Freeman Blog

I noticed the other day in an article about the state of funding in the NFP sector that some of the big trusts and foundations were surprised that they had not had more requests for grants or funds.  Perhaps one reason could be a perception that the funds on offer were not focused on areas that the sector needs?

However, on closer inspection this was not the case - in fact a number of the funds are focused specifically at the changes that our sector needs to be thinking about or undertaking to survive...so why the lack of requests?

Perhaps it’s more about the sector’s reluctance to change, and to accept that it is entering a new era?  I still find it amazing that after four years of recession there are still those within the NFP sector who think it will all end in the next year or so or when the next general election takes place - if only!

Those that think this way will be like the dodo bird – sadly missed when they become extinct and even more sadly missed by their beneficiaries.  (Remember, the dodos became extinct because they did not recognise the threat that humans posed to them, and made the job a lot easier by running up to greet us!)

So how to avoid being a dodo?  Here are some dodo-defying steps:

• Stop thinking of “charity” and run it like a business for the good of your beneficiaries.
• Examine what you are doing and consider how to best take it forward without grant funding. 
• Look at the services that you could re-engineer or repackage to provide you with an income stream.
• Tap into the power of marketing, publicity and awareness-raising.
• Consider who you might want to combine resources with to ensure that you survive.

Need help?  It’s quite a challenge to avoid the temptation of reverting back to the good old days, and to focus on driving forward to even greater strengths.  Here are some of the programmes that can assist in looking at new ways of operating, working with others and not being a dodo!

Resource Funding Programmes

In the third of our blogs on the subject of fundraising, we look at how important accurate information is in the fundraising process.

In this year's report from the Fundraising Standards Board "one sixth of all complaints (5,441) were prompted by charities' use of data".

The minefield of data use is not just about ensuring that you spell the recipient's name correctly! Managing donor data correctly within an effective application can yield enormous benefits, enabling charities to understand their donors better, identify relationships between individuals and organisations, and ensure that campaigns are targeted at the appropriate audience.

Managing your supporters' data should be a key part of a charity's governance policy. Keeping data within one application effectively becomes your Single Point of Truth or "SPOT" to which all other systems need to integrate, allowing the organisation to protect and validate the information held. Unprotected and incorrect data can lead to poor decision making, unsuccessful campaigns and (worse case scenario) fraud being committed in the name of the charity.

Many charities spend considerable sums of money on Customer Relationship Management tools, when there are organisations out there whose commercial CRM applications are available via the organisation's foundation system, and which donate a number of their licenses to charities for free.

These not for profit versions of their commercial offering allow charities to manage their donors, build campaigns, generate greater loyalty and understand the results of fundraising - as well as reporting effectively on Key Performance Indicators. All these benefits then allow the charity to deliver a better service, which in turn generates more return..thus creating a virtuous circle.

When researching CRM applications, don't forget three golden rules - make sure that your chosen application links in with social media, has good reporting tools and preferably is a "cloud based" solution so that it can be accessed from anywhere, so vital when on the move. Not to mention the added benefit that "cloud based" solutions mitigate risks in the event of a serious incident at the office and eliminate the need to buy hardware to house the application.

Let us know about your data dreams and disasters!

Congratulations are in order for those involved in the campaign to get the Chancellor to do his U-turn on the charitable donations cap, but, here are a couple of things we should learn from this embarrassing, ineffective and shambolic way of doing things!!

It certainly did demonstrate that by the sector working together for a common goal it can achieve impressive results ... however, it did get me thinking. What should the charitable sector be considering in future to ensure that this type of result is achieved before the fact not after the fact?

The sector needs to come up with a strategy to ensure that is "at the table", influencing and supporting the government to find solutions, rather than be dismissed as not relevant, as would seem to have been the case with the cap!

If you look at a wide range of industries in the UK and overseas they constantly lobby governments with their point of view - so much so that governments turn to them for solutions as well as for problems. Why are they so effective? Because the lobbying is not done by one organisation having a seat at the table with the minister, but by the industry getting together and putting its voice and its case through the use of professional lobbyists.

Had the sector employed a professional lobbying strategist in this case, a different solution could perhaps have been arrived at.

One of the solutions could have been a system of pre-approvals by HMRC to allow tax deductions for donations say over a £1 million. As has been pointed out by a number of umbrella bodies this is realistically only 100 or so donations a year. The result would have been a win for the government in clamping down on charitable donation tax abuse, a win for the sector in ensuring that donations are genuine and a win-win for the sector and government working together.

Why on earth did this not happen?

