FUNDRAISING SUPPORT FOR SMALLER CHARITIES

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1 FUNDRAISING SUPPORT FOR SMALLER CHARITIES Excellent fundraising for a better world

2 Recommendations: We believe that more support and focus is needed to help smaller charities to fundraise. To help achieve this we want to see key charity sector funders, sector bodies and charities investing greater resources and energy in supporting fundraising activities for smaller charities. Central and local government, charitable and corporate foundations should increase the support they provide for fundraising training for smaller charities. There should be a concerted drive across the charity sector and funding bodies to expand mentoring and ongoing fundraising advice and support for smaller charities. All funders should consider ensuring that where grant, contract or project funding is provided to a charity this also includes funding for capacity building, including fundraising, and overheads costs. Central, devolved and local governments should produce a long-term vision and plan for how they will provide support for capacity building and fundraising to the charity sector, with a particular focus on support for smaller charities. About the Institute of Fundraising The Institute of Fundraising (IoF) is the professional membership body for UK fundraising. We support fundraisers through leadership and representation; best practice and compliance; education and networking; and we champion and promote fundraising as a career choice. We have over 560 organisational members who raise nearly 10 billion in income for good causes every year, and over 6,000 individual members. Throughout this report we refer to small and smaller charities. While there is no fixed definition for what constitutes a small charity, this typically means a charity with below 1million in annual income. 2 Excellent fundraising for a better world

3 ABOUT FUNDRAISING Charity fundraising is a brilliant thing. It raises vital money for good and essential causes. It gives people the ability to have a positive impact on the world by donating. It directly employs thousands of people in skilled and rewarding careers, and indirectly supports over 800,000 jobs across the charity sector 1. Excellent charity fundraising also has a wider benefit too. It helps to build a better and more generous society. Excellent fundraising helps to improve the public s experience of charity and perception of the sector as a whole. Fundraising and the work of fundraisers in general needs to be celebrated, promoted, and supported. By supporting fundraising we help good causes, support jobs and make our society a better place to live in. By supporting fundraising we help good causes, support jobs and make our society a better place to live in. 1 NCVO, Civil Society Almanac, 2016 Excellent fundraising for a better world 3

4 THERE IS A PARTICULAR NEED TO BUILD SKILLS AND OFFER ONGOING MENTORING AND ADVICE ON FUNDRAISING ACTIVITIES. 4 Excellent fundraising for a better world

5 SMALLER CHARITIES NEED SUPPORT RAISING FUNDS Too many charities report that they lack the skills needed to be able to effectively raise the funds they need. In recent years we have seen a significant reduction in funding to the charity sector from national and local government. There is a predicted 4.6billion shortfall in annual income for the charity sector by 2018/19 2. There is a particular strain on medium-sized and smaller charities which have seen funding from grants reduce in recent years 3. This comes at a time when demand for many charities services and work is increasing. 70% of charities expect an increase in demand for their services over the next 12 months 4. This adds up to an acute need for more support for smaller charities including: more and easier to access grant funding from all sources; support to build fundraising and other skills and capacity; and a longer-term and more predictable approach to engaging and commissioning services by government and other funding bodies. The Institute of Fundraising believes that there is a particular need to build skills and offer ongoing mentoring and advice for fundraising activities. The need for investment in fundraising support is backed up by surveys showing a skills shortage among smaller charities to raise the income that they need. Recent research from Localgiving 5 highlighted that while 78% of local charities expect demand to rise, only 18% feel resourced to cope with that increase. Fewer than one in four feel that they have the skills necessary to run a successful fundraising campaign, and 83% of local groups say they would benefit from support with online fundraising. Worryingly, fewer than half of respondents to this survey felt that they would still exist in 5 years time. 2 NCVO, Charity Finance Group, Institute of Fundraising, NAVCA, Small Charities Coalition, Locality, Financial Sustainability Review of the Voluntary Sector, NCVO, Lloyds Bank Foundation, Navigating Change: An Analysis of Financial Trends for Small and Medium-Sided Charities 4 Institute of Fundraising, PwC, Charities Finance Group, Managing in the New Normal, Localgiving, Local Charity and Community Group Sustainability Report, 2016 Excellent fundraising for a better world 5

6 FEWER THAN ONE IN FOUR FEEL THAT THEY HAVE THE SKILLS NECESSARY TO RUN A SUCCESSFUL FUNDRAISING CAMPAIGN. 6 Excellent fundraising for a better world

7 THE CHANGING FUNDING LANDSCAPE FOR SMALLER CHARITIES Smaller charities have seen a dramatic reduction in funding from government sources over previous years. At the same time, one of the ways these charities have tried to cope with this is by diversifying their income streams. Specifically, by increasing income received from individuals and earned income, in particular via increases in income from trading activities and legacy donations. Over the same period the level of individual donations has remained relatively constant 6. This should focus on building the skills and capacity within these charities to raise income for their work and causes. It should include support for charities to fundraise through public donations, earned income streams, and successfully bidding for grant and contract funding streams. In the current environment it seems unlikely that the aggregate level of direct government and local authority funding to the charity sector will increase in the short to medium-term. This makes it especially important that funding bodies, including government, local authorities, foundations, and the wider charity sector support smaller charities to diversify their income. 6 NCVO, Lloyds Bank Foundation, Navigating Change: An Analysis of Financial Trends for Small and Medium-Sided Charities. In particular see the changes in income mix charted on page 22. Excellent fundraising for a better world 7

