A topic that has come up time and again during recent conversations with senior leaders in the sector, and one that was repeatedly raised in our Fundraising Insight survey, is the crowded nature of the marketplace.
“There are just too many charities competing for an ever-decreasing pool of funds,” said one respondent to the survey. “Investment in fundraising is poor and we don’t have enough fundraisers to hit our targets,” said another.
Market saturation is an unsettling phenomenon in all industries, and with every new entrant, the situation gets worse until there is a readjustment and the sector realigns with demand. The problem with the charity sector, of course, is that demand for services is rising, while available funding is falling. From a fundraising point of view, it’s a worst case scenario contrary to normal market forces.
This impacts staff recruitment and retention. New fundraisers are often struggling with the demands of unrealistic targets and leave the sector before reaching their full potential, while older hands are suffering from burnout. So the cycle continues, with fewer people to raise more money from less available funds.
Whether boards and senior management fully understand this or not is a concern. One survey respondent noted: “The value of fundraisers is undervalued.” Another said: “Organisations are not understanding the value of investment in fundraising and expecting unrealistic returns, while not supporting fundraisers to be effective in their jobs.”
So what can be done? Two leaders have said to me recently that the situation is untenable and the result will be a flood of charity closures over coming years, particularly among smaller organisations. Another said that the only path now is collaboration in fundraising and service provision. Yet another said that mergers are the only way some charities will survive, albeit in an evolved form.
There is a perennial argument about the bloated nature of the charity sector. But with falls in regular and individual giving, less statutory funding and more competition for trust and foundation funding in recent years, we may be reaching a tipping point. What that means for fundraisers is difficult to call. But without them, many charities will fail, so driving more investment into fundraising has now become an existential decision.
@stevejcotterill is editor of Fundraising Magazine
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