Because the sector did not act as one, and is not commercially hard enough to influence government. Real lobbying, as we have seen in this campaign, is one voice from many camps not many voices with different agendas.

So, rather than congratulate one another on this campaign, why not take this as a wake up call to smell the coffee, and create a lobbying group to insist that the government listens.

This voice should have agreed positions and goals on what it wants to achieve with government. Had this been done in the past, perhaps the following issues would have been handled differently by the government of the day:

• Advanced Corporation Tax
• Irrecoverable VAT
• Charitable Incorporated Organisation
• Harmonisation of VAT and Corporate Tax
• Gift Aid for small charities

Or ... we can indeed go on congratulating each other whilst the machine of government drives forward without us influencing its direction in relation to the NFP sector!

Anyone for coffee?

Article by Valerie Austin

There has been plenty of publicity on the benefits of using the various social media for fundraising, but probably the one thing that most people forget is that the message needs to be targeted in order to work successfully.

Two examples come to my mind, which demonstrate how successful social media can be when there is an issue that donors identify with - whether it be for charity or as an activity that individuals want to participate in.

The first was when a supporter of "Afghan Heroes" created a Facebook page to tell her followers that she wanted to ride through Royal Wootton Bassett when her local bike club was "throwing around the idea of a bike run" - 15,000 bikers turned up! At £5 per entry - fundraising income £75,000 - expenditure £0!

The action of putting up a Facebook page reached an entire community of bikers as contacts spread the world within their network. They were drawn to support the event as it fulfilled two important criteria - they would be doing something they really enjoyed, and at the same time demonstrating their support for a worthy cause.

The second was a success for social media, but the desired result was not achieved because the charity acted too slowly. This particular charity had a number of places available in the London Marathon, but no-one to fill them. Now places on the London Marathon are really hard to come by if you are an enthusiastic runner, so what was going wrong?

The charity I speak of regularly uses social media, and in fact had been successful both in raising awareness of their causes, and obtaining corporate support. In this instance again they advertised the available places amongst their own Twitter followers, on Facebook, on the website - but it was the wrong audience, no takers.

Then on the weekend of the application deadline one of the team mentioned the available places to a physical exercise coach at her gym, he spread the word via his Twitter account and within hours 14 people had been in contact to register their interest. Unfortunatley it was too late, as the marathon organisers would not accept their names beyond the deadline date. The charity has lost out to approximately £15,000 of fundraising income!

So the moral of this story is, it is not enough to be using the social media to make a success of your fundraising campaigns - you need to consider with every campaign whether you are reaching the correct target audience. Sometimes your own regular supporters are not the correct audience!

Finally, making social media fundamental to your fundraising strategy does not have to cost the earth. The cost of having regular social media activity can be low compared to the income received and it is certainly low compared to the more traditional fundraising routes to market, e.g. mail shots.

And don't forget that every mention in any medium also increases the awareness of your charity!

Article by Valerie Austin MBA

A few weeks ago I needed to pull together a fundraising strategy for a medium sized charity that has been doing fundraising in a traditional way for many years. They had some lucrative income streams and had been trotting along quite nicely thankyou, well, until like everyone else, the recession hit.

So where do we go from here? I made what I hope is a fairly typical mistake and started out by thinking, "What are we good at and what do we want to do?" Well, the world is your oyster - you can do anything, the problem is that you cannot do anything you want, as resources are finite. A focused fundraising plan has to be developed on the back of your strategy. So, after mulling this over I decided actually one of the best places to start was the past.

Unfortunately I could not turn to a database full of juicy information about supporters, campaigns undertaken, or indeed any kind of reporting that would shed light on what had actually been going on for the last 10 years. However, the one place I did find some basic information was the annual accounts. Plugging the numbers of how various income streams had performed over the past five years allowed me to see and graph the income trend - a picture says a thousand words!

I also managed to dig out some history on how volunteering had developed over the years. This all painted an interesting picture. The charity had neglected some income streams that actually could prosper with some TLC, whilst others were starting to decline.

Their volunteering framework was also in decline. I then decided it was time to look at trends in charitable giving, and find out what it is that people look for in a charity before they decide to donate. Long story short is that the volunteering landscape is changing - young volunteers no longer wish to bind themselves to an organisation, but to a cause or an issue that they feel strongly about. Corporates are no longer willing to just give charity money - they also want a reciprocal relationship. You can see evidence of this all around - food companies pledging support and money to save the countryside, energy companies wanting to make a green impact, suppliers of pet food demonstrating their support for animal causes.

