Investing in Fundraising Guide

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This guide aims to help facilitate the right discussions between senior leaders, Boards, and fundraisers. Fundraisers should find it useful and helpful when building strategies and plans, and for putting forward a case for investment.

Foreword

We believe that when much more money is raised, a better world can be made. And we know that when fundraisers have the commitment, investment, and support from the whole of their organisation they can achieve the most for their causes.

Agreeing a shared vision and way forward between Boards, senior leaders, and fundraising teams is fundamental to future success. But we know it’s not always easy.

Every charity has to strike a balance on where it spends its money, with the spend on delivery of services and fulfilling the charity’s mission at the forefront of discussions.

But for each charity to do more – year on year and on a sustainable basis – the spend on service delivery has to be paid for by the money that fundraising teams bring in. And for that income to grow, fundraising must be appropriately invested in with an agreed approach to build capacity and skills. That is what will deliver continually excellent fundraising which will inspire millions of people to support good causes.

The best fundraising that delivers for a charity time and time again by bringing in new supporters, building brilliant supporter journeys, and trying innovative and creative new approaches, does not happen by luck and very rarely on a shoestring.

Excellent fundraising happens when teams and people are appreciated and enabled to do the best job they can. They need the right systems and infrastructure to inform and support their campaigns, they will rightly work with partners and gain the insight from external expertise where needed, and it is essential that they continually develop their skills and knowledge.

I know that committed, motivated and skilled fundraisers deliver the best return on investment. Boards that get it, and engage in open and honest conversations with fundraising teams to properly understand the level of investment needed to achieve their organisational strategies, will be giving their charity the best possible chance to succeed.

I hope that this new guide helps Boards and fundraisers have those important conversations over the months and years ahead, and that fundraising flourishes so together we can make a better world.

Thank you to everyone who contributed by sharing expertise and insight.

Katie Docherty
Katie Docherty
CEO, Chartered Institute of Fundraising

Introduction

Fundraising is so much more than simply making an ask. It’s a multi-layered and complex undertaking that charities must continually invest in to deliver the best for their cause and mission, and to ensure positively inspiring experiences for supporters to encourage long-term support.

Charities are under pressure to deliver their services and to raise more money from a variety of sources. This makes ensuring fundraising lives up to the values in the Code of Fundraising Practice more important than ever for maintaining public trust in charities, what they do and how they raise the money to do it. As such, charities should be aspiring not just for good practice but for better and best practice; and achieving this requires investment in many areas, including quality training and support for your fundraisers, third party fundraisers, and volunteers.

Gerald Oppenheim, CEO, Fundraising Regulator

Fundraising is strategically critical so that it consistently delivers income upon which services, beneficiaries, and causes rely, as well as being a key part of good charity governance.

There’s a responsibility to look after a charity’s best interests and to ensure that it can operate at its optimal level. More widely, appropriate investment will deliver continually improved fundraising practice and protect the reputation of the charity sector as a whole.

When organisations invest in fundraising, they are also taking the right steps to give people the best experience of supporting charities, meeting the expectations and priorities of the public, and ensuring compliance with both legal requirements and best practice standards.

While it is essential to continually invest in maintaining income streams and to ensure compliance and best practice for the highest standards in fundraising, there is also a need for investment that drives growth, that gives competitive edge, that enables charities to keep pace with the market and to try new things for a more sustainable future.

This means investing in fundraising development – in everything from teams and training to the strategies that keep new supporters coming in and encourage them to stay. This could include multiple strands of investment throughout the entire supporter journey, including outsourced expertise, new technologies for reaching new audiences and improving donor care, and longer-term goals such as growing supporter loyalty and encouraging gifts in Wills.

Achieving this takes real partnership between Boards and fundraisers that has ongoing and open conversation at its core. It’s this that facilitates the mutual understanding necessary to help Trustees in their decision making.

You can’t grow unless you invest, and incremental increases in investment alone are not enough. You can look at whether there are efficiencies and economies of scale that you can activate, but if every efficiency has been activated, then the ‘do more with less’ is just a pipe dream, and real investment is needed.

Michelle Chambers, Managing Director, THINK

Open and informed two-way conversations can help with the bigger picture of what’s happening in the sector, such as emerging technologies and shifting supporter preferences and behaviours, and with what fundraising teams need to achieve their mission. And when times are tough, it’s also what helps to protect against the very real risks of budget cuts, the slicing up of programme spend, and disinvestment.

