It’s no secret that successful fundraising is driven by well-managed partnerships. In our new book, Gifted fundraising, we set out the various types of fundraising partnership available to the Third Sector today and offer a step-by-step guide to making those partnerships work for the benefit of the different communities they serve. Here’s a summary of our thoughts on why those key relationships with government, business, givers and professional fundraisers are the lifeblood of transformational philanthropy.
A cornerstone of our complex society is the array of charitable and not-for-profit organisations, collectively known as the Third Sector. From local community groups and national charities to international agencies, there are some 167,000 organisations in the UK that not only assist those in need, but also address what makes our lives interesting and worthwhile.
The breadth of purpose and diversity of the Third Sector often masks common characteristics and challenges. To be successful, all not-for-profit organisations – large or small, international or local – must effectively engage volunteer leadership and efficiently raise funds. Both of these ‘partnership’ activities can’t be described in a business-like, transactional way, but rather rely on shared values and aspirations, where one side invests time and money in exchange for the benefit of a third, often unrelated party.
It’s these exceptional fundraising partnerships that power some of the most impactful organisations in our society. The marriage of volunteer access and influence, with a structured, professional, fundraising approach, is generating £73.1 billion in gifts each year in the UK, funding some remarkable achievements. The scourge of disease is being defeated world-wide; our arts and heritage are flourishing; good quality education is being made more accessible; our communities are being transformed, and all because of the power of volunteer-led philanthropy.
So, let’s examine the key partnerships that shape the Third Sector.
The partnership with government
Choice is a wonderful thing. The opportunity we each have to choose where we allocate our scarce resources of time and wealth is, however, a privilege that isn’t available to everyone. Because of the need to meet the basic necessities of life, many are not able to choose how to shape in any meaningful way the world in which they live.
We are fortunate that in Britain today we have the ability to choose how we develop our communities, national institutions, theatres, centres of faith, culture, education, health and research. In short, we can if we wish, shape every aspect of our life that defines what it means to live in this progressive, democratic society. Yet, this hasn’t always been the case. Once government was at the heart of providing the funding for most of the institutions at the centre of our daily lives.
So, what changed? Due to the insatiable, open-ended fiscal demands of a welfare state, public policy has had to evolve. In the 1970s policy makers eventually recognised that government has, in fact, a limited ability to fully fund the needs and wants of our civic society. As a result, what were once exclusively exchequer-funded organisations are now seeking financial and philanthropic partnerships, not only to develop new initiatives, but also to deliver core services.
Budgetary constraints have not only limited the appetite and capacity for publicly-funded, transformational projects, but have also prompted a re-evaluation of how we meet society’s essential health, welfare, social and community needs.
Whilst the opening-up of Public sector provision to the Private and Third Sectors – under the rubric of the ‘right to provide’ – has enabled not-for-profit and voluntary institutions to step into an even greater role in society, the emphasis on savings within local government, and the costs associated with the procurement process, have presented another set of challenges, particularly for smaller charities.
The partnership with business
Corporate giving was once a significant source of charitable funding in the UK. Local businesses, which employed local people made major gifts to support local charities. The families behind many of these great businesses, like Cadbury’s chocolates or Weston’s biscuits, built towns and established institutions for the local benefit, exercising philanthropic ambitions that continue today.
Open markets and the march of globalisation have delivered many benefits, not least of which has been the positive reduction in world poverty. To compete, many of our businesses with deep local roots have evolved to serve international markets, with suppliers located in different regions and a work force that’s no longer based in one location. Outsourcing, technology and the power of our connected communities have all dramatically changed the business environment.
Today, companies continue to support the Third Sector, but in indirect ways that serve a more widely defined corporate agenda. Corporate giving has steadily fallen to just 3% of the Third Sector’s funding. FTSE 100 Company Directors see that their principal responsibility is to generate sustainable profits for the benefit of shareholders, who in turn have the ultimate discretion to make gifts if they wish, rather than the company.
Business does, however, make other less obvious, positive impacts on the sector. As a recent Charities Aid Foundation survey revealed, ‘more than half (56%) of working people in Britain said they had given money to charity at work in the past year, while more than a third (36%) had supported charities in the workplace in other ways. Clearly there is great potential for businesses to make a positive social impact in ways that extend far beyond financial contributions, and the public are very much behind businesses giving back to their communities.’
The partnership with volunteers
The vital element that powers our Third Sector is the volunteer. More than simply a ‘retired supporter’, the modern volunteer can be of any age and often brings with them an array of commercial and professional expertise. Serving on Boards, undertaking practical tasks as well as actively fundraising for the organisation, these volunteers find reward in the benefits they create for others, the experiences they share and often, the new skills they learn.
Increasingly people are demonstrating that they want to be involved, to play their part in their community, be it perceived as a local, national or international grouping. The NCVO Institute for Volunteering Research, estimates that 21.6 million people volunteer at least once a year, with 13.8 million formally volunteering at least once a month.’ That’s a staggering resource for the Third Sector, provided it’s properly and efficiently managed. In an age when many claim to be ‘time poor’, the fact that volunteering is so well supported, highlights the importance of this partnership.
The partnership with wealth
It's easy to empathise with some of the sombre assessments of the UK’s finances and the civil society they support, but are we really living in a land without access to sufficient financial resources? Well, not exactly. We’re so used to hearing about austerity, scarcity and shortage that we might be forgiven for overlooking the fact that the UK ranks as the fifth largest economy and in the top 25 nations in the world for wealth per head of population. The total net worth of the UK is in fact £8.82 trillion. A quick comparison with the pre-recession, 2008 high of £6.93 trillion, stands in bright contrast to a rhetoric of decline and destitution.
