Funding and Innovation: Is now the time to diversify your income through innovative new ideas?
Submitted by Katherine William... on Thu, 17/09/2009 - 14:43
Some charities are experimenting with innovative new ways of generating funding, fearful that traditional sources of income such as legacy and regular giving might dry up. It’s certainly worth a try – after all the Lance Armstrong LiveStrong Campaign in 2003 selling wristbands raised hundreds and thousands of pounds and was copied by many other charities. A simple new idea that really took off. Should we all be thinking out of the box and giving ourselves space and time to come up with new routes to funding heaven, or is it just too risky?
I just came across this website http://www.sofii.org/ which has lots of ideas on it for new ways to fundraise.
Hello! Here's my tuppence worth: Fundraising is always a tricky matter of capacity - if you happen to have a wonderful idea, the time to develop it and the resources to make it take off, then certainly innovative new ideas are a fantastic way to achieve a good return on investment and stay ahead of the crowd. Many of the larger charities have people in post whose whole role is developing new ideas, or are able to ask a consultancy to look at this for them.
However, even the best new ideas need support to fly and I think this is where many organisations, particularly small organisations, fall down - in which case they'd be better using their limited resources to stick to what they do and do it well, rather than continually chasing the next big thing. It's amazing the number of organisations who forget things like saying thank you, or neglect to keep supporters and funders updated in a relevant way - or even don't manage to put a 'donate' button on their website or a collection tin on their front desk to make it easy for people to give!
New ideas are always going to be more exciting and tempting than the old tried and tested ones, but if you only have the capacity to choose one, then the level of risk and the start-up resources required for new ideas tend to count against them, even with the funding squeeze.
Which asks the question, how can organisations with limited capacity be supported to become innovative without introducing unmanageable levels of risk? Or is it ok to leave innovation to the big boys?
If you look at it a different way, every time you raise income for your work you are getting it in a different way. Each person or organisation you deal with requires a slightly different approach even within "traditional" fundraising methods.
So if you are constantly adapting and refining your approach already, why not go a bit further?
Innovation needn't mean inventing entirely new methods or products, but it can put a new twist on an existing product. Wrapping a rubber band around your wrist was hardly revolutionary, but the wristband trend was a great way to give people something new to talk about!
This sort of information would be so helpful – it’s always great to see what other people are up to so we can plan to make best use of our time and resources.
Thanks Katherine for the Sofii link, I'm going to have a good look at that.
Also a nice reference to the Lance Armstrong LiveStrong Campaign, smartly followed up by shopping trolley tokens. This kind of thinking goes back a long way, few people realise that the AIDS ribbon began life as a symbol of abstinence before being re-branded in 1991 as the emblem of HIV/AIDS awareness. Then you've got the red poppy and red noses - both innovative and successful pieces of campaign merchandising.
I was smiling as I read Ros' post - you hit on the crux of the matter when it comes to small-scale organisational funding. When you've already got a lot of money, it's easy to turn it into more money. When you don't have much money, you're more likely to lose it than increase it.
Which asks the question, how can organisations with limited capacity be supported to become innovative without introducing unmanageable levels of risk?"
It depends so much on the organisation. I've worked with organisations with under 5 staff who have been funding machines and really made a success of it, and I've worked with other organisations with up to 10 staff who haven't managed to get a grip on it. It depends a lot on the motivation of individuals because, unavoidably, when you're a member of a small organisation with low income and minimal resources, it's up to you to find the time and prioritise your efforts. That doesn't seem very fair, but it's also worth remembering that all of the big giants started somewhere too. The greatest oaks have been little acorns. They are the ones that rose to the challenge.
What I try to do when I work with organisations is to replace the traditional cycle of dependency (get money, spend money, ask for more money) with sustainability cycles. These are different for each organisation, depending on the field they're working in, their stakeholders and objectives - but the general principle is one of taking restricted project income and using it to generate streams of unrestricted income. This can then be used to establish new projects.
For instance, the fear above appears to be that spending money to develop an innovative piece of merchandise may lead to financial loss if it doesn't sell.
Provided the money to develop this isn't coming from the organisation in the first place, then the risk is minimal. If you can find one supporter willing to provide the money to develop a new funding source - usually as part of a larger overall project - then you have a free shot at developing a future source of unrestricted income. If it works, you're in business, if it doesn't, you didn't loose much and you hopefully still achieved other objectives of the project.
The key is getting organisations to consider how best to maximise a project's income generating potential, and then getting them to write it in to the bid. As much as we hate to think about charitable organisations this way - it's all about the money. If you don't have any, there's not a lot you can do. Donors themselves are looking for sustainability in projects because they know that dependency doesn't work. Any opportunity for project funding to support a more independent and financially secure organisation is welcome.
In my mind, now is certainly the time to be thinking outside the box. "Using limited resources to stick to what they do and do it well", really isn't a sustainable plan. The sad fact is that many small scale NGOs currently have three main options: 1) fold 2) merge 3) get very good at sustainability very fast. The ones who can achieve the latter will survive the current climate and with any luck continue to develop into mighty oaks. No matter what the size of the organisation, I think innovative and diverse funding is something any NGO should be looking at, always.