11 September 2009 Open Fundraising update Sherine Krause ...

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11 September 2009 Open

Fundraising update

Sherine Krause Director of fundraising and marketing

Sherine Krause Director of fundraising and marketing

This paper is to update the board on the activities and outcomes of fundraising activity this year to date.

The board is asked to note: • the actions and achievements to date • the forecast outturn for 2009 (see item 5) • the impact of results to date on planning and budgeting for 2010

The board of trustees agreed a fundraising strategy at their meeting in November 2008. As a result of that agreement an operational plan was generated which, for the first time covered the fundraising activities of all four national offices. Following that meeting we created an operational plan which has now been in operation since 1 January 2009. This has taken place against a backdrop of economic downturn and a lack of financial confidence is evident in some of the results we are seeing from individual donors. To balance this, our improvements in practice and new strands of work are already seeing much improved results in other areas. These results need to be seen in the context of the last few years of activity. As can be seen from the graphs below both gross and net income has improved significantly on the period prior to 2006 and, with some variances, the trend is upwards in all areas except for branch income (hard to forecast). NB the particularly high peak for MSNC in 2007 is due to a single large (£3m) legacy. Fundraising Gross Income 2000 - 2008 20,000 18,000 16,000

£'m

14,000

MS National Centre Branches Wales Northern Ireland Scotland

12,000 10,000 8,000 6,000 4,000 2,000

Fo re ca Pr st op os ed B dg t

20 08

20 10

20 09

20 07

20 06

20 05

20 04

20 03

20 02

20 01

20 00

0

Fundraising Net Income 2000 - 2008 18000 16000 14000 MS National Centre Branches Wales Northern Ireland Scotland

10000 8000 6000 4000 2000 B dg t

P ro po se d

Fo re ca st 2 01 0

2 00 8

20 09

2 00 7

2 00 6

2 00 5

20 04

20 03

20 02

20 01

0 20 00

£'m

12000

2

The current strategy is designed to increase income and efficiency over the life of ‘Putting the pieces together’, the MS Society strategy, ensuring long term growth and sustainability of our varied income streams. Figures were appended to the strategy which, while too early to offer detailed forecasts, were designed to indicate potential for the future. These figures still seem entirely achievable and are attached here once again (appendix). NB, much of the following data refers primarily to MSNC only. Strictly comparable data across all four nations will only be available with the completion of the database project and adjustments to historical reporting systems.

Some key achievements from the first seven months of the strategy are: • Exceeded annual target for corporate income by end of July • £92,000 gift from the Billy Butlin trust • F&M have taken responsibility for pharma relationships and increased income forecast to £306,000 against budget of £200,000 • Area fundraiser in post in west area of England and pilot working well, providing crucial support to maintain income at local level • Best ever Cake Break results – increased income into national centres as well as branches, lower expenditure (all borne by MSNC) • London Marathon and Great North Run contributing over £500,000 • Achieving cost efficiencies by combining cold direct marketing (DM) activity with Scotland and producing UK-wide legacy materials • Bringing almost 900 former branch members into our warm appeals programme as first time donors – a benefit of the new centralized database • 5343 new individual donors recruited so far this year • We are well on the way to having our first ever UK-wide database Partnership fundraising Figures for 2009 are looking strong; at quarter two we forecast year end figures of £1.7m against a budget of £1.6m. NB it should be borne in mind that this excludes the single prospective gift of £1.25m which never appeared in the original budget from fundraising staff. This aside we are seeing some very strong results and 3

