New fundraising approach from Crisis

By Adrian Fradd 21 October 2009

Last Wednesday, a colleague and I went to an event by UK homelessness charity Crisis, to launch its Urban Investor programme. This is a fundraising initiative based on an analysis of the social returns of investing in Crisis’ Skylight Activity Centres. These returns were calculated using the Social Return on Investment (SROI) approach—which puts a financial value on some of the benefits of these centres, such as increased wage earning potential and a reduced burden on the National Health Service, and then comparing it with the costs of the centres.

The analysis found that every pound invested in its activity centres provides an average social return of £3.92. Crisis are offering investors to fund in units of £1,200, and hopes to reach a total amount of just under £1.5m. In return, funders would be able to track whether Crisis was actually achieving these expected results.

Although we haven’t had a chance to look at the calculations behind all this (my colleague Sarah, the SROI specialist, will do that later this week) this is really interesting on a number of levels—at least for me!

• It draws out the explicit link between funding a charity and its impact: The whole initiative is based on establishing that connection between giving money and the impact it will have. While this might seem quite straightforward, many charities still fundraise by just focusing on the need they’re addressing or describing all their different activities. They don’t talk much about what they are actually able to do to improve people’s lives—often because they don’t know. In this case, Crisis is able to draw on its data to make concrete promises of what funders’ money will be able to achieve.

• It makes Crisis more transparent and accountable: By being public about what outcomes it hopes to achieve in the future and fundraising off the back of this, Crisis is opening itself up to greater scrutiny. It will have to report back to donors on whether its meeting its targets—and presumably provide reasons if it doesn’t. And this isn’t just to larger donors—it is also sharing its data to a much wider audience of other charities and public funders, showing what it achieves and does with its money. Only by doing this can charities learn from each other, and donors compare organisations to support.

• It focuses attention on homelessness day centres and what they can achieve: Too often in the UK homelessness sector, the emphasis has been putting on a roof over people’s head, rather than providing them with the skills they need to maintain a home—like education, a job, self-confidence and friends (see NPC’s report, Lost Property for more details on this). Day centres can do this, but frequently their contribution is overlooked as it is can be hard to measure exactly what they achieve, and even harder to identify the good ones. There has been a recent move to try and tackle this problem—and Crisis’ initiative is a valuable contribution to these efforts. If other day centres carried out the same analysis and made it available it would be increasingly possible to make direct comparisons between different centres.

Of course, there are some dangers of SROI—which are acknowledged by Crisis—that it doesn’t include outcomes that are difficult to monetize (such as self-esteem) and that it partly relies on a set of assumptions that might turn out to be miscalculated. But the whole initiative seems promising—not because it uses financial analogies and terminology—but because it builds on the notions of impact, transparency and measurement. All of which are vital in making the homelessness sector work even better to help the hundreds and thousands of people that need their support.