This resource aims to help facilitate the right discussions between senior leaders, Boards, and fundraisers. Fundraisers should find it useful and helpful when building strategies and plans, and for putting forward a case for investment. Boards and senior leaders should find value in gaining a greater awareness about the importance and potential for their organisation in appropriately investing in fundraising. Most importantly, it is hoped that the right conversations can happen and that organisations as a whole can navigate this area with increased confidence and success.

WHY THE RIGHT INVESTMENT IS FUNDAMENTAL TO SUCCESS

Beyond incremental funding – the case for substantive investment

Most charities incrementally increase spend as a matter of course to cover price rises, updates to existing technology and systems, and the day-to-day ‘cost of doing business’. But it’s purposeful and substantive investment that enables a charity to truly develop or revolutionise its fundraising so that it can deliver marked increase in its work and services.

Gaining that level of investment requires a strong case to be put forward which is grounded in reality and evidence, is open about risks and opportunities, is aligned to the organisation’s overall strategy, and answers the questions that Trustees will rightly have before making a decision to invest.

In a competitive space with strong market forces, substantive investment in fundraising is also essential for sustainability and survival: a lack of investment will leave your organisation behind, mean you can attract fewer new supporters, reduce your brand awareness and recognition, and ultimately mean the delivery of fewer charitable services. Just how important this all is has been thrown into stark relief over recent years as one crisis has followed another.

What recent years have shown, firstly with COVID, and then with the cost-of-living crisis, is that a lot of carefully crafted business models don’t work anymore. In a challenging climate, anyone with all their eggs in the wrong basket will be in a tricky spot. It’s a really important time to be thinking about your business model and income generation, giving strategic thought about where that’s going to come from. For example, digital and legacies are rapid growth areas of fundraising, and if charities aren’t investing in these, they’re likely to get left behind.

Sarah Vibert, CEO, National Council for Voluntary Organisations

Seizing opportunities

When it comes to finding new supporters and inspiring people to donate for the first time, there’s a need for charities to invest in channels and techniques that will deliver. That could be face-to-face fundraising, direct mail, legacies, digital, or a new lottery programme for example. Meeting people where they are means keeping on top of consumer trends and being in a position to take advantage of relevant new opportunities and developments.

This is particularly true in terms of technology and the speed at which new solutions come in and trends take off, for example social media. But at the same time, attitudes towards more traditional channels can change, as well as regulations and guidance, which can also require charities to pivot in response. For example, over the last decade we have seen direct mail go through peaks and troughs of activity levels – criticism of the use of the channel in the past contributed to a marked decline for several years before a more recent resurgence due to the impact of COVID on fundraising activity, and better understanding of regulatory requirements and improved sourcing of data.

Two key areas where opportunity currently lies for charities of all sizes are legacies and digital. Research is showing the increase in legacies as a proportion of the sector’s income, and showing too how the public are starting to leave legacies to smaller local charities, not only to the bigger household brands. This is thanks in part to the growing public awareness of legacy giving, largely driven over the last two decades by the charity sector’s public facing campaign Remember A Charity and its consortium of 200 charities.

While recent rapid advances in digitisation across systems, processes and channels were massively accelerated by the pandemic lockdowns, we have also seen a surge in social media uptake as well digital data capture and contactless payments adoption.

Keeping supporters of course requires investment too. To name just one area, it’s impossible to achieve long-term supporter stewardship and loyalty without a focus on – and investment in – data and insight. Preferences and behaviours change and develop and understanding them is integral to providing a relevant and engaging experience over a supporter’s lifetime.

Optimising fundraising also requires the latest techniques and informed thinking, while implementing a CRM – essential for bringing disparate sources of data into one place for a single supporter view – can come with a hefty price tag. So too can outsourcing to the specialist partners and agencies that provide essential support on these and other aspects of fundraising.

Spotlights

To help turn some of this thinking into practical examples, we’ve highlighted three areas of fundraising where investment can deliver great outcomes. See our Spotlight section at the end of this guide for more on making the investment case for legacy fundraising, digital, and the supporter experience.

