How sustainable is your funding?
Filed under: Planning, Policy & Networks
Sustainability sometimes seems like an over-worked word. Everybody
appears to be pursuing it in one for or another environmentally,
politically, and socially. This is an article about financial
sustainability its about how community organisations can think
creatively about their long-term funding needs.
At NCVOs Sustainable Funding Project (a small, but expanding initiative supported by British Gas) we try and help voluntary and community organisations think about ways in which they could become more financially sustainable by splitting the challenge into 3 parts. Were not pretending for one moment that this is the only way of working its just one way of getting to grips with a potentially daunting challenge.
Step 1 - First, we suggest that sustainability starts at home and that, at least in the first instance, it has nothing to do with money.
Sound organisational planning is the first ingredient of a sustainable organisation, right through from the big-picture questions on mission and vision (the domain of the trustee board) through medium term strategy and objective setting to the ongoing good financial management of the operation.
Business Planning is a term shrouded in mystique, and needlessly so. Planning can be a creative (even enjoyable) process!
Step 2 - Second, we talk a lot about grant diversification. Weve seen too many voluntary organisations depend on one or two sources of funding, quite contentedly until that particular source dries up, sometimes with little or no notice.
Funding information is out there and there are people (good people) who can help you access funds. But too often organisations under exploit access to information.
So these are our first two planks, Planning and Funding, and our website includes free introductory guides to both.
Step 3 - The third theme is Earning. We believe that self-financing (trading goods and services) can be one alternative to the limitations of the current funding environment, in which organisations compete for a slice of the limited pie of existing charitable resources and subsist on a staple of short-term, project-based grants. Were not anti-grants, but we are interested in earning it as well.
And whilst not all voluntary and community organisations will be able to earn income from trading, it is certainly the case that many more could than currently do. Its all a question of hunting for hidden assets? What do we mean?
Very simply income-generation is a question of identifying a product and a market: what do we have - and to whom could we sell it? Our experience is that what is true of individuals is also true of organisations: we all have more than we think.
For example, one community project in east London generates considerable revenue from selling a training package developed from its own volunteer training programme to a private company. The community project draws on the work of dozens of volunteers and in building up voluntary action had accumulated a great deal of know-how on training and motivation. A private company values such savvy highly.
Speaking Up! is a Cambridge-based charity working with adults with learning difficulties, they generate more than 25% of annual turnover from training and consultancy traded to other social care providers wanting to learn about the development of self-advocacy programmes. And because that training is delivered by Speaking Up!s own client group the business not only makes money, it also furthers mission: what better way to self-advocate than train others about self-advocacy.
In a very different setting, Community Action Furness runs a youth project refurbishing mountain bikes, and generate critical income after spotting that it you put the two key assets together (bikes and young people) you can develop yourself a profit-bearing mail delivery service!
Opportunities for income generation extend far beyond the mugs and key rings approach that springs to some peoples minds when they hear the phrase charity trading.
Other voluntary and community organisations have generated income from charging service users. Naturally this is not suitable in all situations. Yet many of those that have introduced a realistic charging structure suggest that when we charge we force the quality up. Others reflect on the democratic dividend of turning a user into a customer. Its a hard call and can seem counter-cultural but there are many examples of effective charging.
Thinking in terms of social enterprise
Right now we hear an increasing amount about social enterprise and not all of it is clear. Befuddled and befuddling definitional debates emerge as we all try and decide what is (and isnt) a social enterprise. Perhaps it is better to think of social enterprise less as a noun and more as a verb. At base, social enterprise requires organisations and their individuals to take a lateral look at their mission and their assets: its all a question of sweating the latter. What have you got and to whom might you sell it? A simple matching of products and markets.
Every silver lining has a cloud. Income generation is not a cure all for funding flu. Not all organisations will be able to trade successfully and there is nothing wrong with grants. Moreover ask any who have embarked and they will tell you that the practicalities of earning it are hard and challenging. But they are not impossible, and are immensely rewarding.
Many examples do invite us to reflect on ways in which social mission might be harnessed to markets. And we all have more than we think. So explore examples of social enterprise not because they are necessarily replicable in your back yard, but because the social economy really is like a bit like football (or opera for the finer-minded): the more you watch, the more you see; the more you listen, the more you hear.
And its when we start to think closely in terms of product and market, and seek the illustrations that best suit our style, that all sorts of exciting connections can emerge. The future doesnt have to see us reliant entirely on the kindness of strangers, appealing like Oliver Twist nervously asking for more.
For more information, call the freephone helpdesk on 0800 2 798 798.
You can also visit the Sustainable Funding Project at www.ncvo-vol.org.uk/sfp, download our conference report (a good way to start thinking further about income generation) at www.ncvo-vol.org.uk/sfp/conferencereport.pdf.
For ideas from further a field try www.northlandinst.org and download a copy of the Social Enterprise Sourcebook.