Kathryn Stone of Voice UK and Peter Saunders of Napac on life running a small charity, while Nick Aldridge of the Association of Chief Executives of Voluntary Organisations puts his finger on the challenges facing them

It is becoming ever more difficult for smaller charities to compete with the full-time fundraising machine of the big players

The Funding Challenge
Who put the “fun” in fundraising? And were they having a laugh? For voluntary sector organisations fundraising is a serious business. And many larger charities pay people very well to raise them money: indeed so well in some cases that fundraisers are laughing all the way to the bank.

The NSPCC, for example, is displaying no child-like innocence in its recruitment strategy. It’s after fundraisers, fundraising assistants, senior fundraisers, senior fundraising managers and fundraising executives. All posts are advertised at up to £42,000: way more than a chief executive’s salary of many small charities (who often have spend a disproportionate amount of their time fundraising because they can’t afford a fundraiser). The money spent on two NSPCC fundraisers could finance some small charities for a whole year.

The NSPCC, generous as it is, is not alone. A quick scan of the situations vacant reveals that Sense is after an event fundraiser (£30k) the Stroke Association wants a corporate fundraiser (£31k) the Open University is graduating towards a major gifts fundraiser (£39k) while the successful applicant for its head of fundraising will qualify for over £46k.

However, the peerless Southend University NHS Trust is the top dog putting £50k into the bowl for its associate director of fundraising.

How do you compete with that?

Kathryn Stone – Head of Voice UK

Voice UK supports people with learning disabilities who have been victims of crime usually sex crime. Finding money to support our cause is increasingly difficult.

In a former life at local authorities I was used to managing the budget carefully all year and then followed the bizarre tradition of making sure there was nothing left by the end of March. Anything that looked like it might be left over was quickly spent on new furniture, training courses or stationery.

If it wasn’t spent it would be taken off the budget allocated the following year. This always struck me as odd. What would in other circumstances be seen as good budgeting was seen as poor accounting. If only I had that luxury now.

I not only have to manage the money I have to find it. This is the bit that keeps me awake at night and I know that many of my colleagues in this sector feel the same. We don’t have a fundraising team, we don’t have legacy officers, corporate relationship builders or “chuggers” (paid street fundraisers). We rely on the very small number of funders who recognise the importance of the work we do. Lloyds TSB Foundation for England and Wales and Esmée Fairbairn Foundation have been particularly supportive. We have also managed to secure funding from the Home Office Victims’ Fund for our helpline.

Trustees are supportive but they too have day jobs and we are acutely conscious of the time spent on us. Funding is easier to find for projects but there is a conflict in having a good project but with no core services to support it. Project funding is also usually available for one to three years.

I have dreams about finding a generous philanthropist, or being given the money to pay for a fundraising post. We have developed a very commercial approach to our work and now charge for all training, conference appearances and so on. Interestingly, there is a view sometimes that as we are a charity we should do it for nothing!

Knowing that you have helped someone through the most traumatic experience when everyone has failed them is the best reward.

And you can’t put a price on that.

Peter Saunders – Head of Napac

A top man from the Home Office visited National Association for People Abused in Childhood (Napac) earlier this week and he was very supportive. But he left us feeling that without a relevant “department” to deal with “commissioning” applications we don’t have a snowball in hell’s chance of getting any money through the new system of bidding and commissioning. And if, as he said, he felt dazed and confused about these changes to funding, what hope is there for tiny charities like ours?

The temptation is to think “why bother?” Napac doesn’t even have a fundraiser, let alone anyone who understands “commissioning”. We provide a service, a unique service, to adults abused in childhood. We operate a national free-phone support line for adult survivors and virtually every penny needed to run the service is raised through my efforts as chief executive. But this seems to be the way for the bulk of small charities. Most, like Napac, don’t have the luxury of hundreds of paid fundraisers, a marketing department and a million pound advertising budget.

But I’m not bitter. Our organisation runs on the goodwill of our many volunteers and no amount of money could replace them. Some may say that a reliance on volunteers is a weakness. In fact, sadly, I have heard one or two people from larger charities talk quite uncharitably about their volunteers. I feel the opposite. A willing and motivated volunteer is worth two paid staff any day.

From nearing the edge of financial oblivion less than two years ago Napac is now on a high. And it’s all down to volunteering. My staff and I volunteer many more hours than we are paid for and our support line is staffed entirely by volunteers.

What I think is sad is that the charities that do our sort of work (as opposed to the cosy, cuddly charities supported by the likes of Marks & Spencer, Tesco or, let it be said, the government) will always struggle to find the bits of money we do need for rent, training, the phone bill, and so on. But we are getting there.

Nothing beats a personal appeal from someone who is genuinely passionate about what they do – and as long as I have breath in my body I will be banging the drum for Napac!

Burn-out at the top
Nick Aldridge, strategy director at the Association of Chief Executives of Voluntary Organisations, puts his finger on the challenges facing smaller third sector groups

When I ask chief executives about their major successes over the past year, too often I hear about a raft of institutional fundraising efforts. Of course, keeping an eye on fundraising is a core part of the chief executive’s role. But for many, the stress and time involved in the constant scrabble for income causes burn-out at the top. Some report that senior staff spend 40 per cent of their time completing funding applications and reporting back to existing funders. Funding consistently tops our polls for keeping our members awake at night, more so than strategic planning and staff management.

There is some evidence that smaller organisations are now feeling more of a squeeze. According to the National Council for Voluntary Organisations (NCVO), the sector’s total income is rising, but growth in the number of organisations means their individual incomes have remained static at best. In short, the sector has become ever more competitive.

The philanthropic funding environment has become tougher. Contrary to popular belief, most local authorities are not abandoning their grants programmes. However, they are making them more “strategic” – aligned to overall priorities, rather than open to all-comers. A similar trend means corporate giving is becoming narrower – or, for the optimists, deeper – as companies search for the business case.

Reforms to the public sector are likely to create new opportunities for independent organisations. But how to take advantage of them?

First, third sector organisations need to brush up on their negotiation skills, so they can secure more, better, and fairer funding from their supporters. Acevo’s guide to negotiation, launched next month, will be a useful start.

Second, commissioners in the public sector need to devote serious time and thought to sub-contracting and ring-fenced funding for local or specialist service delivery. It would be a shame if scaling-up commissioning means levelling down service quality.

And last, independent funders should be wary of specifying too narrowly their areas of interest. Many seem to be rushing to focus on programmes for children, despite our aging population. We don’t want to lose those few remaining funders that are open to ideas from all parts of the sector.

Related article
Voluntary sector: special report

This article appeared in the 12 April issue under the headline “Pennies versus pounds”