The Rise of the Social Enterprise

April 26, 2011 Leave a comment

With an increasing number of my clients operating as social enterprises, rather than solely as charities, I read Noam Kostucki’s post on the SOFII blog with interest.  Noam has put together a list of suggestions to help organisations – charities in particular – look at how they can become more entrepreneurial in their outlook and generate their own income.  And that has to be something that is not only worth considering but becoming increasingly important in these trying economic times. 

I’ve blogged many times about the need for charities to take a more creative approach to diversifying their income and generating income can certainly help to provide more sustainability for an organisation.  Noam’s tips include:

1. Look at what you’re best at and capitalise on that – don’t try to completely reinvent the wheel but use the skills and experience you have available to you to help diversify your income.  What do you currently offer clients/service users/the community you’re based in, how does that help them and can it be adapted to  provide an income for you e.g. by providing the same service but to an audience who can afford to pay for it? 

2. What is your current business model and can it be adapted in such a way to earn you an income without your current beneficiaries suffering as a result?  Are there income generating opportunities that ‘fit’ with what you do already?  TOMs Shoes is the example given where, for every pair of shoes sold, the charity sends a pair to a child in need – a nice and obvious link between what the business does and the charitable aim.

3. Use technology to make your life easier – an area which I already advocate to enable organisations to make their fundraising work smarter not harder through crowdfunding, Facebook, Twitter and the use of social media to ‘spread the word’ about your organisation, raise awareness and ultimately, raise money.  Noam suggests using social media to harness that free PR and publicity to help you grow your business and promote your business services to a broader audience.

Noam’s post offers good suggestions as to how to think creatively about adapting your charity into a social enterprise model by thinking out of the box, working smarter not harder and harnessing the skills and experience you already have – thereby turning a change in your organisation’s income generation model from something scary into something achievable, flexible and, most of all, sustainable.

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Funding Cuts & Philanthropy

March 30, 2011 Leave a comment

The Arts Council of England’s funding cuts have been the big news of the day with only around 650 organisations (out of 1330) being successful in receiving funding – although the success varies from funding increasing to funding continuing but at a lesser rate.  But it does beg the question, how will those who were unsuccessful raise their income and how many will disappear under the pressure of lack of funds? 

Obviously, philanthropy and sponsorship have a role to play – and I’ve blogged here before about the coalition government’s desire to increase philanthropic gifts for the arts, including their support for giving in last week’s budget.  But we can’t rely on philanthropy and sponsorship to plug the gap entirely.  It’s too big a gap and often it’s needed to cover core costs, which are just not that appealing to philanthropists who, in general, tend not to give to areas which have traditionally or previously been funded by government, preferring instead to provide the ‘icing on the cake’.

No-one is under any illusion that organisations will need to think creatively about diversifying their income if they have any hope of surviving and over the coming weeks and months we will no doubt see more mergers or organisations adapting by creating social enterprise/social fund models – combined with a creative and strategic approach to fundraising.  Although in a small, low resourced organisation this is going to be a huge challenge to say the least.

And this challenge doesn’t just apply to the arts in England but to the entire charitable sector as a whole.  Government funding is going to reduce if it hasn’t already.  It’s going to be tough but there are also real opportunities out there to engage donors, optimise service delivery and achieve sustainable results.

Or perhaps I’m just being overly optimistic and a bit too glass half full?  What do you think?  Are the challenges insurmountable for small, lean organisations whose resources are spent on providing their core services without having to concentrate huge amounts of time on income generation?

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Charity at the Checkout

January 3, 2011 5 Comments

I read Paul Vallely’s article in The Independent with interest.  In it, he talks about the coalition government’s latest ‘Big Society’ type initiative to encourage philanthropy – by making it easier for shoppers to add a donation to their purchases through the credit card PIN machine.  And it made me wonder whether I would consider adding a donation to my bill at the end of the usual frantic shopping at Tesco experience.  And I’m a professional fundraiser.  All the, who gets the donation, how much should I give, will I Gift Aid it – is that not expecting a bit too much of shoppers who really just want to get out of there as quickly as possible (preferably with all the children, bags, keys etc. they arrived with)?

And then, of course, there’s the point of view of the charities themselves.  The article made the valid point that PIN machine donations don’t give donors the opportunity to really connect to the charity itself – as those charities benefitting from the donations will have been chosen by the retailer rather than the person making the donation.  It also means, in all likelihood, that the large well-known and already well supported charities will benefit while small, local or less appealing causes will be unlikely to make it onto any list of potential beneficiaries chosen by the likes of Waitrose, Tesco or HMV.

And so, where is the potential for donor engagement; encouraging future possibly larger donations; and increasing the sustainability of fundraising for these organisations.  And how likely is this initiative in helping to fill the gap left by the inevitable government cuts to the sector – both direct and indirect? 

Of course, encouraging philanthropy and making it easier for people to give to charity can only be a good thing – perhaps it might get people thinking about how they can support charities close to their own hearts.  However, the cynic in me suspects that this is yet another PR exercise.  And that, while taken as a whole, the entire level of donations may sound impressive at the end of the first, second or third year of this scheme, it is unlikely to have made that much of a difference to individual charities – and even less likely to have helped those smaller, leaner and often highly effective grassroots charities that our society really needs.

