Fundraising in hard times

As bad as this economic downturn has been for us all, chairites who survive will have learned lessons that will prove invaluable later, whether times are good or times are bad. Here are some tips I have collected over the past few years.

I’d be interested in hearing your experiences.

Which ones have you tried?

Can you add to the list?

1. Don't become or sound desperate.Instead, emphasise to your donors that every year, good or bad, your needs continue. Don't talk about grand plans for expansion, but do talk about solid plans for today. Don't lose your enthusiasm and optimism about your cause. Donors will notice and pull back if they think that you, the fundraiser, have doubts.
2. Prove that you are responsible. Let your donors know that you are doing your part by being financially responsible. Cut costs where you can, make sure you have good controls in place, and that you are examining marginal programs. Keep your money safe and avoid risky investments. Don’t do an Iceland!
3. Don't give up on your corporate and cause-marketing activities. Gifts may decrease, but keep your corporate contacts strong. It is very hard to get back on the corporate charitable list if you are dropped. Avoid this by staying visible, and keep cultivating your contacts within the company. Likewise, don't give up on cause-related marketing. Companies are finding that these activities pay off for them with consumer loyalty. Remember too that just because a company's stock price has been depressed doesn't mean that it is not a strong company. Look at the balance sheet to identify companies that are in a good position, and that will likely come back strong from the economic meltdown.
4. Diversify your funding sources by identifying all types of financial support. Avoid depending on one or two major donors or trusts. Most charitable giving is made up of small donations. If you are not doing direct mail to a large base of supporters, start working toward doing so. Use the Internet to reach more people. The cost is low so that donations can be smaller. Those add up quickly. Explore payment options with low transaction costs and online donation sites.
5. Put your fundraising programs under the microscope. Determine which fundraising programs work best and are the most efficient in terms of resources. Then cut the least efficient ones and shift those resources to the ones that are doing the most good. Maybe that big special event eats up precious time and resources for very little return. Or the promotion you started last year just doesn't seem worth the time and effort. But, don't let the money and volunteer time you use in those efforts just dissipate. Put them to use by expanding the annual campaign or making more major donor calls or doing another planned giving seminar.
6. Don't pull the plug on major campaigns, but do slow down. If you were starting a capital campaign when the economic crisis hit, don't stop. But do slow down. Recognise that getting those lead gifts in the size you want will take longer and be dependent on how the economy is doing. If you ask for a multi-year gift, and the donor resists, fall back to asking for part of that gift now, and plan to go back later for the rest. Donors are understandably shy about making long-term commitments in this economic environment.
7. Keep up your marketing and PR. Building buzz about your good work will help you with your donors. The more they know and see your name about, the more likely they are to contribute to your cause. Got PR professionals on your board or committees? Seek their advice before you launch anything big. Let them organize a PR/Marketing Committee that might bring in other professionals to help. See if their firms can do pro bono work or work at a discount. This kind of help is really priceless.

From the perspective of a SME how would you want to work with a charity?

A few days ago I posted the following question to a LinkedIn group. I think the replies make interesting reading.

The question: “From the perspective of a SME how would you want to work with a charity? What would your measures of a successful relationship be?”

The comments:

“I would work with a charity for two reasons: number one - I feel good if I know I helped someone and number two - I feel good if other people recognize that I did something good”

“I think that moving forward SME's need to straddle both working with charities for shared strategic goals (geographical location, community, social issue and/or stakeholders), but also maintaining close relationships with charities close to the hearts of people within the SME (due to personal situations/experiences).”

“Making a difference is key here and should be at the forefront of the relationship. But the relationships need a clear measurable ways of how each can and will make a difference together.”

“If SME's are committed to this, a one-off feel good event, whilst laudable may not be enough. So an SME and charity relationship needs measurable strategic and personal targets so that the relationship can begin to share successes and aspirations for 'making a difference'. This should help enhance and support the success of the charity in the future and create a 'deeper' longer lasting feel good factor and more genuine commitment to 'making a difference' across the SME.”

“giving less or giving more? and does it matter? donations are not just about getting more business and generating more business is not just about making more money...there is much more in this world apart from money and fame...giving for free large or small from the bottom of your heart is all that matters”

“…I really do like the idea sustainable difference and shared goals you can measure (in line with D'Arcy's question), without this giving for free is still an amazing thing little or small!”

“Hopefully where possible SME's can make long term relationships with charities. I am certain would be the way forward for both the benefit of the SME's (maybe not for more business/money, maybe good for staff...), but ultimately to the benefit of the charity and their ability to make a difference (and bigger measurable difference) in the future.”

“We would like to embed the social caring into our Brand awareness so that the element of putting something back into society is pre-structured. Part of this process is to engage the charity social media and develop positive perceptions and recognition while another part is to introduce our clients & customers to the automatic positive benefits of the shared goals we and our causes have.”

“Charity work should be connected to what our core business is, because that's where we can help most. For example, If I had a bakery I would cooperate with an NGO that works with young people at risk of social exclusion, training them to be bakers so they can have a perspective in the future. I think this is the best way to embed charity work in our company culture, and also a way to differentiate ourselves from other companies.”