8 FUNDRAISING IS ONE OF THE MOST EFFECTIVE WAYS FOR SMALL CHARITIES TO RAISE THE MONEY THEY NEED TO CONTINUE THEIR AMAZING WORK. 8 Excellent fundraising for a better world

9 BETTER AND MORE FUNDRAISING: A BIG PART OF THE SOLUTION Fundraising is one of the most effective and sustainable ways for charities to be able to raise the money they need to continue their amazing work. Because many smaller charities lack the skills and expertise needed to undertake fundraising activity, there needs to be a step change in the investment and support offered to these organisations in fundraising skills, training and advice, and long-term support. More investment in fundraising is not the only change needed to support smaller charities. Direct grant funding has an important role to play in supporting and promoting the work of charities, and more and easier to access funding of this type is needed. However, there is also a lack of investment and support for smaller charities fundraising capacity. This is under-resourced and has largely been overlooked in recent years by funders of all types. This is a missed opportunity and if investment were to be significantly increased to provide long-term ongoing support, as well as targeted interventions, it could have a transformational impact on the sustainability and capacity of many smaller charities to deliver their vital work. Excellent fundraising for a better world 9

10 FOR EVERY 1 INVESTED IN FUNDRAISING ACTIVITY, OVER 4 IS RECEIVED BY THE CHARITY TO SUPPORT THEIR WORK. 10 Excellent fundraising for a better world

11 WHY INVESTMENT IN FUNDRAISING SUPPORT WOULD MAKE SUCH A BIG DIFFERENCE Fundraising offers a high and sustainable return on investment. On average, for every 1 invested on a fundraising activity, 4 is received by the charity. This return is even higher for smaller charities 7. Increasing a charity s capacity to fundraise can increase their sustainability in the long-term. It gives the charity the ability to raise diverse funds from numerous sources, and to do so time and again. people go on to take additional positive actions after donating, including volunteering or being involved in a campaign, and 43% have changed their behaviour or felt better or more positive as a result of donating 8. Fundraising activity doesn t simply raise money for a charity, it also raises awareness of the cause and work of a charity. This benefits both the charity and cause by creating a greater understanding of what they do and why it is important. It often spurs individuals to other charitable and philanthropic activity. 63% of 7 NCVO, Civil Society Almanac, IoF and YouGov, Insights into Charity Fundraising, 2017 Excellent fundraising for a better world 11

12 FUNDRAISING ACTIVITY DOESN T SIMPLY RAISE MONEY FOR A CHARITY IT ALSO RAISES AWARENESS OF THE CAUSE AND WORK OF A CHARITY. 12 Excellent fundraising for a better world

13 THE TYPE OF SUPPORT NEEDED In discussions with charities and sector bodies working with and representing smaller charities, a number of key themes repeatedly come up about the type of support required. Support for specific fundraising skills and training is an area where more funding and focus is needed. While there are several welcome and effective initiatives already in place, demand outstrips supply and there is a need to significantly scale-up the level of support for fundraising skills, mentoring, advice and training. Finally, a need for a long-term approach from governments and other funders was identified as crucial for smaller charities to be able to plan for the future. This includes support programmes being provided over multiple years, and a wider strategy over the medium and longer-term for how funders would like (or not) to work with and support charities. This approach is essential to allow charities to plan appropriately for their future work. Specific skills training, for example in digital or community fundraising, is necessary but not sufficient. It needs to be complemented by ongoing support and capacity building for smaller charities to fundraise. Ongoing advice, capacity and mentoring over the longer-term is also required to help charities to put these skills into practice and deliver in the real world. This type of support is best when it works with the charity as a whole, rather than any one individual tasked with raising funds. Excellent fundraising for a better world 13

14 If you would like to work with the Institute of Fundraising or want to know more, please get in touch. Mike Smith, Head of External Affairs at the Institute of Fundraising at: or on: Excellent fundraising for a better world

15 RECOMMENDATIONS This short briefing highlights the serious need for more focus and support for smaller charities to fundraise. Investment from funding bodies, and the wider charity sector to help more charities to effectively fundraise could make a big difference in their ability to continue and expand their work. To help achieve this, the Institute of fundraising is recommending that key charity sector funders (including central and local government, and trusts and foundations), sector bodies and charities invest greater resources and energy in supporting fundraising for smaller charities. The IoF recommends that: Central government, local authorities, and charitable and corporate foundations should increase the support they provide for fundraising training for smaller charities. For example, the DCMS should significantly increase the level of support for smaller charity fundraising from its current level of 100,000 per year. There should be a concerted drive across the charity sector and funding bodies to expand mentoring and ongoing fundraising advice and support for smaller charities. As a first step, a summit should be convened between government, local authorities, foundations, sector infrastructure bodies and charities to identify ways to support and scale up existing and new fundraising mentoring and support initiatives. All funders should consider ensuring that where grant, contract or project funding is provided to a charity, this also includes funding for capacity building, including fundraising, and overheads costs. Wherever practicable, this support should be long-term over the course of several years. Central, devolved and local governments should produce a long-term vision and plan for how they will provide support for capacity building and fundraising to the charity sector, with a particular focus on capacity building support for smaller charities. Excellent fundraising for a better world 15

16 FUNDRAISING SUPPORT FOR SMALLER CHARITIES Institute of Fundraising, June The IoF is a charity registered in England and Wales (No ) and Scotland (No SC038971), and a company limited by guarantee (No ). Excellent fundraising for a better world