So, it seems that a good place to start on your fundraising plan is actually the past and what it can tell you! Then move on to some research about the causes and issues that your charity can use to appeal to others - and build up from there.

Next week, part two in this series looks at social media and how it can advance your fundraising and marketing strategy.

It struck me the other day that one of the things that all organisations, groups and individuals need to survive and prosper is compassion... but... does it still exist with the pressures of the world we live in?

What I see is that as a society we have become self centred, and focused on the quickest way to acheive what we want at whatever cost (or by doing as little as possible!). In fact we should be doing the opposite - considering our own actions more closely, stopping and looking around, and seeing what we can do to assist others in our community and close by. Its really not that hard to do, but why don't we do it?

Perhaps it has to do with the fact that in the past ten years or so we have become more isolated as individuals as a result of the internet, social media, long working hours and so on... and this has resulted in us hiding behind the technology so we don't have to show our true selves.

Those I see showing most compassion in our society are those volunteers who help out for no other reason than wanting to assist their fellow man. Now there are a lot of us who have volunteered or maybe worked for an organisation unpaid, but perhaps have done it to improve our career chances or make it appear that we've done something for nothing. In the present recession I've heard lots of people suggest that volunteering can improve the chances of getting a job.

Yes it can, but do you think that is real compassion or just a self-seeking gesture?

What I think we need to do is look hard at ourselves and show a little more genuine compassion towards one another - do a selfless act for someone else, whether known to us or not, and get that ball rolling!

For those of us in the not-for-profit sector we need to be especially aware of this as communities start to fragment.
Let's not end up going the way of the dodo!

Volunteering week is the 1st to 7th June - let's all show a little compassion and do something for someone else that is truly selfless!

Article by Lynda Frampton
Marketing & Communications Consultant 

Isn't it interesting to see what makes people donate to charity, and how media coverage can influence that?

The tragic death of Claire Squires in the London Marathon last week caused a deluge of giving to Samaritans via Justgiving. At the time of writing this total stood at nearly £1million, compared with the £600ish she might reasonably have expected from family, friends and colleagues, and is an example of great goodness and generosity coming out of a personal tragedy.

The Great British Public have been prompted to find a huge sum of money which they hadn't already pledged, in memory of someone they didn't know personally, to a cause (albeit well-known nationally) that they may have no connection with. What is behind that?

Would it have been different if Claire had been running for a little known national charity? Say Choice Support (choicesupport.org.uk) which supply those with learning difficulties - to live a fulfilled life? Or perhaps Beatbullying (beatbullying.org) who also had marathon runners, or even Small Charities Coalition (smallcharities.org.uk). Or perhaps...or perhaps...we can all name them, local, national or international, but those with very limited media coverage.

Perhaps it was the London Marathon itself that we have such respect for - for any amateur athlete or even couch potato it's the one event which is open to all regardless of ability, and which has an iconic connection with fund-raising and a second-to-none feel-good factor for all concerned.

Or did the media coverage focus laser-like into more profound feelings of guilt, thankfulness or admiration which we might all feel, and which were released by Claire's death.

Whatever combination of those it was, it's heartbreaking for Claire's family that it took her death to make it happen, but happenstance that she was supporting Samaritans rather than one of the thousands of other deserving causes whose work could be transformed by the same media coverage... not to mention the money!

Approximately 3.5 years ago the world entered into a recession that still continues to this day... although thankfully there are some rays of light at the end of that particular tunnel.

The not-for-profit sector was cushioned from the onset of the recession for about two years, but then it certainly was hit, and perhaps not in quite the same way as the corporate world was!

Some time ago I commented that our sector had sustained not a double but a triple whammy (1) the reduction in donations and giving, whilst demand for services increased (2) the cut in grants and government funding and (3) the poor return on investment seen by foundations and trusts over a number of years. However, there was a fourth whammy lurking quietly in the wings - the lack of action and indecision following the 2008 recession.

In 2008/09 when the recession was starting to bite, the third sector did go some way towards protecting itself, but not quite far enough to protect itself from those three whammies.

For example, some time ago, I sat at a round table discussion about mergers within the sector and why they happen. At the end of the debate we all agreed that the very worst reason for seeking a merger was financial instability or survival. Now, three years on, we see a PWC report indicating that up to one in every five charities is considering or will "have to" consider a merger because of finances...seems to me a little late for some of these organisations!

But where should we be focussing our actions now in the knowledge that the recession for the not-for-profit sector is likely to last for two years after the worldwide recession is over?

