Saving threatened habitats worldwide

Recent negative publicity about charity fundraising has given us all pause for thought

26 August, 2015 - 17:25 -- John Burton

Recent negative publicity about charity fundraising has prompted many of us in the charitable sector to review our fundraising methods to make sure that they are ethical and effective. World Land Trust (WLT) has been relatively successful at raising money and over the years I have developed a few golden rules.

I work with a wide range of potential donors. As well as treating them all as individuals, I assume that they are being as generous as they can be. It doesn’t matter if the donor is a corporate supporter planning to give £100,000 a year, or a schoolchild raising £25, they all have expectations. 

I work on the basis that every donation should be acknowledged appropriately, in the way the donor expects. I have accumulated evidence over the past 40 that potentially very generous donors will often make a (small) donation just to see how a charity responds. I have done it myself, which is one reason why I won’t support charities that don’t properly acknowledge a donation. I believe that donors need information on what their giving has achieved, and that it is important to make sure that this feedback is given in the format that best suits the donor, whether that be in a specific report, or in an ebulletin or printed newsletter, or in person.

I also believe that just because someone makes a donation, it doesn’t give us the right to bombard him or her with further requests for money. Here at WLT we pride ourselves on never making unsolicited requests for funds. Chugging and direct mail are both out. We do use digital advertising and, occasionally, print advertising. But these allow potential donors to choose to support us without pressure.

From time to time over the past 40 years, I have been persuaded (usually unwillingly) by trustees and boards to employ professional fundraisers. I have never found fundraisers cost effective.  They consume a huge amount of staff time and resources, and this all has a very real cost. Spending on our charitable objectives the cash that would have been spent on fundraisers’ fees, and utilising existing staff more creatively, is far more cost effective in my experience.

Within a charity, the fundraiser (if we have to use that tag) is just one of a team of people that together are responsible for making sure that the donor has a positive experience. At WLT, for example, the conservation programmes team provides the rationale for the way in which WLT spends the donor’s money; the communications team put out compelling and inspiring calls to action; the donations team manages the practicalities of collecting that money and nurture relationships with donors; and the web team creates a website that retains public interest and encourages repeat donations. Unless all these people are on the same wavelength, then as fast as new supporters join, they will leave.

Too rapid growth can be a problem for a small charity, and being too big an organisation is another problem. Throughout the recession WLT attracted Friends (regular monthly donors) at a net rate of 7 percent a year. As a result of this steady growth, we could use technological innovation to keep pace, rather than having to hire extra staff to deal with a deluge of new donors.

As WLT grows, it faces serious issues; not least is the question of optimum size. There is plenty written in business manuals and management handbooks, but most of the conclusions are fairly obvious. An organisation with more than about 50-60 employees is probably too big. But an organisation employing fewer than about 30-40 people may not be as cost effective as it could be. I doubt that many charities with fewer than 10 staff can be effective because the administrative burdens of HR and so on are so cumbersome, and there aren’t the economies of scale. And a turnover of less than £1million is unlikely to be cost effectively managed. (Having made these generalisations, I am equally sure there are plenty of exceptions – and I would love to hear about them.)

The upper limit on income is an interesting question. In 2014, WLT had income of £3.2million. With its current staffing and network of conservation partners, there is little doubt that WLT could spend £10-£20 million annually with only a very small increase in staff - provided the increase in funds consisted of large sums from relatively few donors. However, if the growth in income was the result of a rapid expansion of supporters giving relatively small amounts of money, that would create its own burden. And if the income growth was from government interventions this could create its own risks and problems.

Income and expenditure in excess of £20 million a year would almost certainly create a completely new set of risks and problems for WLT and that is why I prefer to see modest increases in income rather than ambitious ones. Over the years I have probably seen more conservation programmes fail because of too much funding, than because of too little. This is largely because with excess funds, money is pumped into consultants and experts (often ex-pats) and into a whole range of short term projects. The result? Once the funding dries up, the consultants leave, and there is no guarantee that a project will be sustainable without external sources of income and expertise.

Comments

Submitted by Simone Eckhardt on

Read your blog. Nicely written and good opinion. Although 1 thing, your remark

I doubt that many charities with fewer than 10 staff can be effective because the administrative burdens of HR and so on are so cumbersome, and there aren’t the economies of scale. And a turnover of less than £1million is unlikely to be cost effectively managed. (Having made these generalisations, I am equally sure there are plenty of exceptions – and I would love to hear about them.)

I am working for a small Dutch NGO and we are merely working with volunteers, 1 staff member paid. We don’t make the turnover of 1 million but still I think we are making a difference. Based on my experience with lots of other small ngo’s I dare to say that the small ngo’s are often more functional then the big ngo’s. It seems that the bigger ones are more busy with ‘what scores’ then what really matters. My thought is that they need to do so because they have lots of staff to pay for. So they jump on to every media thing cause they need money to pay their staff. That is always very dangerous cause sometimes you have to work for the ‘less sexy’ topics in order to make a difference.

So I am very glad that we are so small, we don't have to look into what's 'hot' but what really matters. It is amazing what we achieve as small ngo, in comparison with some big ones.....

Submitted by John on

Exactly the point I was making; Generalisations are always dangerous, and SPOTS is a good example of a small efficient organisation. But because it is largely volunteers, some of the legal issues I see as a problem may not exist (I am no expert on Dutch employment law!). I think the real problem is not with small NGOs, but BINGOs (Big International NGOs). There appears to be a law of diminishing returns in terms of effectivenes; but this is extraordinarily difficult to measure. How much of the donations given to BINGOs actually hits the ground, and how much stays in the country of origin, or gets repatriated via consultants fees, salaries and expenses etc? An interesting research project for someone.

Submitted by Wendy on

Well said. I have just cancelled direct debits to those charities where the CEO earns a larger than fair salary (in my personal estimation). I also cancel those charities which I have supported in the past when I receive a begging telephone call asking for my direct debit to be increased. At present I make a small donation to your charity through the sale of plants, but as a thank you I recieved a lovely acknowledgment . When I have phoned you, your staff could not have been more helpful. I am fully committted to your cause, having recently sponsored an expedition to Peru (through Crowdfuder). The philosophy and attitude of you and your staff will ensure that my future support will reflect my satisfactIon with your methods and objectives.

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