How to be a better donor in one easy step

It’s easy to be a better donor. All you need to do is ask for your donation to be used for core costs.

Why?

1.      Because if you ask any charity* what they need and what they find hardest to fund, they will always reply “core costs”. Take this diagram from the recent State of the VCSE Sector in Somerset report which shows the responses to the question ”what three areas do you find it hardest to raise funds for?”

If you trust the charity to deliver positive social change, then why not trust them to know what they need to spend your money on.

2.      The clue is in the name ‘core’. These are all the things at the heart of a charity that they need to pay for before they can do any good. They are often not very interesting: electricity bills, auditor fees, rent, IT support contracts. The largest cost is usually staff wages – vital if you want to build trusting relationships with the most vulnerable people in society. Staff salaries, including for senior managers and CEOs, are not a ‘nice to have’ – they are fundamental. A charity cannot commit to supporting a care leaver for the next few years as they transition into adulthood, if they don’t think their team or even their organisation will still be around to see this through. Neither can they commit to providing vital community transport or counselling for someone with a life limiting condition or being there for people in recovery from mental ill health. They need a solid core to offer consistent and long-term support. And surely that long-term help is what any donors wants to support?

3.      Charities are experiencing many demands – loss of statutory funding, increased demands for services, changes in technology. They need to adapt – to work with others, to deliver services in new ways, to grow or develop. If their core is wobbly then it is hard to find the time, the headspace, the resources needed to make good decisions about how best to change. There is a need to invest in the core of any charity to ensure it continues to focus on delivering relevant, quality services – and if it is looking to grow then, of course, the core needs to grow too.

Source: https://nonprofitquarterly.org/2016/08/16/graphic-re-visioning-nonprofit-overhead/

4.      And finally, as a donor giving core funding, you can feel reassured that you have done the most good you can with your donation. You will have demonstrated your trust in your chosen charity, your commitment to their future and your understanding of what they need. I have no doubt that you will receive heartfelt thanks.

* I am using ‘charity’ to mean any social purpose organisations including voluntary groups, community interest companies and social enterprises.

This blog was featured as a guest blog on Localgiving on 3rd April

You get what you pay for

As consumers, we all want to know what we get for our money, and funders are no different. The heart of a funding decision is often the competitive comparisons of ‘what will the money pay for and what difference will that make, to who and how?’ So that the value or return can be measured and considered in a tangible way.

Philanthropists too are attracted to tangibles whether a capital appeal towards a building or to restore an important painting or just to know what benefit individuals will get from a donation. One example, from Spear London, shows how this, now common, fundraising technique is used to communicate how amounts of money are matched to what it will pay for:

HOW YOUR MONEY CAN BE SPENT

• £20 pays for a thermal sleeping bag
• £50 pays for an outreach shift to ensure that we don’t miss a rough sleeper
• £100 pays for food for all our hostel residents
• £250 pays for a new home starter kit for someone moving to permanent accommodation

The reality is that charities need all their costs covered and not just those listed. All charities find it easier to raise money for projects than they do their core costs. Therefore the admin time, insurances, planning days, staff recruitment and management time gets built into an attractive project with tangible outcomes. However, adding too many core costs may make it look like the project is expensive. Adding too little of the core costs runs the risk that the project is under-resourced and so cannot be maintained.

If philanthropists just fund projects, the risk is that they are weakening the very organisation they want to support. To avoid joining in with this dance, philanthropists can give unrestricted donations for a charity to use on whatever costs they wish. But the desire for a tangible result runs deep, so if you still want to know exactly how your money will be spent, I have a suggestion for you.

In these straightened times, charities are having to cut their cloth. One item increasingly being trimmed is staff and volunteer training and development. With people being the biggest asset of any charity this is a short-term fix. So if you want to specify how your donation is used, how about asking for it to be used to cover the costs of training and development?

There are a number of foundations already doing this:

• Clore Duffield Foundation – individual training budgets for leaders with a social purpose
• Wolfson Foundation – covers palliative care course fees for doctors and nurses
• Paul Hamyln Foundation – has a new Teacher Development Fund coming in September 2016
• Foundation for PSA – covers the costs of conferences and courses for those delivering acute mental health services to adolescents

Given the size of the charity sector and the number of staff and volunteers involved, there is scope to do more in this area. Your donation will be greatly appreciated by your recipient charity now and represents an investment in their future. And you will still know exactly how your money is spent and the impact that it will have.

