PM1: Messy relationships – fundraising and beneficiary/customer/donor muddle
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NCVO Annual Conference 2016
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PM1: Messy relationships – fundraising and beneficiary/customer/donor muddle
- 1. Drinks sponsors: MESSY RELATIONSHIPS – FUNDRAISING AND THE BENEFICIARY/CUSTOMER/ DONOR MUDDLE CHAIR: ROS JENKINS SUSTAINABLE FUNDING CONSULTANT, NCVO SPEAKER: STEVE SAYERS CHIEF EXECUTIVE, WINDMILL HILL CITY FARM Partner sponsor: Media partner:
- 2. MIX IT UP FOR SUSTAINABLE FUNDING
- 3. 3 More than ‘just fundraising’ More than ‘just financial management’ = All the elements that keep your organisation nourished WHAT IS SUSTAINABLE FUNDING?
- 4. 4 WHAT IS SUSTAINABLE FUNDING? • A strategic approach • Income diversity • Financial Management • Communicating Success (Impact) • External positioning and marketing • Relationships
- 5. 5
- 6. IF YOU INTEGRATE YOUR INCOME GENERATION… • You can build an *income* strategy around what your organisation needs. • Those raising the money are more effective, because they better understand operations and… • Operational staff are better able to identify and support income generation opportunities because they understand it is part of their work.
- 7. THE CHALLENGE OF MANAGING RELATIONSHIPS TO ACHIEVE INTEGRATED FUNDRAISING
- 8. CHALLENGE #1: MESSAGING • Re-evaluate where the distinctions lie between audiences • How do you make your messages both appropriate and effective? • The danger of the lowest common denominator
- 9. SEGMENTATION
- 10. CHALLENGE #2: TIME MANAGEMENT! • How do you record ‘return on investment’? • How do you make sure time and resources are being used efficiently? • How do you balance short term wins and longer term development?
- 11. CHALLENGE #3: ACCOUNTABILITY • Is it fair to give fundraisers a target if the work involved in effective fundraising crosses several functions? • How can more people be motivated to support fundraising targets? • What happens if targets are not being met?
- 12. PAYMENT BY CAKE
- 13. CHALLENGE #3: CULTURE AND PERSONALITIES • Different types of income generating activity tend to attract different types of people • Cultural implications – especially between the ‘asking’ and ‘earning’ sides of the income spectrum • But also between the operational and administrative side.
- 14. SHARED EXPERIENCE OF THE MISSION
- 15. GETTING THE BALANCE RIGHT Steve Sayers CEO, Windmill Hill City Farm
- 17. City Farm History Pre-1800 agriculture. 19th Century housing. 20th Century derelict. Set up in 1976 by community group responding to dereliction. Facilities have grown organically over 40 years responding to need.
- 18. City Farm Now Annual footfall 120,000. 80 Staff. 350 Volunteers. Facilities: Farm & Gardens, Cafe, Play Areas, Room Hire, Events Services: Child Day-care; Adult Health & Social Care; Courses; Schools
- 19. City Farm Essential Stats Income (total £1.49m) Central Nursery Farm & Gardens Health & Social Care
- 20. City Farm Essential StatsIncome by type Grant income (inc FEEE £260k) Nursery fees Earned income Other income Café sales Long term lets General room bookings Sports pitch hire
- 21. City Farm Essential Stats Cost base Direct Personnel Establishment Admin Legal
- 25. UNTANGLING THE MARKETING ELEMENTS Products Community hub Environmental education Therapeutic Family day out Price Promotion Process Mapping Tool © Ros Jenkins, NCVO 8ps, © Ian Bruce
- 26. SPREADING THE RISK – A FUNDING PORTFOLIO
- 28. Any questions?
