Help & Advice:

1. Getting started in fundraising
2. Planning your fundraising
3. Sources of money
4. Applications

 
Help for Community Groups - 3. Sources of money

Voluntary organisations get their money in a variety of different ways. Some resource themselves entirely from local fundraising activities; others are funded mainly by local government, or from grant-making institutions. Many get a mixture of money from a number of sources. This section outlines some of the main sources of money for voluntary and community organisations.

The public

The public are by far the largest givers to charity, giving as much as £5 billion a year. The amount that people give is usually limited more by the number of times they are asked rather than them having a pre-set limit on charitable giving (Section 1, Getting started in fundraising has more on how to ask people for money). The methods of raising money from the public suggested below might appear to be an old hat, but they can be enormously successful. Also, money raised from the public tends to come without strings attached (unlike, say, money from the National Lottery or grant-making trusts). You can use it for whatever you want to, rather than it being tied to a single piece of work.

Here are some ways of raising money from your local public.

Fundraising events

Organising a fundraising event is still one of the best ways of funding voluntary activity. It can help to:

raise money – generally without strings attached;

give people a good time, so that they feel much better about you as an organisation and are more likely to support you again;

• act as a thank you to friends, supporters and volunteers, renewing enthusiasm and maintaining morale;
• let people know about you and your work.

There is no limit on choice of events (other than possibly the limits of your imagination). Events can be as straightforward as a coffee morning or something more involved, such as a quiz night with prizes, refreshments and a raffle.

Who will come?

People generally attend events because:

They like the organisation – this might include the management committee, staff, volunteers, members, supporters, suppliers and anyone else associated with your project.

They like the people – friends, family, neighbours, colleagues of the above.

They like the cause – people who may or may not know the organisation, but sympathise with what it is trying to do.

They like the event – people who may have no connection with or interest in the organisation, but would like to take part in the event (e.g. they will enjoy the concert; they have always wanted to go abseiling; they have always wanted to meet that celebrity, or whatever).

Try to make sure:

The event is enjoyable – make your event interesting, fun and/or different; have good prizes for raffles or competitions.

People come – there is no point in having a terrific event if nobody knows about it. Personal invitations are far better than general adverts, so mobilising your staff, volunteers and supporters to sell tickets is crucial. If you can attract children, you will usually get their parents as well, so good publicity in local schools can be really effective. Getting an interview on local radio, or a piece in the local paper, gives you a chance to explain the attraction of the event and what it is about.

Key Questions Once you have decided what kind of event to hold, you will then need to
answer some key questions.

• Who will be responsible for organising the event?
• Where will it be held?
• How do we publicise the event?
• How much money do we hope to raise?
• Will the event have a good financial return?
• What could go wrong, and what can we do to minimise the risks?
• Do we need permission or a license for anything?
• Are there any insurance or legal aspects you need to consider?

Can you do it?

A good, well-run event can be worth its weight in gold. However, an unsuccessful event will damage your bank account, reputation and the confidence of your supporters. So, start off small and build up your experience. A gala ball with dinner for 300 at the most prestigious hotel in your area may be an attractive thought, but how risky is it in terms of ticket sales, organisation of music, catering etc? Be careful!

Sponsored events

Sponsored events can be really effective – and are probably still the most popular – ways of raising money. Through those taking part you can reach their family, friends, neighbours, work colleagues and more. Every potential donor is being approached by someone they know, like and trust and you get access to people who may never have heard of you and have no interest in your organisation but will sponsor someone because they are a friend. With imagination and enthusiastic volunteers, you can make a sponsored event really different – sponsored carol singing in June and marathon beach parties in December, for instance.

Here are six tips on maximising the value to you of sponsored events:

1. Make sure the form breaks the sponsorship down into smaller rather than larger units (kilometers rather than miles, minutes rather than hours etc.).
2. People usually look on the sponsorship form to see what those above have decided to give and give roughly similar amounts. Make sure that the first sponsors are close family or good friends who will give larger amounts of money.
3. Make the form positive, upbeat and enthusiastic and give it a good fundraising message.
4. If you offer prizes for the largest amount collected make sure that it is the largest amount actually paid over to you rather than the form that pledges the most.
5. If you have team events, use your business contacts to get companies to enter teams. Then ask the companies to match the amounts collected by their employees.
6. Remember to say thank you to all those involved. If they have had a really good time they are your most likely recruits next year.

