The law of unintended fundraising consequences

Howard Lake | 28 October 2013 | Blogs

We read and hear a lot (not least from me) about the importance of innovation, testing new ideas and thinking our way through challenging times.  BUT… something we don’t often talk about is the law of unintended consequences.

Newton’s laws of motion state that for every action there is an equal and opposite reaction… in other words, there is always a knock-on effect of the decisions we make.  Consequences are not always immediately identifiable so we can’t plan for every permutation but wherever possible, we should try to think about what the impact of our ideas will be in the future, before jumping into what seem like great initiatives right now.

One of the best ways to plan for unintended consequences is to share experiences so that we can all incorporate them where possible and so here are a few real-world examples (with the names removed to protect the innocent).

1. A major UK charity has a group of contacts who have been awarded special status amongst the charity’s supporters.  The original intention was to recognise their services both to society and to the charity’s works and over the years this group has grown to number in the thousands.  Unfortunately, this group is embargoed from fundraising activities, so today’s fundraising team is faced with having to ignore literally thousands of potentially loyal, supportive, higher-value donors.

2. A UK health charity providing scientific research, information, family and community support spent a significant amount of resources on developing and growing community groups whose members shared a particular health problem.  Now numbering over 10,000, the members of these groups should be a fantastic resource for fundraising and campaigning teams… however, the very health conditions that made them join the groups in the first place mean that they cannot be as mobile, active or engaged as the charity’s teams would like in any proactive work.  But the groups are well-regarded so more people are joining and further pressurising the charity’s resources, instead of getting out there and adding to them as other charities’ members and volunteers do.

3. Several well-known charities embarked on the ‘X pennies in the pound go towards the cause’ marketing tactic a few years ago.  Sector researchers and opinion-formers encouraged a major focus on the public’s need to trust charities and they continue to report on these metrics – for perfectly positive reasons.  One result of these actions is that barely a week goes by without a newspaper or TV headline talking about the inefficiencies of modern charities and the costs of Chief Executives or ‘overheads’, instead of the great work that is being done to help make our world a better place.

4. Lastly, and this is a societal-level problem I believe, the public sector has much less money to invest in delivering services.  So they ‘innovate’ and try to engage with the civil society sector to deliver some key services that many charities are incredibly well-placed to be successful at.  However, because the public sector departments and bodies are so pressured to eke every last gramme of value out of those budgets, the procurement teams lead the charge (instead of the service deliverers).

Result; the best placed charities to deliver cost-effective services ie; the smaller ones closest to the community issues in question, are precluded from even applying to deliver the services they are good at because procurement rules state they must have extortionate levels of various indemnity insurances, minimum levels of financial turnover, and large teams already in place.

The unintended consequences are that the procurement process takes time and costs money to participate in, only the largest charities (with higher overheads) are able to participate and they often end up sub-contracting to those same smaller organisations because those are the ones best placed to deliver the service.  But the larger guys will take a cut of the finances available (reasonably so) which means the overall cost to the public purse may end up being higher!

Innovation and thinking are great ways to move forwards but we need to think about the consequences of our actions beyond the current financial quarter or years, as appropriate.  That doesn't mean stop innovating; it just means think about what your colleagues might have to deal with in a few years time…

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.