Why do some charities struggle to raise funds?

There are many reasons why charities might
find income generation a challenge. Again,
experience shows that it is not likely to be a
result of so-called ‘donor fatigue’ or a shortage
of donors with cash. Instead, one common
reason is a failure to adapt the structure of the
organisation as the demand for its services
increases. Output can only expand if input
keeps pace.
Most charities are formed by people who have
a passion for a particular cause. Usually they
are experts in delivering a particular service.
So, doctors and nurses will form medical
charities; parents of disabled children will start
a disability trust. And they are usually very
good in their area of expertise.
This diagram shows how a charity should
be structured:

Perhaps the founders have invited a few
friends who share their passion to become
the first Trustees. Together they begin an
organisation to deliver the service. There is
often much overlap between governance,
resourcing (fundraising) and service delivery,
with just one or two people doing all the
work. Frequently, those who become the first
trustees do not realise the responsibility they
are taking on, and are often not skilled in the
areas of governance.
As the organisation grows, these three areas
should be kept separate and the management
must become responsible for keeping it
all in balance. In practice, trustees often
‘meddle’ in management or service delivery.
A frequent problem is where the ‘founders’
are still involved in the service delivery but
are reluctant to relinquish authority and
accountability to the Trustees. ‘Founder
Member Syndrome’ restricts development.
As the need for the service grows, if funding
for the work falls far behind development
in service delivery, the result will be
financial crisis.
Is your charity top-heavy with people who have excellent service delivery skills but little knowledge of how to run a business or raise funds? If so, you might require some help to achieve a correctly balanced structure. Give us a call!