Martyn Drake: Where is the conversation about income diversification?

It's clear that this is the number-one challenge facing charity leaders, but we need to do more to develop and share the expertise

Martyn Drake
Martyn Drake

Third Sector reported last week that a survey of more than 100 charity leaders showed once again that their biggest concern for the future was income: specifically, the ability to generate enough income to fund their charity’s objectives over the coming year.

This is not a new situation.

In April the Charities Aid Foundation, in association with the charity leaders body 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.

The report showed that this closely intertwined triumvirate of charity challenges sat 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.

This is not to say that those aren’t important, but clearly and consistently the greatest challenge leaders feel they face is the ability of their charities, with eroding traditional income sources, to finance the increasing need for their work.

The first recommendation of the CAF/Acevo report was 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 its 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. There is nothing on income diversification. Its 2019 conference does, however, have one afternoon panel session on encouraging ethical entrepreneurialism. So there’s that.

This isn’t a criticism of CAF or Acevo per se. Look at almost any of the umbrella organisations, the academic institutions, even the media within the sector, and it’s the same story.

Which raises the obvious question: if we’re all aware that diversifying income and finding ways to replace or augment traditional fundraising and grants is the number one issue facing the sector right now, where’s the conversation about it? Where is the expertise being developed and shared?

One place where interesting stuff is being shared is the Good Lab project, as reported here. But this is just the tip of the iceberg in terms of what’s happening behind the scenes.

Ever more charity professionals are being asked to explore commercial ideas and opportunities right across the sector, 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, because most of the many charities that are working on income diversification are doing so in splendid isolation, reinventing the same wheel again and again.

Yet plenty of organisations have trodden these paths before, made their share of mistakes and mis-steps 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.

I know, because I’ve met many of them, having spent the past year researching the topic for a book that’s coming out in April called The Commercial Charity. But I know there are more stories to be told, experiences to be shared and skills to be transferred.

So how do we share those skills and lessons learned? How do we help people come together to talk about diversification and earned income?

My suggestion for you, dear reader, is to reach out to your networks, your associations and your educators of choice, and get income diversification on their agendas as a topic for conversation.

This is our biggest challenge and has been for some time. The expertise is there and the need is there. We just need to start bringing the two things together.

Martyn Drake is founder of the management consultancy firm Binley Drake Consulting

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