How UK Charities Can Demonstrate ROI in Their Fundraising Programmes
It is no secret that UK charities are facing a very turbulent landscape, and the lingering effects of the COVID-19 pandemic, rising inflation, the cost-of-living crisis, and a war in Europe have only intensified global uncertainty. Yet, while UK charities must recognise and acknowledge these challenges, they mustn’t grow discouraged. Philanthropy was intended for times like these, and the role of charities and fundraisers has never been so vital. Furthermore, in this climate – with the right tools and strategies – fundraisers can be empowered to do their very best work, connecting the generosity of donors with meaningful, charitable causes.
Here are several ways that UK fundraisers can not only demonstrate impact, but also make the case for the continued investment in fundraising by illustrating the return on investment (ROI) of their programmes.
Highlight the Effectiveness of Your Donor Stewardship
Fundraising leaders are able to highlight their loyal donor base as a critical factor for continued investment. Clearly, raising money during an economic crisis is hard, therefore it’s imperative to retain current donors by focussing on stewardship. Remember, acquiring new donors – even under the best circumstances – is more costly than retaining the donors you already have.
Incredibly effective stewardship is often the motivating factor between a donor’s initial gift and their decision to continue giving. Over 60-plus years of working in philanthropy, GG+A’s studies have shown that when a charity clearly highlights the ways donors are making an impact by helping an organisation fulfill its mission, these donors are much more likely to continue their support.
In this climate – with the right tools and strategies – fundraisers can be empowered to do their very best work, connecting the generosity of donors with meaningful, charitable causes.
Assessing your stewardship programme does not need to be arduous or complicated, and donor surveys are a valuable tool for obtaining feedback from your constituents. Asking your donors how you are doing relative to other organisations that they support is a good place to start, along with aligning your stewardship programme with evidence-based, best practice guidelines.
A review of your programme will reveal where your organisation could augment its stewardship practices in key ways that are personalised to your donors.
Data, including giving history and communication touchpoints, can be used to deepen connections with supporters and to better understand their needs. Combining strong storytelling with programmatic metrics that emphasise impact will help to highlight the positive outcomes your donors make possible through their giving. Use your stewardship programme to remind your donors of their incredible value to your organisation, and to help them experience the well-documented personal benefits of their generosity.
Effective stewardship does not have to be costly, and with consistency, it will help to increase donor retention and offset the costs of donor attrition.
Use Benchmarking to Gain a Clearer Picture of Your Fundraising Peers and Context
GG+A often encourages clients to analyse the relationship between fundraising performance, staffing, and resource expenditures by comparing data with a set of peers or aspirational peer organisations. This benchmarking analysis provides reasoned, evidence-based guidance to help rigorously evaluate the resources currently invested in fundraising.
The charitable sector is an incredibly collaborative one, and helping fellow leaders understand how other organisations invest and allocate resources can provide crucial context for budget discussions. To instill a sense of ownership in the process, fundraising leaders should work with their charity’s leadership to help identify and agree on an appropriate peer cohort.
GG+A has worked with many organisations who have used benchmarking as a significant and decisive factor for operational planning and budget discussions. One recent client working in medical research asked us to provide a frame of reference – relative to their peers within the sector – for how to assess their own productivity and best deploy resources. The resulting analysis helped this organisation to gauge the progress of its development and provided an opportunity to position its fundraising programme for additional investment.
Forecast Fundraising Potential with Growth Scenarios
The relationship between a charity’s fundraising leadership and financial leadership has always been critical – they cannot work in silos. This need for close collaboration is only amplified against the current economic backdrop.
It’s likely that many internal discussions are currently taking place around the balance of investment. Should this investment be focussed on the short term and driven towards income streams that might produce a “quicker” return, or on areas that could provide more sustainable and reliable income, over the longer term?
The charitable sector is an incredibly collaborative one, and helping fellow leaders understand how other organisations invest and allocate resources can provide crucial context for budget discussions.
To help UK charities set realistic expectations, fundraising leadership must highlight the correlation between fundraising income growth and the expenditure needed to support this growth over an extended period. In the near term, this will help to make the case for continued investment in the fundraising team. In the long term, organisations can frame their fundraising performance by developing growth scenarios that encourage sustained or increased fundraising investment.
Growth scenarios can be a particularly useful reference point within budget conversations, setting out forecasted fundraising results relative to the investment needed. There may be areas where a certain percentage of additional investment will yield a much higher rate of growth, which can be a decisive factor in discussions with financial and organisational leadership.
We suggest that fundraising leaders create a range of growth scenarios, with various outcomes, to evaluate the investments required for their financial projections and charitable ambitions. Several scenarios will allow an organisation to better align fundraising investment needs across the charity and plan appropriately.
The crucial role of the UK charity sector is reinforced when economic challenges arise. Demand for services is only increasing, and every organisation is feeling pressure to meet income targets. By framing the need for sustained investment in fundraising with evidence-based techniques, fundraising leaders can demonstrate their ability to grow income, even in times like these.
Ian Wilson, Senior Vice President, leads GG+A’s UK/Global practice area and partners with charitable organisations across sectors to help them achieve their philanthropic ambitions. If you would like guidance in developing your organisation’s fundraising strategy, contact Ian at firstname.lastname@example.org.