It’s not, however, until we look more closely at how the wealth of the UK is distributed that we can really begin to understand the best way to unlock this financial resource. Because of the way people are able to give, it’s important to appreciate that wealth is reflected in two ways: assets and income.
Firstly, of the people who control the UK’s assets:
- the wealthiest 10% own nearly half (45%)
- the wealthiest 50% own nearly everything (91%)
- the least well-off 10% own virtually nothing (0.05%).
Secondly, breaking-down income reveals a similar profile:
- the top 10% of earners take home over a quarter of the UK’s income ,
- the top 20% earn 40% of the total income
- the bottom 20% earn just a fifth of the top 20%, at 8% of total income .
This uneven distribution of wealth (both assets and income) across the UK comprises the material climate in which fundraising takes place and, like most climates, provides opportunities for growth.
Statistics like these do not, of course, furnish us with the full picture. They can’t explain the dynamics which gave rise to them and their interpretation is often a function of political disposition, but they do need to be taken into account if the enormous promise of the UK’s financial strength is going to be realised.
As publicly funded bodies continue to seek efficiencies and savings in their budgets and as the Third Sector assumes a more central role both in frontline service provision and seeding future infrastructure, it’s more important than ever that we unlock this latent capacity.
The partnership with givers
Many of our most cherished national institutions were founded hundreds of years ago by philanthropists, industrial barons and wealthy landowners, all of whom have played a significant part in shaping British society today, through their major gifts. More recently, mass engagement at events such as Live Aid, Red Nose Day, Comic Relief, Poppy Appeal, Children in Need and the like, have developed the habit of giving in the wider community – with 61% of people reported as having made a gift to charity in the last year.
These facts and an understanding of how our wealth is distributed, clearly indicate that if we are to continue to grow the amount raised by the Third Sector, a focus on developing partnerships with the wealthiest 20% of the UK population is imperative.
Yaojun Li, a professor at the University of Manchester’s Institute for Social Change, noted that while the poorest fifth of UK society gave 3.2% of their monthly income to charity, the wealthiest fifth gave less than 1%. Whilst the gifts of the wealthiest in our society were greater in absolute terms, efforts to triple the relative size of these gifts would have a significant, positive effect on the sector. Professor Li, recalling the Big Society believes that ‘given the voluntary and altruistic nature of charitable giving, how to get the economically well-off to give their fair share– that is, to contribute relatively more – is the challenge, if our society is to be made big’.
The partnership with professional fundraisers
Many organisations across the Third Sector seek to raise funds in a systemic and proactive manner. Because of our ambitions to positively shape society – and as the predominant role of government in providing community funding declines, in relative terms – the challenge to make up the difference is being met through increasingly sophisticated fundraising programmes. Not-for-profit organisations that fail to present their case in the best possible light, via the most effective network of influential friends, are finding it difficult to raise the funds they require.
In this highly competitive space, professional fundraising expertise is in demand. The days have gone when it was considered inappropriate to compensate fundraisers, as it’s now recognised that to attract the most talented and able development staff, competitive remuneration needs to be offered.
Real risks weigh on Trustees considering investing in their fundraising capacity. Questions concerning the quality of the staff employed; issues about proper processes and ethical practice all create a challenging set of considerations, which many feel poorly qualified to address. Few Trustees recognise how best to engage the right type of fundraising professional, with some, misguidedly believing that whoever they employ will be able to operate effectively, without any direct support from the organisation’s leadership.
The key is in understanding that an effective professional fundraiser works best in partnership with a team of committed volunteers who lead by example, in giving and helping to get the gifts that are needed. They understand the importance of philanthropic giving and quickly grasp what’s motivating volunteer leaders to fundraise. They have a personal history of philanthropy, actively giving time and money to the projects or programmes they care about. Simply put, being a successful professional fundraiser means being a good partner to not-for-profit leaders and volunteers, appreciating the journey they’re on and understanding the challenges they face.
An effective professional fundraiser also knows what it means to give and what’s at stake when you invite others to share your enthusiasm for a project. They appreciate how important major gifts fundraising is to building financial health and long term organisational resilience. They also realise that to be a philanthropist, making a major gift isn’t necessary – and in fact, it’s a privilege available to anyone who is prepared to master their wealth, whatever size it may be, and direct it for the greater good.
Designing winning partnerships
Whilst the competition for gifts may seem fiercer and campaign metrics more complex, the fundamentals of successful fundraising remain the same. Campaigns only win when fundraising is personal and gimmicks are put to one side. Philanthropy is inherently person-centred; it flourishes when people are encouraged to give to other people, rather than causes.
No two not-for-profit organisations are the same and therefore each will require a different set of partnerships to achieve their objectives. Getting the support needed to create the right set of partnerships for your organisation is vital and it’s also the reason why Gifted Philanthropy was founded.
If a complimentary copy of our book would be helpful to furthering your fundraising ambitions, please get in touch via http://www.giftedphilanthropy.com/contact. (Offer runs until 31 July 2018)
 ONS: ‘UK National balance sheet: 2016 estimates’ (https://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/bulletins/nationalbalancesheet/2016estimates#total-net-worth)
 OECD: http://www.oecd.org/unitedkingdom/OECD2015-In-It-Together-Highlights-UnitedKingdom.pdf
 The Equality Trust: https://www.equalitytrust.org.uk/scale-economic-inequality-uk