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“Trembling and alone on a crowded airfield”

  • Lessons for charities about cost and value

    So there I was, almost in tears, lost in reverie, alone in a crowd on an airfield just outside Newark in Nottinghamshire.

    But what had happened, and why I am I telling you about it in a blog about charities? 

    You see, I was at this airfield to attend an antiques fair (I know what you’re thinking, my weekends must really fly by), when I came across a table of old football programmes. Now, forgive me, but it’s my affliction to be a lifelong Arsenal fan and a season ticket holder for the last 22 years. And what I found, after a few minutes of flicking through the piles, was the programme of the very first match I had attended.

    It was on Saturday 20 October, 1979, but I remember the game like it was yesterday. A nil nil draw versus Stoke City, but for this seven-year-old, it was all high-octane excitement.

    Hands trembling, I bought the programme for the marked price: £1.50. But for me it was worth so much more than that. And this historic memento is now framed and displayed for posterity (in my downstairs loo).

    Think about the difference between cost and value

    But what can charities learn from this somewhat particular experience? Well, I think it’s a particularly appropriate illustration of the distinction between cost and value, which charities should pay greater heed to.

    The programme would have cost 20p in 1979. I ‘bought it back’ a few decades later for £1.50. But what was its value? The significance of it to me emotionally, and the way it was a gateway to a formative experience for me meant I would have paid much, much more for it.

    This is because cost and value are rarely the same. In fact, for charities if the value of our work wasn’t greater than the cost of doing it, are we the best people for the job? Shouldn’t a funder be doing it themselves in that case? What added value do we bring?

    Inputs, outputs and outcomes

    Or, putting it another way, we need to be clearer about the differences between inputs, outputs and outcomes. So often, I’ve seen charities cost up their work in their project proposal, assuming that the outputs of the work, or what they’re planning to do with funds raised, is the most important aspect of the proposal.

    It isn’t. The vital element of your plans is what will change as a result of what you’re planning to do.

    It’s not the cost, it’s the value.

    If the work you’re doing will increase the chances, for example, of your beneficiary earning themselves a decent living rather than being unemployed, how much money is saved in the long run from your ‘intervention’? You need to be able to prove your value, and if it’s not greater than the cost, then, quite frankly, you shouldn’t be doing it.

    And what about the value from a funder’s perspective?

    And there is another element of the cost/value distinction that I believe charities also neglect, and that’s in our fundraising. Applications to charitable trusts are rightly normally focused on asking to cover a project’s costs. But this leads me to two questions that I think we all need to consider:

    • Have you made it clear, even so, what the value of the work will be? This is what will lead to donors and supporters, in effect, investing their money in you.

    • Have you reflected the full costs of your organisation doing the work? There should, after all, be an added value in your expertise and management, otherwise, again, the funder would be wise to consider “cutting out the middle man.”

    Proposals to companies, on the other hand, ought also to take into account the value to the company of associating with our organisations. Are we fully aware of the power of our brands? Do we under-sell ourselves?

    Remember that wide-eyed seven year old

    But there’s a final, and arguably more important, lesson from my airfield story. It’s about my willingness to part with my money for a reminder of a special moment in my life. What does that tell us about the importance of memory, emotion, and excitement in reaching our supporters? For me, it’s got something to do with understanding them and their identity.

    My somewhat blind faith in a football team is part of what defines me as a person. And likewise, we need our supporters to get to the point where their allegiance to our cause is part of who they are.

    Now that is value.

    Richard Sved, founder and director at 3rd Sector Mission Control, is a charity consultant specialising in fundraising, charity strategic planning, governance and communications.

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