How the various strands across a fundraising programme relate and integrate with each other means a lack of investment in one area will eventually likely have a knock-on effect somewhere else that could end up impacting a charity’s future viability. There’s a responsibility then, and a need, to ensure all parts are working to an optimum level.

Investing for a sustainable and successful future

Charities need to understand the interrelationships between different parts of the fundraising mix. So, if your individual giving base is decaying because you haven’t done new donor acquisition for a while, then that’s also going to have a knock-on effect for your legacy pipeline.

Grahame Darnell, Managing Director, Darnell Consulting

The pandemic’s sudden halt to face-to-face and event fundraising, for example, forced charities heavily reliant on those channels to pivot quickly to find new donors and income from elsewhere. As well as digital, use of the telephone really took off during this time and saw great results. This was in part because more people were at home, but also because a growing focus on stewardship brought more personal, relevant, engaging approaches.

In recent years too, charities have seen the impact of burnt out and dissatisfied staff. Building and retaining skills, knowledge, experience – and happiness – necessitates investment in staff wellbeing and training and development to avoid burnout, increase job satisfaction, and therefore staff retention.

Last and by no means least, continuing to invest in fundraising is essential for innovating: for research into tech, modelling, and new channels, and developing new techniques and strategies needed to keep pace with a rapidly evolving world. It’s this that means every charity must invest in whatever it takes to move forward.

But when finances are pulled in every direction and Board members can be unfamiliar with fundraising’s complexities across different components and reach, there can be a lot to do to make an investment case that clearly communicates everything they need to know to provide their support.

You need to ensure you have a diverse and sustainable fundraising mix so you’re not reliant on any one particular fundraising stream. No matter how much you plan, situations can come into play, and something can be altered, wiped out or become impossible overnight. So it’s about making sure that you’re testing, that you have different approaches at different stages, and that you’re not reliant on one single major donor or the one member of staff who’s able to do something. We can’t be complacent.

Jamie McIntosh, CEO, Scottish Love in Action

Even a small increase in investment makes a difference

Board members and fundraisers will find the right approach and be able to make the best decisions when there’s mutual understanding on both sides, a shared vision, and trust. It’s a sound strategy that can bring success, since with their organisation’s best interests at heart, Trustees are heavily invested in helping them to develop and improve. Not only is this central to general good governance, but it’s a fundamental part of their duties.

Trustees of course also have an overriding duty to ensure that they are spending charities’ money in the best possible way, and are rightfully mindful of needing to account for every pound. It can be a tricky balance to get right, so it’s important that fundraisers understand the questions that they might have.

And with fundraising making on average £4 from every one pound invested in generating that activity* , even a small increase in fundraising investment can deliver positive, tangible impact. Investing in collecting Gift Aid is a simple example of this. By making a small investment to promote the opportunity to supporters and then ensuring Gift Aid is claimed efficiently, a charity can increase eligible donations by 25%. And with some £1.4 billion** raised for charities through Gift Aid each year, it’s well worth it.

*NCVO, 2019 & **HMRC, 2021

We raised over £100,000 from a walking challenge with a few thousand pounds of investment and relatively low effort, and generated a real sense of community among the people taking part. The beauty of the activity was how it related to our cause. We support people through pregnancy and some of those taking part have recently had babies and might want to get fitter again, and we created a community that allowed people to talk to and support each other. This was a real added value and lovely to see because of course we also support people who have sadly lost babies.

Kath Abrahams, CEO, Tommy’s

Introducing virtual events is another prime example of how charities can bring in significant income for relatively little spend. While a small outlay and immediacy in action and results can be an attractive, simple investment to secure, getting Trustee buy-in for big budget or longer-term projects can take more work. Legacy fundraising, where the returns from pledges often aren’t seen for decades, can be a challenge if the Board’s focus is directed more towards answering immediate need. Yet real impact can be gained here with just a small amount of investment. For every £1 invested in legacies the return on investment can be as much as £33 and residuary gifts in Wills can generate the same as a regular donor giving £5 a month for 400 years***. So although it takes time, established legacy fundraising can lead to high returns.

*** Smee & Ford

Appetite is high for legacy giving, but we need to continue to drip feed that message. For charities, this means not shying away from making a legacy ask and ensuring the legacy message filters through and across every part of the organisation and its work. Simple steps like making legacy giving visible on your charity’s homepage, celebrating what legacy gifts have funded in newsletters and making sure all your people – right across your charity – feel comfortable in having conversations about gifts in Wills. None of those things have to be particularly costly, but they can all help to achieve crucial change.

