This is a guest post by Alicia Grainger and was originally published on her own blog.
As a consultant I’m often asked what kind of return on investment you get from trust fundraising and whether it’s really worth the effort. Particularly if you’re at the beginning of your fundraising journey, trust fundraising can seem like a lot of effort. The hours spent researching prospects, shaping projects, building relationships and all before you even get around to crafting the perfectly worded, compelling application.
So is trust fundraising really worth it?
Although the answer to this question will very much depend on the characteristics of each organisation, one important factor in helping you decide whether to pursue trust fundraising is the potential return on investment (ROI). Put simply, this means how much money you can expect to generate from the money and resources that you put into it.
Up until 2013, one benchmarking study that was available to charities was the Institute of Fundraising’s Fundratio’s study. This ran for a number of years and gave a snapshot view each year on how the ROI for different types of fundraising might be changing. The latest report from 2013 showed that for the charities who took part in the study, for every £1 invested in trust fundraising there was an average return of £9.56, higher than any other type of fundraising including legacies, corporate and major donors.
In 2019, our friends Caroline and Tony at LarkOwl fundraising decided to update the information available to the sector by completing their own study. This too found that trust fundraising had one of the highest returns on investment at £7 for every £1 invested. A pretty compelling reason to invest in trust fundraising, right?
But when I’m supporting charities to grow their trust fundraising I’ll always be honest about whether it’s right for them. Here are a few reasons why trust fundraising might not be right for you:
Your projects and services are well funded but you need money to fund your overheads, meaning your office spend, rent, utility bills etc. It’s much more difficult to raise unrestricted income from trusts and foundations, so in this scenario it may be better to look at how you can achieve full cost recovery on your services rather than looking at trusts and foundations to fill the gap.
You have an immediate, short term need. Trust fundraising has a notoriously long lead in times – so you might submit an application and not hear anything back for 3-6 months on average. Some funders will ask you to submit an initial outline, followed by an assessment call or visit and submission of more detailed plans. The whole process can easily take up to nine months. If you need money urgently, something like a crowdfunding campaign might work better for you.
You don’t have the staff capacity to manage an additional income stream that will involve reporting to funders, evaluating your work or monitoring outcomes. If you’re not used to working in this way and don’t have the time to invest in the right systems, trust fundraising may not be right for you.
Being aware of what’s involved in trust fundraising is always a good step though to help you in deciding whether it;s right for your organisation to invest in. There’s no denying that it can have a great ROI, especially if you’re running a capital campaign so it’s often one fundraising discipline that organisations are most keen to pursue.
So if you’re considering investing in trusts, here are some things you might want to think about:
You’ll get the best success if you can build relationships with the trusts and foundations. Do you Trustees have networks and contacts they’re willing to talk to? Do you have a wide network of volunteers or potential influences who can help you to reach out to key funders?
Do you have new projects or services that you want to get up and running and have you scoped these out in enough detail to work up a compelling case for support? Trust applications tend to be quite detailed, so making sure you have this information before applying will help you to write your applications more quickly and efficiently.
Do you have a longer term vision for your organisation, say at least three years? If you want to secure multi-year gifts, you’ll need to be able to plan ahead and know what you want to deliver and why in three years time.
Do you have some resources to manage grants once you start getting some success? You’ll likely need to be able to carefully track restricted income, manage the grants as a discreet project and report back to funders.
Are you prepared to invest some time in learning how to fundraise effectively from trusts and foundations? Yes anyone can send off a few applications but if you really want to be sure of success and getting your projects funded it will take time to learn some good techniques for researching prospects, building your pipeline and crafting a well written and persuasive application.
Done well, trust fundraising can bring you a great return for your efforts. With the right skills and contacts, fundraisers can secure 6-figure gifts from one application. If you have a well-crafted small application template letter you can send this off to multiple trusts and foundations securing low-level gifts from just one letter. And then there’s the opportunity to secure multi-year transformational grants, giving your organisation the security to fund projects and services for three or even five years.
Together with a great ROI, there’s lots or reasons why trust fundraising is worth the effort!