Public confidence and a wise man who lived 2,500 years ago

Howard Lake | 26 April 2016 | Blogs

Since last summer I’ve heard precious little about one of the main reasons why the public can get fed up with the sheer volume of fundraising appeals out there, namely that there are too many charities all trying to raise money for the same thing.
Take visual impairment for example. Google gives ten charities on the first page alone. Go to a specialist directory and you’ll find hundreds. That’s an awful lot of charities all asking for money for the same cause. Yes, they may each do different things with the cash but donors don’t always distinguish much between the details so all the public sees is dozens of different organisations all asking for the same thing.
In the commercial sector it’s unlikely there would be so many players in the game. Smaller firms struggling to compete may just shut down and look for a better place for their capital. Alternatively they might go for a merger or sell to a bigger rival which is often a sign of success because the company has something to offer such as a good product that consumers will pay for. (Why would a big company snap-up a small one unless there was something worth buying? Note that, it’s important). Either way, any overcrowding wouldn’t last long because the pressures of the market would see to it.

What can the small charities do?

So what about all those small to medium sized charities which struggle to raise money? The big boys have already invested in recruiting donors and they’ve got the economies of scale. Smaller ones still have that mountain to climb. And whilst small companies might use reserves or borrow to invest many charities either can’t or won’t.
What to do? What can hard-pressed charities in a fiercely competitive market learn from their corporate cousins? You can probably see where I’m going with this. Why should many charities struggle to raise money when joining forces with others could solve so many problems at a stroke?

If you can’t beat them, merge with them?

Look who might win. Beneficiaries, because they can get more under one roof and have it delivered more cost effectively. And donors? Might not they benefit on several levels not least of which is fewer charities contacting them to raise money for the same cause? In other words a quieter phone, a tidier doormat and less reason to worry that their generosity is being wasted?
Sadly, too many charities think mergers and takeovers are monsters that roam only the corporate jungle and a charity that merges must be one that’s failed. But why? In the commercial world a takeover is a sign that a company has something of value; similarly a smaller charity might have something worthwhile to the people who benefit from it. That’s not a disaster, that’s a sign someone has done a good job.
New regulation might help restore some public confidence in the sector but it won’t do anything about the desperate overcrowding in the market for some causes in which each charity has a legal obligation to maximise resources. Or, to put it another way, to raise ever more money from the same pool of weary donors as all the others.
Two thousand five hundred years ago the Chinese strategist Sun Tzu wrote that a good general should avoid battle when victory wasn’t there to be had. So ironically an answer to some of fundraising’s problems is to be more like those big, red blooded beasts from the commercial sector; not to scrap like alley cats for every last bit of market share but to find a way to ‘win’ without scrapping at all. Maybe it’s time to let the market rule for a while: If you can’t beat them, merge with them?
Over to trustees for that one.

About Howard Lake
Howard Lake is consultant editor of UK Fundraising. He founded the site in 1994 and successfully sold it in 2022. As director of Giving X Ltd he is exploring growing giving on a massive scale. He is the founder of Fundraising Camp and co-founder of GoodJobs.