Intro to Sustainable Funding Webinar
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This webinar discussed sustainable funding and introduced strategies for organizations to develop stable, long-term funding. It began with introductions and an overview of sustainable funding as a strategic approach involving income diversity, financial management, impact communication, and relationships. Participants then considered how integrated funding is within their own organizations. Key characteristics of sustainable funding are that it is suitable, sufficient, and stable. The webinar concluded with a discussion of actions organizations can take based on their current financial situation, from emergency measures to diversification, as well as announcing further training opportunities.
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Intro to Sustainable Funding Webinar
- 1. INTRODUCTION TO SUSTAINABLE FUNDING WEBINAR 19 APRIL 2016
- 2. INTRODUCTIONS • Ros Jenkins Sustainable Funding Lead, NCVO • Clare Aarons Training Coordinator, NCVO • Lauren and Helen Webinar organisers, NCVO
- 3. ABOUT THE WEBINAR • 30 minute presentation • 15 minutes Q & A Please type your questions into the questions panel at any time (at the bottom of your webinar dashboard) • Please complete the short follow-up survey upon exiting the webinar.
- 4. 4 More than ‘just fundraising’ More than ‘just financial management’ = All the elements that keep your organisation nourished WHAT IS SUSTAINABLE FUNDING?
- 5. 5 WHAT IS SUSTAINABLE FUNDING? • A strategic approach • Income diversity • Financial Management • Communicating Success (Impact) • External positioning and marketing • Relationships
- 6. POLL TIME… How well do you think funding and income generation is integrated within your organisation?
- 7. 7
- 8. 8 WHY IS IT IMPORTANT?
- 9. 9
- 10. 10
- 11. 11
- 12. 12 SO WHAT?
- 13. 13 THE CHARACTERISTICS OF SUSTAINABLE FUNDING
- 14. 14 SUITABLE SUSTAINABLE FUNDING IS… Photo: Masaki Ikeda, Wikimedia Commons
- 15. 15 SUFFICIENT SUSTAINABLE FUNDING IS… Photo: Christine Matthews CC BY-SA 2.0
- 16. 16 STABLE SUSTAINABLE FUNDING IS… Photo: Karen Arnold CC0 1.0
- 17. POLL TIME… How confident do you feel in your financial sustainability?
- 18. 18 THIS IS ALL VERY WELL IN THEORY…
- 19. 19 WORKING TOWARDS SUSTAINABLE FUNDING Your situation CRISIS Critical Secure Stable What this means Less than 12 months secured funding remains You have secured at least 50% of next year’s funding You are confident your funding is secure for at least two years You are confident your funding will be reasonably stable for the next 2-5 years Options open to you Emergency appeal Approach existing supporters and donors Quick wins Look for natural progression Mixed approach You can start developing new ideas, but need some safer options too. Diversification You have the time to try something completely new!
- 20. 20 Q&A Type your questions into the questions panel on your webinar dashboard
- 21. FURTHER INFORMATION Links to all the resources mentioned in the webinar can be found on our website: www.ncvo.org.uk/practical-support/funding You can also see all of the sustainable funding training courses and consultancy offer from NCVO in our downloadable leaflet. 21
- 22. FURTHER TRAINING Fundraising Responsibilities for Trustees – 4 May Certificate in Financial Sustainability starts in June Writing Successful Bids - 10 June Turning Ideas into Income - 13 June training@ncvo.org.uk 020 7520 2587 22
- 23. THANK YOU Please complete the short feedback survey which appears when you exit the webinar. Ros Jenkins Rosaline.Jenkins@ncvo.org.uk @RosJTweets
Notas del editor
- Welcome back. Agenda for today.
- Hi, I’m Ros and I lead NCVO’s work in the field of Sustainable Funding. We run training and support organisations through consultancy projects as well as manage a wealth of online resources – including webinars, such as this one. I can usually be found delivering face-to-face training, so feel slightly unnerved by my inability to gesture or see your faces, but I hope that I’ll be able to give you enough of an introduction that you will be able to understand the approach, so you can go away afterwards and explore further in order to improve the sustainability of your own organisations.
- This is an introductory level training webinar, but that doesn’t mean it’s aimed at a more junior level. In fact, we often find that Sustainable Funding is most useful at a strategic, or organisational level. In order to be successful, it needs to be understood and supported by senior managers, CEOs and trustees.
- What sustainable funding ISN’T About one type of funding About one size fits all Income generation isn’t something that can sit outside your organisation, like a bolt-on You can’t just recruit a fundraiser and expect funding to magically appear The whole organisation needs to support generating funds AND Funding needs to support the whole organisation
- One of the tools we often use as a starting point here at NCVO is the Sustainable Sun Tool. It asks organisations to evaluate their strengths in six areas (CLICK TO REVEAL AREAS) You’ll notice that all of these areas extend beyond the realms of traditional fundraising, yet they are all crucial if an organisation is to raise money successfully. If you wanted to undertake a quick audit of to improve your fundraising and income generation success, I’d strongly recommend you start by looking at these six areas.
