SPECIAL REPORT: Charities are diversifying their approach to building revenue streams as a soft economy challenges their business-as-usual fundraising models.
Youth Focus is among a number of charities in Western Australia to have defied the downward trend in community giving by broadening its appeal through relationship building and diversifying its offering to potential donors.
The charity’s recent successes have included a strong showing in the 2017 Hawaiian Ride For Youth, held in March, which has raised an above-target $2.5 million for youth mental health services (donations ongoing).
“Third-party relationship-based fundraising works really well for us,” Ms Kalaf told Business News.
“Riders in their teams go out to their networks, individuals and corporates, and put on their own major events.”
“Some charities’ annual gala dinner would attract 300 people, but Hawaiian Ride for Youth ends up having a number of events with 300 people attending each.”
WA charities have been forced to recalibrate their strategies due to the challenging environment in the philanthropy/giving space.
According to the most recent results from the National Australia Bank’s Charitable Giving Index, individual giving in WA contracted last year and experienced the largest decline nationwide – a decrease of 2.8 per cent, down from 4.9 per cent of recorded growth the previous year.
WA also delivered the largest fall in average donation size – down by $8, to $320.
In the past financial year, events and fundraising income made up 39 per cent of the charity’s total revenue.
“We had a tough year comparatively in the year ended June 30 2016; the high net worth individuals who have in the past made major annual gifts have pulled back a little,” said Ms Kalaf, a 40under40 winner in 2002.
“Where we are seeing a lift is in the general community; more individuals are engaging in smaller, but still meaningful, contributions.
“We’re introducing new campaigns and mechanisms to donate, like text to donate, which can appeal to a younger donor.”
Other large income earners for Youth Focus included revenue from the Headspace centres it operates (40 per cent) and remaining government funding (18 per cent).
“Although we would like to see it (government funding) increase by value and percentage to some extent, the flipside is being able to be more self-determined,” Ms Kalaf said.
Charities listed on BNiQ’s top 10 Charitable Organisations all reported increases in annual WA revenue for the past financial year.
However, a closer look at 2016 financial reports reveals only half of these organisations (Royal Flying Doctor Service, MSWA, Ability Centre, Nulsen Disability Services and Rocky Bay) experienced growth in income related to fundraising, corporate sponsorships, donations and bequests.
Government grants made up more than 50 per cent of the income for the majority of BNiQ’s list of top 10.
Anglicare WA general manager marketing and partnerships, Carrick Robinson, said while government grants made up a significant amount of the organisation’s revenue (78 per cent), it was constantly assessing how it could diversify its revenue through philanthropy.
“You need to be very strategic in your approaches and need to consistently question the status quo because the market is so volatile,” Mr Robinson told Business News.
“Existing donor databases and broader donor friendships are absolutely crucial.
“And what might have worked yesterday might not work today, so we need to approach our strategies in a reasonably fluid way.”
Mr Robinson said the organisation’s individual donors were characteristically those aged 65 and over, but Anglicare WA had recently invested in more opportunities to target those in the 18 to 35 years age bracket.
Increasing digital engagement, electronic direct marketing campaigns and social media presence are some new approaches Mr Robinson said had been incorporated to tackle giving in younger generations.
Mr Robinson said although sustaining the same level of financial commitments from corporates had become difficult for Anglicare it was still a viable philanthropic source and that the organisation now had a greater range of business partnerships than previous years.
“You can’t rely on one or two big corporates to do the heavy lifting anymore,” he said.
“Partnerships vary in their style but characteristically what has changed is that they’re more tiered relationships now – volunteering, mentoring and providing pro bono access to things like business analysts.
“It’s a response to their own evaluations about how corporate partnerships can benefit organisations like ours beyond the straight dollar.”
Channel 7 Telethon Trust chief executive Steve Mummery said he was constantly exploring new and innovative ways to raise money in addition to the annual Telethon weekend.
“There are some set campaigns every charity does to hang their hat on, but you’re always looking for something that stands out,” he said.
For example, the organisation recently launched its Perth’s Brainiest Business campaign, where businesses across WA were invited to hold their own quiz night to raise money for Telethon.
