Finding the right path to financial sustainabilityOriginally published: June 2018
Small charities typically have limited time and resources to invest in strategic, long-term work such as building relationships with valued partners.
“They’re so busy dealing with the day-to-day, they don’t have the luxury of taking risks or trying new things,” said Janine Edwards, Head of Consultancy and Development at the FSI, which hosted an event for small charities in April 2018.
But charities absolutely must think strategically and look to diversify and maximise their income, she said, according to what’s right for their particular organisation.
“That could be making sure you’re doing your grant funding as efficiently as possible, or working on moving relationships from transactional to transformational. The challenge is to work out what that mixed income picture looks like for you.”
The latter was the case for the small charity Youth Concern, whose CEO Fran Borg-Wheeler spoke at the FSI event.
When she became CEO, she told the audience, the task ahead was all too clear.
“The finances were pretty precarious, and the charity had almost negligible reserves,” she said. “The big challenge was to move it from a position of just surviving, to thriving.”
Despite “zero experience” as a fundraiser, she threw herself into bid-writing, achieving an impressive success rate. But funding pots tended to be small (often just a few thousand pounds at a time), meaning she was simply churning out application after application. Yet the pressure wasn’t subsiding, with the board continuing to warn that still more money was needed.
Something had to change if the charity wasn’t to face cuts to its already minimal staff. So Borg-Wheeler made some conscious decisions:
- Taking on a professional bid writer. Youth Concern was occasionally hiring out its premises, and was able to use income from this to pay a professional (who came recommended by word of mouth), initially for just one day’s work per month. “It really paid dividends,” said Borg-Wheeler. “Our income increased massively from grants in the first year, while the time I was investing in fundraising decreased substantially.”
- Organising a trustee strategy day. Finally taking time out to reflect and plan in depth together led to a new, five-year business plan. The plan included objectives to secure funds for more than one year from national funders, and to diversify funding streams.
- Looking for other sources of income. With less time tied up in writing bids, Borg-Wheeler was able to work on fundraising events (using volunteers to help organise them); proactively engaging the local media, including persuading the local newspaper to choose Youth Concern as the charity of the year; and seeking regular donations (though with limited success so far) from a corporate partner.
The result of all this was an approximate 20 percent growth in Youth Concern’s income for three years running between 2014-15 and 2017-18. With improved internal systems including work on its monitoring and evaluation, the charity secured funding from the Big Lottery Fund. Despite a significant drop in local government funding, Youth Concern met its fundraising objectives and has currently got four months’ worth of income in reserve, Borg-Wheeler said.
“It’s relieved a load of pressure… I can now focus my energy on delivering excellent services for our young people,” she added.
What would her advice be to other small charities?
- Find ways to present your charity’s different services as a project or package, which may work better for some funders.
- Research funders thoroughly, and don’t waste time trying to adapt to fit a certain fund. Most likely, there’s a much better match out there.
- Win hearts and minds with the right figures (show how the need for your services is rising, and provide financial figures as well as statistics on outputs and outcomes) and with case studies. Use video testimonials if you can.
- Ask for help: if you can’t pay an external bid writer, find someone who’ll at least read and give feedback on your proposal.
- Always try to get feedback from a funder — even when you’ve been successful, it’s helpful to know what convinced them. At face-to-face evaluation meetings, ask if there’s anything in the bid you can improve or clarify.
- Take time out as a team (with the trustees) to think more strategically and longer term about your fundraising objectives.
Find out more about the FSI's events and other support for small charities at www.thefsi.org.