- This is the NCVO Income Spectrum. It’s a way of breaking up voluntary sector income into general categories, in order to begin to think about the different characteristics they share and skills organisations need to access them. Let me talk you through it… BOXES FIRST (definitions) Now RELATIONSHIPS Now TYPE OF ACTIVITY Think about the characteristics of organisations that might major in one type of income or another? What are they good at? How might those skills allow them to develop into new areas? Now, for your own organisation, think about how much of your income falls into each of these categories. Are all your income ‘eggs’ in one funding ‘basket’ And how about diversity WITHIN income streams – perhaps you have most of your income from grants, but you have lots and lots of different grant funders. This is great – it helps to insulate you from the risk of funding ending. If you find a high proportion of your income is concentrated within one type of income, or with a few sources (e.g. a few funders, or donors), then generally we would say you are operating with a high degree of RISK. This is because trends within the sector tend to affect types of income. Let’s look at some of the recent statistics…
- NCVO Research team produce a brilliant publication called the UK Civil Society Almanac. It gives us a really good picture of what the trends are for income to the sector in the UK. Generally, the trend has been for VOLUNTARY INCOME (grants and donations) to decrease whilst EARNED INCOME has increased. If we look at this in a bit more detail…
- This shows how huge the shift has been away from grants towards contracts for organisations receiving money from government. This shift has been so huge, that when we look at the income spectrum now, when we talk about ‘grants’, we usually think first of grants from charitable trusts and the National Lottery.
- But here you can see two things – firstly that voluntary sector grants (i.e. Trusts) have bucked the recent trends. But also in absolute amounts, they aren’t massively more than government grants. (Previous slide showed govt grants = 2.8bn) The big question is, how much longer will income from trusts continue to grow?
- Macro trends are one thing, but how are they relevant to individual organisations funding strategies – especially smaller organisations. After all, some organisations are still receiving large amounts of grant income, and doing very nicely. Others are growing rapidly on government contracts. There are always exceptions…
- How to decide which funding sources are right for you
- I’m assuming everyone is familiar with the tale of the Three Little Pigs? Just like little pigs’ building materials, not all types of income will be suitable for all types of organisation. Many organisations will choose not to ask for donations because they don’t wish to portray their beneficiaries as needing help – they prefer to earn their own income. Others may eschew money from the government in order to win the trust of particularly hard to reach groups. Or there may be ethical issues at play – perhaps meaning that funding from the National Lottery is inappropriate. But further than this, it is also necessary to think of which types of funding are suited to the organisation and its cause. Thinking back to the six supporting areas we look at as part of a sun tool audit, some organisations will be more geared up to the demands of one type of income rather than another. Or perhaps their cause naturally lends itself to some sources rather than others.
- This is where Sustainable Funding overlaps with strategy and with financial management. It sounds fairly obvious, but how many organisations truly link their organisational strategy to their funding strategy to their financial management processes? It is absolutely critical that a strategy brings in not only ENOUGH income, but the right kind of income (e.g. restricted, unrestricted) and at the right TIME. And organisations need to be confident of this. If the majority of your organisation’s income is hard to predict (for example, legacies), then a key priority for a funding strategy is to develop sources of income that give them confidence they can at least pay the essential bills every month! Do you know what your bottom line is? The things you have to fund in order to exist?
- And this is the big one. In order for an organisation to successfully follow any sort of strategy, it needs to be confident of the level of its income. The trends we’ve just looked at on a national scale may affect your organisation, or you might be lucky. But the chances are some sort of external influence will affect your funding in the near future. The Sustainable Funding approach therefore aims to spread the risk by supporting you to develop a portfolio of funding sources. Weaving different income together into a cohesive whole that means if one source fails, you can compensate with another. (Or, if something unexpected happens, like a wolf trying to blow down your metaphorical house, you are strong enough to remain standing) For example, if your organisation is heavily dependent on legacies, then look at some of the more regular sources of income to give you a base-line of cash flow that you can depend on. Trading often provides this sort of opportunity, but regular donations (perhaps through direct debits) can also do the same. When I am supporting organisations to develop their Sustainable Funding Strategies – or assessing candidates for the Certificate in Sustainable Funding – it is these three words, ‘suitable, sufficient, stable’ that I use to evaluate whether the strategy is likely to generate sustainable funding. Have I seen evidence that the strategy is a suitable fit with the organisation’s strengths and weaknesses, and their needs? Am I confident that the plans are robust and reasoned enough to bring in sufficient income to achieve the organisation’s goals? And does the strategy assess and balance the different risks that the organisation’s funding is exposed to, in order to create stability?
- Being able to sit back and develop a beautiful Sustainable Funding strategy for many seems like a luxury. There are certain situations when it just won’t be possible to diversify your income in time to deal with the risk you are facing. It is important that you carefully look at your projected income over the next few months and few years so you know how critical your financial need is. If you are unsure of whether you will be successful in bringing in money, think carefully about how likely it is. Perhaps build some scenarios based on if you are successful vs if you are not.
- In particular, if you have less than six months’ worth of secured income, then it is extremely unlikely you will have the time and resource to start something new. CLICK FOR TABLE In which case, the most sensible course of action is to focus your efforts on increasing the success of what you already do. Identify the course of action you would like to take, if you had more time (perhaps using some of the sustainable funding concepts) Approach your existing donors or funders – if appropriate – and demonstrate why they should continue to fund you whilst you develop your sustainable funding strategy. If you have good relationships with people or organisations who value your work, they are unlikely to want to see all their investment thus far go to waste if you fold. IF YOUR INCOME IS CRITICAL Look for natural progression – e.g. new fundraising products to your existing donors, or (if suitable) take your existing fundraising products to new audiences IF YOUR INCOME IS SECURE A mixed approach is sensible – the risk of a reduction in funding is still within sight, so balance the risk of something new with some less risky options, even if perhaps you don’t anticipate they will ultimately bring in as much money as doing something completely different, they will buy you time to develop and test your new idea. IF YOUR INCOME IS STABLE And for those of you lucky enough not to be facing an imminent financial crisis, now is exactly the time to begin looking at a sustainable funding strategy. Most new initiatives take several years to begin bringing in significant income.