Overheads or investment? A new perspective on nonprofit “admin” costs

Guest blog post by Lee Durbin (@lddurbin)

In February this year a story broke about the appalling conduct of some of Oxfam’s staff in Haiti following the 2010 earthquake, and there was understandable outcry. Channel 4 news spoke at the time with Sir Stephen Bubb, the former head of the Association of Chief Executives of Voluntary Organisations (Acevo), and although it is worth watching the interview in full Sir Stephen begins by highlighting a challenge for donors in light of the Oxfam scandal: “Administrative overheads are completely crucial for delivering effectively on the front line”. Without such investment, he argues, charities cannot develop proper processes, procedures, systems, and checks that would more successfully guard against the behaviour that Oxfam was rightly criticised for.

This is a compelling argument, but what about the argument for investing in fundraising specifically? How do we convince donors that a charity’s fundraising “overheads” aren’t a necessary evil which detract from the causes they care about, but are instead crucial forms of investment enabling charities to perform greater good?

This is more difficult to sell to donors than the idea that effective safeguarding needs to be financed, but in the video I’ve embedded below the great Ken Burnett is quite right when he states that “we won’t achieve the revolution we need unless we’re prepared to invest”. Ken spends the previous 6 minutes demonstrating why this form of investment provides tremendous returns over the long term (I do recommend watching it, together with the other “lightbulb moments”). So why aren’t charities heeding this call?

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Relationship fundraising for Higher Education today

A relative latecomer to this industry staple, over the last couple of weeks I ‘took Ken Burnett to bed every night’ (as my partner teased) and read his oft-quoted book. Many of you will know it well – it’s called Relationship Fundraising: A donor-based approach to the business of raising money.

Given the sound advice contained within, the amount of time passed since this book was published (1992!) and its popularity in the industry, you might assume that we’re all ‘relationship fundraising’ by now. I’ve certainly heard many a quote from this book (or from the man himself) at team meetings, conferences and industry events.

Not so! Within the well-thumbed pages of my copy of Relationship Fundraising, Ken had described many of my 2017 frustrations and concerns so accurately, I can only imagine how bittersweet it must be for him that this book is finding a new audience 25 years later. The truth is (references to fax machines and ‘working women’ aside) Ken’s book is still as relevant and revolutionary as ever.

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Thinking about fundraising as a risky business

 

Increasing scrutiny from the media and regulators about the fundraising activities of charities, the sources of their funds and even the pay-packets of their senior staff has made charities and fundraising organisations more and more conscious of the cost of poor reputation and breaching public trust.

The fallout of summer 2015 is still being felt across the HE fundraising sector in the UK, with most institutions reviewing their programmes and if needed, taking measures to ensure their full and demonstrable compliance with regulations and ethical practices. Before that, there was the Woolf Inquiry in 2011, with many universities hurrying to put in place standard procedures for the solicitation and acceptance of philanthropic gifts.

When public confidence falls in charities, so does public willingness to donate, and the good work that many charities do in our communities becomes harder. This is the reason many organisations are opting to fix what’s broken as quickly as possible. The National Council for Voluntary Organisations is already taking this a step further by attempting to equip charities with a “narrative” to help tell the positive and meaningful story of what they do. For the benefit everyone in the UK, particularly the vulnerable who rely on charity supported programmes, it’s important that our industry is well respected and held to high standards.

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