Place-based funding: is everything in its place?

At a recent meeting, it was striking how the majority of the funders that attended introduced themselves as a ‘place-based’ funder. It seems that this term, that has been kicking around for several years, is now taking centre stage.

What does it mean?

For a really good summary, I suggest you take a look at IVAR's briefing paper (see below). They define place-based funding as:

“targeted investment in defined geographic areas. This is usually a package of support – for example: multiple grants; particularly large investments; grants and additional funding plus activity (capacity building, networking, influencing activity) – within a defined place.”

I also like this description from US blogger Janis Foster Richardson: “A place-based funder has an intimate tie to a particular place that you can find on a map, and is focusing their work in that place with the people who live there …They may work on one problem or issue at a time, but do so with respect for local history and culture, a commitment to identifying and mobilising local assets, and an interest in building local capacity to weather the next storm.” which tries to get to the difference between a geographic limit and an approach that is deeply focused on place.

Being ‘place-based’ sounds like a good and necessary thing: a way to get funding into areas where there are no organisations ready and able to seek grants; to provide a narrow focus so that in depth work can be done in a defined area; to listen to, involve and build relationships with local people. It’s emphasis on collaboration certainly acknowledges the messiness of real life and how social change comes through different people and forces interacting rather than one organisation competing with another for funding.

Whilst I like the ethos behind it, I am still wrestling with a few questions:

How is seeking to assist people in a place, any different from supporting a community? Is ‘place-based’ just another way of describing good old community development, which seems to have fallen out of favour?

Does it only apply to urban areas where boundaries are easily defined and people more readily gathered together? And if it does include rural areas, how big does a place become: the whole of Wiltshire or Scotland?

If everyone becomes a ‘place-based funder’, then what happens to communities of interest? And who will help the various ‘places’ to connect up to bring about systemic and social change when it is needed at a regional or national level?

What happens to these ‘places’ when the next trend comes along? I don’t wish to be cynical but I am old enough to have seen a few swings of the pendulum from local to central, universal to targeted and back again. How long will place-based funders stay in one place? When will things be sufficiently better to move to the next place? And will there be a lasting legacy when they do move on?

http://www.janisfoster.com/2009/08/wanting-more-from-place-based.html

Searching for serendipity

It is wonderful that technology allows us to be so easily connected to all the new research and ideas out there, but frustrating that it is so hard to find time to actually digest all this information. Lately I have been working out how best to build reading time in to my week. Assuming this is true for others, I thought I would share my efforts so far …

Acceptance - I found twitter overwhelming at first because I wanted to read everything and got frustrated that this was never going to be possible. Now I have got the hang of it and accept that having a sense of what the key issues are and getting to read one or two short articles is enough.

Necessity - I am currently working on a series of lectures for the Advising Donors module of the University of Kent’s Masters in Philanthropy. As well as the pleasure of teaching the students, this has given me a great incentive to read all those books and reports I have gathered because I want to read them but somehow struggled to find the time to do so. There is nothing like a deadline and a driving need for creating space in your schedule.

Help – Step up the wonderful Kathryn Redway. I took one of her rapid reading courses which has given me some very effective tools and strategies for quickly tackling longer reports and strategy documents. I now have a slot in my diary to read them and permission to be ruthless. The upshot is things don’t sit in my ‘to read’ folder on my desktop but actually get read.

I have made good progress but, as is often the case, solving one problem has created space for a new one. The reading I am doing is focussed on my areas of interest: I follow like-minded people and subscribe to mainly UK-based bulletins about philanthropy, charity, funding. There has been lots in the media lately about echo chambers such as this piece in the Guardian (see link below) where users of twitter interact most with those who share their views. Tom Stafford, a cognitive scientist at Sheffield University explains that “homophily, where we hang out with people like us, is an ancient human trait, resulting from our basic psychology.” Whilst this is great for a sense of connectedness, it can lead to narrow thinking.

