Fundraising needs more calculated risk!

When it comes to growing a charity’s fundraising programme, the temptation is to stick to your comfort zone and play it safe. It’s an understandable approach when the economic climate is uncertain. And, of course, when you’re spending money the public has donated and entrusted to you to use responsibly.

Most of us, if we’re honest, also tend to favour certain channels. The ones we’re most familiar with, that we’ve seen the most success from, or that we think will raise our profile and bring us more supporters.

Generally, playing it safe means charities set their budgets in one of three ways based on:

·      what they’re prepared to spend to gain a supporter,

·      what they did last year, or on

·      what simply feels right.

But there’s a drawback to this approach. It’s a trustee’s and a charity’s responsibility to fulfil the real potential of their fundraising. It cannot be just a tick box exercise in budget and planning. As fund-raisers, the job is to raise money for the cause.

So, could charities be taking a different approach, and taking more calculated risks to grow their fundraising? I believe so.

A way of doing this is to keep a close eye on the market climate you’re working in and link your paid for spend to your measurements of success.  This way you can adjust your fundraising activities to fulfil the potential seen at any given time. So, for example, if times are good and your ROI rises, so does your spend, which will enable you to grow your income faster.

Of course it’s a risk, but it’s a calculated one because you’re only increasing spend when things are going well. And in good times, you can capitalise on this by increasing your activity, and thereby increasing your returns. And of course if things don’t go so well, you can change how and where you spend your allocated budget i.e. perhaps switching to a better performing channel or audience group.

Sounds reasonable, doesn’t it? Yet the reality is we’re talking about an ideal world where you can access more funds.  I’m acutely aware it’s not always possible to find additional investment.

Also, understandably – we’re a pretty risk-averse bunch. And generally, bureaucracy prevents us from trying new or different things… at least without a fight!

But there are times when we should consider how we can take calculated risks.

It’s not uncommon for fundraising activities to stop once the set target is reached. Even though you’ve achieved your fundraising goals, couldn’t you push to go further if things are going so well and supporters are receptive?  It could be a specific window of opportunity not to be missed.

Calculated risk also comes in the form of testing. We need to test to know what will work. And test again and again in different scenarios. If you’ve tested a channel, or an audience, you’ll have a better idea of whether it’s worth going further down that particular avenue. Of course, testing does require investment – and it might fail. But there’s a value to failing, which needs to be understood throughout the organisation. It's just as important to learn what not to do, as it is to learn what to do.

Of course you may be reading this knowing that what you’re already doing is providing the growth you need. But have you weighed up whether it’s sustainable for the longer term? Or what you’d do if circumstances changed? As the pandemic has shown us, sometimes this can happen very quickly.

If you’re heavily reliant on a specific channel and it unexpectedly becomes unavailable, it can be problematic to say the least. We saw this all too clearly last year when lockdown brought a sudden halt to face-to-face fundraising and mass events.

Better then to have a broad mix of channels that work for you and that you can pull in at any time. Plus, the more channels you use, the more people will see your charity. This will build your brand, raise awareness and trust, and – so it follows – their likelihood to give to you.

Research shows that consumers are generally feeling quite favourably towards charities at the moment. A recent survey showed high confidence in charities with the public believing they are more important today than before Covid, with trust remaining stable. And even when times are tough, we know that people are still keen to give if they can. Now is surely the very time then to be testing different areas and taking that element of calculated risk.