Lucinda Frostick, Director, Remember A Charity

HOW TO HAVE GREAT CONVERSATIONS

The reasoning behind a case for fundraising investment may be sound and the need apparent, but there are many reasons Board members might feel they have to say no. Some of this is down to the purely practical – there are key details that every case for investment needs to include for the optimum chance of success.

The reasoning behind a case for fundraising investment may be sound and the need apparent, but there are many reasons Board members might feel they have to say no. Some of this is down to the purely practical – there are key details that every case for investment needs to include for the optimum chance of success.

A good business case will obviously focus on setting out expected returns and be realistic about when they will be realised – this is very much a long-term goal. There’ll be a strong emphasis on the hard metrics, but also inclusion of softer or more anecdotal measures. It will include examples of best practice and results achieved by other organisations. And critically (and something which is often missing), it will include the voice of the supporter, evidencing how they currently feel and presumptions about how they might feel going forward.

Paul Amadi, Chief Supporter Officer, British Red Cross

Fostering mutual understanding

Building mutual understanding between Trustees and staff is crucial, and often there is simply too little communication outside of the boardroom. It’s imperative that Board members, and senior teams, understand fundraising methods and strategy, and what they’re expecting their fundraisers to deliver over time, compared with what they need to invest to help the team take that strategy forward.

Working together, having frank and open conversations that start before the case is presented, is what enables fundraisers to build their understanding of Board members’ priorities and concerns, and how to address them.

Your Board care about the same things that you do. You work for the same charity; you will have the same strategy and vision behind you. Lean into that. You’re all trying to head in the same direction – getting some good results for your beneficiaries. They’re not trying to be the bad guy, they’re just being careful with the charity’s resources, because that’s the law they are governed by.

Emily Bush, Chair, Chartered Institute of Fundraising Supporter Engagement Special Interest Group

It’s important that fundraisers work together with Board members and senior teams to help develop and maintain their understanding of fundraising and its role in delivering a sustainable future for their organisation. The more they’re involved in discussions and can see the process, the more trust will grow in their fundraisers’ expertise.

I’ve been on the Board, and I’ve been a fundraiser pitching to the Board, and it’s about accepting as a Trustee that there are people who know more about the fundraising landscape than I do and trusting their expertise when deciding what areas are worthwhile for investment.

Emily Casson, Digital Marketing and Fundraising Manager, Salvation Army

For fundraisers, there’s great value to be found within the Board as well. A Trustee with a financial background, or who knows their stuff from a brand and communications perspective, for example, is in a prime position to offer useful insight and advice, way before any board meeting. Getting to know Trustees and their skillsets and bringing them in earlier in the process can add value to the case being built and bring support to the table during the pitch.

The bottom line is that, especially if they don’t have any fundraising expertise of their own, Board members are reliant on open and honest communication to understand what level of investment is needed, where and why, the evidence that points to that and what targets are realistic. Having these conversations really helps to bridge that gap between fundraisers and Boards, making it easier for the two to develop a joined-up approach.

It might seem obvious to say this, but it’s essential that when we present investment cases to the board, we present them in a way that addresses the issues that are important for them. That’s why evidence like the research we’ve done, showing that growing supporter loyalty can increase income by 20% over three years, is so important in gaining understanding and commitment. Evidence like this demonstrates how investment has a positive impact on the bottom line, which is after all one of the most important issues to boards and senior leaders.

Richard Spencer, Director, About Loyalty

AGREEING THE WAY FORWARD

Be absolutely clear about why you want to do what you want to do. Think about the journey from inputs, to action, to outputs, to outcomes, to impact for your organisation. Take them on that journey, help them see that you’ve thought through the steps that you need to follow, what the timeline is likely to be, when they’re going to see that return on the investment, and what difference that’s going to make finally for your beneficiaries.

Clare Mills, Director of Policy & Communications, Charity Finance Group

Taking the right approach

Of course, it’s also about preparation and approach. Boards need to be given the facts – to understand what investment is being sought for, and how much is needed, the resources it will require, the impact it’s expected to have and when, and what return is likely to be seen.