So my next challenge is how to widen my reading to create the space for opposing views and serendipity – the random connections, insights and advances that come from outside my sphere of interest and beyond people like me. How do I do that without getting even more overwhelmed with all that there is to read in the world? And can serendipity come through effort? I have found some encouragement from research conducted by a Dr Erdelez who found that serendipity is something that people do so it is a skill that can be learned. Those who see things through a narrow focus and tend to stick to their to-do lists experience less serendipity. Whereas others, the ‘super-encounterers’, report that happy surprises popped up wherever they looked.

https://www.theguardian.com/politics/2017/feb/04/twitter-accounts-really-are-echo-chambers-study-finds

What's in a name?

The speech towards the end of the film ‘I Daniel Blake’ included the statement:

“I am not a client, a customer, nor a service user”

It is a powerful reminder of the importance of words when used as labels. Anyone who has felt processed when trying to access their rights or a service can relate to how Daniel Blake feels. But exactly what to call ‘the people that a charity is set up to support’ is a problem. You need to call them something in your communications, but however factual or descriptive the chosen term may appear, the word can easily become a loaded, political and contested label.

The different words used for the people supported include clients, service users, members, companions, customers, mentees. There are lots of debates about which is the ‘right’ term to use. For example, some say that ‘service user’ is a useful, neutral term whilst others state that it is too impersonal and does not imply any relationship. When shortened to ‘user’ it has negative associations with substance misuse or someone manipulating others to get what they want.

Which words get used also changes over time. In grant making, there are a range of terms for the one with the money: funder, grant maker, philanthropist, investor. Although potentially neutral terms, the first two convey a more traditional approach. The latter two seem to be on the increase and suggest a more current and engaged approach. Calling yourself a philanthropist, social investor or impact investor seems to be more exciting and carry more status. Traditional funders now talk about investing in those supported e.g. the Arts Council “we invest in art and culture for a lasting return”. This could be a passing fashion or a genuine shift to deeper and more equal partnerships between funder and funded.

There don’t seem to be many different terms used for those getting the funding. They are mainly referred to as grant holders, grant recipients or grantees. It will be interesting to see if new terms come which describe those funded more as ‘partners’. And what I think we really need is a new term for those who benefit from the grant, the ‘beneficiaries’. Again, this is a descriptive term but I have yet to meet anyone who describes themselves in this way and it brings to mind a real Victorian sense of the deserving poor deriving good from a distant ‘benefactor’. It is very much someone on the receiving end and not an active agent contributing their assets. So we are back to what to call them: clients, service users, citizens, stakeholders etc?

Given we do need to use something to describe people, I think it is important that charities check the term they use with those they support. My practice is to ask each charity I visit what they call their service users/members/clients and trust that they have checked that this really is the stated preference of those described. It still leaves me with the unsatisfactory term ‘beneficiary’ so if you have any suggestions for a better word, then please do get in touch.

What pumpkins tell us about impact measurement

The upside of not being able to sleep some nights, is that I get to listen to random features on the wonderful BBC World Service. Around Halloween there was an interesting programme all about pumpkins. And mainly about the huge amounts of waste involved when there is such high demand for pumpkins over a very short period. Did you know the majority of pumpkins bought at Halloween are carved up and then go to waste? Around 5 million pumpkins end up in landfill each year in the UK.

Pumpkin carving used to be the by-product of the edible pumpkin season but now the market has flipped on its head with decoration driving demand. The result is that pumpkins grown to be carved no longer taste nice. As one chef puts it: “Decorative pumpkins are grown with colour, structural strength, a flat bottom, and a sturdy stem as their main attributes. The flesh tends to be bland, watery, and fibrous. No one cares because they're going to be carved, not eaten.”

So what on earth has all this to do with impact measurement?

Measuring your outcomes and impact started off as an internal tool. It is a useful way for charities to decide where to allocate resources; where services can be improved; how your model benchmarks against others. It can also motivate staff and volunteers as they can see the difference they make. The by-product is that it is a good way to demonstrate to funders and other supporters the impact of your work. Funders often ask about how a charity measures its outcomes and how it uses this data to determine if this is an organisation that is still meeting a need, learning and adapting.

