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Posted by Sarah Brown on 24 Feb '14

Starting on the journey to income generation

Moving from a culture of donations and grants to earning income can be a big step for some charities and for some it seems impossible but there are lots of different routes and you can start with small steps

Working across public, private and voluntary sectors we are ideally placed to see the differences and similarities between the sectors. At the moment all three seem to be converging as the public becomes less forgiving of businesses that act in an ‘unethical’ way even if, for example, their tax reductions methods are legal; the voluntary sector is having to look for ways to make money and even the public sector is looking to generate income as budgets get squeezed for both.

In our experience it is often the marketing and selling which puts off charities when they consider income generation but there are ways to start earning money which are simpler and can require less marketing.

Any charity with a website which attracts visitors has the potential to earn money. Aside from a simple button for donations, charities can encourage their supporters to use shopping malls like easyfundraising.org.uk clicking through from the charity website so that the charity gets a small percentage. The next step on is becoming an introducer for something like Utility Warehouse which takes more of an active role as you have to encourage your supporter to change their behaviour and move to a cheaper energy/phone supplier but it is relatively high reward for little work.

More proactive income generation begins when you review your resources beyond your supporter base to identify what you could potentially sell. Have you got space that is now not used or equipment that you only use occasionally? As the diagram shows there are more and less labour intensive ways to move towards income generation. Running training courses takes more work than promoting other peoples’ and will be less risky but will generate less income generally. Small regular income is an attractive model to develop, if possible. This is the classic annual service model for your fire extinguishers or magazine subscription that you pay without thinking. Be creative, are there updates you could sell on your area of expertise – probably something you do anyway but would be valuable to others?

You may be thinking about the big contracts and becoming a fully fledged social enterprise but if you have no track record of income generation it is good to practise with smaller pilots to establish the systems such as invoicing and to begin to change the mindset to providing services/products for money.

Income generation isn’t really that different from funded work where you have to convince the funder to give you the money - it is just generally more immediate and when you get the money you can spend it how you like!!!!!!!! And if you really want to grow there is also the potential to get support from something like the Business Growth Service which can support you in your innovation.