Charity fundraising – employees vs. volunteers

I’ve been looking to post on my blog about charities and volunteers for some time, but never got around to finding an interesting angle. Much of this is based on a draft that I started back in 2007, but never got around to posting. The reason I’m posting now is in relation to a story running through the press about someone being sacked for not raising enough money during a marathon run. The news story is available: BBC News London Marathon snail crawl man Lloyd Scott sacked; MSN News Charity sacks snail marathon man and Yahoo! Sport Marathon man sacked for not raising enough.

I don’t think that this particular story is that news worthy. The news stories are certainly one sided with certain information excluded, but what concerns me are the comments that have been left on some of these pages which have completely misunderstood what has happened here. For example many seem to think that this was a profitable event, but the charity is being greedy whereas in fact the charity has lost a substantial amount of money through this. Unfortunately this is turning out to be a lot of bad publicity for this charity that from the sound of it is not deserved.

My perspective is mainly from that as a volunteer. I do not work, nor have I worked as paid employee of a charity, although I have friends that do or have done so. I have experience with volunteering at a local level, a regional level and a national level and I have worked directly alongside paid employees. I have been involved in volunteering for some time with a few different charities, although mainly with one that I’ve been a member of for 17 years. I have not mentioned that charity in here as this is about charities in general and the charity I volunteer with is nothing to do with the example stated. I also contribute regularly to some charities (both through membership and through regular donations) and like to know that many money is being used towards the aims of that charity.

I am providing references to this particular event involving the marathon runner. I am not involved with that charity in anyway and I don’t have any further information above what is in the news stories or Twitter (note some news stores have more information than others).

Different charities

There is no such thing as a typical charity. Charities vary from small organisations with just a few volunteers and raising small sums of money to large national organisations with a large income and turnover. Some of these may also be part of a worldwide movement, but in the UK to be classed as a charity they need to be registered as a UK charity. Charities may help locally, nationally, overseas or a combination of all these.

A charity must benefit the wider community. Although they normally have a target group that they support they cannot be set-up to raise money for an individual. For example if someone has a specific illness that cannot be treated on the NHS, but then raises money to get treatment elsewhere then this cannot be a charity, because it is for an individual and not the public good. A charity could be established which is designed to be for anyone suffering from that same illness, as long as it didn’t give proportionally more to that individuals treatment than to others.

A charity, must also benefit a charitable purpose.

The Charities Act sets out the following descriptions of charitable purposes:
a) the prevention or relief of poverty;
b) the advancement of education;
c) the advancement of religion;
d) the advancement of health or the saving of lives;
e) the advancement of citizenship or community development;
f) the advancement of the arts, culture, heritage or science;
g) the advancement of amateur sport;
h) the advancement of human rights, conflict resolution or reconciliation or the promotion of religious or racial harmony or equality and diversity;
i) the advancement of environmental protection or improvement;
j) the relief of those in need, by reason of youth, age, ill-health, disability, financial hardship or other disadvantage;
k) the advancement of animal welfare;
l) the promotion of the efficiency of the armed forces of the Crown or of the police, fire and rescue services or ambulance services;
m) other purposes currently recognised as charitable and any new charitable purposes which are similar to another charitable purpose.

More information is available at: Charity Commission: Commentary on the Descriptions of Charitable Purposes in the Charities Act 2006.

Investment for fund-raising

Fund-raising is a vital part of many charities to be able to support their charitable aims. They do however also incur costs in raising the money. This could be through the purchase of equipment (in this example £18,000 for the snail costume), the cost of staff to support the fund-raising (see below) or in some cases to pay an external company to fund-raise on their behalf.

For example some of the door to door schemes may take a cut of the donation. This may be a large percentage of the donation for the first term (eg. year) with a diminishing commission for future terms. In the long term this can be a good source of income for the charities, but in the short term it can make almost as much for the commercial scheme as the charity receives.

All these investments or costs are a decision that the charities must make to find cost effective ways of raising money. Most of these make money, but in some cases the cost of investment may not pay off; in this example the combined cost of the costume and marketing costing more than the money raised. In fact it sounds like they may have lost around £30,000 from this venture.

Paid staff

Whilst it’s nice to think that charities can manage completely using volunteer help, for larger charities this is rarely the case. The demands of a large charity mean that there is normally a need for paid staff in addition to volunteers to ensure that the charity is run correctly, legally and in an effective way.

