Fundraising feasibility examination

Photo: Mika Baumeister and (insert) Brooke Cagle on Unsplash

This area of the site was written for very experienced trust fundraisers.

We’ve all been doing this for some time. However, as no one writes about it, I thought it might be useful to put some ideas on the site – mainly for people who’re starting in a role where they haven’t had many new projects before.

When does FR come in?

If you watch a little interview by Neela Jane Stansfield interviewed by the CIoF on YouTube/Vimeo, or you read books written by consultants (such as the old DSC guide edited by Anthony Clay) you will see a two stage process:

1. Services develop up the project
2. Fundraising fundraise for it

I honestly don’t believe that this approach works well in the majority of cases. It does work, brilliantly, in the two specific circumstances where they seem to come from, though:

• Neela has worked extensively at Unicef, where programme officers are heavily involved, for an extensive period of time, in working up a project before it gets anywhere near a UK fundraiser
• Likewise, if you’re using a consultant, you’ll want to have the project fairly ready to go before they get involved and you won’t them being THAT involved in project development, for a few reasons:
  • Consultants’ day rates are so high that development work by them is prohibitively expensive
  • They’re usually too removed from the cause to actually do great development work
  • Because you’re paying a consultant a fortune, if they say, “go and develop this up” then everyone will say “Alright, then” to a degree they just don’t with internal trust fundraisers. It’s basic psychology, sadly. Also, when you’re paying consultants a lot of money, and you know that if they come back in and nothing’s happened it will cost even more, then there’s a lot more impetus to get the development work done.
  • Consultants aren’t focused on raising a certain amount of money in the FY, usually. They are focused on getting a piece of work over the line, at some point, but otherwise their motivation is as much to get paid and if things run late, that’s an issue for the client, not them. It’s totally different when you’re an in-house fundraiser with your year’s target hanging over your head and nothing’s getting done. The methods I describe are much easier for Services, which means that things happen more quickly.
  • With consultants, the impetus comes from higher up in the charity, because that’s where the cash is coming from. If these people are putting £5k or more into fundraising for something, the chances are that they’re very committed to it. I can’t rely on someone senior being on my side day in, day out on any old project. They just don’t care enough about my work.
  • As an internal fundraiser, I have to compromise more with Services and make things as easy as possible for them. I rely almost wholly on continual repeat business. Consultants don’t want a bad name for making Services’ lives difficult, but reputation isn’t quite as much of an issue for them..

The balancing acts

You need to balance off against each other:

• What development work do you absolutely need to give your feedback, VS the impositions you are making on Services (which will impact on your likelihood to get responses / your future relations if you say “No” at the end)
• The level of certainty that it’s worth committing a lot of your future time to doing this project, VS the time needed to generate that certainty
• In some charities, what’s an efficient use of your time VS needing to be seen to take daft fundraising ideas seriously enough
• What changes you think you can get Services to make to satisfy the funders VS the charity’s real needs (you shouldn’t be just chasing funding) and the possibility that, if you just built something in for the funder, it might not get delivered properly

A moment’s thought will reveal there’s no one right answer to these questions: many factors will affect the decision, such as the people and the organisational culture, the scale of opportunities and the other projects available to fundraise for.

Getting enough costs for the feasibility study

You DO need ballpark costs – something that not all Services staff are good at. The best way to rough these out is:

• By analogy with other similar-ish services, for as many of the costs as possible. These might be internal costs, but if you Google the type of service and the word ‘budget’, you’ll probably get a few sample budgets come up that you’ll need to scale up/down and tweak for the different model of work. You probably just need a general idea at this stage.
• Get the Services Manager to say what grade the post(s) will be on, within one grade. If they can’t say, you can take a guess (maybe on the basis of Googling similar-sounding job ads or asking HR) and feed that back in your assumptions underlying your feasibility work
• If there are big costs that you struggle to get a handle on, you’ll need to note in the feedback how that impacts your ideas about funding opportunities
• As my editor Robyn McAllister pointed out to me when she read a draft of this page, you can sometimes rely on your Finance department to give you ballpark costs.

Getting clear enough output/outcome targets?

If you can get rough targets out of Services, great – but sometimes they’ve no idea. I’ve sometimes asked, “Do you see this as being a high volume, low intensity service or a low volume, high intensity one?” and they haven’t known.

As Robyn pointed out when she read my draft, you’ll often have seen something similar enough elsewhere in the charity to be able to take a stab at the targets sufficient for the feasibility study. However, that hasn’t been the case 100% of the time. Other options are: to look at evaluations, ring a few similar services that you aren’t competing with, or even take a complete guess. You can tell Services the basis on which you’re saying it’s worth having a go (so if their targets do come out totally differently, you perhaps aren’t under so much of an obligation to carry on with the fundraising).

However, how far does it really matter? Are you going to say to the Service “I can do this but only if you reach 30 service users a year for a full time member of staff. Otherwise, it won’t sound like value for money to the funder”? Maybe not. If it does, you can give your feedback in exactly that kind of way. If they want the funding, Services can come up with a project model that incorporates that constraint. Robyn made the good point that there needs at least to be a clear rationale for the targets that you can use with the funder. 

