But anyone who has made that jump - either way - knows that it's a massive culture shock. Things are different in the voluntary sector.
A friend who is considering making the same jump asked me to articulate the main differences. "What has the biggest challenge been?" she asked. Immediately this infographic from Targeting Fundraising Talent sprang to mind:
But on reflection I said, "Planning."
Universities think ten, twenty, twenty five years ahead. In my last higher education job I was raising money for capital projects in a twenty five year rolling cycle. The strategic plan ran on a rolling 5-10 year cycle. The vision was huge, international, and long term. They could afford to be like that because they had five hundred years of history behind them and a turnover in excess of to £600M each year. Voluntary income is part of that - a small, but important part. It helps buildings to rise and research programmes to emerge. It helps to change the world, but it isn't the difference between people having a job or not having a job.
In comparison, many charities operate in a much more volatile marketplace. They may be over dependent on one income stream. They might be trying to deliver services and second guessing what the government or local authority are going to do next. All of this can make it difficult to plan more than 12 months ahead. It also means that voluntary income is the difference between a charity being the captain of its own ship rather than a shipwrecked passenger clinging to a liferaft.
This means that accurate financial forecasting is absolutely essential.
That's no small feat. In higher education fundraising, a Head of Development is most likely looking after six or seven income streams: major gifts, trusts and foundations, corporate, legacies, annual giving and telethons. In voluntary sector fundraising you can double that.
My fundraising team manages between 12-14 different income streams. It's my job to work with people in the team to ensure that income and expenditure projections are accurate. That way my charity can estimate what it has to spend. It's important to get it right.
So how do you do it?
Well, it depends: each income stream will require a slightly different approach. But are some starting points:
- What's been happening over the last five years? Look back over your data and identify trends and averages. For example, what is your average response rate for direct mail? Are the same people giving each time? What is your attrition rate? How many are you retaining? Are you repeatedly mailing people who don't give? Can you cut costs by excluding non-donors?
- What activitie / proposals have you got planned and what is your anticipated return on investment for each project? For example, if you're launching a new community fundraising product this year might be a pilot. Your aim might be to have ten events, each raising £50. This will break even. But you might also have a well established dinner dance which raises between £9000 and £25,000 each year depending on number of raffle prizes and guests. What's your target for that?
- Have you remembered to factor VAT into your costs?
You don't come up with this hiding in a hobbit hole. You come up with it as a consequence of discussion with people in your team. It's your fundraisers who will tell you what is feasible within their programmes and outline what they are going to do and how much it will cost. It's your job to look across the piste, join the dots and provide the framework within which they can develop their ideas.
It should have become obvious is that financial forecasting and strategic planning are inextricably linked. The budget is merely the output from your plan. But your planning should be informed by historic data, benchmarking against competitors, horizon scanning to identify external trends which impact upon your work.
For me, the most valuable tools to use for these things are:
The Boston Matrix - what's rising and what's falling? Is your direct mail base shrinking? Is your partnerships function flourishing? Where will you need to invest more to shore things up? Where can you cut costs and gain efficiencies?
SWOT Analysis - what is impacting on all this? Is your database crumbling around the edges? Are your staff brand new and shiny? Have you just had a rebrand or acquired a chain of charity shops? Where are your opportunities? What are your competitors doing?
PESTEL Analysis - what's happening in politics? Who is making the decisions? What's happening with the economy? Is there new science or technology emerging which could aid you? How are you taking advantage of SMS giving? Should you consider digital?
I set the context and get people to think about these things as a team, and individually. Then I ask them to develop their plans with these factors in mind.
As they do so, I'm asking them to consider different horizons: three, in fact. Where is this going? Where do we want to be in five or ten years time (long term horizon)? So what does that mean we need to in the next year to make that happen (mid-term horizon). And what does that mean for the here and now (immediate horizon)?
Plans inform income and expenditure. They are the birthplace of budgets.
So how do you plan strategically for success?
If you're not sure, why don't you pop along to the Institute of Fundraising Scotland on 11 February and find out from the best in a one day workshop aimed specifically at people growing into a management role?