I have long since believed that charities are not sustainable unless they find their own way of bringing in the income they need to provide their services. Whilst many continue to receive gifts, donations and funding they are becoming increasingly difficult to rely on for the long term running costs of many charities.
Enterprise could be a solution for many ranging from small local volunteer run charities right up to the larger charities. In fact many large charities already have enterprising arms such as shops, trading arms and fee charging options. All of these help provide a regular income which enables them to keep running their main charity work.
So what does it mean to add enterprise into the charities mix?
If you don’t already have enterprising arms you need to first check if what you wish to do is acceptable by the charity commission. There are several options for trading that may suit your needs. It is usually acceptable for trading to be carried out where the aim is to raise finance for the primary purpose of the charity. There are however restrictions and these should be considered.
It is also possible to set up a separate trading arm to a charity if your ideas do not fit into the current charity rules. Clearly the aim of the trading work / enterprise work must be beneficial to the charities overall work and should not put the charity at any risk. In addition the trading work needs to sit comfortably with your current aims and objectives and reasons for being in existence.
By involving the charity in trading or enterprise activities it is possible to bring in additional income, resources and employees to help the main charity work. Often it is used as a way to engage with service users as well as bring in income.
What type of things could you do?
The list really is endless. Many charities choose to add trading activities which match their current work as a charity others do something completely different to their usual work but not unusual for the sector for example a hospice which has a high street shop selling donated goods or a night shelter running a coffee shop.
There are so many ideas your charity could explore in order to add income streams. By working with your employers and service users you could come up with some fantastic ideas in line with your overall objectives.
Feel comfortable with the ‘P’ word
Charities and other 3rd sector organisation need to feel more comfortable using the ‘P’ word. Profit is not a bad thing. It is how you choose to use that profit which sets you apart as a charity from other profit making commercial companies. It is important to remember however that whatever activity you choose to be involved in it must make profit. If it doesn’t it will become a distraction and draw on your resources without adding any additional value.
It is common for charities to have trading arms which make very small levels of profit because the staff involved feel it isn’t right for them to charge too much, or make too much profit. Everyone involved needs to remember that the aim of the trading work is to bring in income (profit) which can then be used for the great work of the charity. The more profit you make the more you are able to do in your charity work.
Be collaborative in your enterprise approach
It is important to remember that if you are breaking away form your traditional work in order to try to me more enterprising some people, staff, volunteers and service users may find this uncomfortable. By adopting a collaborative approach, joining them in with the idea development and roll out of the enterprise you can have yourself super supporters of the idea. Working with people who feel the charity is doing something they disagree with will take up too much time and effort. Collaboration is the way forward and collaborating with stakeholders other organisations and other charities can also have powerful results.
If you are interested in developing a trading arm or encouraging more enterprise in your charity or 3rd sector organisation drop me a line and we can discuss ways in which I can help you through workshops and master classes.