There are three areas that organisations need to examine closely if they have not already done so, and in the following order:

1) Cost cutting and examination of true operating costs

2) Marketing and awareness raising

3) Fundraising diversification, investment and ROI

But...the ultimate question that every charity must consider is, should we continue as we are or shut up shop? This is probably the hardest question that Trustees will ever have to answer...but they should be asking it. Actions speak louder than words!

Over the past few weeks we have seen uproar about the giving cap (aimed at the wealthy who gave £1bn to charities in 2010) However, have you noticed the consultation on the Gift Aid Scheme for smaller donations? If not, you need to!

It appears that the government will be giving £1,250 to every charity, or a cool £200 million... for not doing anything! Apart, that is, from dealing with the red tape associated with the Gift Aid Scheme (and the administration itself seems more geared to larger organisations).

The Charity Commission stats for December 2011 show that the 150,000 charities generating under £500,000 of income a year in total generated £2.6 billion in voluntary income. However of this number, 132,000 are small charities with less than £100,000 income, and the £1,250 top up would make a significant difference to them. 

However, for them the threat is that the consultation brings in even more red tape with a "matching" scheme (i.e. you can claim the £1250 top-up on £5,000 of non-gift aided income only if you have £5,000 of gift aided claims). As the average voluntary donation per organisation is in fact only £6,000, the average top-up claimed can be only on £3,000 not £5,000 - you do the maths!

Oops! That means that the £200 million gift from the government has in fact become £120 million. Factor into this that organisations a) will not necessarily apply for registration on day one, and b) won't be able to submit a claim for three years (compliance) and you begin to see the issue.

I'd be interested to know how many charities below £500,000 are registered for Gift Aid - I bet it is nowhere near 150,000...!

So all in all we have been taxed at the top end, and the "gift" at the bottom range is a veritable wolf in sheep's clothing. What's next - a tax on the impact that charities have?

If you want to take part in the consultation download the HMRC consultation document (it is 32 pages long). Pages 13 and 25 cover the points raised above. You only have until the 25 May 2012 to make a submission on the consultation.

We will be doing this on behalf of our clients as we feel the approach taken by the government and HMRC is heavy handed and potentially unworkable for smaller organisations.

Last week's long-overdue Big Society Capital (www.bigsocietycapital.co.uk) launch was received with a predictable combination of enthusiasm and scepticism. However the real test of benefits to the not-for-profit sector will be its performance once it starts lending or investing - not to mention ensuring their website doesn't fall over with the demand for information!

It will be interesting to watch how the Bank overcomes the issue of security - they will have to lend or invest on a cash flow basis, which as we know the mainstream banks avoid at the present time.

Sure, there have been others, Futurebuilders and the like, who have taken on this challenge and undertaken long term lending. Result? The funds have been wound up and are now administered by the Social Investment Fund.

Of course Charity Bank has been successful with this model, but you have to ask whether there is actually £600 million worth of demand out there. Charity Bank has loaned around £80 million or so and has only just made a surplus - and they appear to loan to the same customer group that the Big Society Capital will. Oh...and have a look at Charity Bank's history - it would appear to have had requests for more than £100 million back in 2006!

In an age when the government is putting pressure on not-for-profits to become more efficient and effective, it seems to be giving quite a different impression by setting up the Big Society Capital...perhaps there is another agenda behind this move than the one we are led to believe?

So where does all this leave us? I am enthusiastic about it having been at the sharp end of trying, often without success, to find funds for clients who have good ideas, supportable cash flows and solid track records on delivery. But at the same time I'm putting my cynic's hat firmly on until we see what Big Society Capital is prepared to fund.

For the government's sake, I do hope that the operating costs don't outweigh the undoubted benefits it could bring to the not-for-profit sector.

The other day a client said to me "For the past ten years we have lived on a gravy train which has now stopped dead in its tracks - if we thought it was tough then, its just become 100 times tougher now!". This got us to thinking about our first blog, what Mark Freeman and Associates aspires to, and why we are working here - to assist not-for-profit organisations and ensure that they are working as effectively and efficiently as they can.

Over the next few months we will start to provide the sector with ways in which they can generate more money and ensure they are receiving the most return for their money.

We will start to look at social media, corporate partnerships (which are not just asking for a hand out) to ways in which not-for-profits can work more closely together without losing their identity.

We will also be looking at the issues the sector is facing and ways that they can be addressed and perhaps solved - although some of our approaches may not be everyones cup of tea! Of course, in this day and age there are many types of tea available so hopefully there is something here for everyone!

Please pass on our details and our blogs as you see them...and we look forward to your feedback.