Getting up to speed on a topic

This is a cool technique, invented by famous physicist and educator, Richard Feynman:

• First, decide what you want to learn. Write your chosen subject on a blank piece of paper.
• Second, write an explanation of the subject in simple terms, as if you were explaining it to a novice. This mainly highlights what you don’t know/understand! In our context, you could be just starting to rough out a bit of the draft.
• Third, read your explanation and take note of any areas of limited understanding.
• Finally, reread your original sources, find new experts and listen to new explanations. Then return to step two and repeat the process. (One advantage of this very engaged approach is that you can spot people who don’t really know the subject, at an early stage.)

Modifications to the work to make it fit the funder

By “fit” here, I mean BOTH eligible in terms of published criteria AND fitting within the published and hidden policies of the trust, which you’ve managed to unearth. 

I see it as my job as a trust fundraiser to say “Although this is unlikely to work, it WOULD be a decent fit if you were to change the service model a bit in the following way…” It’s one thing to avoid chasing funding (a very laudable aim). However, it’s another to undermine the charity’s aims by refusing to try and reconcile the needs of Services with the needs of the funder.

Beware, though, that as soon as you start adding extra elements that weren’t Services’ idea, these new elements are at higher risk of not being properly delivered when the project is implemented. You’ve created a situation to monitor.

“Key risks” approach to the feasibility of eligible projects

Assuming the work is within policy, how will it be assessed? There are really two approaches:

1. “It’s great work, we should fund it.” That does happen, but it normally only relies on the work having been checked for risk first
2. “There’s a significant risk to whether this will…” whatever: secure full funding; work; get enough service users; carry on at the end of the grant. It’s about spotting the risks that a trust might think would genuinely undermine the project. (People DO reject your work just because it has blemishes, but it’s not recommended practice for grants professionals.)

You need to make a call as to how far you think the project can be worked up and “polished up” for the funder.

What kinds of risks should you be looking at?

1. Project management-type generic risks (Are the lines of management clear? Do the salaries look realistic? Does the project fit the charity, e.g., does charity have the skills and experience to manage a project like that? And so on) The material in the Project Development sub-menu will be relevant, but at this stage you’ll be looking especially for issues that are likely to be fatal.
2. Risks specific to the area of work (If it’s a project in schools, how can they engage busy teachers? If it’s with disaffected young people, how will they engage them? And so on) I’ll try and build a list of these at some stage on the web site. Feedback from project staff, specialist “how to” guides and ways that similar projects have struggled at your charity are a few good starting points. Again, in the feasibility study you are looking especially for issues that can’t realistically be addressed.

You’ll come away from this section with a list of concerns/potential action points that, if they’re satisfied, will result in you committing to fundraise for the project.

Key assumptions that constrain future performance

Separate from but closely linked to key risks that the assessor might spot are the key underlying assumptions. You need to have identified what these are (service managers don’t often present them) and interrogated. For example:

• The unrealistic key assumption that half of all service users will take up the service may lead to an embarrassing set of reports. 
• The assumption that only 5% of volunteers will claim travel expenses (potentially a big line item in the budget) may leave your project under-powered to deliver its work. 
• The plan may assume that because the internal grading for a post pays X or that’s all the money there is, therefore you can attract a candidate at that level. This could leave you struggling as the work attracts incompetent staff or can’t fill the vacancy.

These examples all come from real life. They may not have been spotted by the assessor, but they are constraints that cannot be undone by staff reworking the project once you’ve got the money. You’re always going to struggle to deliver because of them.

Sometimes a guess has to be a guess. In that case, you need to decide whether to guess high or low, bearing in mind: (1) what will be competitive? (2) ethics; and (3) the future relationship with the funder. Personally, I find balancing these considerations often leads me to guess a bit lower: it’s only fair and in the long term interest of the charity to be able to deliver..

Is the money likely to be there? Doing the maths

Over the years, I’ve had three main ways of getting work funded:

• Trusts are the only funder (revenue projects)

In practice, the success or failure of fundraising has usually turned on the decisions of just a few funders. So, I’ve tried to treat these applications as separate where possible and then stitched any separate grants secured together, to make a bigger project. So, I’d have a go at an application to, say, the Henry Smith Charity, the Paul Hamlyn Foundation or the Lottery for some stand alone costs, including full cost recovery. That way if no other applications work, then something complete and meaningful will happen in a Services context and from the fudner’s standpoint, we can deliver. If more than one application comes off, we’ve perhaps got a team of two staff if the funders will agree to that. However, if I only secure one grant then I haven’t created a nett cost to the charity by funding only 35% of a project and then having to advocate internally that the charity stump up the rest of the cash.

