What is sustainable funding?
An introduction to sustainable funding for infrastructure organisations
Sustainable funding is based on the premis that organisations are most at risk if too much of their funding is concentrated in one source. This could either be in one 'income stream' or from one funder. A sustainable funding approach is underpinned by a good understanding of financial management and planning.
The income sources
We think of income sources on a spectrum – from asking, on the left, to earning, on the right. We encourage organisations to keep an open mind - there might be opportunities in areas they wouldn't normally consider.
We have produced a handy tool to help organisations to analyse their income and think about the different demands of each source – download the Income Spectrum Tool.
We also have expert advice and information around each income possibility. Click on the links below to learn about what is involved in raising money from each stream.
Unrestricted donations. This includes community fundraising, events, corporate donations, legacies etc. Many organisations who are reliant on grant income have not considered using local support to improve their sustainability.
Subsidies for specified activities. Grants are normally applied for via an application form and usually have to meet criteria set out by the funder. Major grant funders are public bodies, the National Lottery and trusts.
Contracts, often to deliver public services. This has been a rapidly increasing area in recent years, with the voluntary sector getting involved in all aspects of delivering public services. However, it can also include contracts with other voluntary organisations or with the private sector. Contracts are legally binding agreements and are ofte secured via a competitive tendering process.
Trading goods or services. Charities are legally permitted to trade, within limits. For some - and for social enterprises - this stream will make up the majority of their income. There are lots of types of trading that organisations can explore, which can provide valuable unrestricted income.
You might also be interested in learning about:
- Loan finance – money to help organisations to grow, develop or manage cash flow effectively. Loans can be an incredibly powerful and positive injection of cash for organisations - if used in the right way.
- Outcome funding - An introduction to what outcome funding is and its growing significance to both funders and funded.
- Venture Pphilanthropy – Support for organisations that combines financial resources with the provision of management and technical support.
