Charities

Philanthropy: how to partner with the perfect organisation

What if you don’t have unlimited resources to throw at a problem? What if you’re not willing to work through all the steps only to find that your chosen solution doesn’t work quite as well in practice? What do you do then? Decide that philanthropy is not for you?

Date
Philanthropy
Nick Ryan, guest contributor

An alternative approach, or perhaps a stepping stone to more in-depth involvement, is to support a small or medium-sized charity. I run an advisory service and fundraising consultancy specialising in helping these entities grow. It can be highly fulfilling as equivalent input levels generally derive greater outputs at the smaller charities, especially on a personal level. On the other hand, some of these organisations are smaller for a reason and are best avoided. So what should you look for when choosing who to support?    

An inspiring vision

Of course, when trying to improve the world, you want to find a charity whose vision matches yours. However, when we begin working with new charity clients, it is usually the vision where we start. Most are unambitious, not unique, too vague or ill-defined. Fortunately, most of our clients are happy with our suggestions and the organisation can then begin a new journey of growth. Many people assume that charities’ visions are set in stone, but you may find that many are open to your ideas.

The Board

One of our clients is run by a turnaround specialist. His view is that nearly all organisational issues arise from a dysfunctional board. Whether that is entirely true or not, the quality of the leadership and governance groups undoubtedly has a disproportionate effect on everything else. Slow or timid decision-making, sudden and haphazard changes in strategic direction and the undermining of the CEO by trustees are all common in such organisations. The answer to this is usually board diversification, but this takes time and is not always easy. So always have a private conversation with the Chair or CEO about how well the top team is functioning and what other issues might be lurking unseen. Do you want to spend time tackling these?

Personal reward and involvement

Big charities will have clear limits on what each donation brings. Twenty years ago, the first eight-figure donations were being secured and the red carpet was rolled out; those giving four figures would be of little interest unless they could be stewarded upwards. The figures needed to get recognition at the biggest charities are even greater now. However, smaller charities are typically much less clinical in their ‘gift-recognition tables’ and gratitude is likely to be effusive, genuine and repeated.

It’s not just about receiving due acknowledgement, though. Smaller charities are much more amenable to non-financial means of giving. Whether writing policies, reviewing legal contracts or helping with accounts, high-net-worth individuals can often help their charities in numerous ways.

Exit strategy

Funding a smaller charity can put you in the position of a fairy godmother or guardian angel. That has many benefits, including the feel good factor, but the charity will often develop an unstated expectation that you will support them forever. This often leads to the charity becoming complacent and the funder feeling trapped. So, as with children, you want to encourage independence however much you love them and want them to be part of your lives. In short, you need to continually make it clear that the charity should be looking to have a minimum of three to five main funders who can collectively take the strain.

Turnover

I started my charitable career at Help the Aged and the NSPCC, large charities which were extremely well-run. When setting up the consultancy, I could have focussed on these organisations – life would certainly have been smoother – but they are already well-served and I find the rewards are much greater with smaller charities. What should you expect at various-sized organisations?

  • £100k: Virtually nothing is fully developed and if the charity has been going for some time, there are usually significant issues blocking progress, often insurmountable. However, working with these charities can be the most fun and personally rewarding if the CEO is ambitious and flexible.
  • £100k-£500k: Such charities require a lot of work and there is still a daily existential threat for those at the lower end of the range, but usually there is a bit more breathing space and issues can be tackled strategically over time.
  • £500k-£2.5m: Charities in this range have many things working well. However, there is often considerably more that can be done but nobody in the charity knows what is possible or what they should be doing next. The result is often stasis or risk-averse cultures. However, change can be effected quite quickly where there is the ambition and desire to grow further.
  • £2.5m-£50m: Such charities will have dedicated teams covering all the main functions of an organisation, such as HR, Finance and Marketing. However, we come across those, even with eight-figure turnovers, that have minimal income-generation activities and are thus limited in what they can do. Internal politics can be a significant and time-consuming issue in such charities.
  • £50m+: These organisations will give you a very professional service. Your level of giving will be expertly matched to the personal benefits you will receive. Update reports will be sent on time and suitable engagement events will run like clockwork. While your support will likely make a slight difference in the overall charity’s work unless you’re giving huge sums, you will experience a well-run organisation.

Enjoy the journey

So, in summary, an ordered, step-by-step approach to philanthropy is undoubtedly an excellent way to go about things. But if you like getting your hands dirty and prefer a more organic or entrepreneurial existence, do consider helping out a small or medium-sized charity. It can be highly gratifying.

Nick Ryan is the CEO of Vantage Fundraising www.vantagefundraising.co.uk

You can see details of a medical project that Nick is currently supporting here: My Bridge International UK

 

Read more from Insights.

This communication is provided for information purposes only. The information presented herein provides a general update on market conditions and is not intended and should not be construed as an offer, invitation, solicitation or recommendation to buy or sell any specific investment or participate in any investment (or other) strategy. The subject of the communication is not a regulated investment. Past performance is not an indication of future performance and the value of investments and the income derived from them may fluctuate and you may not receive back the amount you originally invest. Although this document has been prepared on the basis of information we believe to be reliable, LGT Wealth Management UK LLP gives no representation or warranty in relation to the accuracy or completeness of the information presented herein. The information presented herein does not provide sufficient information on which to make an informed investment decision. No liability is accepted whatsoever by LGT Wealth Management UK LLP, employees and associated companies for any direct or consequential loss arising from this document.

LGT Wealth Management UK LLP is authorised and regulated by the Financial Conduct Authority in the United Kingdom.

Contact us