St John of God Foundation chief executive Nick Harvey said he was looking for an increased focus into the corporate sector, as the majority of support for the Foundation had traditionally been delivered from high net-worth individuals.
"For anyone in the not-for-profit sector looking at raising funds you're always going to be held back by the economic climate at the time, but beyond that one of the biggest challenges for any funding entity is being able to articulate the need and the impact that support will deliver," Mr Harvey said.
"That's something we're constatntly looking at and something I prioritise as one of my key KPIs.
"You've got to really look at why somebody might be interested in supporting a particular cause and then show there's a co-alignment there between that need for support and what you're doing."
Giving at community services provider MercyCare has become more relationship-driven, according to corporate partnerships manager Geraldine Mellet.
“Corporates are starting to realise that there’s a real value to them in many ways of being associated with a not for profit who’s achieving good outcomes,” Ms Mellet said.
“It’s good for their brand in a public sense and in attracting staff.
“And there’s a lot more competition for the dollar and less government money, so those things drive you to look outside and say ‘we need some big powerful friends’.”
Ms Mellet said the relationship with key sponsor Datacom had become more hands-on, with the IT business organising a Golf Day fundraiser on the charity’s behalf and, unlike other sponsors, its employees were given opportunities to meet the children they were directly supporting.
“They (donors) don’t just want to write a cheque; they want more involvement,” she said.
Facilitating face-to-face contact between donors and causes is one of the factors The Funding Network founder Lisa Cotton attributes to the rise of collective giving circles.
“Collective giving is making giving accessible to everyone,” Ms Cotton told Business News.
“They put the face of social entrepreneurs in front of donors – that gives people a real feeling of connectedness.
“And money has a multiplier effect when given in a group.”
Since launching in 2013, TFN has raised more than $4 million for charities nationwide through its live pitching and crowdfunding events, and Ms Cotton said it was one of around 36 giving circles currently operating in Australia.
The emergence of this particular giving model has become so popular that the federal Department of Social Services has commissioned a research study, currently under way by Creative Partnerships Australia and due for release later this year, to look at collective giving and its role in Australian philanthropy.
Local giving circle 100Women founder Alicia Curtis said the group’s member base had continued to grow, and it had raised $300,000 in three years.
“Every day, people are realising they don’t have to be rich and famous to be a philanthropist,” Ms Curtis said.
“Collective giving is still in its infancy in WA. People want to see where their money is going and have an active role in choosing where their money goes, and this (collective giving) gives them that confidence.”
She said the group had continued to promote inclusivity by tweaking membership structures to respond to economic pressures.
In addition to the one-off $1,200 annual contribution, Ms Curtis said members were able to opt for lower contributions of $300 and $600.
“No-one has to give away huge amounts of money if we all come together and give what we can,” she said.
Ms Cotton said collective giving circles were also effective in the way they were giving a voice to smaller grassroots organisations.
This community voice is important, considering the largest 10 per cent of charities receive 90 per cent of the sector’s income, according to the Australian Charities and Not-for-profits Commission.
Classroom of Hope, a charity founded in Perth that is dedicated to enabling education access for children in poverty, is one grassroots organisation that has benefited from giving circles, including 100 Women and TFN.
Founders Duncan Ward and Nicola Courtin shifted to Bali last year in order to operate the organisation full time and, after a pilot campaign in 2015, launched their unique Wise Owls giving model earlier this year, which encourages to donors to think of giving as an investment.
“We came up with the concept of $9 a month; if you invest in Classroom of Hope with a $9 share we’ll treat you like a shareholder, provide you with exclusive video reports and a share certificate.
“It’s a different way of thinking and trying to get your operational funding.
“It’s no different to running a company; you need to invest capital and have an operational budget, and it’s the same in the charity sector, you need to spend money to be able to get a return on investment.”
Since January this year Mr Ward said the Wise Owls campaign had doubled.
“We send donors all of our financials, they know exactly how we spend our dollar and we’re completely transparent about everything we do, including our income,” he said.
“And I think that is so important in the sector right now – instilling confidence in the sector by being an open book about everything we do.”