Matthew Taylor examines fundraising in The Charity Business
Howard Lake | 9 March 2018 | Blogs
For a radio programme dedicated to fundraising, as part of a series called ‘The Charity Business’, there was surprisingly little content about the business of fundraising.
The new three-part BBC Radio 4 series on ‘The Charity Business’ presented by Matthew Taylor was first broadcast earlier today. Episode one, entitled ‘Fundraising’, appeared to offer much – a challenging examination of fundraising, and what role in plays in charities today.
Unfortunately the programme missed the opportunity to explain how fundraising works, and how charities large and small secure funding to achieve their charitable objects. Instead it focused mainly on broader questions and issues about charities’ role today, how they are run, and what the public thinks of them.
Questions about fundraising that were not asked
An examination of fundraising in 2018 by an experienced charity CEO and aired on the BBC certainly has much scope. There are plenty of challenging questions that can be asked, and indeed plenty of issues that can be raised or presented.
- What are the ways in which charities fundraise?
- Do they all do it in the same way?
- What are the ‘best’ ways to fundraise?
- Who is a fundraiser?
- What skills do fundraisers need?
- Do charities really need fundraisers, given that people will give without being asked?
- How do charities decide how to pay fundraisers – are they all on commission?
- Why do charities outsource some fundraising activities to other companies?
- How does one fundraiser persuade someone to give away money, whether £5 or £5,000, when the donor only gets a warm glow in return?
- Do fundraisers really care about the causes they work for, or are they just ‘guns-for-hire’?
- How have charities survived 10 years of cuts and austerity? Are fundraisers really that good?
- Do fundraisers really research people who have donated or who might donate?
- How are fundraisers regulated?
- Why does the government give some tax income to fund charities?
- Why don’t we know more about fundraising and what works? Don’t we need some independent research into giving and philanthropy?
- Does successful fundraising help guarantee charities’ independence from political interference?
- Which laws govern fundraising?
- Surely volunteer fundraisers are good enough, so why does any charity need to pay a fundraiser?
- Do fundraisers still ask for money when charities have ‘enough’?
- How much should fundraisers ask members of the public for?
None of these and similar questions were asked.
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Charities and scandals
The CEO of the RSA, itself a charity of course, said he was setting out to examine how charities work and ask what they are for.
Indeed, the opening programme expanded into these wider issues on the public perception of charities and how they are run.
The programme was introduced by the BBC announcer with a reminder that some charities have been the subject of criticism: “In the wake of several scandals in the charity sector Matthew Taylor asks if there’s a gap between what we think of charities and what they really are”.
Within the first minute, Taylor mentioned self-righteousness amongst charity staff, Kids Company, ‘chugging’, and cold calling.
The link to scandals was emphasised from the start, with a recording of a conversation from two years ago between Taylor and Justin Forsyth, then CEO of Save the Children.
Forsyth, who recently resigned from his subsequent role at UNICEF following allegations of misconduct, said: “The biggest weakness of any organisation is self-righteousness and the sense of self-doubt. People who believe they are so right they can do anything are the ones who are the most dangerous.”
“The irony is clear” commented Taylor, in the wake of the safeguarding and sexual abuse issues at many UK charities operating internationally that have been revealed in the past month.
Public perceptions of charities (not fundraising)
The programme continued to move away from fundraising as Taylor said that Forsyth had mentioned something else what was important. “The assumption that because charities are organisations seeking by definition to do good it must also mean they behave well. We’re starting to see past that assumption.”
Indeed, Taylor explains that the traditional view of charities and their staff as saintly, Good Samaritan do-gooders is arguably unhelpful to charities.
“I don’t think it helps charities to be effective or to address their failings if we, the people who support them through our donations, our engagement and sometimes our taxes… view them through rose-tinted spectacles.”
There is the slightest hint there that the public might be out-of-step with just what charities do and how they operate – or indeed, that charities themselves have failed to explain to the public how and why they operate of course.