• Trusts are contributing to a fixed budget

If it’s actually okay to just secure some funding, I’d calculate what’s realistic in the same way I’d do any income budget: first, working out the probability of each grant and multiplying the percentage by a suitable size of grant that I’d get if successful. (I’ll often use the trust’s median size of grant to that particular area of work, e.g., “disability”, on its grants list). That gives me a list of values. Then, I add them together:

80% x £20k

50% x £10k

20% x £10k

10% x £10k

5% x £20k

2% x £20k

2% x £5k

+….

________________________________

£16k+£5k+£2k+£1k+£1k+£400+£100+…

• Capital projects (possibly just from trusts and maybe a few other sources)

Here, you’ll usually need to try and piece funding together – and it seems easier to do in some ways. Marion Allford’s excellent book Charity Appeals: The Complete Guide to Success is well worth finding second hand on Amazon. (It’s long out of print.) She recommends calling the trusts BEFORE you get going. 

I ask if I’ve got a realistic idea about what the size of a successful application would be for the size of the project and (crucially) how much money we’d need to have in the bank before applying. (The issue of other funding secured can be central.)

 

If you then rough out a timeline, with the key applications you’re making and again factoring in the chance of success (as in the previous example), you can get a sense of whether it’s a realistic possibility or if you’ll be miles away.

Rolling out of a pilot service

This is fine detail, but important sometimes and hard to explain. So, please bear with me… A not uncommon problem I’ve seen with Services is to underestimate the challenge of rolling out their great ideas to different external partners. There’s a tendency to find a partner in one place, think “Great! This proves that the idea works. Let’s plan to roll it out.” However, one swallow doesn’t make a summer. Thai innovation is discussed by Geoffrey Moore (unhelpfully, just in IT, but if you watch his videos he clearly now thinks it applies generally) in his book, Crossing the Chasm. It 100% reflects some things I’ve seen:

The idea is that the market is actually made of lots of different segments who behave in different ways, who are more or less difficult to get to and who need to be approached differently:

Innovators The chances are that Services’ enthusiastic local partner is an innovator (or just possibly the next stage, a Visionary). They’re almost irrationally interested in cool new ideas and I’d speculate that they’re one reason why first pilots are as good at getting the model right. They’re keen to get their hands dirty and help.

Visionaries Also trying to grab new ideas, but because they think it will change the world and they want to be making that happen.

The chasm – this is where efforts can most often stall, which is why you might want to be skeptical about Services’ claims things will be great because – hey, they have these one or two good partners, so it must all work, right? 

Early majority – They are hard to engage and you have to engage them totally differently. They’re pragmatists, who are normally plenty busy enough with the work they already have, thank you, and they’re looking at and maybe talking to each other. They don’t want to be left behind, but if the mainstream isn’t adopting your service, they don’t want to be first. To get anywhere, the best thing is to identify sub-groups who have serious problems that your service solves and show how you have a comprehensive offer to solve the problem. Then people will start to want one and after a while, most people will want one because they don’t want to be left out.

What does this all mean for a typical trust fundraiser looking at a project that’s getting piloted and rolled out?

1. Be skeptical about these claims of easy roll-out! Ask questions about: how many people really are interested; how many options to roll out there are; listen to Services talking (if it sounds like the partners have expressed a bit of pilote interest, if they have to put themselves out then they probably aren’t really bought in, they’ve bought in only if (a) it’s super-easy, or (b) they’re pulling us in, rather than us having to push
2. Don’t over-commit in the proposal: (a) to numbers of areas or (if you can’t avoid that) to which specific locations; or (b) to a roll-out that doesn’t assume it will be a tonne of work to engage more partners.
3. Be wary about whether the team will see that they may need to engage different partners quite differently.
4. Be prepared for the individual projects to end up more different from each other than they look at this stage. Not only will the situations on the ground be different, what actually induces partners to take part will also vary, possibly a lot. 

If you can wave Moore’s book or talks at them, all the better. Doubtless there will always be a lot of other variations. However, if you can get over to them that the attitudes of different charities may well be very different, yet there will still be ways to make things work, hopefully you can encourage a genuinely entrepreneurial spirit.

Negotiating with Services

It should be clear by now that the end result of this feasibility study might well be a “maybe, under the following conditions”. For this reason, it’s better to have at least a passing understanding of the issues in the Working with Services pages: it’s about negotiating and influencing, as well as providing great customer services. The feasibility study is the first part of a process of engagement, understanding and persuasion as you start trying to bring funders and Services together towards the same goal.

For example, suppose the Trusts team is trying to contribute towards a fixed service cost (as in option 2, above). In some organisations there’s a significant possibility that, as soon as we have helped the project get approval by the Senior Management Team, Services will say, “Thanks, SMT, for agreeing to underwrite the project from unrestricted funds” and they’ll then proceed as if the Trusts team weren’t involved. The way this normally looks is that they’ll only do development work at the point when it’s really needed to deliver a service, rather than for trusts’ timetables, but they might even try to leave the Trusts team out altogether, so that the funding for the service actually comes from unrestricted funds.

In such a scenario, you need to look hard at the wording and see how you can build influence and internal commitments, rather than just relying on SMT to deliver.