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| A
fresh approach to funding |
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| Charity
funding streams are becoming increasingly diverse, making
use of new and previously overlooked sources of revenue. Anastasia
Kershaw finds out about the innovative and exciting ways some
organisations are ensuring that the money keeps rolling in |
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Charities
are increasingly looking at new ways of making money, and
there are a variety of alternative funding streams being used
as a growing source of finance. This move away from traditional
donor support is a trend which is being fuelled not only by
social changes, but technological changes as well.
Ideas for new fundraising streams can, and do, come from anywhere,
including staff on the ground. Shop manager Amanda Holdgate,
for example, who works at the branch of Cornwall Hospice Care
in Helston, Cornwall, had the idea of turning the shop’s
basement into an art exhibition space. The charity’s
head office agreed and the first exhibition was held in June.
“Now we exhibit paintings, glass, ceramics and textiles
with one exhibition every two weeks,” says Holdgate.
Cornwall Hospice Care is not the only charity to see the potential
of new sources of funding. In November this year, a rare Patek
Philippe wristwatch is being auctioned by Bonhams for Practical
Action (formerly ITDG). Justine Williams, head of public fundraising,
explains: “We are beginning to see, from a number of
donors, a desire to give something more to Practical Action
than just money. We are keen to ensure that we can also engage
with donors who want to support our work in differing ways.
We are particularly seeing a growing trend in share giving
and proceeds from online auction sites such as eBay.”
The internet is arguably the most prominent area of growth.
In the last 10 months over 1,000 charities have registered
to trade under eBay’s Missionfish service. This allows
sellers to donate their proceeds to the charity of their choice.
Overseas development charity ActionAid is one such organisation
registered on eBay. “The internet is an extremely important
tool as it enables us to have much more timely contact with
our supporters, communicate with a wider potential audience
and build strong online fundraising communities,” says
marketing and events officer Andy John.
The organisation is also currently running a non-internet
selling campaign to collect jewellery. “Supporters are
sending us their broken or unwanted hallmarked jewellery for
recycling. ActionAid works with a leading UK metal processor
which pays us the market value of the particular precious
metals,” John says. “A number of the finer pieces
are valued for re-sale.”
This is currently done through mainstream jewellers, but John
says online sales through eBay provide the charity with a
“new and exciting opportunity” to raise funds.
“By marketing the jewellery campaign online and via
supporter emails, we hope to raise awareness,” he adds.
Whatever the new funding idea happens to be, technology is
a driving force to allow that idea to become reality, with
web services like eBay of particular significance. Lara Nagoski,
business director of Missionfish UK, says charities are increasingly
using eBay in different ways, with charity shops from Oxfam
to small hospices, for example, selling items on-line.
And technology has also changed the way more traditional fundraising
events are organised, such as the charity gala. “Now
charities hold the auction part of that on eBay, or may abandon
the gala event in favour of a virtual gala event,” Nagoski
says. “If you hold the auction on eBay, there are 200,000
other potential bidders as well as your supporters.”
According to the Institute of Fundraising, the most important
areas of alternative funding stem from an organisation’s
trading arm. Social entrpreneurism, where services are provided
from an external source on a not-for-profit basis, is also
becoming important, according to Megan Pacey, director of
policy and communications at the Institute. She thinks the
trend towards new forms of fundraising could change the way
that charities look at their wider finances. “A more
complex approach than charities are used to is necessary,
with less of a focus on ‘money-in-money-out’ and
more focus on the overall picture,” says Pacey.
“Taking a long-term strategic approach in this way will
secure long-term stability, also ensuring there is a diversified
funding stream.”
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To support these long-term efforts, the Institute launched
the ‘Innovation Zone’ back in July. This involves
commercial sector fundraising products and services being
presented to a live panel of the organisation’s members,
who review each item and feed back comments to the commercial
sector.
The first products to go under the microscope included a card
to allow charity donations by customers in shops, and a system
for donating by WAP and PBR. There was also the idea for a
system that enables charities to purchase advertising on TV
and rather than paying for specific time or space, paying
as a percentage of the number of donors signed up as a direct
result of the advertisement. Although it was large companies
which presented these ideas, Pacey says: “[Both] large
and small companies are welcome; even a two man band with
a cracking idea.”
The Institute also offers professional development to foster
new skills. But it can be a challenge for smaller charities
to invest in alternative funding because exploring new ideas
takes time and energy. As Nagoski says: “Even though
registering with Missionfish is easy, it’s still one
more thing to do.”
In some cases it may make more sense to hire a commercial
company to undertake fundraising on your behalf. Entrepreneur
Tony Mooney, for example, raises funds for charities and good
causes through his company Hermes Management. “Our aim
is to work with a group of organisations servicing a similar
area, thereby reducing the administration costs often related
to fundraising,” he says. “We do not look to duplicate
the efforts
of the organisation or other fundraisers working with them.”
In March 2005, he launched the website art4charity, a service
which sells mobile phone wallpapers and ringtones on behalf
of artists. In the future he hopes to expand the service internationally
and offer prints from originals.
Mooney’s past projects have included an Australian pop
television programme to raise awareness of drug problems and
an affinity deal with Carphone Warehouse where money was donated
to charities with each purchase of a mobile phone.
Whatever the alternative funding stream, though, charities
say that the trend in using them is set to continue. Practical
Action already account for five per cent of their voluntary
income through alternative sources, and Williams says this
percentage is steadily growing. The situation at Actionaid
is similar: “Initiatives like these certainly have a
large role to play alongside fundraising events and challenge
products,” says John.
As with any new trend, lessons are being learned as each new
project progresses. Based on her experience, Williams advises:
“Review and fully evaluate the likely time that might
be spent on setting up a scheme that is likely to have minimal
income coming from it. In truth a great deal of time could
be spent on inputting lengthy details about your cause for
only a handful of pennies, so it is really worth researching
the worth of any potential avenues of revenue before fully
committing time to developing them.”
The nature of many of these new developments should encourage
a more extensive exchange of ideas between charities. “I
am certainly aware of some good discussions and idea-sharing
that takes place among fundraisers on the Institute of Fundraising
Yahoo smart groups, and I have found that most of us are willing
to share key areas to avoid,” says Williams.
In the end it comes down to thinking about new ideas and how
they can be made to work for your organisation.
You can even debate how alternative fundraising will affect
the fundraising landscape in The Giving debate on 7 November.
For more information, visit www.institute-of-fundraising.org.uk
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