some that are less so. We are overachieving in both corporate (forecasts £823,000 as opposed to a budget of £600,000) and major giving (£170,000 as opposed to £125,000) lines, and underperforming in trust income (£750,000 as opposed to £900,000). This latter is caused by an over-optimistic budget considering we were understaffed by a manager in this area (now rectified but impact will be felt next year, not this). Costs are coming in slightly higher than forecast due in part to previous errors in the salary calculation (the head of partnership fundraising’s salary was omitted from the budget). It should be noted that in this area almost all costs are salary related; it is a particularly profitable area because there are almost no on-costs beyond salaries. The result of these variances is that net income will be slightly up on forecast and ROI improved. As these are areas where we have traditionally underperformed we are confident that there is still huge potential for growth in partnership fundraising income. As a demonstration of this, in 2003, with higher staffing levels (4.5 individuals as opposed to our current 1.3) we achieved a corporate income of £1.2m. Income has been unsurprisingly lower ever since, with little possibility for pro-actively seeking new business. Successful pitches have brought us in for this year two significant charity of the year partnerships and it is vital we maintain this momentum. We are currently being very proactive and, with staffing levels high enough to continue this proactive approach, are very confident that our past income levels will again be achievable. Total Given

Corporate Income and number of companies donated

Number of donors £1,400,000.00

1800

1600 £1,200,000.00 1400

Income

1200 £800,000.00

1000

800

£600,000.00

600

Number of companies

£1,000,000.00

£400,000.00 400 £200,000.00 200

£0.00

0 1999

2000

2001

2002

2003

2004 Year

2005

2006

2007

2008

2009 (to July 2009)

4

The graph below indicates that in terms of our trust income we have a real objective of raising the average gift level. Average gift per Trust Average/Donor £4,000.00

£3,500.00

A m o u n t

£3,000.00

£2,500.00

£2,000.00

£1,500.00

£1,000.00

£500.00

£0.00 1999

2000

2001

2002

2003

2004

Year

2005

2006

2007

2008

2009 (to July 2009)

We had already begun the process of putting in fewer, larger bids and the appointment of a new Trusts and Statutory Fundraising Manager, Helen Palmer, will make a huge difference here. We are currently completing the application process for a grant for £170,000 from the Third sector investment fund to support our work around personalization. The impact of this newer way of working will be hugely significant (helping us to achieve the £1.2m we projected in the strategy by 2012) but, given the lead times involved in grant giving bodies, not felt in this financial year. Major donor fundraising is a whole new area for us. An income of £170,000 is a real achievement at this early stage and we aim to present our major donor strategy to a subsequent meeting of the board. Our return on investment in partnership fundraising in 2010 will be 1:3. Longer term we aim to get to 1:4. Community and events At the start of this year we reported the likelihood of a very significant drop in income in both community and events income for 2009, as far as we could tell due to the recession; in January and February we hit only 55 per cent and 67 per cent of our targets respectively (into MSNC). It is pleasing to be able to report that there has been significant uplift since that time and, as of mid August, income for the same areas stood at £830,000 (against £713,000 for the same period last year). This represents, across both areas of activity, numbers of participants improved on 2008 but average income levels from both individuals and groups falling. 5

7000 6000 5000 4000 3000 2000 1000 0 2 Ju 00 ne 8 20 09 )

20 09

(to

20 07

20 06

20 05

20 04

20 03

20 02

20 01

number of participants New Event participants

20 00

19 99

Number of Event participants

Event Participants

Year

Our concentration in the coming months will be on stewardship and development of existing donors. As the economy improves we will be working to ensure that average gift levels rise again, leading to continued income growth. In addition we will be concentrating on low risk events and activities rather than seeking to introduce new activities into the programme. We aim overall to achieve a return on investment of 1:3 but are cognisant of the fact that sometimes we achieve this very quickly (Run to the Beat and Royal Parks events, both new this year, achieved 1:6.5) while others take time to develop. As an example Wheel & Walk, which made a loss in its first year is, with a growing reputation and a firm grip on costs, now generating 1:2 and we expect to see this situation improve further. While we have to allow some projects time to achieve their potential (we will give Big Book Sale a second test this year before deciding its fate), the board should be assured that, where business sense dictates, we do not hesitate to halt activities; Big Foot and the Christmas Stars are two projects we have killed off in the last couple of years. As the board will be aware not all the activities of this team are about bringing income into the national centres. The second largest income stream into the MS Society after MSNC is branch income, as can be seen in the graphs on page 2. To support this area of work we have successfully recruited an experienced local fundraiser, Andy Jarrett, to pilot a new role in the West and three months into this project prospects are very encouraging. Stringent targets have been set and a steering group involving area teams and people with MS is involved in monitoring impact. In addition we have taken responsibility for developing a cross-departmental project to reduce reserve levels in our branches. The board will hear more about this project as plans are developed. 6