Of course, trust and transparency are essential elements of a healthy civil society and do have an impact on some people’s willingness to give. Yet public donations to charities can not be directly pegged to the changing levels of trust in charities that are revealed in surveys.
Even now, the focus of the programme moved not to fundraising itself but to analysing some of the common questions or criticisms of charities themselves e.g.
- small charities are more deserving than bigger charities because they are closer to the original voluntary-only ethos of charity
- too many charities pay their leaders too much
- too much competition between charities and not enough mergers
Interview with a volunteer
The programme did give good prominence to small charities, which is appropriate of course because they are the vast majority of charities in the UK. Many are run on an entirely voluntary basis.
Some of the interviews were conducted before the aid agency revelations, “when Oxfam and SCF were still synonymous with virtue” comments Taylor.
In highlighting the first in a series of conversations with small charity staff and volunteers he acknowledges “In this series I’m expecting to talk to many well-paid charity professionals…”. One didn’t have long to wait before the contrast with the remarkable work of unpaid staff was presented.
Oddly enough, there were no conversations with professional (or paid) fundraisers, at large or small charities.
Taylor visited Hope Pastures, an equine charity, north of Leeds. Their representative shares her views on larger charities.
“We don’t want to become a big charity”, she says. “We’re uncomfortable with spending people’s hard earned money with things like admin”. As a result, “we get our funding from absolutely anywhere”.
She is not impressed with what some of the bigger charities do. She added: “What the bigger charities does have an impact on us. Which is really quite frustrating.
“The public perception is that you’re going to be fleeced left, right and centre”.
She proudly mentioned that her charity was able to spend 95% of all donations on the direct activity of helping animals. This was backed up by her confident mention that, even when the charity did gather visitors or supporters’ email addresses, she would tell them “Don’t worry: you’ll probably never hear from us. We don’t have anyone to send you email”.
She presented the lack of expenditure and professional business methods as a positive achievement for the charity. Yet her apparent lack of awareness that gathering/processing personal data that was not going to be used highlighted a potential lack of compliance with current data protection legislation and GDPR was not commented upon.
Instead, there was a brief reference to the successful (and very unusual) situation of the ‘donkey sanctuary” reserves.
All this section missed was the use of the word ‘overheads’ as a tool with which to criticise charities.
Too many charities?
Taylor next attended a meeting of multiple small charities in Leeds working with refugees. He asked another ‘charity business’ issue that doesn’t directly encompass the business of fundraising.
“I was surprised by just how many groups were working on the same issue in the same city” he said, wondering – are there too many?
While the volume of charities is an issue for some fundraisers (‘competing’ with similar causes) and donors (confused by similar causes), it’s hardly a description of what fundraising consists of, and its role in charity today.
Charity leader salaries
The next non-fundraising issue was how much (some) large charity leaders are paid.
“I’m planning to be tough on some aspects of the charity business” he stated.
He acknowledges that he is a charity leader himself. He recognises that he is well paid, sometimes feels smug, and sits in a central London office, and that, as such, he is far removed from the volunteers he has been interviewing. He recognises he shouldn’t feel any credit for what he does, when compared to the “sacrifices” others make.
Nevertheless, he compares the work of local Action for Children workers in the village of Mirfield not with the workload and responsibility (for fundraising amongst other issues) of leaders at larger charities but with the salaries some of them earn.
He talks to Sir Tony Hawkhead who has recently stepped down as CEO of Action for Children.
He mentions his salary of £150,000. And the fact that he earned 10 times what the charity’s lowest-paid staff earned. (Action for Children publishes its wage ratio). Hawkhead responds by pointing out that in his role he was responsible for managing 5,500 people, 600 services, and reaching 370,000 children and families.
Taylor subsequently acknowledges that if we do need big charities “we’re probably going to have to pay for them”.
Fundraising growth for growth’s sake?
The conversation with Hawkhead does then move directly onto fundraising.
Taylor asked about Hawkhead’s earlier aim of doubling fundraising income over the next four to five year period, suggesting that growth was a focus of some charities in itself.
