Member Article

How can charities maximise their cash generating ability?

It’s Third Sector focus week on Bdaily. Graeme Jones, Head of Not for Profit for business and commercial banking at RBS and NatWest, looks at how charities can maximise their cash generating ability.

With falling levels of donations and tighter competition for grants, charities are under more pressure than ever to ensure their fundraising activity is as efficient as possible.

Institute of Fundraising data highlights that those organisations that engage in fundraising and continue to invest in it have at worst suffered flat income and have in fact been able to diversify their income streams.

Today’s fundraising world is a fast changing environment with new and exciting opportunities for income generation.

But charities need to be clear on who - at board level - is responsible for fundraising and how they are going to maximise the impact without compromising the cause. It is vital for the chief executive or a key board member to have some involvement in the fundraising activity.

It is important that charities maintain high standards of fundraising in order to maintain their income, including adopting best practice. Using resources such as the Institute of Fundraising Code of Fundraising Practice and other resources is one easy way to eliminate poor practice, build public trust and be more effective in your fundraising activities.

Return on investment (ROI) is a vital measure, and although charities are under pressure when it comes to maximising donations for the cause, expenditure should be expected - you don’t get something for nothing.

Investment of time and money, and a focus both on the expected return and on keeping expenditure within acceptable limits is vital for a successful campaign. Other performance measures such as donor retention rates and participation rates should also be monitored as these may highlight impact on future income and allow plans to be reviewed as needed.

A mixture of fundraising sources is also key – taking into account long, medium and short-term needs without relying too heavily on one or two sources. There are a host of options to consider some of differing degrees of appropriateness dependent on the size of your organisation: major donor fundraising, legacy giving, event fundraising, direct mail- the list goes on.

If your organisation is large enough then corporate fundraising could also be something to consider – and there are real opportunities to get involved in what can turn out to be a longer term relationship. You do need to be clear in what the objectives are for the company and what they want as an outcome. Good communication is key as is the ability to measure the benefits.

But successful fundraising is not just about raising money. Fundraising enables a charity to meet its aims, deliver services to beneficiaries and build a strong future for the organisation. Fundraising is a fast evolving profession and the challenge is to develop a stable, reliable overall income base that can support your organisation now and in the future.

This was posted in Bdaily's Members' News section by NatWest and RBS .