Organisation: The Roy Castle Lung Cancer Foundation
Objective: To clear its deficit and generate a stable income
Two years ago, the Roy Castle Foundation was facing a huge deficit and had to overhaul its fundraising strategy. Under the leadership of former Manchester Evening Standard editor Mike Unger, the charity switched its focus from one-off fundraising events and charity shops to more reliable income sources such as payroll giving and legacies. The charity is now forecasting a surplus.
Created in 1990, the foundation's history is entangled with that of entertainer Roy Castle, who was diagnosed with lung cancer in 1992 and spent the last years of his life raising millions of pounds for his eponymous charity.
When Unger became chief executive in 2002, the charity was staring at a deficit of £737,000. Income fell by £1m after a four-year sponsorship deal with Littlewoods Leisure ended, forcing the foundation to dip into its reserves.
"We were attracting the sort of damaging media headlines that fundraisers pray they will never see," Unger says. "The Charity Commission launched an inquiry and it found that the foundation's rapid growth was not accompanied by vigorous checks and balances or by a supportive management structure."
This forced Unger to instigate radical changes to put the charity's house in order.
How it worked
Unger's first move was to sell the foundation's building to the University of Liverpool, whose cancer research centre shared the charity's offices and which received funding from the foundation. The headquarters was built in 1994 with money raised by Castle during his international Tour of Hope. "It was wasteful for us to be responsible for the building's maintenance work when our money should go to research," Unger says. The charity now rents space in the building.
Unger's efforts to stabilise the foundation's finances included staff cuts, but there were no compulsory redundancies. Instead Unger chose to close posts when staff moved on. The remaining staff were trained to gain professional qualifications such as the Institute of Fundraising's certificate in fundraising management. "We were a group of happy amateurs before," Unger says. "An enthusiastic team, but we had never been trained."
Unger also reduced the foundation's retail activity, selling seven of its 15 charity shops in Scotland and the North of England to Marie Curie Cancer Care.
Voluntary sector consultancy 3rd Solutions was recruited to rethink the fundraising and marketing strategy, which until then had relied almost solely on events and celebrity support. "Events and celebrity fundraising may work for short-term capital appeals, but long-term research organisations need to establish their constituency of support and fundraise for their strengths through sustainable means," says the consultancy's chief executive, Steve Sloan. As a result, the focus switched to payroll giving, legacies and trusts fundraising. The foundation has since set up a payroll giving scheme with Macmillan in the North of England and with the Merseyside Fire and Rescue Service. Both schemes are expected to become nationwide next year.
Unger managed to reduce the deficit to £150,000 this year and forecasts a surplus of around £300,000 in 2005.
And, far from casting a shadow on the charity's future, Unger says that the Charity Commission's enquiry was constructive: "It helped us to get to the point at which a stable and vibrant future was a reality." At a follow-up visit in January, the commission found that the foundation was operating at high standards of governance.
Nex t month, Paul Gauntlett, former director of fundraising at Samaritans, will join as director of development in charge of fundraising, marketing and PR.