But just as with pumpkin carving, the situation is in danger of being flipped on its head with the wish to demonstrate the outcomes and impact externally now driving the process. Some charities are monitoring their outcomes not because they want to learn from this but because they know it is what they are supposed to do to get certain funding. I know I have been asked “what do you want us to measure?” And some commissioners are directing which frameworks or outcomes a charity must use.

If the external driver for impact measurement dominates, then we could end up with considerable waste as charities spend time gathering data that they don’t use, or implement systems in a token way. As funders, we need to convey the message that, whilst being able to understand the difference a charity makes is important to us, it is even more important that the charity adopts impact measurement systems that are appropriate for their clients and the nature of their work; proportionate to their size and resources; and that helps inform and improve their service delivery. We want our tasty soup first and then the lantern.

http://www.redindustries.co.uk/2016/10/scary-waste-facts-released

Let’s be more “charity-like”

I noticed at a recent meeting that the term “being business-like” was used as a shorthand for a well-managed charity. Now I do agree that charities and other non-profits can learn from the best of business practice and the increased attention on getting the financial and business model right to try and secure sustainability for vital services is a good thing.

There is a welcome increase in businesses giving time for employees to share their expertise with charities and providing pro bono help – for example, Business in The Community has over 400 professional firms in its ProHelp network; LawWorks helps smaller groups find free legal advice and The Whitehouse Consultancy run an annual pro bono scheme providing support from their political consultants to a charity without the means to get involved in the political debate (see links below).

However, not all businesses are well run and not all practices are appropriate to the charitable sector. How well would a business manage when all its ‘customers’ are experiencing severe trauma? How well would they cope with a doubling of demand, but with no additional resources and providing a service that is free?

It got me thinking about the reverse situation. What would “being charity-like” mean for businesses?

Here was the list I came up with for what for-profits can learn from not-for-profits:

1. How to motivate people – when you can’t do so through large salaries and bonuses
2. How to be lean – this may be one of the latest buzzwords for companies but charities have been delivering quality services on limited resources for years
3. How to stay positive – these are tough times and I am always struck by the optimistic outlook most charity leaders hold despite the odds
4. Embedding values at the heart of delivery – charities often live and breathe their values in ways corporates can only wonder at

So while we are quick to look to business to fill some gaps in charitable practice, we should also remember that we have approaches and expertise to exchange.

http://www.bitc.org.uk/programmes/prohelp

https://www.lawworks.org.uk/legal-advice-not-profits

http://www.whitehouseconsulting.co.uk/about-us/corporate-social-responsibility/

Do you give enough?

There are plenty of opportunities to give to good causes and there is also great scope in the UK for philanthropists to give more. NPC’s recent report into ways to increase and improve philanthropy (see link) reminded me that donors are not always motivated to give by the impact they can make but often are encouraged to give by their peers. “Whether giving a large one-time charitable donation or deciding on one’s annual giving level, most people want to give in line with the perceived average amount.”

If you search giving on Google, then the questions that come up such as ‘How much to give as pocket money?’ ‘How much to spend on a wedding present?’ confirm that there are strong social norms at play that mean we want to know what other people give. No charity is going to be offended (or know) if you give too much or too little yet many donors still want to make sure they are in line with the average.

So how much do other people give?

Well, if you are rich enough to take the Giving Pledge then you are asked to commit ‘the majority of your wealth’. For the rest of us, the expectation is that we give somewhere between 1% and 10%.

In Christianity the faithful are supposed to give a tithe, which means a tenth of their earnings. In Islam, the required charitable contribution is called Zakat and is 2.5% of your wealth each year. In the Jewish faith, tzedakah, means giving away 10% of your income.

The Life You Can Save has a calculator to help you work out 1% of your annual income (see link) and this is the minimum amount we should all give suggested by effective altruist, Peter Singer. There are other organisations promoting giving 1% including Philanthropy Ireland’s ‘The One Percent Difference’ campaign. Their idea is that anyone can afford 1% and the aim is to double the giving levels in Ireland. “The idea is simple, it doesn’t matter who you are or what you do, we all give the same – 1%.”

