A successful Supporters’ Trust will be a successful fundraiser. Ordinarily, the Trust will need to raise significant amounts of money in order to achieve the objectives of the Trust as laid out in the IPS constitution. Yet fundraising often remains one of the more daunting tasks of the average Trust.
Raising the amounts required to purchase a significant shareholding in the football club, securing the election of a supporter-director to the board, and achieving objectives such as branching out into local communities are certainly challenges, and often thought about with apprehension and trepidation. How on earth can a group of volunteers hope to raise the sums required to put the plan into action?
There is a wide and varied selection of fundraising techniques. Indeed, imagination and a creative mind is required when it comes to encouraging people to part with their hard earned cash. So what should the strategy be for both new and established Supporters’ Trusts in this area?
Clearly any fundraising strategy is a means to an end. It is not the money itself that is important, but what can be achieved with it. Some questions that will need answering are: What are the priorities? How should resources be allocated? What are the ultimate objectives? The Trust should be able to answer these questions in order to develop an appropriate strategy and fundraise effectively.
The vision of the organisation is vital to the fundraising task. When approaching individuals and organisations for funds, the Trust should be able to articulate that vision effectively, and also be able to give a concise and effective account of what the funds will be used to achieve. People want to give in order to make a difference. If there is a clear articulation of what their donation will be used to achieve, then the case for support becomes much stronger.
It is also important to consider the broader environment in which the Trust is operating. What are the strengths and weaknesses of the organisation? Where do its most lucrative opportunities lie, and are there any potential threats to an effective fundraising initiative? No two Trusts operate in the same environment, and this initial analysis could prove the most effective usage of time in any fundraising effort.
A simple PEST (Political, Economic, Sociological and Technological) analysis should also prove fruitful. Assessment of the these environmental factors should engender some valuable information and resources that the Trust can tap into in its fundraising effort. This might include the local business environment, initiatives that can be developed in association with local authorities, and the opportunities that may be available through technological advance, such as web-based fundraising strategies.
It is absolutely vital to identify the key targets of the fundraising effort. Action Planning, a professional organisation dedicated to assisting the voluntary sector to raise money, estimates that in any single campaign 80% of the income will come from individuals, and 20% of the donors will provide 80% of the total. Of that 20%, a single donor will usually provide 10% of the overall total. Identification of potentially lucrative targets will therefore greatly assist the Trust in its fundraising effort.
The Trust should identify what fundraising options are available, and be able to develop a plan of action. Any plan should be manageable, and broken down into areas of individual responsibility and an exposition made of all the costs involved. Whilst it is important for the Trust to be ambitious, it is also important to balance the amounts of money required with the amounts that it is possible to be made. What might appear to be a mountain, in terms of the money required, can be achieved through a number of smaller initiatives. For example, if the fundraising target is £60,000 over one year, it could be achieved through 500 people donating £10 a month or six events raising £10,000 each, or a combination of the two.
The Trust also needs to organise its own human resources effectively. Ideally the Trust Committee, or the membership, should include fundraising expertise. A fundraising sub-committee can be formed with a core group of individuals with the skills required for an effective fundraising effort. Individuals can then focus on their strengths and passions, whether it be through specific activities and events or types of approaches.
Regular donations and standing orders
Many Trusts have found that the core of their fundraising effort comes through regular donations via standing order. This has been the case at Brentford, Swansea, Carlisle, Watford and Leicester, where each Trust has generated a regular and high-level income stream.
The membership drive, either at the formation of the Trust, or at a later date, provides the ideal opportunity to encourage regular donations through standing order. Application forms can be designed so as to encourage both one-off donations, and also to enable members to pay their membership fee through a monthly standing order with a minimum amount. Not only does this enable the Trust to generate regular income, it also has the benefit of automatically renewing membership. This enables the Trust to minimise administrative costs, and also has the advantage of not being too labour intensive. The money rolls into the Trust bank account on a regular basis, without the Trust committee members needing to work too hard.
The events-based approach is also proving a highly valuable method of Trust fundraising. Whilst more labour intensive than securing funds through regular donations by standing order, the successful organisation of events can generate large amounts of money. Events have varied from sponsored walks and quiz nights, to sportsman’s dinners, to large-scale public meetings. Not only does an events-based approach help make valuable additions to Trust funds, it also helps raise the profile of the organisation within both the support base and in the wider community.
- Create the vision
- Develop the case for support
- Break down the funding requirement
- Identify potential donors
- Why will people give, and for what end?
- How might people give?
- Identify the skills required to organise the fundraising effort
- Unless Trusts ask, nothing will be received. It will be necessary to take a confident and even audacious approach.