But it can’t just be about sharing the positives, or the dream. When putting together or reviewing a case for investment, it’s important to be realistic, with budgets and risks presented upfront so that there can be honest conversations.

Submit a realistic budget and plan, with milestones to show you understand the work involved and how to measure success. And if you’ve been asked to submit unrealistic budgets, try to get that message through and offer solutions – say why it’s unrealistic and explain what would be needed to fill that gap, whether that’s more time, resource, or expenditure.

Becki Young, Head of Individual Giving, CARE International UK

Boards also want to know the risks and how they’ll be mitigated, as well as what will happen if their answer is ‘No’, or what other options are on the table. A big part of preparing a case for investment centres around anticipating the questions and challenges that might arise, and ensuring they’re covered, with hard evidence wherever possible. This is where finding an ally with financial experience to support in bringing that case together can be a huge benefit, whether they’re on the fundraising team, the Board, or in senior management. Fundraisers will always have to answer questions about metrics. Any case for investment will need to include how success will be measured and what the returns might be – and Boards will also want to know success measurements and expectations for anything new. This is where sharing sector statistics and benchmarks, as well as examples and case studies from other charities can be invaluable in helping to back up a case.

If you’re asking for investment for continued development, the likelihood is you’ve got a lot of your own metrics around what that investment is likely to deliver in terms of net income. So there will be parts of the business plan that are much easier to make because you can answer with some sort of surety. When it’s something brand new, you’re relying on either data that’s available in the sector, or data that peers in your network or in other organisations are happy and able to share with you to use in your modelling.

Michelle Chambers, Managing Director, THINK

Building support with a test and learn approach

However good the case, there’s no doubt that putting forward a proposal for significant investment in something new and untested will meet with questions, concerns, or perhaps resistance. After all, it is every Trustee’s duty to ask these questions and ensure they are making the right decisions in the best interests of the charity. Where Boards and fundraisers agree on an approach to growing their fundraising, often they start with a pilot or an initial investment which they can then scale up when the positive results come in. It’s having a clear process for a test or small-scale project, which can then be scaled up, that demonstrates a rigorous, sensible approach, and assures Trustees that any investment will be in good hands.

The key is to ask for permission to spend a small amount of money first on a ‘test and learn’ that says – this is the plan, this is what we think is going to happen, this is why we think it’s the right thing to do, these are the milestones that we expect to hit, and if we hit those milestones, please can we come back for some more investment? Because as the guardians of the finances, the Board need firm assurance that they’re going to get updates on progress, and dipping their toe in the water first can feel much more doable than being asked to jump in at the deep end.

Kath Abrahams, CEO, Tommy’s

…and a clear presentation

With so much information to impart in a case for fundraising investment, there’s no doubt that how it’s presented also plays a large part in how it’s received. The more accessible salient points are, the easier Board members (who of course are voluntary, often with other jobs and limited time to spare) can grasp them and factor them into their decision-making. Not being as familiar as the fundraising department is with the details and background means that clarity is key for Trustees. There’s a balance to be struck between ensuring all the pertinent information is available and not overwhelming with too much detail at the outset. At Oxfam GB, this means structuring cases in a pyramid or cascade format: starting with what the investment is required for, then the key information of the financials and the risk, followed by the layers of detail underneath.

Your case needs to be straightforward, and in language that anyone can understand so it doesn’t take being a marketing expert, a fundraising expert, or an anything expert to be able to read it. 90% of the time people don’t read past page three or four, so if we don’t put all the salient information into pages one, two, and three, then nobody’s going to say yes to it. The structure of investment cases is critical, as is thinking about who’s actually reading it in the first place and understanding that they won’t have much time.

Johnty Gray, Individual Engagement Director, Oxfam GB

The right time for investing

Whether there’s an optimum time for presenting a case for investment is much debated among fundraising teams. Ask when everything’s going well, and the response from the Board might be that there’s no need. Ask during challenging times, and it could be that now’s not the right time. But the fact of the matter is investment is needed, for different reasons, whatever the weather – internally or externally. At the same time, when times are tough, investment may be the only realistic answer if a charity needs to implement a new strategy, channel or activity in order to solve a problem. It could be a drop off in acquisition or retention, the need to digitise, or to find a way to respond to a new issue or situation.

