June 2011

I.G. Memo: Giving White Paper

In May 2011, the Government published its Giving White Paper. Now that interested parties have had a chance to digest the Papers contents, charities and social enterprises have started to ask what the Paper actually means for them. If the government manages to make it easier and more compelling to give, particularly in view of large reductions in public sector grants and contracts, how will this actually impact an organisation? Will it now be easier to get new donors? At I.G. Advisors (I.G.) we think that while the Paper contains some good ideas that will probably stimulate more giving over time, the proposals will have little or no immediate impact on the bottom-line.

The Giving White Paper explains how the government is committed to making it simpler for individuals to donate time and money. In over 60 pages, the Paper outlines how the Government will:

Fit giving into everyday life through a variety of schemes such as ATM giving or Round Pound schemes; Raise awareness about giving through investments in a new Philanthropy UK website, the existing Do-it volunteer site (www.do-it.org.uk), and mobile phone donations; Remove existing barriers to giving by reducing government bureaucracy (e.g. changes to Gift Aid); and Provide new tax incentives, such as reducing inheritance tax to 36% for those leaving 10% or more of their estate to charity.

In addition, the Paper describes the plans behind several funding programmes the government plans to create to support civil society organisations, train volunteers, establish an endowment match-fund, and encourage more social action in areas of high deprivation. These are largely grant programmes to be delivered over the next 2-3 years. Since its publication, industry leaders have justifiably welcomed the Paper and the actions it outlines (no one will argue, for example, with the simplification of Gift Aid). Sir Stuart Etherington, Chief Executive of The National Council for Voluntary Organisations (NCVO), noted: This paper draws together a wealth of intelligence on what can be done to stimulate greater levels of giving and participation in the UK.

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The Papers greatest shortcoming, however, is that the solutions it suggests will not add up to significant changes for any one charity, especially those who depended significantly on government funds. ATM Giving and Round-Up schemes will raise some money for some organisations, but who knows exactly who they will be, how much will result and how many people will participate. The lack of encouragement for wealthy individuals and corporations to give strategically to organisations is a big omission. The Paper also overlooks the role effective fundraising and fundraisers play in increasing giving. So what impact will the Papers recommendations actually have on the bottom lines of charities and social enterprises? Its I.G.s opinion that it wont actually affect most organisations very much. While some of the proposed government investments will have a meaningful impact on some groups, most organisations will not benefit from its recommendations in the short- to medium-term (or even at all). With that noted, what should organisations be doing? For starters, if they havent invested the resources to develop a diversified fundraising strategy, nows the time. Invest in effective fundraisers and fundraising training. Involve volunteer leadership in business development. Capitalise on the ideas laid out in the Paper but dont wait for any great sea change take action, develop a strategy and ensure that donors can engage with you in a straightforward, transparent and safe way. As Marcelle Speller OBE, Founder and CEO of Localgiving (www.localgiving.com) points out, "Most local charities are short on resources and have limited, if any, fundraising experience. Yet many have taken a step toward sustainability by recognising that finding new sources of income is vital. Because fundraising online doesn't require a huge investment, it is in many ways a lifeline for small charities." The White Papers recommendations may lead to new policies and behavioural changes that over time may increase the amount of money donated, the number of people donating and hours of volunteering. However, even if the recommendations and plans laid out are executed quickly and effectively, they are no substitute for a solid fundraising strategy to support the delivery of an organisations work. Be pro-active and invest in developing a strategic and dynamic fundraising strategy, and then focus on implementing it in a systematic and comprehensive fashion.

To learn more about strategic fundraising, I.G. Advisors, our services, or approach, please contact us at info@ig-advisors.com or visit www.igadvisors.com. You can also follow us on Twitter @IG_Advisors.
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