Being financially independent to some may seem like a tall order and certainly not something to be strived for by the average Joe Bloggs. However that said, it is something that needs to be given serious consideration if people want to be sustainable and survive the current economic climate. The dictionary defines financially independence as having sufficient personal wealth to live indefinitely without having to work actively for basic necessities. For charities this would mean generating enough money to meet your needs from sources other than through fundraising.
Aside from the obvious, i.e fundraising, there are numerous ways a Charity can seek financial independence, either through income generation activities such as direct payments, tenders or even trading activity. Many charities have established trading arms or subsidiaries which allows them to trade and plow any profits back into their charity. Age UK enterprises a subsidiary to Age UK have successfully leveraged the Age UK brand to create highly successful business, contributing over £20 million to the charity through its trading arm and it’s not only mainstream charities that are adopting this style of working some churches are beginning to too!
One Hackney based church has an agreement with a local bakery to supply the church with fresh hot bread every Sunday at reduced prices; the church in turn sells it to its members after services and re-invests the profit back into the church. Another entrepreneurial church in Hackney sells pastries on Sundays to its members to make extra money to promote its work. Faith groups who have their own buildings have also started letting parts of it to other groups for office use or hot desking.
John Mensah, my fellow Committee member and the Director from Outreach Management Services a charity dedicated to providing solutions and support to community groups and advocate for financial independence states “the current political and economic changes, is affecting the work of small charities and faith groups. Most small faith groups are beginning to adjust by operating small businesses such as sale of books and literature, gift shops, gift aid, organizing a series of community fundraising activities, or opening crèche facilities to earn extra cash”. John has worked with several faith based groups who adopt this mode of working.
Case Study
Pecan is a community-based Christian charity set up in 1989 in Peckham, South London. It aims to help transform the lives of local disadvantaged people through various job training, employment and motivational projects.
The organisation serves as good illustration of a voluntary organisation seeking financial independence. They began as a response by church and community groups to address chronic unemployment rates, as high as 57 per cent in areas such as the North Peckham estates. Drug abuse and crime statistics were also disproportionately high. It has now evolved into a fully-fledged community sector agency bidding for government contracts and employing 110 people at its peak.
Charities need to look at diversifying funding, rather than being too dependent on grants and individual giving. The Charity world recognises that to be sustainable they will need to adopt various business techniques to ensure that they have a constant flow of surplus income. The problem is some charities are still very myopic in their outlook. Becoming self sufficient and less dependent on handouts can still be quite daunting.
Author : Lara Rufus Fundraising Consultant and Chair of the Black Fundraisers’ network
Copyright © 2011 Black Fundraisers Network/Keep the Faith
Leukaemia Trust (ACLT) - also key note speaker on the night. They both delivered two power packed sessions. Orin relayed his amazing story of how the ACLT survived the funding cuts. The passion that drives it, the rallying round of the community and the pure grit and determination that keeps them going from day to day. 
