Fundraising – making sure benefits outweigh risks

  • Charities need to raise funds to support good works, but how you achieve this is just as important as the amount you raise
  • Mitigating against the risks doesn’t have to mean taking a soft approach
  • We look at some of the risks, and rewards, of fundraising

Esther Kwaku, Communications and Marketing Director at the Resource Alliance looks at fundraising do’s and don’ts.

Fundraising has a crucial role to play within the charity sector. Without it, services cannot be delivered, campaigning cannot take place and vulnerable people and communities will not receive the life-saving and life-changing support they need.

But for all the benefits fundraising brings, there are an equal number of risks attached to it.

There is the personal safety of fundraisers out on the streets and at events to think about; the potential of someone saying something they shouldn’t on social media; the risk that too much restricted funding will hinder your ability to deliver general activities – the list goes on.

Negative PR

In 2014, Macmillan was criticised for hijacking the #icebucketchallenge and for stealing the spotlight from ALS. Around the same time, Plan UK’s “Give child marriage the finger” campaign was banned on London underground for being obscene. More recently, we’ve all seen the negative coverage attached to direct mail, telephone and face-to-face fundraising.

So, does this mean we need to take a safer, softer approach and take fewer risks?

At the Resource Alliance, we don’t agree with this. Charities should be courageous. We are trying to solve some the world’s most pressing and difficult social challenges. These are not going to be solved if we are not daring, angry and willing to step out of our comfort zone.

This is not to say that we should set out to take unreasonable risks or that we should not be concerned about our reputations. Instead, we should put plans in place to mitigate against the risks.

Assess the risks

One of the first things to address is to evaluate your current situation, says Victoria Gibson, strategic risk consultant at Zurich. “Charities should identify the risks they face and then assess their appetite to those risks. Is the risk of doing something worth the end reward?”

Lucy Gower, innovation consultant, agrees. She highlights how perceived risks can be lessened when everyone is committed to a mission. “People are motivated by push, pull or a combination of both. Push is when you actively push yourself away from pain or anticipated pain. Pull is your desire to achieve something; your end goal. Depending on the goal, pull motivation is a stronger force than push. In other words, the gain of achieving your organisations’ mission must be greater than the pain of not reaching it.”

One example of this is the donor experience. Some charities focus on short-term transactional fundraising, which can see fundraisers under intense pressure to generate immediate returns. We have seen how this can translate into donors feeling bombarded with asks, putting the long-term viability of our fundraising at risk.

Conversely, transformational fundraising leadership places attention on long-term results. This in itself can be risky – not least because of the higher costs and slower returns. However, when lifetime value is taken into account it’s potentially a risk that should be taken.

Data security

However, some risks are not worth the pain. Being fined by the Information Commissioner’s Office for failing to keep donor data safe, being one example.

Charities should be aware of what constitutes personal and sensitive data and make sure that it is secure. Encrypting disks and assessing your IT network and its perimeters, filters and authorisations may help to protect your data from malicious attacks.

Once the fundraising risks have been identified, next steps should include developing ways to protect the organisation. Gibson says: “Training has a key role to play here” and we agree.

“Most crises occur because of the behaviour of a person or group of people. Therefore, ensuring that all your fundraisers, both staff and volunteers, understand the risks, what’s involved and how they need to behave, is essential,” she says.

This training could be delivered in-house or by attending a relevant conference or workshop.

Crisis management

Of course, no matter how much training you provide, some risks do turn into crises. When this happens, make sure you have a response plan ready and waiting. People will forgive you if things go wrong, but they don’t always forgive you if you respond inappropriately.

Knowing what the right course of action is for a particular crisis will enable you to deal with it quickly and effectively. This includes effective communication, both internally and externally.
Failure to keep people updated can result in rumour, loss of morale and reputational damage. Making sure that all stakeholders are aware of what is happening and why has a big role to play.

Finally, don’t let your fundraising risk management plan sit on a shelf getting dusty. It needs to be current, dynamic and updated regularly as issues within your organisation change. That includes testing public opinion and attitudes, which may help adapt your response.

So how did Macmillan fare after it was criticised for hijacking the #icebucketchallenge? It raised more than £4.5m, a sum that will make a significant difference to their mission of helping more people living with cancer.

Meanwhile, the banning of Plan UK’s “Give child marriage the finger” campaign resulted in lots more press coverage and a significant number of people requesting the rings to use as wedding favours. In both cases, the gain outweighed the pain.