Fundraising: Charities warned not to rely on voluntary income

UK voluntary organisations should follow the example of their counterparts in the developing world by raising income through business and trading activities rather than relying on fundraising, according to a leading international activist.

Mechai Viravaidya, an influential charity founder and social entrepreneur from Thailand, will tell delegates at next month's International Fundraising Congress that funding challenges for charities and voluntary organisations in the developing world are just as demanding as those in the west. He believes that this is because all charities and NGOs are chasing a static or even declining pool of donations.

"One of the best ways to offset the dependence on voluntary income is to earn our own money," said Viravaidya, who is giving the plenary address at the congress. "This is a lesson NGOs in the developing world have already learned, and something western NGOs will have to learn quickly."

Graham Leigh, director of development at the Directory of Social Change, agreed that charities should aim for a diverse range of income streams, including trading. But he warned that not all organisations would be able to succeed.

"It's horses for courses," he said. "Smaller charities in particular might not be structured for the sort of work you could get through earned income."

In his speech, Viravaidya will outline what he believes to be the key requirements for charities in business, which include making contacts and analysing customer behaviour.

He will also share the experiences of the Population and Community Development Association, the sexual health charity he founded. The charity raises 70 per cent of its annual income through trading and aims to be completely self-financing by 2010.

One of its ventures is one of Bangkok's most popular restaurants, Cabbages and Condoms, which has grown from an informal lunch gathering of Population and Community Development Association staff into a chain that last year generated almost $1m (£530,000) in profit.

The IFC runs in the Netherlands from 17 to 20 October.

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