Examples of Trust fundraising activities
The Swans Trust has had a large degree of success in its fundraising efforts. Launched on the 27th August 2001, an early decision was taken to set the membership fee at £5. It was agreed that strength would come through numbers and that the financial rewards would follow. With over 1,000 members, this has indeed become the case.
In total the Trust has raised over £90,000. Of this money raised, over £50,000 has been invested in shares and another £10,000 invested in shares linked to a loan-player scheme. The Swans’ Trust has specialised in fundraising through specific events. On top of the depressingly familiar bucket collections, the Trust has organised a range of one-off events that have gone a long way to building the financial weight of the organisation. The 2002 Christmas raffle, with a first prize of £1,000, raised £5,250. The previous raffle with the first prize a car raised over £12,000. Trusts should be aware that a licence is required to organise raffles. The Swans’ Trust used the licence held by the club, but it can be arranged through application to the local council. (As a licence names the promoter however, using a club’s licence might not always be appropriate. It might be unclear to Trust members where money raised goes to.) The launch meeting auction raised a further £3,500 with items of club memorabilia the main attraction.
The Swans’ Trust also offer an excellent example of linking a fundraising initiative to a specific scheme, so that donors know exactly what the money will be spent on. The Trust wished to raise £10,000 for shares linked to a loan player scheme. The scheme targeted £5 a week for 13 weeks from 150 individuals in order to raise the money required. The scheme exceeded expectation and the Trust raised a total of £25,000 with the hope that this might be increased to £28,000.On top of this the Trust has regular donations coming in through membership fees and standing orders, and the Trust hope to increase the amounts raised through the regular donations of members. Finally, the fact that the contributions of single individuals can make a defining contribution to Supporters’ Trusts is illustrated perfectly by one specific example. A fifteen-year old Swansea fan raised over £2,000 alone, through a sponsored bike ride of over forty miles from Swansea to Cardiff.
Bees United was launched in April 2001 and has had a very substantial degree of fundraising success. The Trust now has over £150,000 in the bank, and can call on another £100,000 in pledges should it be required.
The Trust has raised the money through a combination of events and regular donations. The Trust organised a sponsored walk to Wycombe, raising over £6,000, and a match at the club’s home, Griffin Park, was arranged between two fanzines (Beesotted and Hey Jude), raising over £9,000. Each player involved raised money through sponsorship. An entrance fee of £5 was charged and over 600 were in attendance. Bees United has also made effective use of the loan note scheme (see section 2.3.1 below).By far the most effective fundraising initiatives have come through regular donations and standing orders. The Trust is currently generating £6,000 a month through this method, with over 500 members donating. The system allows individuals to donate a minimum of £1.25 a month to cover the annual membership. All those donating automatically become members of Bees United and this has the advantage of minimising administration costs. With the rolling donations, memberships are automatically renewed. This helps retain a high degree of loyalty from members and also has the advantage of minimising administrative costs, such as the printing of application forms and associated mailing costs. In a not-for-profit organisation, the minimisation of administrative costs can make a tangible difference to the amounts available to achieve organisational objectives. One of the key aspects to the money raised by Bees United is the heavy involvement of the Brentford fanzines (Hey Jude, Beesotted, and Thorne in the Side) and the Brentford Independent Association of Supporters. These organisations have arranged the majority of the fundraising events, demonstrating perfectly the benefits of the separate and distinct organisations, with different purposes, working together for the benefit of all supporters.
The Watford Supporters’ Trust raised over £40,000 in its first six months. The Trust has been able to invest 25% in a new share issue at the club, and the majority of this was raised through membership and regular donations by direct debit. The Trust has used a wide and varied selection of other techniques to maintain and increase funds. This has included bucket collections on match days, collections and raffles at members' meetings, Christmas parties and developing a range of Trust merchandise including t-shirts and a book, written by supporters.The Trust has utilised the online auction site eBay (http://www.ebay.com) to sell items of Watford memorabilia, with a link from the Trust website. They have also been successful in attracting corporate sponsorship and all membership cards are sponsored. Additionally, a number of companies have donated raffle prizes. The Trust has also utilised the ‘events’ based approach, organising a sponsored walk, from Brighton to Watford, which has raised over £1,000.