When things are going well, you’re in a good position to continue to invest because your finances are looking healthy so it’s a good time to build those working relationships and talk about what else you could do. Charities that I’ve worked for have had a continuous improvement mindset where everybody is very passionate about what they do and the output of that for the charity. This drives the desire to improve, and it’s bound to be easier when things are going well and you’re hitting your fundraising targets.

Emily Bush, Chair, Chartered Institute of Fundraising Supporter Engagement Special Interest Group

When you’re trying to get money to flow into the organisation, the faster you can turn the taps on, the quicker you can achieve the objective. Putting constraints on fundraising spend or investment when times are hard is counterintuitive because if anything the need will have increased and charities will need more money, not less. If you look at organisations who have a period of investment and then stop investing, it doesn’t matter how good your stewardship is, or how strong your pipelines are, you can very quickly see decay happening.

Grahame Darnell, Managing Director, Darnell Consulting

A ‘No’ may not be the end of the conversation

How then to best keep the conversations going, and work together if the response to a case for investment is a ‘no’ or a ‘not now’? It could be that the case just hasn’t answered the concerns or priorities of the Board, which again is why ongoing communication is vital. Or it could simply be that the money isn’t there at this moment in time, in which case perhaps another approach could be developed that costs less. This is where suggesting that ‘test and learn’ approach can really help, by making it clear to the Board that the risk and expenditure at the outset are limited, in order to prove its worth. It’s also where thinking laterally can be advantageous. The key, quite simply, is to ask for feedback and to act on it, whether that means simply tweaking your case, or coming back with different options.

I proposed to our Board that we invest in an additional fundraising position. But because it was a brand-new role, our Trustees struggled to picture what it would look like. So I listened to their concerns. I applied for a funded internship to help demonstrate what one additional fundraising position would look like and to road test it, helping to bring the proposal to life. It’s an approach that helps everyone see if there’s mileage in something.

Jamie McIntosh, CEO, Scottish Love in Action

Certainly, whatever area of fundraising a charity is looking at, getting buy in and being able to move strategy forward is all about making a solid case for investment that answers what Trustees need to know to say yes. How to achieve this together is something every fundraising team and Board must be looking at to ensure a strong future in achieving their charity’s mission. Even a small increase in fundraising investment can pay dividends in improving practices and processes, resulting in a stronger supporter experience, and more sustainable income. And it’s this that we all want for our charities, whether we’re at Board level, or part of the fundraising team.

Spotlights

Spotlight on digital – meeting people where they are

Quite simply, digital can be transformational. It may be thought of as the cheaper, easier option for fundraising and building relationships, but that’s to underplay its significance in integrating with other channels, as well as the resources and investment needed to do it well. Almost half of consumers now donate through digital channels****, with 87% of charities receiving a donation via their website in 2022, and 69% via social media – a significant rise compared to pre-pandemic. These market growth stats alone make a clear case for investment, helping charities who are currently not digitally fundraising see plainly how they risk being left behind, and those enjoying success to see the necessity of continuing to invest as the market becomes increasingly competitive. Charities just entering the digital arena that Casson has worked with have seen their income from digital fundraising increase by as much as 300%. Growth can be huge for bigger charities too – when she started at her previous charity, Cats Protection, income from digital was about £250k a year; five years later, it had reached £10m a year.

**** Giving, A New Landscape, Barclays, 2023 

Why Digital?

Digital offers a massive opportunity to communicate with supporters and potential supporters to raise awareness of the cause in a very low-cost, real-time way. It’s much more agile than other fundraising streams and used with them it can transform across the board. It’s also where your supporters are, so while not everything needs to be digital, digital does need to be considered in everything. You don’t get that level of growth from any other channel and particularly not at a positive year one ROI. At Cats Protection it meant we could invest in areas such as education and rehoming.

Emily Casson, Digital Marketing and Fundraising Manager, Salvation Army

5 TIPS FOR MAKING THE DIGITAL CASE FOR INVESTMENT

  1. Do an internal analysis of where your organisation currently is on digital skills and capability (often called a Digital Maturity Index).
  2. Sell the dream: explain what you want to do, what it will achieve, and what you need for this.
  3. If it’s new to your organisation, share the successes of other charities that have taken the same approach, showing their results if possible.
  4. Set out how you will manage risk.
  5. Suggest a simple test and learn approach starting with a small-scale pilot you can roll out if successful – and help the Board to understand how it works!

