Fundraising Management - British Heart Foundations - Case Study Example

Fundraising Management Introduction The Charity Commission for England and Wales is an independent body, free from any kind of ministerial influence that is solely responsible for acting as registrar and regulator of various charities in England and Wales. The commission has been empowered to exercise powers that are equivalent to that of the high court. The commission reports directly to the United Kingdom Parliament. The main aim of the commission is to regulate charities in order to maintain public confidence and support towards charities. The Charity Commission is responsible for 180960 charities with total income of £64.84 billion. In this paper, the fundraising management has been assessed with respect to the British Heart Foundation (Charity Commission, 2015a). The British Heart Foundation was found in 1961. It is the largest independent heart charity and funder in the UK and is registered with the Charity Commission. The foundation is essentially responsible for researching various cardiovascular diseases and discovering the cure. The charitable foundation operates throughout the UK including Northern Ireland and Scotland. Around 2617 employees and 26000 volunteers work for the foundation and are dedicated towards providing care and support to heart patients and increasing awareness among mass population to reduce unsystematic risk of encountering heart diseases. The net income of the foundation is £275,100,000 which is raised by means of voluntary sources, trading for fund raising, investment and charitable activities (British Heart Foundation, 2014; 2015a; Charity Commission, 2015b). The paper critically assess the effectiveness of the fund raising sources of the British Heart Foundations that has been discussed previously and accordingly, recommendations have been provided that measures can be adopted by the foundation for improving the fundraising mix or the fund raising sources. Fundraising mix Different charities have different choice or source of fund raising which they can bring together to develop an appropriate fundraising mix. The fundraising mix can differ from one charitable organisation to another depending upon its nature of business. Inappropriate fundraising can affect a business as the need of fund is not same for all business. The fundraising sources of British Heart Foundation and their effectiveness have been discussed in a detailed manner in the following section. Voluntary income The voluntary sources of fund raising are donations, legacies and gifts from common publics and grants from government bodies. These sources either provide core funding or deliver general funding. Some authors have argued that fundraising by means of gifts and donations is difficult because marketing in a non-profit segment is relatively complex. The main reason for the same is that there are certain distinct characteristics of charitable organisations that challenge survival of these organisations. The primary factor that affects fundraising process is the return. Charitable institutions are mainly organisational centric rather than being driven by consumer demand and consequently generate no personal benefit or return from the amount donated. The voluntary income sources of BHF are legacies, donations, volunteer fundraising, events and restricted appeals. The maximum income is generated by legacies and donations while least is done from donations received in BHF shops. Legacy fundraising is relatively delicate in nature and an organisation may require establishing strong relationship with its donors so that they donate at their will. The foundation has witnessed growth in its voluntary income since 2013 suggesting that the fundraising efforts of the company are being well paid off (British Heart Foundation, 2014; Charity Commission, 2015c; UK Government, 2013). Trading to raise fund Trading is referred to a commercial activity but charities can and frequently do trade to raise fund. The trading activities include selling of a series of goods to general consumers such as charismas card, hand crafted goods, sale of theatre tickets and sale of educational products. At BHF, retail trading is done in two forms: selling of donated goods by means of charity shops and selling of bought-in goods through BHF Shops Ltd. It was observed that the retail revenue of the foundation has increased from the previous year but moderate rise in operation cost resulted in decline in net income. Raising fund by means of charity trading is effective as long as it is favourable for the business. Substantial involvement in trading for raising fund can often prove to be risky. Opening trading subsidiary which can be controlled by the charity has been recommended as an effective measure for mitigating associated risk. BHF currently four subsidiaries but one of these is dormant as of this moment. However, retail trading can be considered as a effective source of fund generation for BHF because the earnings generated therein are exempted from various taxes as it is a registered charity (British Heart Foundation, 2014; Charity Commission, 2015c). Investment income A number of organisations are presently engaging in investment activities so that the gain from therein can be used for charity activities. The investment category comprises rent, interest and dividend. However, it is not worthy that the investment income essentially exclude different kinds of realised and unrealised gains that are generally earned from capital investment in various portfolios. The long term investments of BHF are worth £182.5 million, the net gain from investment was determined to be £13.7 million, and the net income was determined to be £4.30 million. There are several reasons because of which charitable organisations undertake investment activities. Investment activities often generate lump sum income which can be either reinvested or used by charity. Such kind of investment is often referred as financial investment (UK Government, 2007). Investment need to be made cautiously for maximising returns and in this context, one important factor level of risk. Since charitable fund are for greater good they need to be invested in safe investments such as government bonds, long term deposits and others. Growing interest of charities in investment has compelled the UK government to develop social