Essential Fundraising - Because were worth it

At a time when Third Sector organisations are increasingly coming under pressure to deliver services cheaper than the private and public sectors, Alice Devitt argues that arts organisations need to know their own value and should resist demands to sell themselves short.
Ive always preferred to see myself as affordable and good value for money, rather than down-in-the-gutter cheap though few concur. I wish that arts and voluntary organisations would also rate themselves a little higher. We sell ourselves cheaply in the arts and voluntary sectors but there seems little choice.

The funding game

The way in which much private and public money is distributed to arts and voluntary organisations is almost guaranteed to erode the self-confidence and pricing policy of any organisation. Statutory and private funders have forced arts organisations to contort themselves in a game of funding Twister to accommodate the latest direction. We desperately strain to keep our left leg on arts company while arching backward to keep our right arm on training provider and our right leg on education consortium.

Mainstreaming is another killer. Government funds an initiative, sees it works and then stops funding it on the assumption that because its so great it will become one of the core priorities of local government, competing easily with all that other stuff: policing, housing, social services, health, waste.

Then theres EU funding, which frequently does not pay VAT and regularly demands a 7% overhead that is unlikely to reflect the true cost of delivering the project. Twenty per cent of the grant may be retained until completion, leading to cash flow problems on large grants. Compliance is so onerous its only worth applying for large EU grants, the size of these, coupled with delays in receipt of funding often lead to bridging loans (with interest) being required.

For years trusts hammered us fundraisers at every conference with the idea that they were up to their eyes in badly written and inappropriate applications. We got our act together. Now we hear that they only fund existing relationships or contacts of the trustees. My favourite argument goes You cant apply to us but we will know by special, magic osmosis whether your work is worth funding. Actually these are just attempts to manage demand and declining assets. Its still easier to imply that applicant organisations are somehow at fault rather than the funders.

Managing expectations

According to the Directory of Social Change (DSC) trust research website (trustfunding.org.uk), one of our most prominent funders has an office with over 30 staff and a large number of specialist advisers to disburse £55m a year. Yet they dont want to be wanted for their money. We must want them for their mind.

Their entry on the DSC website states: Staff are polite, but wary of people seeking to talk about money rather than issues. The most inappropriate approach would often be from a fundraiser. Staff, and in many cases trustees, are knowledgeable and experienced in their fields, and expect to talk to others in the same position. What sort of funder thinks organisations fundraising is NOT driven by their fundraisers who will doubtless have had to brief the expert on what to say and then badger them to do it? A huge amount of time is spent trying to second-guess funders actions and tailoring the right approach to tickle their ego. This is only worth doing if theres money in it.

Some trusts now behave like that friend of the Chairs who wants to help: has a trust fund, works in the City and has some really good ideas about attracting Young Friends with a leaflet. They wont part with money but want the warm glow of involvement and deference from those who can benefit from their good ideas. Our funding system shouldnt act like this, but the culture is now crawling with quangos, think tanks and advisers so its not really surprising that just funding people to do stuff is so unfashionable.

Many trust funders primly announce that they do not pay overheads. Lets consider that for a minute. You mean you want us to undertake a project with you but not recover the full cost of delivery? Well just inwardly absorb that from thin air or reserves then.
Demands on the arts and voluntary sectors have massively increased. Government prefers us to provide social, cultural and education services rather than deliver them directly itself. These services are provided at cut-throat rates as the commissioning model demands costings that government or the commercial sector could never deliver.

Full cost recovery

It will take some nerve, but as a sector we are going to have to try and start producing costings that actually reflect true project costs. This wont work if it is only adopted by individual organisations: the sector as a whole needs to demand that we are paid fairly for the job. Otherwise I suspect that we will follow the fate of chunks of the voluntary sector, bled white to deliver projects with inadequate funds by rather better resourced commissioners and funders. Some trusts and statutory funders are too comfortable to realise just how hard it is to produce a regular application or evaluation.

As the arts are increasingly assessed and evaluated, some statutory and most private funders evade all enquiry. It remains to be seen whether Guidestar, the new independent body imported from the US to provide information on any charity and its activities (http://www.guidestar.org.uk), erodes this blissful state of great power with little responsibility.

The Charity Commission has revealed that an increasing number of voluntary sector organisations are raiding their reserves . It is widely believed that many are doing this to cover the costs of delivering contracts that do not allow for full cost recovery. And full cost recovery is as good a way as any to describe the contribution a project should make to the bottom line.