Getting the Most from a Fundraising Post!
Case Study
A Museum in the North West has used the services of a London based consultant to work alongside the staff of the development office on a specific capital project. The project in question was the creation of a new centre in the North West, costing over £7M. The sum of £1.5M was sought from the private sector. It was felt important to employ the services of a consultant who had contacts in London which the North West development office did not have.
It was important from the start to ensure that all contacts became known personally to the Museum, so they could develop an on-going relationship. The initial agreement with the consultant involved a one-off fee and a small percentage of money raised as a result of the efforts of the consultant on the basis of one days work each week. The percentage was increased after some months as an additional incentive. There came a time when the fundraising effort needed to move up a gear, and the consultant was offered an annual retainer, paid monthly, plus the same percentage, for two days work each week.
The arrangement worked well, but raised a number of issues;
- It was impossible to control and monitor the consultants time at such a distance
- after a time, it became very difficult to be clear about who was responsible for raising a particular donation, and the consultant wished to claim a percentage on most, if not all, of the money raised, on the basis of even the most tenuous involvement
- the working relationship with the development office became extremely complex, with the consultant creating more administrative work
- the working relationships with permanent staff became difficult as they saw the consultant earning much more than them for less time input
- the consultant was also working on other projects at the same time
- the museum had to take care to ensure that the consultant did not become the 'tail wagging the dog'
Howsoever you go about it, raising money is going to cost money. In addition to time, there may be travel, subsistence, magazine or organisational subscriptions, printed materials and so on. The costs aren’t fixed in proportion to how much you need to raise - some projects are more difficult to raise money for, and therefore more costly. Generally speaking, the percentage is going to be higher if you have a small fundraising need, and probably a little lower for very large sums. There are also additional costs associated with servicing sponsorship deals or rewarding donors - keeping the building open late for a reception, light refreshments, which must be taken into account.
The important thing is to set a budget and stick to it. Get specialist advice from the agencies listed at the end if you need to. If you choose or agree a deal with a freelance fundraiser which includes payment by results, you should set budgets to limit expenses - 2nd class travel and so on, to stay within the overall target . We recommend that you pay a flat fee in return for a specific number of days work and with a target amount to raise. Payment or commission by results also needs to be very, very specific. You can’t simply agree a flat rate plus a percentage of everything raised. Our recommendations are:
Fundraising from any statutory authority - Europe, Local Authorities, Arts Boards or Area Museum Councils - should not be subject to commission. These bodies exist to grant-aid for specified purposes, and it is not a matter of negotiation, benefits, and profile as to whether they grant-aid you. It is a matter of meeting criteria, quality of execution, and them distributing money evenly throughout their areas of interest. By all means pay for time or expert advice to help fill the forms in, but only to start you off.
Fundraising from Trusts and Foundations - it is more appropriate to pay a commission here, especially if the fundraiser is identifying and researching Trusts for you, as well as making the approaches. Again though, these organisations exist to give money away.
Corporate donations and sponsorship deals are most appropriate to commission rewards, as they involve a greater degree of research, relationship building, persuasion and negotiation. Even in these cases, a percentage reward should reduce for subsequent deals with the same company. If a company choose to take up corporate membership or patronage of your organisation, you should only pay the commission once. (Think about it - if you buy insurance, the salesman only gets a commission on the first year's premium). Companies and sponsors react very badly to the idea of a percentage of their contribution being commission for the fundraiser. You must declare this to the sponsor if it is part of your deal, in line with the requirements of the Charities Act of 1990, and this must be done before the donation is actually agreed.
Choosing Consultant or Freelancer
If you decide that the appointment of a freelance fundraising consultant is the best way for your particular fundraising needs, then you should recruit with just the same care and precision as you would if you were looking for a permanent member of staff. You should write a specification for the work to be done - including background of the organisation, history, what the fundraising is for, when the money is needed, and what support the organisation will give the fundraiser (this is an important point - freelancers can easily feel isolated, uninformed and unsupported) ask consultants for a detailed submission on how they will carry out the work, and on what financial basis ask for a full CV as part of the application so you can determine individual strengths of applicants - with particular specialism in the public sector/Trusts/ or the corporate sector ask for at least two references from other organisations who have used the fundraiser, and, we recommend, one reference from within the fundgiving sector (a major sponsor or donor). Take up the references and ask about what type of fundraising was undertaken, from whom money was raised, how the consultant worked with the organisation, and if they would use them again.
The specification and the submission then form part of the contract with the fundraiser, along with any specific negotiations about how and when the work will be carried out, payment and commission, expenses and other details.
The Institute of Charity Fundraising Managers publish a more detailed guidance sheet which includes a specimen agreement for working with a freelance fundraiser. Their address is at the end of this document.
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