Charities need new approach to build income
For charities to successfully diversify their income base requires capacity building and financial support, finds a new briefing paper by Venturesome.
Enterprising charities – transitioning from grants to trading summarises the work Venturesome has done with charities and voluntary organisations seeking to make the transition from grants to trading, and is based on a recent discussion with a small group of Venturesome investees.
The paper highlights that an increasing number of charities are using entrepreneurial ways of working to solve social problems - which often means generating income from trading.
It finds “charities and voluntary organisations are more resilient if they have a range of different funding sources across the spectrum from the philanthropic at one end to the commercial at the other.”
The paper concludes that it is harder, and takes longer than is frequently assumed, for charities to successfully diversify their income base. “Building financial resilience is crucial to achieving social impact over time and requires insight and hard work by charities. It also requires a new approach from funders so that thoughtful, relevant funding is provided.”
For more information, download the report below, or visit the Venturesome website.