Would you consider adding a donation onto the end of your shop at your local Tesco’s?  Or are you so busy rounding up children, filling up bags and trying to find your car keys that charity is likely to be the last thing on your mind?

PIN philanthropy, fundraising ideas

by Flickr user Mark Hillary

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Tax Breaks & Philanthropy

December 9, 2010 1 Comment

I read with interest the article on BBC’s website yesterday in which culture secretary Jeremy Hunt (he of the unfortunate surname mispronouncation by BBC’s James Naughtie) announced that he wanted to encourage philanthropy for the arts through matched funding.

The plan is ambitious with £80m of government funds being set aside and arts organisations encouraged to fundraise for the remainder.  But it does beg the question, who is going to be able to achieve this?  Surely the bigger fish in the arts world with the contacts – and the resources – are going to fare better than smaller organisations?

In order for an organisation to set up an effective, sustainable fundraising operation of the sort Jeremy Hunt envisages, they need to at least have the resources available to them to research, recruit and look after their donors.  And corporate sponsorship is even more labour intensive with high demands placed on the recipients of such monies.  Most smaller organisations don’t have even one member of staff who deals solely with fundraising, never mind a fundraising team, so how realistic or achievable will it be to replace government funding with philanthropic gifts and sponsorship?

It is important to encourage philanthropy – although Jeremy Hunt’s suggestion that we should emulate the levels achieved in the US is unlikely to happen without a radical alteration of the tax system in the UK – and I firmly believe that all organisations need to think of introducing an element of fundraising into their income streams – increasing the diversity of their funding and helping them to become more sustainable.  But is it unrealistic to expect small, cutting edge, community-based or new work to achieve the same levels (proportionally) of more ‘traditional’ larger arts organisations? 

It may be an uncomfortable climate for all of the arts but I worry that new talent and the development of new ideas and audiences will suffer as a result of the plans of the current government.

Do you agree?  Perhaps you think the arts are expendable in terms of government support?

 

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The Future for Arts Funding

October 18, 2010 1 Comment

Photo by Jean-Pierre Dalbéra, used under Creative Commons Licence

Two recent studies have highlighted the current funding situation for the arts which, like many other areas, is suffering as a result of the recession, while the campaign, I Value the Arts, aims to raise awareness of the added value the arts bring to the economy through a publicity campaign supported by well-known artists, such as Tracy Emin and David Shrigley.

A recent survey found that overall, more arts organisations where experiencing increased revenues than those experiencing shortfalls of income.  However, rates of improvement were slight and rates of fundraising have been far lower than had been anticipated for this post-recession period. (source: Economic Impact Survey, Arts Quarter).  This has to be a concern, particularly given upcoming government spending review which is anticipated to impact negatively on the arts.

A recent report on philanthropy trends by Arts & Business also clearly states that philanthropy is unlikely to fill the gap left by these inevitable cuts, although, it also suggests that there is still capacity to increase philanthropy in the arts – even if it won’t fill the gap entirely.  At the moment, 15% of the income received by arts organisations comes from private investment with over half of this coming from individuals.  A&B recommend that arts organisations need to build networks and to look at fundraising to contribute towards the sustainability of the sector – rather than simply to fill a gap or as a quick fix.

What is clear is that the sector needs to immobilise itself now, as the I Value the Arts campaign illustrates.  It is also important that arts organisations work locally, collaborating with others in their area.  Fundraising is a long term activity – any relationship takes time to build and develop and fundraising is no different. 

Arts organisations should use existing networks and contacts to build support – it is most likely that those who already know you and are familiar with your work will consider giving you support.  Look at best practice and emulate – look to those in your sector (and other sectors) to find out what is doing well and what isn’t in terms of raising income and try to think of ways you could adapt these to fit with your fundraising.  Engage with your audiences in new ways – perhaps you could use social media?

I did, however, wonder at the suggestion by A&B that fundraising can’t just fill a gap created by a lack of public funding.  It is a view that I completely agree with but I suspect a few arts organisations read this and thought:  ‘But that’s precisely what we need it for!’ 

It is highly unlikely that you can simply switch like for like.  There will be a need to scrutinise resources and make cuts but, in a sector that is already fairly lean, that might not result in much in the way of savings.  Perhaps viewing your core costs differently could help – could essential maintenance could be used to train artisans or does it have an environmental or community engagement aspect that might appeal to donors?  Perhaps you could assign an element of core costs as part of a project you are fundraising for? You will need to think about your entire programme of activity.  What could be of potential interest to a donor or sponsor?  Are there any areas which are only likely to be met through public funds?  Can you adjust your income streams accordingly? 

There needs to be a move away from knee-jerk fundraising.  There will always be times when there is an urgent need for funds but that shouldn’t be the main pattern for your fundraising.  The arts are by their very nature creative and they need to adopt this approach in their fundraising in order to ensure future sustainability and growth.

What do you think?  Are you dismayed to read that fundraising is unlikely to meet the funding gap?  Or have you already adjusted your programmes in anticipation of the funding cuts?

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