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Making the transition to a self-funded charity

Making The Transition To A Self-Funded Charity

Charities play a fundamental role in supporting disadvantaged people and communities around Australia. Most charitable organisations fund their services through a combination of donations they receive from organisations and individuals, and government funding. However, government-funded charities are always faced with the risk of losing their funding, whether at the state, local or federal level.

An effective fundraising plan and the right people to deliver it are fundamental to the long-term survival of any charity. Diversifying our income streams in preparation for a non-government-funded future turned out to be a wise decision in the case of Stepping Stone House, as we are losing our funding from the NSW Department of Family and Community Services this year.

Planning for a self-funded future

When I joined Stepping Stone House in 2014, one of my key duties was to build up diversified revenue streams through good financial planning, fundraising and driving sales.

Over the past three or four years, we have been strategically building up a regular income stream outside of government support. We have also been accumulating prudent reserves to safeguard against the risk of losing government funding in the future – which has now happened.

So, I thought I’d share some of my insights on how to make the transition to a self-funded charity, which Stepping Stone House has, happily, achieved.

  • Regular income is key.

    Monthly or regular giving should be the top priority for leaders, rather than large, one-off sums such as bequests. While bequests can make a huge impact on a charity’s finances, they are rare, and can sometimes take years to come to fruition.

    My advice is not to rely on bequests, but to continuously drive diversified campaigns that encourage regular donations from sponsors, organisations and individuals. For example, organisations can set up a recurring donation or a workplace-giving initiative where employees make donations to your charity pre-tax.

  • Be strategic about your fundraising initiatives.

    To raise awareness for your cause, identify activities that return the greatest return on investment, i.e. dollars raised for hours input. For example, at Stepping Stone House, our annual Sailing Regatta and Sleep Under the Stars fundraiser account for about 25% of our total costs for the year.

    It’s also important to be strategic about building strong relationships with key donors and the timing of your fundraising campaigns and events. As you might have guessed, Christmas, Easter and End of Financial Year are ideal times to ramp up your fundraising efforts and call-outs for donations.

  • Raise your profile.

    Today’s donors are becoming more and more savvy about where they invest their money. No longer are people donating on gut instinct. Rather, people want to donate to a cause that is credible and can demonstrate evidence of great performance and true social impact.

    To ensure donors trust your brand, it’s important to invest time and money in raising your profile. A key way to do this is through strategic marketing. Whether it’s through an internal team or an external partner, marketing will help you to promote brand awareness. Clearly articulate the values that you stand for, and share outcomes that validate your charity’s high performance.

  • Validate and lift outcomes and impact.

    Strong impact goes hand in hand with raising your profile. If you are focusing on promoting awareness of your cause, you must be able to prove your social impact and outcomes. Otherwise, you are unlikely to spark people’s interest and encourage donations.

    A good way to demonstrate – and in turn improve – your charity’s performance is through data analysis, statistics and reports that contain measurable outcomes. By validating your performance outcomes, it’s not only donors who will feel connected to your vision and cause, but employees, volunteers and the board as well.

Becoming self-funded and self-sufficient is a universal goal for many charities – and one that requires strong leadership and a collaborative approach across the organisation.

Effective fundraising includes regular income streams from donors, profitable fundraising events and strategic call-outs for donations. Profile raising and measurable performance are key to success, because donors want to have the confidence that your charity is truly making a difference.

Be sure to continually reinforce your brand’s credibility when you’re asking for donations and, most importantly, thank your donors for their contributions, explaining the impact their donation has made.

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