Asking for more
Past income streams may not flow so freely in the future. Jess Farr comes up with some tips on sustainable funding
If you have been badly knocked by funding cuts and tougher competition for grants, then now is the time to start getting a solid short-term strategy in place, rather than simply hitting the panic button, or running on empty and hoping for the best. This article summarises some tips I have picked up from organisations that are dealing with this very issue.
Short-term survival
In business terms, it is far less risky to exploit an existing income stream than branch out into new markets or launch a new product. So if you are in an urgent situation and need to balance your books in a hurry, the most effective solution to generating more income is to re-approach your existing supporters for extra funds.
Because many income generation methods often have a lead-in time of between one to two years, asking your current supporters for more resource is the most immediate and cost-effective way to resolve a short-term funding crisis. And it’s even more effective to target those supporters who might be able to offer you more unrestricted funding, or resources that can help cover your core costs (asking for free office space for instance). A good way of tackling an ‘ask’ like this is outlined in these four steps:1
1) Review your resources and where they come from. This includes in-kind support as well as money.
2) Identify which supporters are most likely to be able to help you.
3) Work out how you are going to approach your supporters and make sure you tailor your ask to them.
4) Remember to keep in touch! Make sure that you don’t ignore your supporters until it’s time to ask for their support again.
Find efficiencies
Organisations I have met with through the NCVO sustainable funding project have done all sorts of innovative things to save money, from sharing back office functions and/or space, to collaborating on projects with other voluntary and community organisations and public bodies. One found that it could massively reduce the amount of time spent contacting and recruiting schools for its projects by simply asking the local authority to do it on their behalf. This worked because local authorities already have strong relationships with their own schools and did not have to spend as much time researching and chasing schools as the charity did.
Of course, an added benefit of moving towards a more collaborative way of working is that grantmakers are increasingly favouring organisations that work in this way. This means that working more collaboratively is a good short-term and long-term aim if you want to reduce costs and attract more future funding opportunities.
Stick to your mission
In times of financial anxiety, the gloomy spectre of mission drift may well begin to loom. If you are considering a new income stream, you must always be clear how it fits with your organisation’s mission and values. Organisations I’ve worked with have found that going back to basics and carefully evaluating which projects or activities most closely fit with their mission is the best way to identify how to move forward with less resource. If you need to scale back on what can be delivered over the next year or two, be clear on what your core activities are, and what can be scaled back without too much compromise.
In extreme situations it’s also important to address the unthinkable: how the work of your organisation could be continued in the event of closure. While you will of course be fighting for the survival of your organisation, planning for the worst case scenario in this way will help ensure your organisation’s ongoing legacy.
Guard against future knocks
Surprisingly some organisations remain unprepared for the fact that the current changes in the funding environment could well be long-term, rather than some sort of blip in an income chart. In a recent survey carried out by one of our partners, 57 per cent of voluntary and community organisation respondents chose grants as being the most important income stream for their future. One size does not fit all and it is important to identify your own appropriate funding mix. However, it is distinctly risky to bank on enough grant income coming through to keep your organisation going in the future.2
You can never guard your organisation entirely from financial knocks, but trying to get resources in through more than one type of income stream will help to protect against future vulnerability. And whatever your sources of funding are, you need to make the most of your current funder relationships, and build up a bank of goodwill you may need to call in at a future date.
1. Ian Bruce, The Art of Raising Money: Using Marketing Theory to Stabilise and Grow your Income (NCVO, 2010).
2. Survey carried out by CommUNITY Barnet of its member organisations, April 2011. http://www.communitybarnet.org.uk/pages/funding-programmes-imminent-deadlines-and-information-about-impending-changes-from-the-funders-.html
Author: Jess Farr
Jess Farr joined NCVO in March 2010 as part of the Foresight team and is now a sustainable funding officer.
Over the past year, Jess has supported Foresight to research the wider social, political, economic and technological trends that impact on voluntary and community organisations.
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