Charity has to act more like business to end donor gap

 
Dan Corry
CHARITIES need money to do good. As such, it’s no surprise that many spend time and energy trying to elicit donations from the general public, and especially from those on higher incomes. But it is also a hard slog; fundraising dinners may be fun for City folk, but they involve a lot of effort, and for many charities they are just not an option.

But new evidence published today by New Philanthropy Capital, and based on a major Ipsos-MORI survey, suggests that there are substantial sums that could be donated to charity, which currently remain stubbornly ensconced in the accounts of those who could afford to give more.

So why aren’t people donating? First, according to our research, the UK seems to have a fairly poor culture of giving. Only 39 per cent of the population gives over £50 annually, and less than half (47 per cent) of those who donate that amount think you should give if you can afford to do so. Work needs to be done to change attitudes, not least by richer folk setting social norms.

But one of the main reasons for people holding back is that potential donors don’t understand how their money might get used – if it will even achieve anything. A full 54 per cent of high income donors said they would change their behaviour if charities met their needs better. This, rather than the ease of donating, or even tax issues, was the biggest issue holding back more donations.

Indeed, based on evidence from the survey, if donors understood more about how their money would be used, and that it would be effectively spent, another £665m would be given annually. In these straitened times, that is a prize well worth gunning for. In addition, another £1.7bn would be given differently – to charities achieving more – if people had a better handle on which charities were doing the best work.

What can charities do to access that money? First, they must be clearer in explaining what they are trying to do and how their actions help to achieve their aims. Then they need to look at how they can evaluate their success and results – getting to grips with the issue of “impact”. A charity working with people leaving prison may offer them life-enriching activities, for example. But does this lead to a drop in re-offending rates? Lastly, though no less importantly, charities need to find ways of communicating all this to funders. This doesn’t need to be difficult: a well-written annual report and an accessible, user-friendly website are perfect vehicles for showing the difference a charity can make.

None of this is rocket science. Companies have to do this sort of thing every day if they want to attract investment. But it will involve a cultural change for charities that are often driven by the admirable emotions of mission and passion, and are not used to thinking about, measuring and reporting on their impact.

If charities want to survive and thrive, they need to get smarter in the way they approach and explain themselves to donors. Just like companies, knowing what impact they are making will help them be better charities.

Dan Corry is chief executive of New Philanthropy Capital, and a former Downing Street adviser. The report Money for Good can be read at www.thinkNPC.org