Overcoming charity’s biggest challenge

Income - sIn April 2019 the Charities Aid Foundation, in association with ACEVO, published the outcome of its research on the greatest challenges charities face. As in previous years, the number one challenge reported by charity leaders was generating income, followed by meeting increasing demand, and in third place, the reductions in public and government funding.

This closely intertwined triumvirate of charity challenges sits head-and-shoulders above the four other big issues of the day: Government support (or not) for lobbying and advocacy; Brexit and its implications; the rapid development of technology; and eroding public trust. That’s not to say those four aren’t important, but clearly and consistently, the greatest challenge felt by leaders is the ability of their charities, with eroding traditional income sources, to finance the increasing need for their work.

The first recommendation of the report is therefore, and stop me if you’ve heard this one before, that: “Charities should look to diversify their income.”

And yet, in CAF’s events calendar there’s nothing; not a single event looking at income diversification, and through all their recent publications, the income conversation is confined entirely to public giving. Similarly, ACEVO’s events agenda comprises leadership, conflict management, unconscious bias training and storytelling – nothing on income diversification; its 2019 conference does, however, have one afternoon panel session on encouraging ethical entrepreneurialism. So, there’s that.

They aren’t alone. Charity Times, Third Sector Magazine and indeed most of the academic and umbrella institutions that offer charity leadership development, rarely touch on the biggest challenge facing the sector: how to reduce its dependency on fundraising and grants by diversifying its income. At best there may be an article or module on setting up a social enterprise. At worst, the 50% of all charity income that comes through commercial means is entirely ignored.

There are a great many charities looking right now at income diversification, particularly new ways to earn more income, but most of them are working in splendid isolation from each other, reinventing the same wheel again and again. As a result, there are even more charity professionals exploring commercial ideas an opportunities, few of whom have a network to tap into, resources to draw upon, or skills to fall back on that can help them on their way.

Yet clearly, across the sector, there are plenty of organisations who have trodden these paths before, made their share of mistakes and missteps and found their way through; just as there are plenty of charity professionals who’ve found their feet in sales and business development, in marketing and commercial strategy.

How do we share those skills and lessons-learned? How do we help people come together to talk about diversification and earned income? These are questions I’ve been asking myself for the last year or so, and here are my answers.

To answer the first question, I have a book coming out in April next year, that I believe can be pre-ordered on Amazon now. It’s called The Commercial Charity and it consolidates everything I’ve learned from working with charities on earned income and market-based social change over the last six years.

To answer the second, I’m working with potential partners to try and put on a series of events beginning in the Spring, free to all wherever possible, through which we can start to share knowledge and build a community of commercial professionals working across the charity sector. I’ll be sharing more about this in the coming months, but if you’d like to be kept informed, please let me know, and if there are others in your organisation or network you think might benefit or be interested, likewise please put them in touch.

Income diversification is not just desirable, it’s eminently possible, but only if we start sharing what works. Here’s to a more diverse and successful future for all of us.

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