Spotlight on legacy fundraising – investing in a sustainable future

There are no two ways about it – it’s going to take years, decades even, for some legacy income to come through. But the size and scale of that income means it’s something few charities can afford to ignore. With Baby Boomers set to pass on the bulk of their estates in the next thirty years, the sooner charities embrace and maximise their legacy fundraising the greater and faster their returns will likely be.

Lucinda Frostick, Director, Remember A Charity

Why Legacies?

Building legacies into organisational culture is about planning for the long-term and creating a more sustainable future. At the moment, larger charities typically spend less than 5% of their fundraising budget on legacy marketing, according to Remember A Charity, yet legacies are the single largest source of voluntary income in the UK, bringing in a record £3.85bn in 2022*****. Generally, this tends to be unrestricted income, giving charities the freedom to use those funds wherever the need is greatest. Currently, 1 in 5 charity supporters over the age of 40 say they’ve left a gift in their will, while around twice as many say they’d be happy to do so, meaning there’s massive growth potential. Oxfam GB for one has renewed its focus on legacy fundraising in recent years, launching in-depth supporter research and a new proposition and strategy in 2021 along with new pledger content, enquiry pack, and legacy webpages. Since then a new legacy team has been formed, the charity has introduced automated digital journeys along with prospecting direct mail and email, telemarketing and more – and has also joined Remember A Charity. Legacy gifts have contributed 25% of Oxfam’s unrestricted public fundraising income over the last five years. But, with renewed investment in multi-channel engagement and focus on putting supporters at the heart of the engagement strategy, its goal is to grow legacies to generate one third of fundraised income.

***** Legacy Market Outlook, Legacy Futures, 2023

5 TIPS FOR MAKING THE LEGACY CASE FOR INVESTMENT

  1. Manage expectations regarding timing.
  2. Explain what legacies could mean for your charity in terms of size, scale and growth potential.
  3. Highlight the risk of not investing – what could happen in the face of a major incident (pandemic/recession/media crisis) when donor attrition could spike, or usual fundraising is not possible?
  4. Show what legacies already mean to the organisation and what could happen if that income was magnified.
  5. Highlight too the window of opportunity linked to the Baby Boomer generation.

Spotlight on supporter experience – building support for the long-term

Hard evidence can help you build a solid case for investment. For instance, we know that investing in improving the supporter experience and building loyalty leads to greater support, and more income. A one-point increase in loyalty over three years leads to 15% more people continuing to give, 20% more income from those people, and a further increase of 9% in people who pledge to leave a legacy. It’s a commercially critical metric that drives fundraising income.

Richard Spencer, Director, About Loyalty

Why the Supporter Experience?

For a sustainable future, every charity needs to able to communicate relevantly with its supporters. This requires a single supporter view that builds up that full picture of behaviour, their every interaction and motivations for support, while ensuring they feel valued and engaged. Statistics make clear the difference investing in the supporter experience makes, specifically in terms of the worth of working to build loyalty, and the increased income this can bring. With a commitment to enriching the supporter experience, in recent years British Red Cross has sought and won investment to increase the team and build a framework that enables it to be more robust in tracking the supporter experience and how that translates into income. The charity has also invested in new techniques and platforms that enable donors to communicate in the way they choose, using the framework to measure the impact.

The impact we’ve seen as a result includes an increase in response rates, average gift size and a preparedness to recommend British Red Cross to friends and family. And we’ve seen these trends combined with declines in supporter attrition. We’ve also received great anecdotal confirmation that our supporters feel more engaged and part of the British Red Cross movement.

Paul Amadi, Chief Supporter Officer, British Red Cross

5 TIPS FOR MAKING THE SUPPORTER EXPERIENCE CASE FOR INVESTMENT

  1. Present options for investment, along with your recommendation and what that’s based on.
  2. Communicate the value of understanding, measuring, and growing the supporter experience and long-term loyalty.
  3. Make it real, by demonstrating what your supporters want, need and expect from your charity – for example, bring this to life through letters or videos sharing actual supporter feedback.
  4. Benchmark previous activity against where you are now and what is being proposed.
  5. Get to know your Board members – their priorities, and the information they need to make decisions, so you can build a case that answers these requirements.

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