Nicola Tallet spells out why you should snuggle up to your finance director

There are two types of people in the world – those who love counting money and those who want to know that last month’s bills have been paid (OK, so there are lots of other types of people too, but I’m a fundraiser and I love counting money).

Each of your directors and trustees will fall into one of these two camps. They will be keen to know the performance indicators of your fundraising activities, the average value of a legacy, the return on investment of fundraising events and the income achieved. Or they just want to know the bills have been paid.

When you are at a board or executive group meeting, you’ll find yourself dealing with both types of people. But if you are to truly have support in delivering your fundraising strategy, you want to be talking to the ones who have set aside time to understand and to care. This won’t be every board member or every staff member.

So as a fundraiser or fundraising director, who is your Best Friend Forever in your organisation? I propose that you work on getting your finance team, your finance committee and your finance director on your side. And here are three reasons why.

Sharing your ideas

Some people just aren’t interested in money. That may surprise you because as fundraisers we spend every day thinking about income and expenditure – as do your organisation’s finance director and committee. But the rest of your board might not, and your other directors might be entirely focused on outcomes for your beneficiaries.

However, your finance colleagues (whether staff or trustees on the finance committee) do want to get behind the figures. You can share thoughts and ideas with them; spend time together discussing and understanding the cash flow from your particular fundraising strategy. You can talk about your legacy pipeline and how this has changed as the housing market has slowed (a very recent and pertinent conversation in our charity), and work out whether there is a peak when a major gift is due.

So when you are reporting to the CEO or the board on your income to date, there is another voice to affirm or challenge your assumptions and your forecast.

Understanding the risks

Managing finance and managing fundraising are both about risk and reward.

A finance director at another charity once told me that fundraising is “all about smoke and mirrors”. At The MS Society we spent a long time together blowing away the smoke and smashing those mirrors. For us, it’s all about risk and reward. Do we invest in activity A or B? How much is the upfront investment, and when will we see a return? What activities are ‘certain’ to produce income and which carry more risk? Your finance director will be thinking about this with the charity assets in shares or investment accounts, or (with current interest rates) notes stuffed in the mattress in mind.

As fundraising directors, we do this analysis every time we plan or review an activity, and every month in our forecasting. We balance out higher risk in one area with lower risk in another. We also do this when we want investment.

If your finance director and finance committee understand how you evaluate this risk and reward process and how you make these judgements, you’re more likely to have their support. They can understand the risks involved in any fundraising strategy you put before them, and when you are asking for investment they can understand the business case. And the board will trust the finance committee to have got behind the figures on their behalf and will therefore support your fundraising strategy.

Getting to sleep at night

Cash flow is king. What if you aren’t on target for net income at year end? Does it matter if you are £100k or £10m behind target in fundraising? I don’t know, but your finance director will. Your charity’s expenditure this year might have gone down as well. The charity might not need that £100k after all and your BFF can tell you this from the organisational expenditure forecasting.

This will save you sleepless nights worrying and will stop any short-term decisions having to be made in an attempt to make up the shortfall. So you can continue with your plan, deliver long-term growth and still deliver for your beneficiaries. But if the charity still plans to spend that £100k, then you and the finance director need to work together – and that is much more fun with a friend.

Nicola Tallet is director of fundraising and marketing at The MS Society

This article first appeared in The Fundraiser magazine, Issue 21, September 2012