Notes de l'éditeur
- You may have come across Sustainable Funding before, but for those of you who haven’t I’m just going to give a very quick re-cap. What sustainable funding ISN’T About one type of funding About one size fits all Income generation isn’t something that can sit outside your organisation, like a bolt-on You can’t just recruit a fundraiser and expect funding to magically appear The whole organisation needs to support generating funds AND Funding needs to support the whole organisation
- One of the tools we often use as a starting point here at NCVO is the Sustainable Sun Tool. It asks organisations to evaluate their strengths in six areas. (CLICK TO REVEAL AREAS) You’ll notice that all of these areas extend beyond the realms of traditional fundraising, yet they are all crucial if an organisation is to raise money successfully. If you wanted to undertake a quick audit of to improve your fundraising and income generation success, I’d strongly recommend you start by looking at these six areas – HAND OUT SUN TOOL!
- This is the NCVO Income Spectrum. It’s a way of breaking up voluntary sector income into general categories, in order to begin to think about the different characteristics they share and skills organisations need to access them. Let me talk you through it… BOXES FIRST (definitions) Now RELATIONSHIPS Now TYPE OF ACTIVITY Think about the characteristics of organisations that might major in one type of income or another? What are they good at? How might those skills allow them to develop into new areas? Now, for your own organisation, think about how much of your income falls into each of these categories. Are all your income ‘eggs’ in one funding ‘basket’ And how about diversity WITHIN income streams – perhaps you have most of your income from grants, but you have lots and lots of different grant funders. This is great – it helps to insulate you from the risk of funding ending. If you find a high proportion of your income is concentrated within one type of income, or with a few sources (e.g. a few funders, or donors), then generally we would say you are operating with a high degree of RISK. This is because trends within the sector tend to affect types of income. The aim is to make sure that all your different sources of income are working together to give you financial security year-to-year, which will allow you to build a much stronger organisational strategy, and give you the cashflow you need to pay for what you need, when you need it.
- No more random targets! No more scrabbling around for ‘core’ vs ‘project’ funding. End the ‘boom and bust’ funding cycle!
- This isn’t to say that integrating fundraising and income generation is easy. One of the biggest challenges is with relationship management (hence the title of this workshop!) I’ve identified four of the biggest relationship-based challenges I’ve identified from the approach, along with some examples I’ve encountered. Then we’ll hear from Steve at Windmill Hill City Farm about their amazingly well integrated income generation.
- Perhaps the biggest challenge posed by the blurring of distinct categories. There is an ethical consideration here – is it ethical to speak about your beneficiaries to funders in a way you wouldn’t to their faces? Few organisations are yet at the point where they don’t have any distinct audiences left – usually applications for grants or contracts are not seen by beneficiaries. But one day they might be (how long will it be before all applications are published on the web?) The ‘8ps’ are a really useful tool to check whether your messages are working for everyone encountering them. I won’t go into detail about them here, but do look them up. They essentially revolve around the theory that messages are given out in lots of different ways – not just the spoken or written word. Even if you write an incredible funding bid, the message and identity of your organisation needs to be supported in every way the funder comes into contact with you if they are to believe what you’ve written. But sometimes you do need to appear differently to different audiences – even if it is just when using technical language or plain English. How to segment.
- Here’s an example of segmentation in practice. The poster is on the tube – so every passenger can see it. But the charity only wants to speak to those who are likely to become donors. So, they’ve designed the material to appeal to a particular type of person – it is on the Met Line, which heads out to suburbia and it offers an incentive for those people who have their own garden. So immediately, when the charity gets a response to this advert they know that in all likelihood they are talking to someone living in a house or flat with a garden (which doesn’t come cheap along the Met Line). They probably have also thought about the level of knowledge that person has of the subject matter. I’d be prepared to bet this guide is not aimed at bird enthusiasts who might be members of the RSPB already – it’s a basic level guide, aiming at recruiting new members. But they’ve also integrated their mission (increasing the numbers/diversity of birds and wildlife) with their fundraising. So there is a double win here – they will raise money, but also raise awareness and have a positive impact on birds. So this advert is not just segmenting the audience to increase the chance of successful income generating, it is also contributing to the charity’s mission. If someone gets in touch who cannot donate, they can still help the charity by making their garden bird friendly. (Or, this is how this advert was set up in theory – we discuss more about whether they will have achieved this impact in the Certificate).