Public collections

The most common reason for not giving to good causes is that people aren't asked! Collections can be a good way not just of raising money but also of getting known locally. These include:

• street collections, flag days and carol singing
• house-to-house and pub collections
• collecting boxes in shopping precincts, outside shops, on shop counters, in bars or anywhere you can get permission.

To run a street collection, flag day or house-to-house collection you will need a permit, and you have to comply with a strict set of rules designed to protect the public (contact you local authority for more details).

Regular giving

Members of the public give regularly to the causes they are committed to. Some do this as members of a charity; others through a standing order via their bank, even though they are not members. The more regular givers you have, the more reliable income you have. Again, start off small. Maybe you could try to get each member of your management committee to sign up three people to give you £1 a week each. If you have 10 management committee members, this would be worth over £1,500 a year. And then, sign up more. A valuable by-product of running fundraising events is to get people to sign up as regular supporters.

Charitable trusts

There are bodies set up to make charitable donations. They may be set up for a variety of reasons, from enabling a wealthy individual to give regularly to good causes, to providing a memorial of a loved one. They include public fundraising charities (e.g. BBC Children in Need and Comic Relief) plus less well known ones such as the Tudor Trust (which has over £20 million a year to give away). Over £1 billion a year is given away by charitable trusts. However, the competition for these funds is strong. If you want to approach trusts you will need to identify those, which are the most likely to fund you – there are thousands in the UK. Each trust has its own guidelines and criteria and will only fund work that helps them to meet their objectives. You could have the most useful project in the world but if it's aimed at helping the environment and you apply to a trust interested in education, you won't get a grant. By reading up on the trusts in the directories you can work out:

• what subjects interest them;
• if there are any geographical restrictions (i.e. they only fund organisations in certain towns or cities);
• how and when they want to receive applications;
• how much they give per year/per application;
• what type of funding they prefer (e.g. start-up or projects);
• if there is any special information required.

Only write to those trusts whose criteria you can fit. Don't waste time writing to the wrong people. Most trusts receive more relevant applications than they can fund, so general appeals to any and every trust are guaranteed to fail.

There are six key points to bear in mind when writing to trusts:

• Trusts will fund capital (buildings, equipment etc.) and revenue costs (salaries, rent, rates and other on-going costs).
• Trusts like to fund innovation. Show there is something new about the work you want them to fund.
• Trusts won't fund work they consider to be the government's responsibility. However, if you are pioneering a service or are meeting a need in a way the government can then copy, all well and good.
• When approaching trusts, make sure you ask them for an amount that they can easily give. Look in the directories and see what is a typical donation.
• Trust funding is short-term. You are unlikely to get a grant for more than three years from a trust.
• Unless you are new, trusts are unlikely to fund your entire organisation. Rather they want to fund a particular aspect of work (called a 'project'). Therefore, try and isolate one service or activity that you think will interest the individual trust you are writing to.

See section 4, Writing a fundraising letter, for more information. Much of it is directly relevant to grant-making trusts. Also to find out, which trust might be interested in your project click on the Trust section and fill in an Enquiry form.

Company giving

Companies give about £500 million to community organisations, half in cash and the rest in kind (items of equipment, expertise and so on). They do this for lots of reasons, but mainly because it is in their business interests to do so. The more they see the donation as a business opportunity, the more likely they are to support you. The onus is on you to give them good reasons to support your organisation. For example, they may give:

to create goodwill within their community – companies want to be seen as good citizens and good neighbours. Supporting local charities is a good way to do show this;

• to be associated with certain causes – to boost their image and provide public relations opportunities;
• to create good relations with employees by supporting charities where staff are involved;
• because the gift is decided by the chairman or managing director.

Company giving to good causes is seen as a PR expenditure. They want a return on their investment, so you should give them good business reasons why they should support you (local press coverage, improved staff relations, access to local people of influence, the chance to be photographed with X celebrity or whatever). It's not enough just to appeal to a kind company heart; show that you make business sense to them.

Four top tips

Companies only give to organisations in areas where they have an office, plant, factory or other presence. Most company donations are to local causes. If the company does not trade in your area don't ask them for money.

Personal contacts work best. The trick is to get the right person to do the asking. Maybe you could recruit a local businessperson onto your fundraising committee and get them to approach their colleagues on your behalf – this saves you time and gives you more chance of success.

