So I’m a nerd. We know this. So it will come as absolutely no surprise to anyone that I spend my leisure moments not on sensible occupations like going out and socialising with friends (whatever they are…) but on pondering answers to questions about fundraising.
Like, how do we know that investing in fundraising works?
Don’t get me wrong, I’ve built a career on investing to grow voluntary income for the charities whose fundraising I’ve headed up. And it’s absolutely worked. For those charities. Big time.
And I can give you plenty of examples of other charities who’ve had similar experiences (and some have even done better than mine. The bastards..).
But is there any evidence that this works as a general principle? That if, on average, non-profit X invests sum Y in fundraising growth, it will lead to growth rate N.
Well, not that I’ve been ever able to find. I’d be very interested to hear of anyone who has any such data…we could be nerd buddies.
But I was recently doing some benchmarking analysis for a client. To do this I had to create a data set of the fundraising performance of a group of major UK charities over the last 6 years. And once I answered the client’s questions, I had a little play.
For these 22 charities, all medium to large and all major active fundraisers, I looked at the following pieces of information over the last 6 years.
- Growth in fundraising (FR) expenditure since 2009
- Growth in voluntary income (VI) over the same period
- Growth in VI less legacies (on the basis that fundraising expenditure probably only marginally influences legacy income over such a short period)
And this is what I found*
The charities are ranked in descending order of fundraising growth
|Name||VI growth||VI ex legacies growth||FR exp growth|
|Battersea Dogs & Cats Home||172%||1673%||2923%|
|Save the Children||102%||134%||57%|
|Macmillan Cancer Support||81%||104%||100%|
|British Red Cross||47%||79%||65%|
|National Deaf Children’s Society||35%||31%||3%|
|Cancer Research UK||18%||27%||19%|
|Marie Curie Cancer Care||19%||27%||46%|
As you can see, most charities in the sample increased their investment in fundraising sharply in this period (an average of 6% compounded per year). Voluntary income rose but somewhat more slowly (a modest 25% over 6 years or 3.8% p.a compounded). Voluntary income excluding legacies showed a more positive average 5.4% growth rate per year. So overall, there’s some correlation. Even if the investment returns don’t look, well very spectacular.
Those charities whose fundraising expenditure went down tended to see income declines. Also not a surprise.
But look at the variations. Not only Batterseas’s very striking 29 fold increase in fundraising expenditure (from a low base) but the difference between those whose fundraising income increased when expenditure went up and those who didn’t. I won’t single anyone out but there’s some pretty worrying numbers here you’d have thought for some charities.
What does this tell us? Well, that fundraising performance is more complicated than just a ratio between inputs and outputs I suppose. There’s lots of other factors at play. So just increasing your fundraising investment isn’t guaranteed to bring success without all the things you need for an effective strategy (which I may have mentioned before).
But I reckon there are also a few more specific things we can say;
- Regular giving has been driving growth. All bar one of the top 8 charities by voluntary income growth in this sample have been heavy investors in regular giving programmes, mostly through face to face and DRTV.
- Cutting your fundraising expenditure is pretty much a bad idea most of the time. Charities with low or negative fundraising expenditure growth had low or negative income growth. Except for NDCS, who it’s worth saying had one of the higher levels of fundraising spend to start with.
- There’s plenty of evidence for UK fundraising suffering from diminishing returns. And it’s not starting from a great point to undergo further restrictions which will add cost to fundraising.
And that I, seriously, need a life.
*all data is from published annual accounts, this means that they might not be exactly comparing apples with apples for all charities but should be close enough