One of the themes that frequently recurs in my conversations with charity leaders is the need to diversify income. Whether it’s because of changes in government policies, fundraising standards, local authority budgets or the European exit, there’s a lot going on in the financial landscape, and not all of it is good.
Most charities saw this coming and recognised some time ago the need to adapt, to reduce their exposure to vulnerable and shrinking areas, and to find ways to generate new income that contributes more of a surplus and feels more sustainable. But from what I've seen so far, few have translated that recognition into real change on the ground, let alone on the balance sheet. The key to unlocking faster progress is relatively simple: choose two or three high-potential ideas, then test, prove and roll them out as quickly and efficiently as you can. So why aren’t we making faster progress?
If you’re like many of the organisations I’ve worked with on this, you’ve probably already got a long list of small ideas, like renting out spare space or putting on more training courses. And sure, some of these will be worth doing in the background when you have time, but they’re not going to fundamentally change the profile of your income. Nor are they likely to be as quick and easy to deliver as they appear – in fact, the more of them you try to do, the less you’ll achieve.
You’ll also have a few big ideas, ones that could potentially create a lot of income while crucially still fitting with your mission. They’ve probably been kicking around for a while, but never got very far because, let’s face it, they’re difficult, daunting and potentially divisive. But these usually turn out to be the nettles you need to grasp and, in truth, the sooner you accept it the faster you’ll progress.
They won’t be easy, but the challenge is to manage the risks without getting bogged down, and the key to that is the approach you take: think big, start small, learn fast and get the right people on board from the start. Most important, though, is that you take a clear decision, despite the challenges and misgivings, that it is a priority to give this particular idea a really good go.
Define it as a project and give it to someone who passionately believes in it. But remember, that person will need to draw on the expertise, the time and the goodwill of others across the organisation if they’re going to succeed. That’s why you’ll need to visibly support them; and it’s also why "mission fit" is so important.
Like it or not, most of your staff aren’t moved by making you money. They’re moved by what happens when you invest that money, by the difference it makes to their roles and to the issues they care most about. The more simply, compellingly and frequently you can explain how this project and its income will directly improve the lives of the people you serve, the more engaged your people will be in making it happen, and the more likely it is to succeed.
If you’re struggling to get off the blocks with income diversification, ask yourself if you have these things in place: a small number of big priorities with a clear purpose beyond the money; a compelling vision of what they will deliver; committed owners who are passionate about delivering them; and executive focus to ensure they move quick, learn fast and get the support they need.
Put those in place and you’ll soon see things moving faster.
Martyn Drake is founder of the management consultancy firm Binley Drake Consulting