At Carlisle much of the effort in the first year was directed towards protests and demos in order to achieve a change in ownership. CCUIST has had success from both the ‘events’ approach, but also mainly through the securing of regular donations with direct debit. The events which were most successful in raising funds were ‘Golf Days’ involving former players, a Christmas buffet and dance with live music, to which a host of former players were invited, and raffles and auctions of merchandise and memorabilia at every occasion. Like Swansea, CCUIST charges only £5 per annum for membership and this money covers administrative expenses. Some 80% of the Trust’s income is raised through regular small donations from individuals. This is collected by credit card or standing order at £13 per month. The balance has been raised by larger one-off donations from individuals (10%) and by donations from businesses and local government (10%). CCUIST raised £110,000 from this combination of sources, and hopes to raise around £130,000 with more regular donations coming in. The biggest problem that CCUIST faced in raising the first tranche of money was a universal suspicion of donating anything towards the club whilst it was under the previous ownership. The ownership has since changed and CCUIST have purchased an initial shareholding of 20% of the issued share capital for £400,000. The initial £130,000 will be paid up front and the balance is due within three years. CCUIST aims to raise the £270,000 balance by extending and expanding the provisions described above. In particular the Trust will seek to maintain and increase the regular donations over the next three years. The target is to collect £1 per week from 2000 individuals (or £2 from 1000 etc.) collected monthly over three years.In addition, the Trust plans to seek larger annual donations over a four-year period (40 donations at £2,500 a year would raise £400,000) from local businesses, groups of businesses (for example, all the local pubs together), local government and charitable and sporting foundations. The Trust also plans to seek larger donations from wealthier individuals.
Organising raffles – Trust requirements
Supporters’ Trusts should be aware of the regulations concerning the sale of raffle tickets to members and the general public. Small-scale raffles to a private audience, with no cash prizes, may usually be conducted without a licence. However, should a Trust wish to sell tickets to a wider audience, with money prizes included, then the Trust would be considered to be running a lottery and would need to register with the local council under the Lotteries and Amusements Act 1976. A small registration fee is incurred, an individual is nominated as a promoter, and a registration number is provided. After the lottery, the promoter must provide a return to the council within three months regarding the expenses, prizes and balance of the proceeds. It is likely that most football clubs will already be registered and legally entitled to run lotteries in order to raise money for the football club. Should the Trust have a working relationship with the club, the Trust may be able to gain permission from the club to use its registration to run a lottery in aid of the Trust.
If you wish to run a raffle and the value of tickets on sale will exceed £20,000, or if the sale from other raffles within the same calendar year exceeds £250,000, then you must register with the Gaming Board for Great Britain. Until you register you cannot sell any tickets.
For further information on the Gaming Board and registration please visit http://www.gbgb.org.uk/lotlaw.html or write to the following address, enclosing an outline of the lottery you wish to run:
The Gaming Board for Great Britain
168-173 High Holborn
Telephone 0207 306 6200.
If you are still unsure whether you need to register, please telephone Supporters Direct.
During the dot.com boom, it was possible to earn good money just for showing banner adverts on a website as advertisers poured money into this new advertising medium. The subsequent downturn has meant that companies advertising online are now much more careful about how they spend their money. Companies now rarely pay organisations just to display a banner advert, and most online advertising available to small and medium sized websites is now performance-based, so one needs to know the tricks of the trade to get the most out of this kind of advertising. Trusts are unlikely to earn a fortune from website advertising, but if done well it can help generate a regular income. Jeff Fidler from the Foxes Trust at Leicester City has written a comprehensive article on using the web for fundraising, available at http://www.foxestrust.com/advertising.htm
Jeff is happy to any questions on website advertising - contact firstname.lastname@example.org
This is where the Trust acts as an agent and either makes its website a portal for online services, or gets members to sign up to a service such as telecoms or electricity, for which the Trust gets a ‘finder’s fee’. It also gets a percentage of the ‘spend’ of each person who uses the service through the Trust.
The advantages of this are clear – instead of getting people to donate explicitly, the Trust gets a cut of people’s normal spending. That means it’s a relatively ‘painless’ fundraiser, as the person doing the spending doesn’t feel they are spending any more than usual. However, the downside is the initial setup work can be onerous – effectively, the Trust is doing the job a company would previously have done itself.
Furthermore, these schemes tend to exist in crowded marketplaces. The chances are that many potential users are already signed up to similar services and can’t migrate to the Trust’s preferred offering. Also, Trusts may find many of the service providers offering them affinity marketing opportunities are new companies, who have a tendency to disappear. These companies are trying to establish a foothold in a market where many others have already been operating - and so the Trust may find that they do lots of work only to find the whole thing comes to nothing. This is not to say Trusts shouldn’t investigate these ideas – just that the credibility of the companies involved should be investigated. Trusts should carefully evaluate whether these opportunities will generate significant revenue over time to justify the effort put in.
