I think a lot of funders are holding back small charities and not-for-profits by their attitude towards freelancers who charge their fee based on a commission of funds raised. So many small not-for-profits and community groups do not have the skill set for raising anything but the simplest of funds and do not have the reserves to risk employing a fundraiser either as an employee or on a day contract. For the small charity and not-for-profit the 'no win no fee' commission fundraiser is their best option for developing and raising funds.

I work three days a week for my own not-for-profit but on the other two days I occasionally undertake freelance fundraising and finance contracts. I love fundraising and finance and love working with small local groups. When I do finance work such as independent audits I charge a basic daily rate plus expenses. But when I do fundraising most of the work I do is 'no win no fee' work.

Even for relatively small amounts such as £50,000 for say a meeting room development from the landfill tax, the work involved and the financial skills involved in putting together a strong bid is beyond the skill set of many small groups. Many small groups also don't have the funds to employ someone at £250 a day and still pay out whether the application is successful or not. For small groups paying a 10% commission on successfully raised funds has to be their most sustainable option. It may not be the cheapest but there is no risk.

Funders though tend to take a negative view on commission based freelancer so you have to be a little devious in the way that fees are charged. When I undertake a commission only contract the first thing I tell the group is go and raise 10% in free, unrestricted funds. That way I know that I can submit applications without having to declare my fees in the application because it is being paid from a separate account where there is unrestricted funds. If I'm successful then the group gets their £50,000 (using the previous example) and I get my £5,000. If I'm not successful at least the group still has £5,000 in the bank.

If I was to charge my normal daily contract rate of £250 the cost of putting together am application - including all the budgeting, getting quotes, meeting with contractors, doing research etc) would probably come to about £3,000 on that £50,000 meeting room development.

That would indicate a saving of £2,000 on a commission only basis but that £3,000 would have to be paid whether the application was successful or not. We all know how there are no guarantees in fundraising applications  and a £3,000 hit to the finances of a small not-for-profit or community group can be devastating.

Funders should realise that the vast majority of charities and groups in the UK do not have the reserves and staffing of the large charities. For the small group using 'no win no fee' consultants can be a way to establishing projects that are much needed in the community. Grant making trusts, lotteries funders and both local and national government need to take another look at some of the conditions they place on fundraising applications to help ensure that the money gets to small local groups that can make a real and noticeable difference to communities.