[I wrote this article the week before lockdown in March '20. I decided not to publish it because the optimistic tone it adopts just didn't seem appropriate while the charity sector was experiencing such challenges. They still are. But I've decided to publish it anyway. I'm worried that as charities review their fundraising strategies in the light of the crisis they'll revert to tried-and-tested fundraising methods that are familiar but were challenged even before the crisis. It's time to be bold and to diversify how the sector funds itself. We should be using the burning platform that Covid has created to change how we deliver income and impact. So, please, be brave!]
The Good Lab reached the end of its three-year programme about this time last year. We wrote a substantial report about it (it’s an engrossing read, so if you haven’t already, download it here!). Afterwards I hit the road and met with over 60 Fundraising Directors to discuss the ‘so what?’ of the Good Lab - the lessons, implications and opportunities for charities emerging from this collaborative experiment.
It’s been an utterly fascinating experience. So, I thought I’d share some of the insights I gleaned about the current state and future direction of fundraising and the charity sector.
Before I do, I need to fess-up. I approached these conversations with a point of view. I approached them with the lessons we’d learnt from delivering the Good Lab experiment ringing in my ears (like I said, read the report!). But I hope I approached them also with an open mind. I wondered whether the people I met shared my perspective, and I was interested to hear theirs.
What I heard overwhelmingly (and, to be honest, it surprised me) was resounding agreement about the need for change as well as a willingness to explore new and different possibilities. So, I’ve emerged from this marathon of conversing with a huge sense of excitement about the future of the sector and energised by a belief that more radical innovation is coming. It won’t be easy, but the appetite for it is growing.
So, read on…
Being a Fundraising Director is a tough gig
With Trustees, CEO’s and senior peers wondering where the growth required to deliver their charity’s mission is coming from, the pressure is on Fundraising Directors. But the fundraising market is tough and getting tougher. So Fundraising Directors are actively seeking new avenues to growth, but nothing has yet emerged to deliver the scale of growth their senior colleagues want. Expectation management is to the fore. And, not surprisingly, it’s becoming more challenging to recruit full-time Fundraising Directors. I discovered that Interim Fundraising Directors is a growth market.
There’s still fundraising growth, but it’s generally incremental
It’s not all doom and gloom, there is growth to be had. But it’s generally incremental. Evolution rather than revolution in fundraised income is the new norm. Squeezing out improvements in existing fundraising mechanisms, aided by investment in innovation and legacy growth, is helping edge-up existing budgets but it’s not providing the step-change that charity CEOs really want.
Even those Fundraising Directors still delivering substantial growth don't expect it to last
It was fascinating that even Fundraising Directors who are currently delivering substantial growth generally lack confidence that it can last (that was true even of the Fundraising Director who is still delivering c. 20% p/a growth). They’re looking at the environment of giving and are actively managing CEO expectations that growth is not guaranteed. And they were all using the platform of growth to proactively seek new and different ways to find new income.
Fundraising Directors are ready to take more risks to diversify income
Given the state of fundraising and the pressure to deliver growth, Fundraising Directors are actively seeking to diversify income from giving. And they’re willing to take more risks to deliver it. The conversations I was having were some of the most expansive I’ve ever had in the sector. And, in particular, an openness and enthusiasm to explore more commercial avenues to growth. There’s increasing interest in the potential of delivering commercially sustainable income by monetising charity assets, skills and services.
And accordingly, the role of FD’s is evolving (as are their job titles)…
I think it’s telling that many Fundraising Director titles are changing. ‘Engagement’ is obviously being incorporated into them to reflect how important true supporter engagement will be to deliver impact in the future. But interestingly, more titles are changing to include ‘Income Generation’, recognising that the route to growth will be a much more diversified income mix in the future.
In the new world of ‘income generation’, delivering money can no longer be divorced from delivering mission
In the old world, fundraisers raised money and their services / programmes colleagues spent it. Never the twain shall meet. Increasingly, that’s no longer possible nor desirable. Service departments have assets and skills that have commercial potential and fundraisers need access to them to deliver growth. This is beginning to happen much more regularly. And Service / Programmes Directors are recognising the benefit for their own depts of creating more sustainable service models.
Faced with stagnant income, Fundraising Directors believe their charity’s need to radically innovate how they deliver mission
For the majority of charities, income from fundraising is not going to substantially grow anytime soon. Yet the problems charities seek to solve are generally becoming more severe. There’s an increasing recognition of the disconnect, and a belief that charities should seek solutions by radically innovating how they deliver mission. Solutions that don’t rely on fundraising growth. Whether that’s by creating commercially sustainable mission-led businesses, engaging supporters to deliver impact differently, galvanising supporters in new ways to drive change, or radically collaborating to innovate the systems that perpetuate the problems charities are trying to solve.
Pioneers are pushing boundaries and leading the way
It was inspiring to talk to Fundraising Directors who are leading the change, guiding their charity’s to new ways of delivering mission, beyond simply fundraising. And the trailblazers are not relying on one route to achieve that. Yes, better supporter engagement is important. But so too is social venturing to create new mission-aligned sustainable income and impact. And also, galvanising movements of change. And also, radical collaboration to change systems. There is no silver bullet. But for those who are up for the challenge there’s a palpable sense of excitement at the change to come.
Thanks to everyone who made time to meet and talk. It’s been a fascinating few months.
I’d love to know what you think, so let me know…
Kevin