Donors care about results

Evidence from the US shows that the two most important things for donors are results and trust. In our own experience at NPC, a number of our donors have increased the amount they planned to give, or changed the issues they choose to fund, after seeing the impressive results of our recommended charities.

A recent article from the Economic and Social Research Council stated 'Lapsed donors rarely claim they couldn't afford to carry on giving, but they often say they lost faith in the effectiveness of their giving.' In other words, they lost faith because they couldn't see any evidence of impact. Nobody was telling them what their donation had achieved. This loss of faith is something charities can ill afford in current times.

Now it is true that we haven't yet seen a massive drop in donations as a result of the credit crunch. Conversely, Children in Need smashed last year's targets as did the Times Christmas Appeal. People are standing by their giving commitments and evaluating spending habits as needs become more apparent and materialism becomes less popular. Some of the biggest givers, The Bill and Melinda Gates Foundation, even plan to increase their giving by $500m this year despite the foundation's assets being down some 20%. The stockbroking firm Execution, an NPC client, held a trading day in November 2008 that raised, a record amount (£1.47m), mainly from hedge funds clients. And the children's charity, ARK, is going ahead with its annual fundraising dinner, at which it raised £26m last year, even though it has halved the price of some of its tables to £50,000!

But while 2009 appears relatively stable with many donations already committed, the impact of the recession will be felt by charities in 2010 - especially if financial markets fail to pickup, further impacting endowments. Charities will have to work harder for their income. And I think that they would be wise to use the credit crunch as an opportunity to move their discussions with donors onto a new track, focusing on what really matters-the results of their work.

More and more, charities are realising the benefits on offer from measuring and communicating impact:

The ability to adapt and improve services. Like Chance UK, the mentoring charity, which following an evaluation, changed its approach after learning that male mentors are best suited to children with behavioural difficulties while children with emotional problems responded best to female mentors;

Or to differentiate your organisation and win funds. Such as The Place 2Be which works in primary schools and has received significant funding through NPC clients who like its focus on results, its ability to demonstrate these and its culture of caring about performance and being accountable to donors; and

Or even to attract support when your cause is unappealing. Take the Lucy Faithfull Foundation which helps paedophiles. Its emphasis on a coherent narrative and evidence of impact, led four NPC donors to fund the charity last year.

When I talk about impact, put simply, I'm talking about a charity being able to provide evidence that its work has changed policy, changed attitudes or changed beneficiaries' lives directly. Like UNLOCK, which campaigned and worked with the insurance industry to provide affordable insurance to ex-offenders and their families. Before UNLOCK, no insurers provided cover to former offenders.

Or St Basil's, the youth homelessness charity, which goes into schools to change young people's opinions about the best age to leave home. Their data illustrates that 55% showed a marked difference in the age that they thought it was right to move home after the session- the mean age rose from 16 to 19.

At NPC we think that charities should be rewarded and supported on the basis of results. But a charity can't be rewarded for its good results if it doesn't measure or tell anyone about them. A donor doesn't feel inspired to give if he or she can't see what their money is achieving. Charities should be aware that there are still committed donors out there, but that decision making has slowed down. Now is the time to inspire donors by measuring and communicating results and showing them the difference your charity is making.

Martin Brookes
Chief Executive
New Philanthropy Capital
http://www.philanthropycapital.org/

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