisis of 2015 and a tightening of the rules, it has had to move away from seeking donations. "About a third of our calls are not for fundraising," she says. "They are welcome calls, thank-yous and stewardship calls without direct asks," she says.
Ten per cent of NTT’s work currently uses channels other than the telephone, such as digital and data management. Bailey says it wants to grow that, creating more integrated campaigns.
We have to look at where the market is going so that we offer what clients need, rather than hoping they need what we offerNatalie Bailey, director, NTT
Dominic Will, former joint managing director of Home Fundraising, agrees that agencies must diversify their offers and increase their focus on managing relationships with donors and supporters. And although he thinks direct-debit and regular giving are not dead, they won’t be "the only games in town" the way they were in the glory days between 2000 and 2010, he says.
In the future, he says, charities and agencies need to be flexible about the kind of returns they expect to see from face-to-face fundraising, and not just expect a set number of donors for their money.
"We need to look beyond the one person who signs up for a direct debit after a fundraiser speaks to 20 people on the street. What about the other 19 people and those conversations? How are we going to capture and use those?"
Will says they could lead to regular giving, one-off gifts, survey information or learning more about the charity. This will take buy-in from charities, he says, because it involves running campaigns without "an obvious linear financial return. We might not realise the value until later down the line, and we might still need to work out how to measure it," he says.
Ben Smith, joint managing director of the agency Listen, says fundraising agencies remain well positioned. "We don’t necessarily have the bureaucracy that charities have," he says. "I think a lot of the innovation is going to have to come from agencies, but the drive we have to innovate should increase significantly."
Like Will and Bailey, Smith believes that a fundamental change in the role that agencies play is needed. "We’re here to facilitate relationships between charities and supporters," he says. "Traditionally, that has been transactional, telling supporters what charities think. But that will have to get more bi-directional. We’re going to have to start talking to charities more about what supporters think. As a service, we have to start pitching ourselves as being much more about development than acquisition."
Attitudes to return on investment need to change, Smith insists. Instead of focusing on short-term, one-year targets, charities will need to think about the supporter’s journey over five to 10 years.
"We have to speculate to accumulate," says Smith. "We need to change now and accept that change is going to cost some money."
This, he says, will require having "a credible and coherent story", with a couple of charities "breaking rank" to have "a grown-up conversation" with a sceptical public of donors and beneficiaries, rather than continuing the narrative that the best charities do not spend money on fundraising.
"I don’t think the public as a whole are so naive that they wouldn’t understand that we are investing now for future income because we’re not on the verge of making ourselves obsolete," he says. "Our work is still needed."
Ultimately, Will says, there remains a future for fundraising agencies. "If agencies, charities and other stakeholders in the sector can work together, there’s still very much a market for going out and engaging with people in the right way – one that offers the necessary choice and communications on an ongoing basis," he says.