The environment remains tough for charities but raising funds is still key

In the aftermath of the 2008 financial crisis charities have been squeezed. In fact, austerity delivered a double whammy to the sector. Just as central and local government grants were being cut, public organizations were also reducing the level of services they provide to groups such as the homeless, disabled, children, domestic abuse victims or families needing extra support. Charities were then expected to step in and take up the slack.

Volunteers are being put off by the increasing legislative burden such as safeguarding, data protection and GDPR, accounting rules and paperwork.

Politicians now jockey for position as a General Election approaches and claim that austerity is over. Unfortunately, there’s been a lag between promises of more money and delivery. In fact, councils are still having to find savings and introducing new charges for some services to make ends meet. This is why fundraising is still so critical to all charities.

Stefan Lipa, head of Stefan Lipa Consultancy, provides some helpful tips on how a charity can continue to keep funds flowing in his latest blog ‘ The environment remains tough for charities but raising funds is still key’.

How can charities expand and diversify their income?

Guest Blog – Written by Stefan Lipa Consultancy

 

Ensuring a healthy income stream is a key function for any charity that wishes to achieve its aims. All too often, charities facing a cash crisis have allowed old income streams to fall away or haven’t considered all options for new ones.

Diversifying income streams does require a deal of work, but relying on a few, dwindling sources of money is not a sustainable plan. Diversifying can make all the difference to your charity’s survival and will empower it to achieve, or even expand, its stated goals.

Step one: Refreshing current income streams

At Stefan Lipa Consultancy the first thing we do when we’re invited to carry out a fundraising audit for a charity is to review what they’re already doing, to make sure it’s up to date and efficient. Our principle is that our clients shouldn’t have to reinvent the wheel, so we look at all possibilities to realise the potential within their current range of activities.

Quite often, clients may have a number of income streams which they developed a while ago but they just assume it continues and they don’t maintain it. Clients say “Yes, we already do that,” but the people or organisations at the other end of the donation get forgotten and drop away and so the income decays over time. This should be the starting point.

A case in point is a parish church we support; 20 years ago they had a push to sign up members who would contribute regularly. But over years they hadn’t updated their campaign or added new people, so the number of donors was down to single figures and income was dropping off. The church council thought there was no more potential from that method of funding and assumed that the decline was just the way of the world, but all it took was a fresh effort to expand that income again.

Step two: new sources

Once we’ve optimised existing income streams we look at identifying new sources. These can come in a variety of shapes including:

  • Individuals
  • Businesses
  • Trusts
  • Grant-making organisations
  • Local authorities
  • Social media crowdfunding

When we start work with a charity, they often say “Oh, we don’t know anyone we can ask for a donation,” but when we drill down into the issue, we usually find many more connections or potential donors than they realise they had.

Gift Aid

Sometimes we suggest to clients something they’ve overlooked which may be as basic as applying for Gift Aid. This is a scheme whereby registered charities can reclaim from HMRC 25p on every £1 donated by a UK taxpayer. It effectively allows you to boost your income from donations by 25%.

All registered charities are entitled to join the scheme but you do have to register; some of our clients haven’t done this because they think it’s too much hassle.

There are strict rules about what you can and can’t claim for, but they’re explained on the HMRC website and it’s certainly worth investigating as a new income source. And you can go back four years to claim in arrears.

External fundraising advice

If you have a professional problem you may go to a solicitor or an accountant for advice and they will usually come up with suggestions, often simple ones, which you had never considered.

All too often, struggling charities are simply reacting to events and can get into a bit of a bind and it doesn’t occur to them that a fundraising consultant can also widen their vision.

Bringing in an external consultant will introduce fresh ideas, and that’s as true for fundraising consultants as it is for any other professional. We bring an external objectivity to focus on the problem and come up with new answers for expanding and diversifying income.

Stefan Lipa Consultancy helps charities to diversify their income

Stefan Lipa Consultancy helps charities to achieve their fundraising goals. We work in areas including heritage, religion, education, youth, culture, museums, the theatre, music, health and community services.

We offer bespoke, impartial and honest advice with consultancy and management services for capital campaigns and revenue fundraising.

We work on projects with targets from £100k to millions of pounds, mainly in Hampshire, the Midlands and the South of England, providing accurate, impartial and frank assessments, every step of the way.

Free initial consultation

Contact Stefan Lipa Consultancy or ring us on 01256 698090 to arrange a meeting for discussing your particular circumstances and the services we offer. This meeting is completely free of charge, with no obligation on either side.

 

How can charities expand and diversify their income?