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

The BfN are pleased to officially welcome ;

• Carole Akiwumi – Vice President
• Carole Etienne – Fundraising Support

both of whom will be joining us on the committee.   We would also like to welcome Sam Onigbanjo who will be helping us with our strategic plans.  The BfN are extremely proud to have them all on board.  They bring a wealth of experience and knowledge with them and we are sure they will be instrumental to the continued success of BfN

Best Wishes

Lara

(Chair)

After the recent unveiling of this year’s Comprehensive Spending Review by the Government, you’d be forgiven for asking the above question. However, most of us know that adhering to good budgeting is essential. That is, of course, if you want to avoid making drastic cuts to your service as a result of poor planning.

As a charity, if you have a vision then you should have objectives and tasks that comply with the vision. Without planning, there is no way of quantifying the success of the task and objectives!

Duty of prudence

Additionally, trustees have a duty to ensure that the charity is and will remain solvent; this means that you need to keep yourself informed of the charity’s activities and financial position.

Charitable funds and assets must be used widely to further the purposes and interests of the charity.  This means trustees should not undertake activities that might place the charity’s property, funds, assets or reputation at undue risk.  Special care must also be taken when investing the charity’s funds, or when borrowing finance on behalf of the charity.

Budgeting is a measuring tool and a prerequisite to any good financial planning!!!

Unfortunately, many fundraising efforts fail because the organisation pays insufficient attention to creating a plan and monitoring its progress. A sound fundraising plan is your map and itinerary for raising the money your organisation needs, and a good budget will provide a near accurate record of your predicted income and spend over time.

In a charity for example, each individual departmental budget, as my friend would ever so eloquently put it, ‘is a facet of a composite budget’. Your individual budget feeds into a master budget, which is the overall charity’s budget.  A charity’s budget may generally rely heavily on the generous donations of its donors. However, during the course of time, we may find ourselves in a position where our actual expenditure exceeds our budgeted income.  This is not necessarily wrong if you can justify your expenditure. However, on the flipside of this, generally speaking your organisation must also remember that they are stewards, and at the end of the day they are accountable to their stakeholders for how they spend the organisation’s money.  Working to a budget infact demonstrates great wisdom! 

Key things to remember:

A reforecast during the course of the year is also helpful, as unforeseen changes in circumstances could mean that you need to review items that you had originally budgeted for.

Don’t be caught out…

Make sure your organisation has a budget that every member of your organisation can work to!

Lara Rufus BA, MSc, Fundraising Consultant and Chair of the Black Fundraisers’ Network; email – lararufus@bfn.org.uk or lararufus@yahoo.co.uk

We have several events and activities that we are looking to plan this year. So in addition to the continued support and enthusiasm you’ve shown by attending our events over the last year, we hope that you will continue your support in 2011.

In the lead up to those events, we also need some additional support from some you if you’re able.  As you may already be aware, the Committee are all volunteers and preparing and coordinating our events requires a mix of various skills, talents and most of all time and commitment. As we continue to broaden our events, we are increasingly in need of additional helpers. We are therefore asking if you would kindly consider being one of our helpers.

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