As a very established fundraising stream this area of work will deliver an income of 1:4 in 2010. Direct marketing To compensate for several years of not recruiting new donors, last year and this we have undertaken extensive recruitment campaigns. In previous years we have taken something of a ‘boom and bust’ approach to bringing in new donors. The aim in the strategy document as agreed by the board last November was to aim for a slow steady investment in recruitment and stewardship to increase the number of active donors by 3% a year. Number of first time donors

Number of Donors

25000 20000 15000 10000 5000 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 (to June 2009)

1st Gift Year

To improve the cost-effectiveness of this work we have concentrated on recruiting donors through door to door fundraising as this method brings people in directly onto a committed giving scheme. New recurring gifts 1200 1000 800 Number of donors

600

Number of cancellations

400 200 0 Jan-09

Feb-09

Mar-09

Apr-09

May-09

Jun-09

Month

7

Although the attrition rate is higher than through other forms of recruitment, the income is also significantly higher so the economics are impressive. For comparison purposes the donors recruited through this means in previous years (1999-2008) have generated, through their direct debits alone, £5.2million at a cost of £1.2million and an ROI of 4.32. These numbers illustrate that we need to take a longer term view of our fundraising activity, with a view to measuring the lifetime value of our donors, not judging them by their contribution in year one alone. Donor recruitment is one issue for us but equally important is the need to ensure that initial gifts lead to further gifts and attrition rates on committed giving schemes (currently delivering £1.5m a year) are driven down as low as possible. In this way our investment in recruitment will yield the highest possible return for the Society. No. of New Committed Gifts and annual Income Numbe r of ne w committe d gifts 10000

£1,600,000.00

9000

£1,400,000.00

8000 £1,200,000.00 7000

5000

£800,000.00

4000

In c o m e

£1,000,000.00

6000

Number of new R.G Total Income

£600,000.00

3000 £400,000.00 2000 £200,000.00

1000 0

£0.00 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 (June 2009) Ye a r

We have launched ‘Advances’ a newsletter for donors and which has received very positive feedback and are planning to concentrate in 2010 less on recruitment and more on stewardship and maximizing income from our existing donors, with a scaled down recruitment programme. The direct marketing programme will deliver a 1:4 return on investment in 2010. Legacies The MS Society has a strong reliance on legacy income, which forms approximately 40 per cent of our income. We are currently on target for £8 million in legacy income in England Wales and NI and in fact will exceed income in Scotland this year. We are receiving consistent numbers of legacies year on year (422 into the MSNC in 2008) but, as would be anticipated in this environment, the average value of each legacy is markedly below previous levels.

8

Number of legators who gave a legacy 600

number of legators

500 400 300 200 100 0 1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Year

2009 (to July 2009) of legators Number

In addition we have not benefited from the very large legacies, as we have in recent years. However we have recently received notification of a legacy of approximately £425,000 which will improve on the situation seen in the pipeline below. Legacy pipeline 2006-2009 10 9

£'m

8 7

Pipeline 2006

6

Pipeline 2007 Pipeline 2008

5

Pipeline 2009

4 3 2 1 0 Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

In order to ensure our high levels of legacy income continue, and even increase, we have produced materials and are developing a strategy for legacy promotion which will become part of our activity programme in all four nations next year. We will concentrate on marketing legacies to our existing audiences and costs are low considering the very high returns possible. In conclusion we have seen some impressive results to date and some that have caused us enough concern to change our planning for 2010. We will shift focus, in particular around fundraising from individuals, concentrating on low cost/low risk activity. We will be investing in those areas where we know there is the most significant potential in the shorter term because we have been underperforming: 9

major donors, corporate and trust and statutory fundraising. In addition we have included an investment in supporting our branch fundraising activity which is one of the most at risk aspects of our income. Both net income and return on investment improve in 2010.

10