A commercial coming of age

Coming of age - sThree years ago, when I first set up the ProfitOnPurpose website and started sending out these occasionally interesting missives, I felt like something of a lone voice in championing the opportunity for charities to take a much more serious look at commercial income. Now, it feels like awareness and interest is definitely gaining momentum.

Back then, nobody was covering it, but in recent months I’ve seen more and more articles, in media like Third Sector, and in newsletters from consultants and associations, talking much more clearly about the commercial opportunity. And when the incoming Chair of the Charity Commission exhorts charities to “behave less like businesses”, you know you’re starting to shake a few trees.

Behind the headline, the points Baroness Stowell makes, about the primacy of purpose and protecting the public perception, are entirely valid. I’d also echo her parable of charities refusing to compete with each other for contracts – as I’ve often said, it’s the business of charities to make a difference, not to make up the numbers on a commissioner’s spreadsheet. But the implication that business skills, commercial acumen, trading proficiency, and “the charity ethos”, are mutually exclusive, is pure nonsense. They can and must coexist if charities are to continue to thrive.

In my experience, the majority of charities have commercial opportunities that fit perfectly with their mission, and many have been actively pursuing them for years, so to insist that a charity reverts to some outdated, “Victorian amateur” culture, does a huge disservice to its people, its potential, and ultimately its beneficiaries. Commercial trading has driven most of the sector’s growth for over a decade and is responsible for well over half of the sector’s income. For a full analysis see the NCVO’s most recent Almanac, and for some eye-opening insights into the make-up of the sector, check out the NFPSynergy’s “Just My Type” report from March last year.

They show that a big swathe of charities are, in fact, mission-driven commercial entities. But as many of us working in the sector will testify, few currently have enough of the right skills, behaviours and experience to make the most of that reality – a situation we’ve made our mission to address.

In addition to the media coverage though, there are two other reasons I believe the tide is changing. For the first time this year, my client list is over 50% non-profit, and most of those engagements are related to developing commercial, on-mission income. Of course, I’d love to think that word of my genius is spreading, but far more likely I think, is that as traditional income streams tighten, awareness is growing, interest is increasing, and more charities have started showing the way.

For me though, the third reason has been probably the most influential. I recently started work with a new client and began, as I often do, by speaking with people from around the organisation, to get a feel for the culture, the appetite, and the level of engagement. I asked what they understood by “commercial income” and how they felt about it. For the first time, probably ever, every single person I spoke to was knowledgeable, articulate, and unreservedly positive about the initiative. They thought it was “absolutely necessary”, “the right thing to do”, and “something all charities will be doing, if they aren’t already”.

One person in particular summed it up for me: “If you’d asked me three years ago, I think we’d have struggled a bit with the idea, but we’ve had new people come in, we’ve talked about it on and off for a while, and now I think we’re definitely ready to give it a go.”

I couldn’t help thinking that she wasn’t just speaking for her organisation but for the sector as a whole. And I think she might be right.

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