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Posted by Sarah Brown on 30 Oct '21
Do you want more money for your charity or social enterprise?
Yes? here are some things to think about.
In my experience, people running a charity or social enterprise think first about changing the world for the better and then consider how they can get the money to do it.
Money, in most cases, is essential even if volunteers are doing everything generally you have overheads like insurance. And if you can afford to pay expenses, then anyone, whatever their circumstances, can be a volunteer. You aren't limiting who can get involved.
There are four potential sources of money:
- Funding
- Income generation
- Corporate support
- Individual donations and support
Each has pros and cons.
Funding
Pros -
- It can provide lots of money and can be great for launching new projects.
- Local funders, including ward councillors, are often willing to give a few hundred pounds to support local activities.
- You don't have to divert any resources from doing good to get the money other than applying.
Cons-
- There is lots of competition for grants and funding.
- The applications can be long and complex.
- It is not easy to get grants that will cover running costs.
- Many grants are 'restricted funding,' i.e. you can only spend them on certain things agreed upon when you apply, and they have to be managed separately to ensure that this happens.
- Generally, you will need to track your expenditure and the impact it has had.
- A significant grant leaves a large gap when it ends.
Income generation
Pros-
- You can decide how you spend the money and don't need to account to anyone else.
- It can be used in coordinated marketing for the social change part of your activities, reinforcing your brand.
- You may be able to use existing resources which are not being fully used already.
- If successful, it should grow over time and doesn't have an abrupt end like funding.
Cons-
- You have to divert resources from doing good to earn money.
- Most income generation activities, like any commercial activities, take time to make a profit.
- If you want to sell something you do to change the world, for example, counselling or a physical space, this may create a conflict as you reduce your resources to do good.
Corporate support
Pros-
- The right brand can reinforce your own brand.
- There is the potential to build a relationship that can last a long time and cover many different types of involvement, from volunteering to gifts in kind or mentoring.
- Companies may be able to share expertise and resources, which are helpful.
Cons-
- The actual levels of support can be small. For example, a donation per sale may take a lot of sales to generate significant returns.
- The wrong brand or behaviour from a company linked to you can undermine your organisation.
- It takes time and resources to find corporate supporters and build and maintain a good relationship.
- You are vulnerable if you become reliant on company support and then they change strategy or have commercial problems.
Individual donations and support
Pros-
- If you can get lots of people donating small amounts regularly, this is an excellent secure income that you can use as you like.
- There are many ways that individuals can support, from choosing you as an Amazon Smile charity to volunteering or leaving you something in their will.
- Charities can get gift aid on top, so a £100 donation becomes £125.
Cons-
- Social enterprises find it harder to get individuals support.
- It takes effort to get donations and to maintain good relationships.
If you want to chat about the options you can always ring for a free chat and is you live in the Sheffield City Region I am running a workshop you can attend free if you run or are thinking of setting up a charity or social enterprise. More details here
If you enjoyed this you may want to read:
Seven issues to consider if you want to earn money as a charity
Free ways to give and raise money as you shop from home