Payment by results – is it worth it?

We work with many charities who are trying to set up a new income stream or are setting up their entire fundraising function from scratch.  It’s not unusual for these charities to ask about working with us on a commission or performance-related pay basis. On the face of it, this can seem like a good course of action, particularly for a small charity with limited funds.  

However, payment by commission is both dangerous and unethical. Along with the Institute of Fundraising we strongly discourage fundraisers and charities from taking this approach.

Here are three reasons why Fundraising Consultants Ltd never delivers fundraising consultancy on a payment by results basis:

1. It sends out a dangerous message – to donors, funders, stakeholders, staff and volunteers.  The premise behind this approach is that fundraisers are solely responsible for the charity’s success.  This is of course not the case. The quality of your work, the networks and relationships your charity has, how well managed your organisation is and even your organisational culture, are important factors that impact on a voluntary organisation’s fundraising success. 

2. It encourages unethical practices – a fundraiser’s motivation should always be to raise funds to enable the charity to have a greater impact on its beneficiaries; not because their work will result in a bonus or larger pay packet.  The risk therefore is that payment by results encourages unethical practices such as using guilt or pressure to secure a donation or grant. 

3. The fundraising ‘ask’ is only a small part of the job – any decent fundraising consultant or fundraiser will spend much of their time gathering programme information, improving processes, building relationships and reporting to funders and internal stakeholders.  Cutting back on these crucial areas of fundraising is a dangerous game, both for the charity’s longer term sustainability and in the short term.