Funding and income basics

There are dozens of way to raise money such as asking the public through mass mailings or street collections, charging for things or services you deliver, contracting with the local authority to deliver a particular service, going to grantmaking trusts, using the income from investments etc.

Where money comes from

But while there are many ways to actually raise the money there are basically only four sources to get money from:

• general public/individuals [47%]
• public or statutory sector (Local authorities, NHS etc)  [32%]
• voluntary sector (particularly grantmaking trusts) [16%]
• commercial sector [5%].

It is wise to have more than one income source or method. If you rely on only one and it dies up, then you are in difficulties.

Many people are surprised that:

• so much of charities’ income comes from the state [32%]
• so much comes from fees or charges [50%]
• so little comes from commercial companies [5%].

(Source - proportion of total charitable income in brackets taken from the UK Civil Almanac 2008, NCVO)

Non-financial resources 

Although this section is all about money, don’t forget that resources you need could come from other sources such as

• volunteer help - volunteer service workers, fundraisers, committee members etc
• gifts in kind - free accommodation, computers, furniture, free adverts etc
• gifts of services - legal advice, personnel/HR support etc.

Top tips

• If you need to raise more money it is generally easier and less risky for you to take an existing method and expand it and/or make it more cost effective (rather than jumping onto a new one)
• But, if all your methods come from one of the four sources  outlined above, you should probably add a new source (to protect yourself in the long run.)
• Choose methods which fit your circumstances and strengths and plan well (eg if you are a local charity, go to local trusts and companies; if you have a membership go to them for help – either money and/or introductions)
• When you are formulating your “ask”, choose important aspects of your organisation’s work that you know the donor/contributor rates highly, not the ones you are most proud of (put yourself in their shoes).

Common fundraising methods

No list of fundraising methods is complete as new methods are being developed all the time. Here are some of the most popular:

• Legacies/wills/bequests
• Trust and foundation grants (including the National Lottery and other national appeals such as Comic Relief)
• Major donors fundraising (seeking large donations from wealthier people in your community
• Company giving (grants or sponsorship)
• Employee donations
• Event fundraising (eg sponsored runs, fundraising dinners etc)
• Direct marketing (eg mass mailings, direct response TV, local radio appeals)
• Membership fees.

Local fundraising

• Collections (street / door-to-door)
• Raffles
• Charity shops
  
• Church collections
• Local sponsorships
• Works collections
• Pub collections
• Local appeal letters
• Jumble sales/car boot sales

Doing it right

Make sure you behaving legally and ethically. Find about the law - funding and income.