Hawkhead argued that the efforts to increase income were to ensure the charity could have a bigger impact. “Our strategy is focused on helping children”, not simply on financial growth he added.
Taylor continued his line of questioning: “Is there not some degree that you and your board look at your size as a reflection of your success?”
Hawkhead rejected this, pointing out that “we had a growth strategy [when he took over as CEO], we don’t have one now.”
This is the only point in the interviews where a wider context to fundraising enters. Hawkhead mentions the multi-billion ‘hole’ in the child services budget after years of austerity and cuts. The decision to increase income in the face of this would appear to be good ‘charity business’.
Taylor switches to other elements of large charities, like ‘brand strategy’ and ‘income diversification’.
He concludes that, to all intents and purposes, Hawkhead is a big business leader.
Does fundraising increase giving?
The programme then finally tackled one of the knotty questions about fundraising that Taylor originally offered.
He suggested that one of the justifications for fundraising is that it increases the size of the giving pie for good causes. “But what it they are just fighting for market share?” he asks.
He talked to Dan Corry, CEO at New Philanthropy Capital, who acknowledges that the total of public donations to charities does has not changed much over time.
Taylor then asks whether charities should work together more, or why there aren’t more mergers. He does not, however, focus on the fundraising element and ask if any efforts have been made to grow total charitable income. Does tax-effective giving have a role? Did The Giving Campaign change giving habits 10+ years ago? Does digital offer an opportunity? Have other charities in other countries succeeded in growing the pie and, if so, how? Or indeed, would more investment in fundraising training across more charities help achieve this?
Instead, Taylor suggests: “That’s worth remembering the next time you read a charity advert or get stopped by a chugger who is probably being paid by results”.
Explanation of fundraising
The only explanation of fundraising comes from NCVO’s Karl Wilding. He explains that fundraising is “fantastic” because it can turn your £10 into £35. An examination of this magic would have benefited a programme focusing on fundraising.
Taylor notes that Cancer Research UK employs 800 people in its fundraising department and spent £108 million on fundraising. With this they “hauled in” £360m in donations and legacies, he added.
Wilding points out that this is only possible for charities if they ask for money. “You have to ask them [the public]” he argues, otherwise these sums will not be achieved.
Wilding also points out that reporting fundraising expenditure and income often needs some context and a charity should not be judged solely on one year’s set of accounts. Given legacy fundraising and the wide variety of fundraising methods, “any one year’s accounts will depend on where they are in their fundraising cycle”. In other words, fundraising expenditure might seem particularly high in one year, but that would be understandable given that income from some of that expenditure was not expected until year two, three or more.
Government policy and charities
Finally Taylor interviews Tracey Crouch MP, Civil Society Minister. She has just launched a public consultation on the charity sector.
Taylor’s questions focused again on the broader issues that matched the title of the radio series rather than issues related to fundraising itself.
He asked “Do you fear the charity sector is next in line for the reputational onslaught?”. She replied: “No, I don’t. It will come through it the other side”.
She did however agree that “the public wants more transparency and accountability from charities”. At the same time she was was quick to state that “people should donate to charity”. She praised the value of volunteers too, and singled out their role in supporting the NHS.
So, what is fundraising?
The first programme on ‘fundraising’ ended is it had begun. If you wanted a reminder of common complaints or views on charities and how they were managed, you would have benefited.
If you had hoped for an analysis of fundraising, you would have been disappointed.
What might have helped shed more light on fundraising or put it in some context? An interview with:
- a fundraiser
- a donor
- a charity client or beneficiary (and there’s a term or notion that could be the subject of a programme in itself)
- the Fundraising Regulator
Taylor explained that he’ll be raising “knotty issues facing the business of charity – their ethos, the way they raise money, their relations with government, even whether they really make a difference.”
He might well do those issues justice in episodes two and three, but in explaining and questioning “the way they raise money” he missed an opportunity to do so.
You can listen to episode one ‘Fundraising’ on BBC Radio iPlayer.
Image: Matthew Taylor on The Charity Business, BBC Radio 4 – source: BBC
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.