Untold Story: Good News for Good Causes
Liat Hughes Joshi discovers fresh ways to fund social enterprises.
If plans for your next life stage include setting up a charity or not-for-profit/ social enterprise, the welcome news is that your fundraising options are broader than ever. New sources now compliment more traditional ways of raising investment, such as grants and organising events.
Dr Claire Routley, fundraising consultant and a tutor at the Institute of Fundraising, the professional membership body for UK fundraisers, shares her advice on choosing the best route for your project: “there’s no one size fits all approach to this. The first step is to consider your fundraising objectives and then why people, or organisations, should contribute to your cause or social enterprise.”
She adds that, “it’s important to consider the pluses and minuses of different sources of income, such as whether they offer a reasonable return for the time or money invested, but to match that with your internal capabilities e.g. does someone on the board have good contacts in the business community that they could approach for sponsorship?”
She also advises, over time, raising income from a range of different routes to diversify. “That way, if one source dries up – for example, if a funder changes their priorities – you have others that you can rely on.”
According to the Institute of Fundraising, the professional membership body for UK fundraisers, some £9 billion each year is donated to charitable causes in the UK. So how can your project access some of this funding? Here are some ideas and inspiration:
Crowdfunding sites are internet-based platforms you can use to reach a wider audience for fundraising, telling people what you are raising money for and posting updates on how it’s going. Popular examples include GoFundme, Chuffed.org and Crowdfunder.
It’s important to check fees or commissions as they do vary – some sites are free, others take a small percentage of whatever you raise to cover costs.
Creating engaging content for your cause’s profile page will help draw in support – video, photos and related hyperlinks will all add appeal. Definitely get on social media to promote your campaign – including a link to the crowdfunding platform. Throughout your project, you can also engage donors and volunteers by posting news and progress reports onto your page.
Fundraising this way:
Annu Mayor, from East London, has been working as a charity fundraiser for 25 years, including for Amnesty International and The Stroke Association. She’s now a freelance fundraiser and, among other strategies, is using the crowdfunding site Chuffed.org for Clapton Community Football Club – a members-owned club in East London that returns any profits to the local community. “Chuffed.org has zero fees for non-profits and social enterprises – there are no set up fees or subscriptions – it fits with the ethos of our club. It was easy and free to use and sits well alongside other activities – events such as golf days and coffee mornings which still work really well to engage people. It suits both individuals or organisations.”
2 Community share schemes
Community share schemes are a way for groups of people to come together and fund settting up a new local business or to save an existing one.
According to the website communityshares.org.uk, there are more than 400 such schemes in the UK, which have involved 120,000 investors since 2009. Popular schemes have funded local sports clubs and facilities and saved village pubs and historic buildings. Local people buy a share in the business, although unlike normal company shares, strictly speaking, these area donations usually bring tax benefits for investors. Investors gain voting rights at the scheme’s Annual General Meeting so they get a say in how things are done and run. Provided the business is successful, shareholders might get interest back on their investment. This is a fantastic way of engaging local communities in a scheme – the investors often boost your customer base and can become advocates.
Fundraising this way:
Debbie Meech, chair of the Wiggington Village Shop project in Hertfordshire ,which used a community share scheme to build, set up and now run its store in Wigginton, Hertfordshire, says “we went down the community shares route because it’s a way of engaging the local community to get them to buy in emotionally and financially.”
The project team wrote a business plan and a community share document then held a launch event in the village. “Our target was to raise £88,000. We went with a £25 per share price but a minimum of 10 shares – although people could club together or even buy as a street group. 184 people bought in and we raised £89,100, as well as a matched funding loan.”
The village shop opened in a new building in late 2018 and according to Debbie, it’s going brilliantly: “We had a target turnover of £16,000 for the first month and we’re delighted to have beaten that. Our most popular products include Danish pastries, local honey and beers. Any profits will go back into projects in the village.”
3 Ethical loans
Loans specifically for charities and social enterprises are another option for not-for-profit organisations which might find it difficult to access or service standard commercial loans. Ethical lenders aim to go beyond just making investment returns, wanting to fund good causes too. Providers include Charity Bank, set up in 2002, which uses its savers’ deposits to provide affordable loans to charitable causes and Big Society Capital which was used by the Wiggington Group for a loan with a ten-year.