An introduction to funding

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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 (including the National Lottery) [38 per cent]
• public or statutory sector (Local authorities, NHS etc)  [36  per cent]
• voluntary sector (particularly grantmaking trusts) [8 per cent]
• commercial sector [6 per cent].
• trading and investments (trading, rent, investments) [12 per cent]

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

Many people are surprised that:

• so much of charities’ income comes from the state [36 per cent]
• so much comes from fees or charges [49 per cent]
• so little comes from commercial companies [5 per cent].

The smallest charities tend to get a greater proportion of their income from individuals and trusts and a smaller one from the statutory and private sector

(Source: proportion of total charitable income in brackets taken from the UK Civil Society Almanac 2010, NCVO, pps 44 and 83).

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 for raising money

• 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 (for example, 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 (for example, sponsored runs, fundraising dinners, etc)
• Direct marketing (for example, 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

Funding and income and the law

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

Have your say

Have you faced challenges involving funding and income recently? What advice would you give to others?

Ask questions, and share your knowledge by joining in a discussion on the Fundraising forum.