Companies like to support causes with which staff members are associated. Some have schemes where they match any money raised by employees; others may give preference to charitable appeals proposed by them. Maybe you could get a volunteer who works for a company to ask on your behalf.

Don't write 'Dear Sir/Madam' circulars. They will be binned.

What companies give.

Companies can give different things:

• cash
• second-hand items (e.g. furniture and equipment)
• business advice or consultancy
• company products
• use of facilities (meeting rooms, printing resources, secretarial assistance etc.)
• staff time – you may get up to 35 hours of an employee's time to help with a specific piece of work;
• allowing you to give a presentation about your work to their staff, as part of a recruitment drive for volunteers;
• agreeing to their staff undertaking fundraising on your behalf.

All the above can be as valuable as cash, especially as the typical local company donation is small (under £250). Try to ask for something that the company will find cheap and convenient to give – this may not be cash.

The National Lottery

The National Lottery is a key funding source for charities. For every £1 spent on lottery tickets, 28p are split between five good causes: Arts, Community Fund, Sport, Heritage, and New Opportunities Fund. National Lottery boards distribute over £1 billion a year in more than 10,000 grants to these causes. Grant policies change regularly, so check before you apply. For details, click on the Lottery section.

Money from government

Government used to be a major funder of voluntary activity. Many local voluntary and community organisations received much of all their income from their local authority. However, over the last few years there has been a shift in the way that government spends its money. Especially at the local level, it is no longer a case of applying for grants; rather, you are expected to run services under contract.

Government spending in Britain takes place at three levels:

• central government
• regional government
• local government.

Central government deals largely with national affairs so it will not normally be involved in funding purely local projects.

One of the roles of regional government is strengthening the regional economy. For example the Scottish Office is responsible for programmes such as the Rural Challenge Fund.

Local government covers your parish, district or region.

Working with local government is as much about people and contacts as any other fundraising. You need the names of the key decision-makers and you need to ensure that they know, like and trust you in order to gain their support. Your local councillor can be a key ally in this.

What will the local authority give?

There are three basic forms of support.

1. Rates reductions - Most local voluntary organisations can receive up to 100% relief off their rates.
2. Grant - There are still small pots of money, which the local authority can give in small grants to local organisations.
3. Contracts and service level agreements - Don't always think of grants. Local government operates very differently from a few years ago. Some of the services are provided through buying in the help needed to run some of the provisions. Service providing agencies may be a commercial company but it is equally likely to be a voluntary group. It depends who offers the best service for the best price.

So, having identified the key people in your local authority, ask them what the authority is trying to do in your area of activity. For example, if you are running an after-school club for young children, rather than asking for an equipment grant, try to find out what the authority thinks are the key issues in working with these kind of children. Then talk to them about how your project meets these objectives. Only then start discussing what you need to be able to do this better. It may be that the local authority does still have small amounts of grant money available for your kind of work. But if you can show how you fit into their thinking and strategy you have a much better chance of securing the funding or support.

Europe

Voluntary groups can access European Funding, however this type of funding always requires Match Funding (Most European Grants provide between 45-50% of funding). For details, click on the European Funding Section.

PHILANTHROPIC GROUPS

There may be philanthropic groups in your area which make small donations to the voluntary sector and who may even fundraise on a group's behalf. Examples of such groups are:

• Rotary clubs
• Round Table
• Townswomen's guilds
• Women's institutes
• Masonic lodges
• Chambers of commerce
• Churches, mosques, synagogues and so on.

There may well be a large amount of local competition. Once again, personal contacts may hold the key.

Earning money

Grants and fundraising sources are not the only way to get money. You may be able to earn money through charging for what you do. Do you have knowledge or information that you can sell? For example, if your group runs a counselling service you could offer this to members of local company staff to help them resolve personal difficulties. This would then reduce absenteeism from work and produce a more committed workforce for the company. The company, therefore, has a vested interest in paying you to do this.

Could you sell things that you make, either door-to-door, over the counter or to another supplier? Could you develop services that you can charge for (e.g. a laundry service in your area)?

The answer may be 'no, we can't' or 'no, we don't want to'. However, more and more organisations are generating income from sales of services rather than grants. It gives you much more freedom in where you get your money from and what you can do with it, and reduces your dependency on other funders. Fundraising is no longer limited to grants and public collections – you now have far more options than that, if you want to take them.

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