Funding the future

17 December 2010 3 minute read

Yesterday morning I attended a breakfast to discuss the report of the Funding Commission brought together by the National Council of Voluntary Organisations (NCVO). This report, Funding the future, outlines a set of proposals to improve the funding of charities in the UK.

Rather than provide a detailed assessment and critique of all the report’s recommendations, many of which are sensible, I want to dwell on just two.

The first is a recommendation for an “Increasing Impact Fund”. Specifically, the report says, BIG (one of the lottery distributors) and other major independent funders should create a £5 million per annum fund to support charities who want help developing, measuring and demonstrating their impact.

NPC welcomes this recommendation. We gave evidence to the commission and this idea seems to draw directly on the recommendation in our Social Impact Manifesto for such a fund. Our manifesto was aimed at government rather than private funders, but the idea is the same—charities need resources to address the challenge of proving their impact and dedicated fund on which they can draw is a good way to tackle this.

Let’s hope the idea moves forward. Crucially, though, government should be invited to be involved and support the fund. Despite some rhetoric from ministers (such as the Minister for Civil Society, Nick Hurd MP, saying things like there is “a great deal of pressure on the sector to more effectively communicate its impact … To be able to tell a story that doesn’t just rely on anecdotes or bringing a few people into the office to tell their personal story – I’m afraid the future is going to demand more than that”) the new government has not done anything yet to help charities prove their worth.

The second point in the report worth picking up is the focus on private giving. It is very welcome to see the report acknowledge some of the problems of giving. I have detailed the key problems in the past, for example here and here.

It is also welcome to see the report propose more investment in boosting private giving. I am surprised though by the numbers the report uses and fear it is far too optimistic.

Funding the future proposes an investment of £10 million in a “Better Asking” campaign aimed at improving the way fundraising is done and tackling the fall in the number of givers and relatively low giving among the wealthy. I am not an expert in fundraising but a number of the ideas ring true and offer the potential for increased donation. (My own experience as a donor to the charity for which I care most is indicative of the potential for more giving. If only the charity would work out that (i) I need to be sent emails not post, (ii) they should call my mobile and not my house phone, (iii) they should ask for more money, regularly, (iv) they should use new media to communicate with me, and (v) they should ask me to help recruit new donors. Like many donors, I am largely reactive and if the charity worked these things out they could easily get significantly more money out of me and, perhaps, others.)

My anxiety is whether the ideas can possibly deliver the near £10 billion increase in private giving which the report talks about. This represents more than doubling the value of charitable donations. According to the NCVO almanac, total spending on fundraising was £2.6 billion in 2007/08. An investment of £10 million is miniscule compared with this total. While a well-targeted investment could make a significant difference to making the £2.6 billion more productive, this would imply gains to the efficiency of fundraising in excess of 100% from a tiny sum of money. That seems too optimistic. The report does not make such an increase in private giving a prediction, but it uses language suggesting it is possible. I doubt it. However, I applaud the way the report recognises the need to boost private giving and the way this might be done by increasing fundraising capacity and quality.