- Do you allocate a proportion of a wide range of people’s time to fundraising? Make the call – which activities do you carry out solely to raise money and which should you be doing anyway? (e.g. evaluating impact in a funder-friendly way?) Process – if you bring people closer together, processes should be easier to streamline – but this doesn’t automatically happen (and a lot tends to hinge on the ‘boring’ things like computer systems). And aligned to this, challenge #3…
- This is a discussion we often have in the Certificate in Financial Sustainability as part of delegates deciding how to manage targets in their funding strategies. If you are to effectively break silos and create an integrated funding and income generation, everyone needs to be clear how they contribute and these activities made a priority within their workload. And relationship based fundraising can be a longer-term game – how do you know you are making progress? Question: Do targets make people effective at raising more money? Under what circumstances might they be appropriate? When you are taking a relationship-led approach to income generation, it may be important to allow lots of different people to contribute to raising money. For example, an individual may be working with a group of parents, and via those contacts they are introduced to a school, with whom they successfully arrange another project. Culture – some cultures are naturally pessimistic or optimistic link to trustees.
- You laugh, but how many people have come across a situation where they are relying on help from other people to do their own work? So often I’ve been in the situation where I feel like I’m bribing colleagues with tea and cake to try and beg favours. When fundraisers tell me that they’ve raised £X million, I often wonder how much of that work was actually done by other people. I once left an interview early because I couldn’t say how much money I had raised on my own! Really, effective fundraising should never be done by one person – especially when it is focused on cultivating a diverse range of relationships and appealing to a diverse range of audiences.
- For example, in our publication ‘The Art of Raising Money’ there’s a great case study of an organisation called XXX They decided that they needed wholesale cultural change in order to be effective raising income from contracts, rather than relying on grants. To this end, they removed the ‘fundraising’ function, and instead recruited sales people. Extreme, but possible to identify both the skills and personalities you need in order to aid integration. It may be that someone operational could also sell ice to eskimoes face-to-face, so you can focus on writing and strategy skills in your ‘fundraisers’. Be alert to structural barriers to cultural integration – for example, if several members of staff have income targets, who gets the credit if they work together?! If one person has an income target, but another has an operational or impact target, will they work together effectively? Often the biggest conflicts are between the entrepreneurial seize-the-opportunity people and the careful-and-considered people. Both are valuable – how will you manage it?
- One of the most effective ways I’ve seen of overcoming cultural and personality barriers between people was at the charity Fairbridge, which used to require every single member of staff and volunteers to attend a week long course with the young people the charity supported. The workforce was really diverse – from ex-beneficiaries and grassroots youth workers to recent university graduates or volunteers from corporate law. This shared experience was so powerful, that it gave everyone a common reference point and passion for the organisation and fostered a great sense of respect for all the different parts that made it happen. QUESTION – if you take your ‘fundraiser’ off of fundraising and onto front line activities for 10% of their time, what impact will this have on the success of their fundraising? Does this work the other way around? (Think – skills – does anyone have any skills that aren’t being used?) Would this help increase understanding and skills to effectively win support from different audiences? Does this sort of integration between the MISSION and the MONEY improve the organisation’s ability to build longer term relationships?? INTRODUCE CASE STUDY – very diverse income portfolio, and has encountered and successfully managed many of the challenges in balancing these income streams, both internal and external.
- Introduction from Steve – insert slides or possibly pictures/video? Questions from Ros: I first came across Windmill Hill City Farm back in 2011, when I helped to run a training course that was being held on your premises. I gather that at that time, you were in the early days of moving towards a more sustainable model? You had some of the ingredients in place, but hadn’t yet managed to make them successful. In particular, I heard a rumour that you were having trouble gathering nursery fees from parents? - Steve to answer with reference to the move from ‘free’ services to paid for – the struggle the staff had charging market rates… How did you turn the situation back in 2011 around? What barriers did you face? - guessing debtors will fit in here? Were there any ethical problems? - perhaps answering with reference to the initial problem charging fees. And the café – pricing points and low waste. How do you choose what to subsidise, what needs to break even and what needs to make a profit? Would you say that the culture of the organisation has changed? What challenges have you had to respond to along the way? - Health and social care would fit here – ‘supported volunteers’ vs clients etc. Which elements of your work fit particularly well together? - perhaps answering with reference to things that keep the same audiences engaged with the farm/increase the lifetime value of relationships? You receive some grant funding for projects, how do you overcome the age-old problem of 3 year project boom-and-bust? What’s next?