This may be because they need someone with a specific skill or need someone to work full time to be available during the day when most volunteers will be at work.

Whatever the reason paid staff can be essential to the running of the charity. It is the case that charities need to careful balance the cost of any paid staff with the benefit that the charity receives, either in financial fund-raising or in fulfilling it’s charitable aims.

In the case of the example stated it doesn’t give any idea of how this person was employed but he was director of fundraising. The decision to employ this person would have been made on the basis that they were hoping that the person would bring in more income than the cost of employing him and the additional costs associated with the fund-raising.

Charity paid employees have the same rights as paid employees of other commercial companies, and you would expect them to apply the same business decisions upon whether to terminate someone’s employment. For any job sometimes decisions are made that cost the business money but in the long term these expect to be balanced out by the profitable activities. Sometimes very big mistakes can cost a lot of money.

Volunteers

Volunteers can have the same involvement and rights as paid staff, but obviously don’t get the same remuneration. Volunteers can be hard to recruit particularly with the right skills and work commitments often get in the way.
This should not in anyway detract what volunteers provide to an organisation, and in fact a good organisation will ensure that the support structure is in place to support the volunteers to contribute towards the charity, and a good charity will appreciate the contributions that the volunteers are able to make.

There are also some volunteers that are able to provide the equivalent of an employed worker either in terms of time or training and/or experience. Perhaps someone that is retired or works part-time may provide a large commitment to an organisation.

A real advantage for volunteers is that whilst an employee needs to provide a significant return to cover the cost of employing them the amount that needs to be raised by a volunteer is much less. Whilst charities still need to cover any overheads associated with supporting the volunteer even a small amount of money raised by volunteers can directly contribute to the cause rather than being absorbed by salary costs.

You may think that it’s easy to keep volunteers motivated, after all they want to help, but when there is a lot of work that needs to be covered by volunteers it can be hard to get volunteers to cover everything that’s needed. After all when we go to work we are motivated by the monthly pay check, but without that it’s much easier to get de-motivated and leave as a volunteer. I did a small group study of these motivations in the past see: Motivation – A Study of the Motivations for Members of a Volunteer Organisation.

Donating to charities

With this particular event the money that was donated by the public has not gone to help the children that this organisation supports. Instead it’s gone towards paying for the cost of the costume and covering the other losses incurred. That is a real shame.

It should not however detract those wanting to give to charity. I think that the fact that this charity is addressing the issue means that fortunately this won’t happen again.

How do you give to charities so that the charities get maximum benefit. This will depend upon the charity. Some will handle fund-raising themselves and others will enlist the help of commercial organisations for some or all of their fund-raising needs.

One way I give to charities is through payroll donations. These are taken from my salary pre-tax and distributed to the organisation of my choice. The particular company that my employers arrange this through makes sure that the charities get maximum benefit through the scheme.

Another way I donate is via regular direct-debit contributions direct to the charity. In some cases it may be better to avoid setting this up through door-to-door or through those that ask you to sign up in the town centres as these people are often being paid to do this work and work for a company that may take a significant cut. Instead find out from the charity how best to arrange this eg. by setting up the direct-debit directly through their website. Alternatively for one off donations do it directly through the charity website.

You can off course still contribute through collection tins and through sponsorship websites (eg. Virgin Money Giving is a not-for-profit scheme compared to some of the others), but small regular contributions are usually much better for charities.

Don’t forget to tick the gift-aid box if you are a UK tax payer to help the charity claim back the tax paid from PAYE.

Also consider volunteering. As a volunteer you may be able to give far more to a charity than you could through a money contribution

Conclusion

There will always be risks associated around investment for fund-raising, but I think it’s safe to say that over the long term the good that comes through fund-raising is normally far more significant than the ones that are not successful.

As I said I really don’t have all the facts to be able to pass judgement on this particular case, but it does sound like it was a a failure. Hopefully the charity can turn this back around for future events and sounds like they are making steps in the right direction.

Again this is just my opinion based on my personal experience. It’s easy to sympathise with this individual who was clearly trying to make this work and put a lot of effort in, but the charity needs to make a decision on whether to spend their money directly on charitable aims or in trying to pursue more money through high-profile fund-raising.