Sunday, February 23, 2014

What does size matter?

Have you ever thought what would your ideal size fundraising office would be? I have been reading a couple of reports recently that appear to suggest that the ideal number of staff is around seven. 

That made me wonder what exactly an ideal fundraising team would look, sound and feel like.

The most recent of the reports came from the Association for Health Care Philanthropy. The report Characteristics for Sustaining High Performance applied statistical analysis to benchmarking data drawn from North American hospitals, health foundations and University medical schools. The results identify a group of 12 organisations raised almost  four and a half times as much funding as the rest. It then discovered that the most significant difference between this group and the others was the size and resourcing of its fundraising teams. Further drilling down in the data revealed these highest performing organisations put their main focus on major gifts.

The second report I have been looking at is the Ross-CASE survey of UK higher education fundraising – Giving to Excellence.  It looks at funds raised and money spent on fundraising. It breaks this data into clusters based on the age of the universities' fundraising activities. Again, the results showed a significant increase in total funds raised correlated to the size of fundraising team and the team budget. The institutions, described in the report as having 'moderate fundraising programs' have 10 fundraising staff compared to only 3 staff in 'emerging fundraising programs'. The former spend slightly more than three times as much on fundraising. But they raised almost 15 times as much funding. Again, the report remarks that "very large gifts" were the source of much of this funding. increased engagement with alumni is a another feature of those organisations with more resources and staff.

So what might be ideal fundraising team be? Being prescriptive is a little foolish, given I don't know your particular circumstances. However I would suggest an effective team would comprise a full-time operations/database manager, a dedicated researcher, a data entry officer, a direct marketing manager (responsible for telephone/digital/mail campaigns), two major gift fundraisers and a director. Here is why think each of these positions are so necessary.

The database is the engine room of the fundraising ship. To keep her sailing requires a dedicated Chief engineer. The last thing anyone wants the middle of a major event, or a mailing from telephone campaign are glitches or data crashes. The operations manager will keep on top of all that is needed to ensure that this doesn't happen or that speedy recovery is possible.

Prospect research is absolutely essential for effective major gift fundraising. That person with the right instinct and interest, who enjoys discovering piecing together the interests and connections of your potential donors will make connecting with them, then developing your relationship with them significantly easier.

The data entry officer is that orderly person to make sure everything is recorded accurately and on time. Addresses, thank yous, reminders etc will go out to the right people at the right time.

The lifeblood of fundraising is the steady, frequent flow of regular donations. Your direct marketing manager is the person ensuring that stream continues to flow. That stream, incidentally, is from where your researcher fishes your major gift prospects(if I'm not mixing metaphors too much).

Then the two major gift specialists. Why two? Because, as both these studies have shown it is from major gifts that most funding will come. Managing the major gift process and, especially, managing relationships with major gift prospects is a demanding (although very exciting and enjoyable) role. A good major gifts manager will probably be capable of managing between 50 and hundred major gift prospects. As they manage these prospects through the major gift cycle they will need to get to know them better and spent more more time on them. The Pareto principle will apply and 80% of a major gift manager's time may need to be spent on only 20 prospects as the ask gets nearer. Of course, this time is not spent face-to-face with the prospect. It involves juggling diaries, preparing briefings, planning and logistics to ensure that the right people make the right ask at the right time.

And then there is the director. The metaphor I prefer to use for the director is that he or she is the film or stage  director,  or orchestra conductor managing all the forces. Backstage, onstage, singers, stars or support artists. He or she is seldom the star but always there ensuring optimum performance and making sure the audience and the players alike get exactly what they want to achieve from their respective involvement in the great fundraising and philanthropy performance.

Anyway, those are my thoughts.  What are yours?  There's a couple of other positions you might want to throw in. An events manager? Social media manager? What if you are too small an organisation ever to aspire to this many positions - what roles could you double up?

I'd love to see and hear your thoughts.

Saturday, February 8, 2014

What is a charity regulator for?

What's a charity regulator for? And should we have one? Is a charity regulator the same as a charity evaluator? And if not what is a charity evaluator for?  Some thoughts have been rattling around my head and I am curious about what others think.
Australia and New Zealand are relatively newcomers to charity regulation. Canada and USA don't have any.  The grandfather of them all is the Charity Commission of England and Wales founded in 1853. It has been a lot in the press these days. It seems almost nothing it can do will keep everybody happy. Is it a policeman? It is a champion for charity? Should ask questions, be provocative, or simply, quietly and effectively 'regulate' the sector?

Meantime what are charity evaluators such as Guide Star, Charity Navigator and Give Well supposed to do? How do you in fact evaluate a charity? Do you look at its overheads? The proportion of donations that reach beneficiaries? Should its reserves be under the microscope? The Chief Executive's salary?

There are a handful of academic papers on charity regulation that are worth a read. One such has the nice title 'Light-handed charity regulation'. Wouldn't that be a nice idea some of you might say. However, for me it was useful in obtaining an overview to answer my opening question.

Regulation, in essence, is required to provide transparency and confidence in the charity sector to the public. The obvious analogy is a corporate regulator which ensures that investors in publicly listed companies can make appropriate decisions before risking their money. However, in a sense everyone's money is at risk with charities. Charities enjoy a privileged position with regard to not paying some taxes. Likewise donations to charities are privileged by the tax system. So it is in the public interest to ensure that charity is bona fide and the public's trust and money is not misplaced.

However the question of proportionality and the burden of regulation frequently arises in discussions. My bias on this question is reflected in my liking for the title of the academic paper above. That is because I believe that 90+ percent of those who devote part of their life to volunteering or working for charities nonprofits do so with noble intentions. Yes of course there are aberrations and rip-offs. But I wonder if we put these against the aberrations and rip-offs in the private sector which would be the more numerous and the greater in the value gouged?

Let's turn to charity evaluators. My understanding is that they are for enabling potential donors to get a look at certain key criteria regarding the charity's performance in order to help them make choices. The challenge here is what criteria and how to evaluate them?

It was with some relief that the sector recently read that three largest US evaluators now recognise that overhead is a poor measurement of a charities performance.

But what is a good measurement of a charities performance? And can you apply that measurement to each and every charity? Such is the diversity of the charity world, I struggle to think of a single measurement which could have universal application. Then there's the wider argument of whether quantitative measures provided effective evaluation? Or whether quantitative stories from beneficiaries and others on the ground are best?

I'd be delighted to hear and read what you feel because I think this is too important an issue to be left without debate.