- Questions from Ros: I first came across Windmill Hill City Farm back in 2011, when I helped to run a training course that was being held on your premises. I gather that at that time, you were in the early days of moving towards a more sustainable model? You had some of the ingredients in place, but hadn’t yet managed to make them successful. In particular, I heard a rumour that you were having trouble gathering nursery fees from parents? - Steve to answer with reference to the move from ‘free’ services to paid for – the struggle the staff had charging market rates… How did you turn the situation back in 2011 around? What barriers did you face? - guessing debtors will fit in here? Were there any ethical problems? - perhaps answering with reference to the initial problem charging fees. And the café – pricing points and low waste. How do you choose what to subsidise, what needs to break even and what needs to make a profit? Would you say that the culture of the organisation has changed? What challenges have you had to respond to along the way? - Health and social care would fit here – ‘supported volunteers’ vs clients etc. Which elements of your work fit particularly well together? - perhaps answering with reference to things that keep the same audiences engaged with the farm/increase the lifetime value of relationships? You receive some grant funding for projects, how do you overcome the age-old problem of 3 year project boom-and-bust? What’s next?
- Now we’d like you to have a go at getting a handle on how you can market the same activity to a number of different audiences. I’ve created an exercise combining the common funding/fundraising activity of creating ‘products’ with the marketing theory of the 8ps. The 8ps is great because it helps you to get a handle on where you might be going wrong – the things that could be undermining your efforts to engage with a particular audience. The first stage, is to turn one of your activities into products. The term ‘product’ is often used to mean different ways of describing your activities to potential supporters or funders. So, using Windmill Hill City Farm, you could have the core activity of visiting the farm animals, but it could be packaged as a community hub (to gain the support of the neighbours), environmental education resource (to win grants), therapy for people suffering mental illness (to win NHS contracts) and a family day out to attract family visitors (and traded income)
- Now for the second stage – write your products across the top of this table, and see if you can begin to work out how you would market them using the 8ps. The 7ps are often used in the world of marketing to think about all the different elements involved in marketing. We use 8ps for the voluntary sector as philosophy – or the portrayal of the organisation’s mission and values – is often very important. On the handout, you can see the definitions of the 8ps. For today, just start to think about the first three – price (how much you’ll charge), promotion (how you’ll describe the product and where you’ll advertise it) and process (what’s needed to administer and run the product). I’ll give you 5 minutes – so just pop a few headline words in the chart. Now, using the highlighters on your tables, I’d like you to highlight any areas of conflict. Where are the different products – ways of selling your activity to different audiences – coming into conflict with each other? If one ‘product’ failed – e.g. the audience didn’t engage and buy into it – would the other products be able to pick up the strain or are the price points so wildly different that you are relying on one product to keep the thing afloat?
- And the third stage is to join all your activities, your products and your audiences up to see whether – linking back to the core Sustainable Funding message – you are adequately spreading the risk. Do all your activities have several ways of funding them? Have you maximised the different ways of engaging with each audience? What is working well? What isn’t? What could you improve? What do you need to stop? There are lots of ways to begin analysing the performance of your products – not least of which would be looking at their return on investment. But being clear about how they fit into your funding portfolio, hopefully helps you to untangle your thoughts about how they all link together to create a balanced and sustainable strategy moving forwards.
- Thinking time = important! Dealing with funding from multiple audiences is complicated and needs sensitivity. It therefore deserves two things from you A proper allocation of time for thought and A bit of testing and questioning of your assumptions (usually by someone else!) You won’t get everything right all the time - be honest and open and willing to learn. LAST THOUGHTS FROM STEVE