Fundraising for charity - A career for effective altruists?
by Ruairí Donnelly on May 31st, 2012
Fundraising sometimes has a bad reputation, but there are a lot of reasons to think that being a fundraiser, or perhaps more likely, managing fundraisers may be a very effective career.
The Institute of Fundraising and the Centre for Interfirm Comparison publish a yearly report called ‘FundRatios’, with statistics on returns on investment, growth and other fundraising statistics.
In their 2010 report they found that for every £1 invested in fundraising charities receive £4.03 in donations. But some forms of fundraising are much more effective; for every £1 invested in asking people to leave the charity a legacy in their will (‘legacy fundraising’) about £25 will be donated to the charity, and some years the figure is much higher.
The exuberant fundraiser on the street who tries to get people to sign up to a monthly direct debit may actually be making a large amount of money for their charity. The average donor they sign up stays with their charity for about 5 years and donates around £8 a month, if their donations qualify for gift aid this can add about an extra 25% too.
Street fundraisers usually average a few ‘sign ups’ per day, maybe between 2 and 4, and the 2010 FundRatios report finds that it costs charities £87 to get one new “committed giver”.
So one street fundraiser who signs up 2 donors who each give £8 a month for 5 years is effectively making about £786 for their charity in one day!
Street fundraising itself might not be an optimal career for effective altruists. Finding new people to fundraise probably isn’t particularly difficult so the marginal benefit of becoming another could be very small. On the other hand it might be more difficult to find people to work for the charity and manage these fundraisers.
Suppose a charity is doing a marketing appeal over the phone, looking for people to donate, and suppose these donations come in almost immediately. If the charity’s only costs are employee salaries then it seems as if they could fundraise and then pay their employees from the money they’ve just made. Because of this they could theoretically employ an almost infinite number of fundraisers.
Perhaps this money could be re-invested in fundraising and the charity can grow more. This could be especially good for charities whose goal it is to raise awareness of an issue.
However suppose a charity is doing door to door fundraising (which can make over £3 for a charity for every £1 invested). The fundraisers might need to be spread out over a large geographical area and it might be necessary to have more people managing these fundraisers, or starting new branches of the charity in different areas as it grows.
Maybe these people could simply be hired and don’t need to be effective altruists, but maybe this wouldn’t work; this might be a good career for effective altruists.
Unfortunately it’s not all good news; if people just switch to your charity from one that would have done the same amount of good with the money then it’s pointless. But if your charity is significantly better than the charities you expect to take money from it makes this less of a concern.
I hope people will look into this more as there are still loads of questions to be answered, at any rate it seems like managing fundraising may be a very ethical career.
I spoke to a representative from the Public Fundraising Regulatory Association who said that after 3 months 25% of donors have stopped giving, at the end of the year another 25% had stopped, and that about 1 or 2% stop giving every month after this.
This seems worrying, and seems to go against everything else I’ve read. Maybe many of the donations increase and the average still equals 5 years. The FundRatios 2010 report says that ‘on average, 12% of existing committed givers increased their contribution during the year compared to just 7% in the previous year. The average increase was £33 a year or just under £3 a month.’ Maybe this explains it.