51% of people think charities should raise money compared with 55% who think they do

What’s wrong with fundraising?

By Rob Abercrombie 24 March 2014

Fundraising is not a peripheral activity for charities. Nor is it an embarrassing black art we know we need but would much rather we didn’t. It is central to what we do and we should be proud of the professionalism, dedication, and achievement of fundraisers. Because without them the sector would be smaller, more marginal, and have fewer assets with which to achieve social impact.

This does not mean, however, that all is well.

I have previously argued that fundraisers find themselves on the horns of a dilemma: the public do not like many of the direct marketing techniques that large charities routinely employ (street fundraising, door-to-door, telemarketing, even direct mail), and this is bad for all charities in the long run because it will undermine trust.

Our recent Mind the gap research with Ipsos Mori shows almost a third of the public feel charities put too much pressure on people to donate—a finding consistent with other research by nfpSynergy, for example. But although fundraisers know there is a problem, these techniques continue to generate a decent response, and the alternatives are not immediately obvious.

Mind the gap highlights a further problem. Lurking behind all the recent criticism of charities is the really tricky question about the extent to which the public understand what charities really do and how they are run. For some members of the public, and indeed for a particular breed of politician, there is discomfort in the idea that charities are professionalised organisations that employ people, have overheads, marketing budgets and so on.

I’m not sure how these people imagine effective interventions can be delivered at scale without these things, but nonetheless there persists a hazy but quaint notion of ‘charity’ to which the professionalised model is inimical.

The point I want to make is that charities, and particularly fundraisers, are often complicit in this public misunderstanding.

The recent Panorama about Comic Relief is a good example. As part of its fundraising pitch, Comic Relief states every penny donated by the public goes to the frontline, and is not spent on overheads or fundraising costs. It can make this claim not because it doesn’t incur these costs, but because it can fund them from short-term deposits, which as we know are invested in the markets (how they are invested is another story).

It’s fortunate for Comic Relief that its business model means it has substantial sums of cash waiting to be spent on grants, which generates enough return to cover their overheads. There’s nothing wrong with this per se, but the sleight of hand used in its fundraising message implicitly suggests overheads are neither necessary nor a legitimate use of donors’ money. By doing this, Comic Relief serves its own short-term interest, but performs a disservice to the sector as a whole by perpetuating the myth that low admin costs leads to a higher performance.

So for reasons of short-term individual gain fundraising charities are contributing to public misunderstanding that undermines our longer-term collective interest. And you can see why there is a strong disincentive for any individual charity to break ranks and be open about the professionalised nature of their activity.

These are big challenges for the sector and I don’t pretend to have the answers. My instinct is that the solution lies in more transparency—a lot more. I also think funders should play a part in investing in the fundraising profession and in fundraising innovation, which is a rarity at the moment. And I think there is an obvious role for the fundraising ‘infrastructure’ in providing leadership to help deal with these collective challenges.

On this last point, when NPC talks to fundraisers working within charities we encounter openness, curiosity, a willingness to reflect, and a thirst to find new and better ways of doing things. That isn’t always the reaction we get from the profession’s leadership, and I don’t know if I am alone in seeing a pattern of defensiveness in the way those who speak for the profession behave in public.

This really matters because the collective action problems I have outlined cannot just be laid at the door of fundraisers. They exist for whole organisations and the whole sector, and we cannot leave fundraisers to carry the can or to find the way through without support. If we are to address the challenges I have outlined, it is vital that the sector as a whole engages with fundraising, and that those with leadership responsibility within fundraising see this as an opportunity not a threat.