28 September 2016

Institute of Fundraising provides helpful guidance for charities on working with fundraising agencies

Alison Paines
Partner | UK

In August, the Institute of Fundraising released 'Successful Partnerships for Sustainable Fundraising: a practical guide for charities working with agencies'. The Charity Commission's revisions to its guidance on fundraising shifted its focus from fundraising generally to trustees' duties in relation to fundraising. This shift is understandable given the emphasis placed on trustees by the Etherington review of fundraising self-regulation, but it is great to see others within the sector filling the gap which has been left by providing useful practical advice.

The guidance is split into four parts: planning and preparation; selecting, assessing and appointing a partner; establishing the terms of the partnerships; and monitoring, reviewing and evaluating.  


Part one helps charities to understand what agencies are and how they work. It also considers the benefits of using a fundraising agency, such as specialist skills and knowledge or access to new ideas and technology, as well as the risk of using a fundraising agency which can include a failure to deliver results or damage to a charity's reputation and brand. The guidance adopts a three step approach to help charities make informed decisions about working with a fundraising agency: (1) Should I use a third party supplier? (2) Identifying and managing risks (3) Are we ready to partner with an agency?


It is important that charities work with the right fundraising agencies. The Institute of Fundraising recommends taking this on a step by step basis. Firstly, identifying potential fundraising agencies that a charity could work with and conducting due diligence on them. Secondly, creating a request for proposal setting out a detailed brief of the services the agency is expected to provide. Next, during the tender process, charities will need to respond to any questions received, as well as allowing agencies sufficient time to respond. The fourth step is to evaluate the responses to the tender against a predetermined set of criteria. The Institute of Fundraising suggest that visiting the agency's premises and meeting key staff should form part of this evaluation. Finally, a charity should appoint their chosen agency and conclude any financial or contractual negotiations before informing unsuccessful applicants.   


Fundraising agencies are commercial participators and accordingly a written contract must be in place between the charity and the fundraising agency which fulfils certain legal requirements. It is important that such agreements are properly negotiated and you seek appropriate legal advice as needed. The Institute of Fundraising additionally recommends establishing service level agreements and key performance indicators (SLAs and KPIs) to help agree and monitor activity. A programme of work should be put in place which includes a timetable of actions, key milestones and responsibilities. The guidance contains a helpful list of aspects to consider for certain types of activity. The next step is to agree targets for the activity before briefing and training fundraisers (including preparing and reviewing training materials).


The Etherington review of fundraising self-regulation highlighted the importance of monitoring and evaluating the performance of professional fundraisers. The Institute of Fundraising's guidance suggests that monitoring should be through a number of elements including reports, site visits, mystery shopping, complaint logs, supporter feedback and call listening. A schedule of reviews should be agreed with the fundraising agency to formally evaluate their performance.

The guidance is well worth a read by fundraisers, legal teams negotiating contracts with fundraising agencies and trustees.

The full guidance is available on the Institute of Fundraising's website

Alison Paines Partner | London, Cambridge

Category: Article

Client types: Charities and non-profit