How to start a new funding stream

Many charities - including the former quango British Waterways - will be trying to compensate for reductions in government and other funding by developing fresh sources of income, writes Sophie Hudson in our Fundraising Extra

British Waterways
British Waterways

Funding cuts and increased demand for services have prompted many charities to adopt new methods of fundraising. Some organisations that previously relied heavily on statutory income have begun fundraising from the public and trusts and foundations for the first time.

But how easy is it for an organisation to switch on the fundraising tap like this? And what is the key to success in such a competitive environment and such difficult times?

Grahame Darnell, managing director of the fundraising, marketing and management consultancy Darnell Consulting, has seen a significant increase over the past nine months in the number of enquiries from charities about advice on starting to fundraise. "Now at least half of our enquiries are from charities that haven't done any fundraising before," he says.

Anyone new to fundraising must have realistic objectives, says Darnell. "For example, some organisations don't have a mass appeal so they might need to focus on a niche of society for support," he says. "The difficulties come when there's no appreciation of the need that they cater for."

He says another common problem is the failure to appreciate the amount of time and money that needs to be invested before a surplus can be made.

"The ones with a good approach realise you can't just click your fingers," he says. "It takes time to build things up." Darnell says it can take up to 18 months for fundraising to generate positive results.

The consultancy nfpSynergy recently published a guide for small charities thinking of starting to fundraise - it's called Gimme, Gimme, Gimme!

Co-founder Joe Saxton says it wrote the guide because of the increasing number of charities that are trying to fundraise for the first time. He advises them to start by choosing three income streams and developing those.

"You don't want all your eggs in one basket, but you can't manage a lot at once," he says.

Saxton points out that charities need to consider how the money they are raising will be spent, because this has a bearing on who they approach. "For example, major donors want to fund exciting projects, but direct debits from individuals or money from grants can be better for running costs," he says.

The growth in demand for fundraising will also mean a growth in demand for fundraisers, Saxton says: they will get paid more, but will have to work harder in an increasingly competitive market.

"Good fundraising is a skill, and not everyone can do it," he says. "Organisations will have to invest more to get some kind of payback. That will be particularly hard for small ones."


 

BRITISH WATERWAYS: FOCUS ON INDIVIDUAL GIVING

The government announced last year that British Waterways, which cares for 2,200 miles of canals and rivers, was to become a charity. The quango is expected to make the change next April.

It will continue to receive government funding, but at a reduced level. Ruth Ruderham, who will become head of fundraising from 1 August, has the task of helping it to generate voluntary income for the first time.

British WaterwaysCurrently head of fundraising at Christian Aid, Ruderham says her new role presents an unusual opportunity.

"It's not often a new charity of this size and status is born," she says. "It's a once-in-a-lifetime opportunity for a fundraiser to have a start-up charity that's not tiny."

The organisation has an ambitious fundraising target: it wants to become one of the top 100 charities by voluntary income within the next decade, which would involve raising £13m a year. It has been working with Think Consulting Solutions to achieve this goal.

Ruderham says the launch will provide a critical fundraising moment. "You're new only once," she says. "We've got an amazing opportunity."

Individual fundraising will be the main focus initially, says Ruderham. British Waterways will attempt to build a strong supporter base, either through membership or by asking people to give by direct debit.

It also hopes to have corporate partnerships in place in time for next year's launch.


 

BRANDON TRUST - DOOR-TO-DOOR DONOR RECRUITMENT

Lisa Cousins and her team of four fundraising staff were recruited by the learning disability charity Brandon Trust in January.

They have a difficult task on their hands: the charity aims to increase voluntary income from last year's total of £275,000 to £5m a year in six years' time.

Brandon TrustThe Bristol-based charity, which has an annual turnover of about £43m and employs 2,000 staff, has in the past been largely government-funded. But the combined effects of public spending cuts and a reluctance by funders to pay for anything other than the core aspects of care have forced the charity to change its approach.

Cousins, the head of fundraising, says the charity's ambitious programme is necessary if it is to continue its additional work, such as providing summer camps for young people with learning difficulties. "This is the first time we have had to capitalise on our charitable status," she says.

The team has decided to focus initially on individual fundraising, corporate giving, trusts and direct marketing. It has just organised the charity's first door-to-door fundraising campaign. "We recruited 350 supporters in two weeks," says Cousins. "They are giving an average of £8.46 a month."

She says one of the main challenges has been communicating to people that, though the charity is large, it provides services locally. "We're trying to connect our supporters with the projects and individuals that they are making a difference to," she says.

Cousins says that, because the charity is not well known outside the social care sector, awareness-building through networking and direct mail will be particularly important.

"We're also looking to hold some large-scale events, which will not only bring in money but also increase awareness," she says.


 

SHELTER - OPPORTUNITIES FOR VOLUNTARY INCOME

The housing and homelessness charity Shelter is trying to increase its voluntary income because of two kinds of pressure, according to Tracy Griffin, its director of fundraising.

The first is cuts to the charity's statutory funding, particularly the threat of legal aid cuts. The second, owing to the economy's travails, is growing demand for Shelter's services. "More people are coming to us asking for advice about housing issues and we need growth to sustain these services," says Griffin.

ShelterThe charity's annual income is currently about £51m, including statutory sources. Voluntary income, the area that Griffin oversees, accounts for almost half of this total, at £25m.

She says the strength of its voluntary income base is a platform for growth. "I see it as an opportunity, but I am aware that we're in a financially challenging climate," she says.

Shelter will be looking at how the charity interacts with supporters and finding ways to get different departments working more closely together to improve this. "We have a tendency to work in silos," she says.

The charity is investing in digital media to help this happen. "We're looking at our website and obtaining more email addresses so we can communicate with our supporters in a more flexible way," says Griffin.

Shelter also needs to communicate its requests for support in more compelling ways, she says, by giving people emotional as well as intellectual reasons to support the cause, and to broaden the way it works with companies by ensuring they give expertise as well as money.

 See our Fundraising Extra Big Issue for related articles

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