Setting up a Fundraising Department
From IFC Wiki
Starting from scratch
Setting up a department from scratch is the ideal situation, but few of us will ever be that fortunate. The first posts to be established should be those that build the base of the fundraising pyramid, then those that deal with its further development. Later the trading and company posts will emerge, depending on the type of interest that the organisation commands.
Obviously, the basic characteristics of your organisation will influence the development of the fundraising department. The National Trust has excellent properties across the country which can house shops that cater for their visitors. Barnardo's has a very experienced legacy department. Oxfam has grown historically through its charity shops. All these organisations, have the usual range of fundraising employees, but also need specialist staff.
Some organisations will have the government or trusts as their principal source of revenue and this will also require specialist staff. However, such sources do tend by their nature to be rather uncertain providers of long-term finance and it is prudent to diversify your sources of income if you are looking for sustained growth.
The fundraising department should be linked organically with the rest of the organisation and not be considered a very separate or different part.
This helps fundraising to serve the organisation's core aims and objectives as well as raising money. Usually the best fundraising has a strong element of advocacy in it, and can be a powerful tool for advancing the organisation's overall goals.
A planned approach to growth will enable your organisation to anticipate the resources needed ahead of your request, and to budget for that need in advance. If things are working out well, and it becomes necessary to have additional staff or space or computer equipment, it is far easier to acquire the resource if you have made people aware of the reasons for your request ahead of time, so that they can consider it before being faced with the actual decision. Planning also allows you to develop those areas of income generation that will maximise the overall income rather than those that may just be someone's pet project. Not planning growth can lead to huge gaps between potential income and performance as well as a very poor staff income ratio.
You must be careful to consider:
- the profile of the organisation. A high profile is essential for effective fundraising but it may come from an area of fundraising that is not particularly profitable such as advertising or national events. These, then, must be encouraged, not dropped on performance grounds alone. It is usual, however, for a fundraising activity which brings a high profile also to be quite profitable. Profiles rise and fall. A time of high profile is usually a good time to increase investment in membership/donor recruitment.
- in any fundraising department there should be several activities or events which are in the process of being developed into major income earners, but which are not yet very profitable.
Typically, it takes three years for an event to mature.
- In the first year you will make many mistakes and probably a loss.
- In the second year you can expect a profit, provided you have analysed your mistakes and acted to correct them, as your expertise grows and begins to take effect. You will find out the best pricing policy, the right size and location of venue, the best time of year, etc. Your audience will return and bring their friends, and the stars who give their time for free will know you are capable of putting on a good show, making it easier to recruit their friends and for them to return.
- In the third year all this should all come together to give a large profit; and in subsequent years it can grow until its time passes and a new kind of event is needed to replace it. In this context an event could be the opening of a shop chain, beginning a legacy campaign, starting regional fundraising, etc.
The size and shape of a fundraising department varies with the availability of volunteers and the use of consultants. With a freely available supply of volunteers and lots of consultants the actual staffing can be quite low. With all fundraising work done by in-house staff the department can be much larger especially if income processing and recording is also undertaken.
Of course, you can fundraise without having a strategy, or planning or budgeting, in the same way as you can journey up the Amazon without consulting a map or buying provisions, but your chances of returning successfully from your venture are immeasurably increased if you think ahead. We have a duty to exercise what the Quakers call 'good husbandry' over our organisation's resources and this cannot be done without an appropriate strategy. Because the bulk of charitable giving comes from individual donations rather than companies or governments.
All fundraising activity involves risk and good management requires the risk to be recognised and discussed with those approving the strategy. Your trustees may be risk adverse and wish for slow and steady growth or they may wish to take chances in the hope of rapidly developing the organisation. You need to know this in planning your activities.
You should also build into your schedule points at which the risk is assessed and decisions taken to proceed or call off the activity. This will apply equally to a major concert or to a direct mail programme. Obviously, the higher the degree of risk the higher up the organisation the decision to proceed needs to be taken. Your plan needs to state who will be making the decision and at what point in time. Some decisions will go to a charity's trustees who may only meet every four months. If this does not fit in with the fundraising schedule then a contingency needs to be built into the plans. For example, a special meeting may be held just for that one decision. For most fundraising decisions involving risk it is likely that the CEO or director will decide.
In making their decision those responsible will need to have a clear idea of the impact on the organisaiton of any failure. How that event will affect the reserves of contingency funds will be one question they will need to answer. With ample reserves to cover failure the risk of serious damage to the organisation is reduced.
Do consider the effect of slow moving risk such as relying on a trust that provides a substantial proportion of your income. If you are in that situation then good risk management dictates you move to diversify your sources of income.