So to increase philanthropy some role models giving more than 10% could be really helpful – especially when unlocking the wealth of high-net-worth individuals whose giving in 2015 equated to just 0.1% of their wealth (see link). But in the meantime, check your annual giving and see if you can increase it. Because rather than fitting in with the average, we should all seek to stand out in our giving.

http://www.thinknpc.org/publications/giving-more-and-better/

https://www.thelifeyoucansave.org/Take-the-Pledge

http://www.onepercentdifference.ie/

http://www.philanthropy-impact.org/sites/default/files/pdf/pi_magazine_12_final_web.pdf

Charles Dickens was a philanthropy advisor

My summer reading included Rhodri Davies’ fascinating new book ‘Public Good by Private Means: How Philanthropy Shapes Britain’. In it I was delighted to learn that Charles Dickens was a philanthropy advisor. In the late 19th century he advised Angela Burdett-Coutts on her giving and helped screen and select applications. As a philanthropy advisor myself, it was pleasing to find myself amongst such illustrious company.

So how has philanthropy advice developed since Dickens’s day? When setting up my consultancy business, the advice I was given fell into two main camps:

1.      People don’t value philanthropy advice and won’t pay for it;

2.      This is an under-developed market in the UK and likely to grow.

Obviously I am banking on 2. being correct. So it was interesting to read Cath Tilotson’s latest research into the philanthropy advice market in the UK for Philanthropy Impact (see link). The research found that only 1 in 5 professional advisory firms (accountants, tax advisers, wealth managers etc.) offered philanthropy advice and then it was patchy.  And Joanna Walker states in her white paper for Boncerto (see link): “the philanthropy advice sector has largely remained static over the last few years - when by now it should have fulfilled its enormous potential”.

There are a number of philanthropic advice specialists in the UK such as CAF, New Philanthropy Capital, Boncerto and I am aware of some sole traders and other small outfits like me. But this is nothing compared to the size of the industry in America where philanthropists can access 1,300 Chartered Advisors in Philanthropy alone. There is clearly much still to do to make the case for and grow philanthropy advice in the UK.

There is a real opportunity here – with gains not just for advisors but also for those they support since those wealthy individuals who do seek advice tend to give more.  

So whether a Dickens or not – do contact me if you are a Philanthropy Advisor. It would be great to discuss how we raise our profile together. And if you are one of the 4 out of 5 private client advisors who don’t yet offer philanthropy advice, please get in touch.

Learning to give: lessons for advisers and would-be philanthropists in Philanthropy Impact Magazine Issue 12: Special Edition June 2016 http://www.philanthropy-impact.org/sites/default/files/pdf/pi_magazine_12_final_web.pdf

Growing philanthropy advice - Joanna Walker for Boncerto July 2016 http://www.boncerto.com/assets/files/Philanthropy-Advice.pdf

How are trusts and foundations like snowflakes?

In the latest BBC documentary series with Brian Cox, Forces of Nature, he explained that snowflakes look similar because they are formed by the same forces but every one is also different as each is formed by travelling a unique path.

Grant makers are the same. There are around 10,000 Trusts and Foundations in the UK alone. Each has different aims, priorities and criteria. They are all similar in that they are trying to make a difference through allocating their resources as best they can. But each is different because of all the choices made along the way.

This weekend I was a guest lecturer on the Cass Business School Charities Masters course as part of the Grantmaking, Philanthropy and Social Investment module (see link). I guided students through just some of the choices needed to create a grant making programme, from the strategic considerations such as: ‘Do you want to help people or change the world?’ to the practical aspects such as: ‘Which assessment methods will you use?’

Each step in the process of creating a coherent grant making programme involves making a decision and the order the decisions are made in matters. For example, if you decide to respond to the needs defined by applicants then it is much more likely that this will dictate an open grant process. For the students, each decision they made created much debate as there are no right answers. The result was that within the session the students created grant making programmes that all started from the same point but, two hours later, were all - like the snowflakes - completely different.

http://www.cass.city.ac.uk/research-and-faculty/centres/cce/msc-programmes