How Charities Can Offset £200m Loss of EU Funds

The Charity Times reported in June that charity leaders across the UK were seeking urgent meetings with government and ‘Leave’ campaigners. In short, they’re concerned about what will happen to the £200 million a year the sector receives from the EU in a Brexit scenario.

In the article, Acevo CEO Asheem Singh was quoted as saying: “The British people have spoken and it is now mission-critical that we come together to ensure a fair outcome for all. Without urgent reform, Brexit will prefigure concrete cuts to community funding. It is time for immediate talks between third sector leaders and the government to ensure this shortfall does not result in immediate and real harm.”

News that the charity sector could find a £200 million shortfall in crucial funding from the European Union came days after the fundraising regulator announced plans to introduce a levy on charities who spend over £100,000 a year on fundraising. The new levy is expected to impact on approximately 2,000 charities.

Charity CEOs and fundraising leaders across the UK now face an uncertain future and, with the expectation of rising inflation and tightening household purse strings, are prioritizing initiatives to meet an almost inevitable shortfall in funding.

So what should charity leaders be looking at?

Fundraising

Improving fundraising performance is key to tackling the threat to charity funding. But how can this best be achieved?

If your fundraising strategies and tactics are not data-driven then you should instruct your teams to address this now. Not only are top charities leading the way in this area, but many are also making significant innovations in data-driven fundraising. Your organisation will require data scientists, a healthy dataset of your supporters and the right mix of infrastructure and analytics technologies such as FastStats.

For charities who have already invested in data-driven fundraising, optimization and continuous improvement of your data, processes, models, campaigns and reports will be required to push performance to a higher level.

Operations

Improving operational efficiency can help increase net revenues. Reviewing internal processes to identify weaknesses and inefficiencies is an important starting point. But how do you identify weaknesses that are not obvious?

Qbase supported the RNLI in achieving exactly this a few years ago. The restructure at the RNLI was spurred by an unlikely source of change – data. In our work with the RNLI, we helped them identify significant inefficiencies in their fundraising and wider charity operations. By working with them to clean their data and develop sophisticated data-driven analytical processes, it became apparent that improvements to their operational processes and systems could be achieved. The organisation underwent a significant restructure in 2013 to remove ‘siloed’ departments and improve resource use across the charity.

Presently, our Business Insight team are working on a similar project for another major UK charity, who are taking the next step and introducing automated processes to support their fundraising activity. The implementation of PeopleStage to provide fundraising campaign automation has enabled the charity to increase their productive output without increasing headcount. They are now able to increase fundraising performance without increase operational personnel or investment, which means their net revenues have similarly increased.

Supply Chain

Getting funds to the support networks and services that help your beneficiaries is the most fundamental part of running a charity. But when was the last time you performed a detailed analysis of this ‘supply chain’?

With time, the processes that enable funding to flow to those who need it can become inefficient and costly. Review your processes to see what efficiencies you can gain. New technology is likely to enable you to automate existing processes or help you transform them. Similarly, suppliers, equipment and other associated overheads can be reviewed to identify more cost-effective alternatives.

By helping your funds go further, you can meet your responsibilities and obligations to your beneficiaries but at a lower cost.

Innovation

All charities are affected by Brexit, from:

  • EU funding cuts;
  • to levies on fundraising activity, and even;
  • the forecast rise in inflation.

It is highly likely other charities will implement the improvements covered in this article. However, with the tightening of purse strings comes an increase in competition for donations. These improvements alone may not be enough for your charity to weather the storm.

To help your charity’s fundraising performance improve during economic hardship, you need to take an innovative approach to data-driven fundraising. Your leadership team will need to nurture an environment in which fresh ideas and innovation can thrive. Pushing your charity to a higher level of performance, especially around data-driven fundraising, will enable your teams to create more engaging campaigns and improve performance.

If you are looking for support for your charity then contact us now and he will be happy to take you through what Qbase can offer.