investment market. In 2010/11, the net work of the social investment in the UK was determined to be approximately £165 million. Social investment is an emerging market but plays a strong role in capitalisation of charities. However, the sector is yet to be capitalised appropriately because charities are least attractive since they are legally not capable of profit distribution (IVAR, 2013). The Charity Commission has played an important role in this regard and has revised its investment guidance in order to support increasing interest in social investment. However, for making social investment successful, it is important to have supportive board, engaging trustee members, skilled management and effective business plan. Investment has been a successful choice for BHF as the organisation has been consistently raising significant fund by means of new investment. The reason for it being able to attract sufficient fund by means of investment activities is that the organisation is involved in significant amount of research activities related to heart diseases and their cure. However, investment income of the foundation declined by £2.4 million in 2014 compared to 2013 and it was cited that the reason is rebalancing of investment portfolio. The charity has sifted significant amount of fund in recent time to fixed interest securities that have very limited risks. Arguably, the choice of investment activities suits the organisation (British Heart Foundation, 2014). Charitable activities Charitable activities have been considered a moderate source of income generation by several registered charities under the Charity Commission. It was determined that a significant amount of the sector’s income is generated by means of charitable activities. Income by means of charitable activities implies the grants and fees earned specifically from supply of goods and services by various charities for meeting needs of the associated beneficiaries. Such activities essentially include selling goods and services as charitable activity, selling products and services that have been designed and crafted by various beneficiaries of charities, utilisation of non-investment properties of the charity for furtherance of charitable activities, grants that has been obtained by means of specific provision related to goods and services that can be related to various charitable activities or services dedicated to or done by the beneficiaries. In this regard, performance based grants are highly relevant. In this regard, ancillary trade can also be considered as a contributor (British Heart Foundation, 2015b) The charitable activities of BHF have been undertaken essentially for benefits of the public. The foundation keep organising several events such as bike rides runs, overseas challenges, walks and treks, skydiving and other sports for funding purposes. The foundation seeks nominal fees for registration, training and complete execution of the events. Most of these events are very interesting and attracts large crowd which again helps in improving quantity of the raised fund. The foundation also organises various campaigns such as social care, organ donation, food labelling, ban on tobacco, new heart plan and others. Each of these campaigns is aimed at increasing awareness of the general public and has strong involvement of the government. It has already been discussed that BHF is the largest independent heart research funder in the UK; the source of growth is the nature of research conducted by the foundation and its impact on common public. It has been observed that such measures not only raise awareness and also probe individuals to make contribution towards the foundation. The charitable activities of BHF are intriguing and have strong impact on individuals of various demographic and social groups as a result can be considered as an effective source of revenue therein (British Heart Foundation, 2015b). Conclusion and recommendation Charitable organisation are non-profit and often non-government organisations that perform several activities for delivering benefits to those who deserves it. BHF is one of the important charitable organisations of the UK involved in heart research, treatment and prevention activities. The fundraising mix of the foundation has been discussed and it was observed that the company mainly draw fund from charitable activities, investment, voluntary sources such as donation, legacies and trading activities. It was determined that in recent times, very little income was generated by the foundation by means of charitable activities indicating great priority is being given to wellness campaigns and researches. Although these efforts are essential for achieving long term strategies of the business, the foundation should also focus on charitable activities for fundraising. These activities not only generate significant share of income but also promote the organisation by means of its deeds. Interestingly, the retail business was determined to face slow pace and should be address by the foundation by addition of greater number of products and services. It was determined that the organisation mainly raise fund by means of products. However, it can also initiate trading of services for fundraising purpose. Reference List British Heart Foundation, 2014. Annual reports 2014. [pdf] BHF. Available at: [accessed 17 April 2015]. British Heart Foundation, 2015a. about us. [online] Available at: [accessed 18 April 2015]. British Heart Foundation, 2015b. Events and campaigns. [online] Available at: [accessed 18 April 2015]. Charity Commission, 2015a. Charities in England and Wales – 30 September 2014. [online] Available at: [accessed 17 April 2015]. Charity Commission, 2015b. British heart foundation. [online] Available at: [accessed 17 April 2015]. Charity Commission, 2015c. The Register Of Charities – Notes For Users. [online] Available at: [accessed 18 April 2015]. http://data.gov.uk/publisher/charity-commission-for-england-and-wales> [accessed 18 April 2015]. IVAR, 2013. Charities and social investment A research report for the Charity Commission. [PDF] IVAR. Available at: [accessed 18 April 2015]. UK Government, 2007. Trustees trading and tax: how charities may lawfully trade (CC35). [online] Available at: [accessed 18 April 2015]. UK Government, 2013. Wills and charitable legacies. [online] Available at: [accessed 18 April 2015]. Read More