The rise of high-value fundraising in charities

Charities have always had it tough, but things seem especially tricky at the moment. The hike in national insurance has added an extra burden on charities, reflected in a reticence to invest in fundraising teams.

This is understandable but, in my humble opinion, a mistake.

For some time, a cost-of-living crisis had already squeezed charities in two key areas. Firstly, core costs increased. Charities have the same bills to pay as anyone else, including electricity, heating, water, and internet, not to mention salaries and other operating costs. Secondly, most donors are also feeling an economic pinch and can’t give at the level they once did—this includes both individuals and government/local authority funders.

At the same time, many charities are seeing a greater demand for their services.

This means charities have to do more, at a higher cost, with significantly reduced budgets.

The solution? As always, the answer is income diversification.

We’re seeing a great increase in the number of charities creating roles to capture the two key income streams that are better insulated from financial difficulties than most: major donors and corporate partnerships.

Charities that were already strong in these areas are doubling down, and those with solid strategies are investing more in recruiting fundraisers with these specialisms, while others are starting from scratch—hiring major donor fundraisers and corporate fundraisers for the first time.

High-net-worth individuals and businesses are secure long-term partners, and their income has actually increased over the pandemic. This means they can be more reliable than local authority and government funding, precarious in the face of political U-turns and poor budgeting (please see various councils across the UK), and less affected by economic difficulties than your average individual donors.

Trusts are also an area of growth, but most charities have well-established trust fundraising programmes and have been accessing this funding for several years without the need for corporate or major donor contributions. Hence, there is a more pronounced shift towards fundraisers with these specialisms.

However, success in these areas hinges on having the right fundraisers in place, especially given the increased competition for these donors and the ongoing quest to find untapped pockets of funding.

For a financially secure charity, you need the best fundraisers and a diverse team in place. They will identify potential donors, build relationships, secure long-term partnerships, and provide stewardship to ensure donors support you in the long term.

Continue to invest in your recruitment process, fundraising team, and charity; sooner than you may think, you will see the benefits on the bottom line and, ultimately, your beneficiaries.