2.3.1. Loan Notes
A number of Supporters’ Trusts have utilised a loan note scheme, formulated by Cobbetts Solicitors, as a means to raise the necessary funds to purchase a shareholding in their football club. Whilst there are many ways of raising funds to support the objectives of a Supporters’ Trust, the loan note scheme provides a useful means by which to generate the larger sums that may be necessary to purchase a shareholding. The scheme also allows the Trust to invest in the club so that supporters collectively can be significant players in the club’s future and ensure a shareholding for the supporters in perpetuity.
What is the Loan Note Scheme?
The loan note scheme has been a key fundraising tool for Supporters’ Trusts. The scheme operates by individual supporters loaning the Trust money to invest in the football club or the holding company. The proceeds are invested into the football club, either through the acquisition of share capital or the provision of secured loan finance, or a combination of both. The scheme is only open to members of the respective Supporters’ Trust in accordance with the terms and conditions of the loan fund.
Any shares purchased are owned collectively by the Trust for the benefit of all members and not just the noteholders. The loan does not give the noteholder any greater ownership of the club than any other member of the Trust, irrespective of whether or not they are loan fund noteholders. The concept of collective ownership is intended to give the community the benefit of owning (or part-owning) its local football club.
How much can be put in?
This has varied from club to club. At the Crystal Palace and Brentford Trusts, the minimum level of subscription to the loan note scheme is £1000. Further loans can then be made in multiples of £1000. At the Swindon Town Trust the minimum amount is £250, with further loans permissible in multiples of £250. Individual Trusts will have to gauge the local circumstances in deciding what is realisable and what will maximise financial return.
What happens to the money?
To ensure good practice, Supporters Direct recommends that the funds raised by the loan note scheme are protected by being held in a separate Trust bank account until opportunities to invest in the club become available. The Trust board decides when to invest the funds. This may be dependent on a number of variables, including the class and price of the shares offered and the amount of money raised. The Trust board may seek to gain representation on the board of the club to guarantee that the supporters will have a say in its future. However, the investment will only be made if the loan note holders vote to approve the transaction.
The decision to approve the investment of funds raised by the loan notes can be made in one of two ways. The decision can be made on a fully democratic basis with each loan note holder having one vote, irrespective of the investment made. This method has the benefit of promoting democracy and ensuring that each note holder has an equal say in the use of the monies raised. Alternatively, the number of votes exercised can be allocated on the basis of the value of the loan note held. At Bees United, the Supporters’ Trust at Brentford, a noteholder has one vote for a holding of £1000 or more loan notes; two votes for a holding of £5000 or more; three votes for a holding of £10,000 or more; four votes for a holding of £50,000 or more, and five votes for a holding of £100,000 or more. This method has the benefit of encouraging the note holder to contribute a larger amount to the loan note scheme. The proposed investment may then be put to a vote of all members for approval before any money is actually committed.
Will I get a Return from my investment?
There is no interest paid on the loan notes. The funds generated by the scheme will be invested in the football club or its holding company and there should be procedures in place by which loans may be repaid at some point in the future.
However, there is no guarantee that any of the money invested will be repaid by the Trust. Repayment will be dependent on the funds available to the Trust and will be less likely if it is possible to purchase a shareholding in the football club. Trusts have allowed loan fund noteholders to apply annually for the loan to be repaid. If the Trust board decides that the money is available to repay any of these loans, it will decide which loans to repay or if a percentage of all loans will be repaid. However, the Trust is unlikely to receive dividends from the investment in club shares and this in turn limits the opportunity for the Trust to repay loan note holders their investment. The Trust should never be under any obligation to repay loans.
Loan for a Loan scheme
Some Trusts have made an arrangement with the Co-operative Bank called the ‘Loan for a Loan’ scheme. The bank will lend supporters a minimum of £1000, subject to eligibility criteria. Individuals will then be able to lend all or part of the money to the Trust. The arrangement is a private one between the individual and the Co-operative Bank.
2.3.2 Other schemes
There are clearly a variety of sources that Trusts can approach to raise their own funds. Another option that Trusts can investigate are local grant making trusts. Many organisations exist that will donate funds for causes related to local community objectives, and Supporters’ Trusts, as not-for-profit, community based organisations may be able to gain access to such organisations and their benefits. The Directory of Grant Making Trusts: 2003-04 by Dave Casson, Alan French, Dave Griffiths, John Smythe, and Tom Traynor, and published by the Charities Aid Foundation, should be available for reference in most local libraries. The publication gives information based on local areas and also references which grant-making organisations service specific interests.
Funding is also available directly from Supporters Direct. Please see Appendix 7 for the Supporters Direct Funding Policy. There are also a number of potential sources of funding for Supporters’ Trusts from the Co-operative Movement. Please see Appendix 8 for further details.
It is important to keep an up-to-date database of names and organisations that have donated to the Trust. This can be a valuable resource when the Trust undertakes future fundraising events.