“I agree ( with the statement above ), it must stem from a fundamental belief that the business and consumers share and be demonstrable so that the cause is creating a magnetism between the two who happily become attracted. Then D'Arcy's question gets answered because the measure becomes the volume of co-operation between consumers, customers friends acquaintances and strangers who are attracted to engage with the business for common the focussed "good". Otherwise known as a fan club.”

I would be very interested to hear your thoughts on this. Please post a comment on my blog.

The Corporate Social Partnership

Building on my thoughts from my blog entry on Thursday, 25 March this year, I am in the process of developing an organisation to help solve the problem of CSR for SME’s. 

The Corporate Social Partnership ( CSP ) will be a non-membership partnership organisation, designed to ensure that local business can get the most out of their CSR whilst enhancing their bottom line. Working in collaboration with each other local businesses are able to develop their networks and pick the CSR that best suits their objectives. There will be benefits of shared best practice and the power of buying groups.

A brief outline

Comprising 500 locally based businesses and 50 charities from 6 disciplines the CSP brings companies and charities together ensuring a business to business partnership.

Initially business partners will each donate £500pa which will be distributed amongst the partner charities. Throughout the year there will be other opportunities for business partners to provide practical help to charities as well as funding. These opportunities will be designed to maximise commercial advantage.

Charities eligible to join the partnership will fall into the £50k - £3m turnover bracket. Charities below this threshold will be able to apply to a small support fund for operational costs. There will also be a start-up soft loan scheme.

Charities commit to share their events calendar thereby minimising clashes and finding opportunities for collaborative events.

Charities will also provide details of Trustee opportunities so that the participating businesses can encourage their staff to get involved. This is a great opportunity for both personal development and a practical demonstration of CSR.

The charities are divided in to 6 categories with 8 or 9 charities in each group;

• Children and Education

• Health

• Animal Welfare

• Faith

• Environmental

Each year on charity from each category will receive a donation of £10k as the “Charity of the Year”.

 

The Sums

• 500 companies x £500 = £250,000
• £10,000 charity of year donation x 5 categories = £ 50,000
• Small Charities grants ( for operational costs ) = £ 20,000
• Start-up loans ( carry over from previous year )
• Charity event sponsorship 50 charities x £8,000 = £160,000
• Administration = £ 20,000

Potential impact of events sponsorship: example £500 for Dragon Boat Racing generated £12,000

With a ratio of 24:1 charity sponsorship the CSP could enable £3,840,000

 

The Trustee Board
The board of Trustees will consist of skill sets such as finance, marketing, strategy, governance. The board will also have representation from both the charity and business community.

 

I would welcome comments and suggestions.

 

The Importance of Corporate Social Responsibility for SMEs

Small to medium-sized business (fewer than 250 employees) account for about 90% of businesses worldwide and are responsible for 50-60% of employment. As such, they play a fundamental role in society and can potentially have a huge impact on social welfare.

I find it surprising, therefore, that corporate social responsibility (CSR) initiatives, so far, have tended to focus on large companies and multinationals. As SMEs have stakeholders and an impact on society, the concept of CSR is just as valid for small companies, as for large companies.

Many SMEs may be doing CSR in some way or form, but don’t call it “CSR” as such. For example, they may provide excellent goods and services; they may be great employers, engaging with their employees and other stakeholders; they may be alert to health and safety issues in the workplace and for customers, or they may be attempting to operate sustainably and minimise their use of natural resources. All of these things are examples of socially responsible behaviour but are not labelled as such by many small and medium sized businesses.

Staffing is often a critical element in the success of a small business. It is true in any business but employees in a small business are often a critical resource for the business’s success and prosperity. As such, many small and medium-sized businesses place emphasis on increasing employee skills and work on motivating and building staff morale. Much of SMEs’ social, community and environmental initiatives are therefore driven by, or focused on employee engagement and development.

Some of the barriers for SMEs in becoming involved in corporate social responsibility include; 

• the cost of implementing CSR activities when survival is often the greatest economic imperative;
• time and resource constraints which may mean a lack of affordable external support and resources; 
• a lack of awareness of the business benefits with no/little understanding of the business case for small and medium-sized enterprises; 
• the fact that existing CSR tools and guidelines are mainly geared towards large business;

On the other hand, there are a number of things which could encourage CSR in small business. Most importantly there is the ability to attract and retain valued employees. A characteristic of small businesses is that their success is largely dependent on a handful of key employees. Other things include the ability to develop unique selling propositions and competitive benefits through their products and services; cost and efficiency savings and enhanced reputation. 

One of the problems that SMEs face when seeking to address CSR issues is that many of the tools are designed for big business. Initiatives aimed at encouraging SME involvement in CSR need to be easily accessible and relevant. The advice needs to be tailored to them with easy-to-use tools and case studies that make it real and provide encouragement to SMEs. If small businesses can see examples of specific initiatives that have increased profitability and improved the business they will be more likely themselves to adopt CSR strategies. I think charities could work with channels known and trusted by SMEs such as industry associations to ensure that information, guidance and partnerships are available.