We’ve worked extensively on NHS charity fundraising in the past few years, helping NHS charities navigate an ever-changing environment and to maximise their fundraising potential. This article reflects on the unique challenges faced within NHS charity fundraising, and on how they can be overcome.
How to ensure NHS charities are well run and effective
NHS charities provide £321 million of additional funding to our health system every year. Yet in the vast majority of cases the charity of the NHS hospital raises under 1% of the total income of the Trust they serve. So how, given the many other demands on their time and resource, do trusts ensure that the charity is given the attention to ensure that it is well run and really effective? And how, with cuts and budgetary pressures might a charity win attention and investment so they can be truly effective? Might the complexities and liabilities of the charity be worth its potential support?
Asset vs liability
We have seen several examples where NHS charities have become isolated from the wider trust. The charities may be frantically busy doing what they can, but their activities are not as profitable as they could be or aligned with the strategic direction of the trust. They are starved of organisational oxygen. Their governance procedures can be opaque: as are the way they distribute funds within their NHS Trust. Often this area can become contentious (“that money was for us!”). All too soon the charity becomes a liability. In turn, it is not a focus and it becomes even more isolated from the Trust.
… yet hospital trusts are continuing to invest in NHS charity fundraising, despite budget pressures.
NHS Trusts have to have a charity
Firstly, NHS trusts have to have charities of some sort: many hold their own historic endowments, and all will need to be able to accept donations from the public. So, given that the charity will exist regardless, there’s some value in ensuring at the very least that it is well-governed and does what it must (thanks donors well, stores relevant information, and manages and spends funds wisely).
…and it needs to be well run
NHS trusts are well advised to focus on the effective governance of their charities as part of risk management. A lack of clarity or misunderstanding of restricted and non-restricted funds can cause significant reputational damage. Only last year one NHS trust was directed to repay over £2m in funds that had been ‘moved’ from a charity endowment to NHS board projects. Errors such as this are uncommon, but total clarity on the legal status of various funds, and regular attention to what trust priorities the charity might support, will guard against potential criticisms or exposure to criticism.
NHS charity income is growing…
Secondly, NHS charity fundraising income across all charities is growing. The income generated can be unrestricted, unassailable by government nor directives, and can be directed to areas of priority for the Trust. A steady £1-2m, each year, opens major possibilities over time. Appeals enable the delivery of projects that may never be official priorities. Once fundraising is established, income will rise. It is our opinion that the longer professional fundraising departments are established in an NHS Trust the more effective they become. Our clients have made substantial grants to scanners, staff training and used charitable funds strategically to unlock other national funds.
…plus, charities do more than raise money: they build morale and enhance the Trust’s brand
Beyond the monetary value there’s a much wider benefit. NHS charities offer staff and the public a way to engage meaningfully with their hospitals, and develop the hospital’s relationship with its community. From enabling people to mark births, recoveries and deaths with a donation, to hosting supporters to discuss ambitious research or surgical breakthroughs, charities create a positive channel of dialogue between hospital and community. Developing an effective community programme may well help achieve many of the Trust’s PR and engagement goals. Developing an effective charity can make all the difference to staff retention, morale and PR.
So, how should NHS Charities set the right targets for Fundraising?
If NHS trusts have a hunger for fundraising, and choose to invest, there’s a choice to be made: What should be its target? A gradual improvement, doing what it already does but better – or an ambitious step-change that will see the hospital become a major fundraiser? Charities and trusts need to identify both their current location and their planned destination if they are going to be able to understand how to get there.
Set realistic benchmarks
The best way to understand what is possible, is by assessing the performance of other NHS trust charities. Key parameters to consider are the size of the trust, in financial terms, the size, wealth and other attributes of the population it serves, and the specialisms within the trust’s operations. Considered alongside current performance, and areas of opportunity, this should offer a range of potential targets for income. It’s all too common for comparisons to be made which aren’t fair (“why can’t we be like Great Ormond Street..?”) and which don’t in fact contribute to an understanding of what’s possible in terms of location, resource and audiences.
Segment your income streams and your fundraising costs
A meaningful target will comprise a series of income streams: individual giving; community fundraising; grants; major giving; legacies; corporate support, etc. The matrix model below shows the interplay between fundraising streams and donor audiences (in other words, which method can be used to reach which funder). In each area a charity needs to understand the costs involved. Once you truly understand which are the most profitable income streams you can really start to plan.
Don’t forget to allow for the time required to achieve success. It will be quite different for different income streams. Some changes can be implemented swiftly, with minor resource: some require significant investment for several years and may, initially, return a loss. An effective strategy will have a mix of income sources, and will be very clear on the timeframes involved, and the resources required. It should include milestones at which progress can be reviewed and future plans developed.
Clear goals enable clear strategies, setting out how to reach the target. The process should also stress-test plans: not having enough resource or having an overly ambitious timescale will result in failure to reach targets. It is expensive – financially, reputationally and in terms of morale. One former client of Tarnside’s felt scarred by past failures, yet subsequent analysis showed that some of these initiatives simply didn’t have the investment of time or resource to succeed. It resulted in that NHS charity ignoring profitable income streams for years, despite there being real potential to fundraise well.
We’re always happy to discuss NHS charity fundraising: please get in touch directly for an informal discussion.