Sources of Income

Raising funds to remain sustainable and fulfil your aims is the number one challenge facing charitable organisations.

The key to successful fundraising is a strong strategy, which ideally has a mixed portfolio of sources of income, so you are not dependent on any single source. Each source has distinct characteristics – they require different levels of resource to exploit them and have different timeframes to deliver a result.

You need to decide which make most sense for you, matching your ambition to available resources. Some of the options are highlighted below. You can also find out more on the different types of income generation on the Chartered Institute of Fundraising and Knowhow Nonprofit sites, or watch the fundraising webinars from the FSI.

Find out more about the core sources of income below:

Trusts and Foundations

Organisations new to fundraising often start with Trusts and Foundations, seeking grants from organisations that exist specifically to give grants.

Pros: Substantial chunks of money at relatively low cost from organisations whose job is to give away money

Cons: Trust grants are usually for specific projects or specific causes – so rarely unrestricted and reporting requirements are usually high.

Find out more on our Trusts & Foundations page and our Current Funding Opportunities page.

Major Donors and High net worth individuals

High net worth individual (HNWI) is a classification used by charities to denote an individual or a family with high net worth.  The cultivation of this type of income takes time and is not a quick win.

Pros: Five donations of £10k or £20k could transform your organisation’s financial fortunes.

Cons: High net worth individual need wooing and often want to meet and keep in touch with the CEO or senior staff or trustees. Like Trusts and Foundations their reporting requirements are usually high.

Find out more on our Major Donor page.

Corporate partnerships

Many companies allocate resources, which could be people’s time and expertise or money, to support charities and community projects.

Pros: There are lots of companies and lots of opportunities to persuade them to give.

Cons: Companies typically give only a very small portion of their turnover to charity and want a lot in return so can be quite resource intensive. A corporation will also want a strong well-known brand which may be hard for a small organisation to have.

Find out more on our Corporate Partnerships page.

Trading

Trading is the activity of buying and selling goods or services. Many charities trade products and services to help generate income, which can subsidise other activities; for example, when a client or beneficiary is unable to pay for the full cost of a service they are receiving. Sometimes they will set up a trading subsidiary to carry out the activity.

Pros: Trading isn’t giving and it is easy to demonstrate a business case, making it easier to borrow money and carve out a unique niche.

Cons: Costs are usually higher than traditional fundraising activities, making margins vulnerable to changes in the economic climate.

Find out more on our Trading page.

Community Fundraising

Community fundraising is a way of mobilising support from your community by raising income and awareness about who you are and what you do.

Often the public face of a charity, it can mobilise large numbers of supporters, increase awareness of and engagement of your cause and it is possible to raise significant amounts of money through events organised by your “community” such as bag packs, street collections, fetes and fairs, or social activities such as quiz nights or concerts.

Pros: Unrestricted income from volunteer-driven events from dozens of different activities

Cons: Hard to grow community income without adding in staff costs and without homogenising fundraising and removing supporter’s freedom.

Find out more on our Community Fundraising page.

Lotteries and Raffles

‘Lottery’ (or raffle as they are sometimes known) is the broad term used for a game where you pay to enter, where there is at least one prize, and winning is dependent only on chance.

Pros: Lotteries allow charities to raise money from the public in a way that appeals to a wide audience. The added incentive of a prize enables charities to engage with those who may otherwise not donate and gain new supporters.

Cons: Can be confusing with different lotteries having different regulations but Community Impact Bucks can help you with understanding what you need for your event.

Find out more on our Lotteries and Raffles page.

 

Challenge Events

Challenge events fundraising is where people get sponsored to take part in a task and donate the money, they raise to you.  These funds are raised by completing an endurance task e.g., London Marathon, overseas challenge, parachuting. These can be organised challenge event companies, or your supporters may raise funds for the charity by organising their own fundraising activity.

Pros: Since challenge events are generally perceived as fun, they usually attract a large number of people. Events also help raise your organisation’s visibility and brand.

Cons: An event can be ruined because of the weather, a competing event on the same day, a supporter not showing up, and many other details over which you have little control.

Find out more on our Challenge Events page.

In Memory Giving & Legacies

Keeping the memory of a loved one alive through fundraising it is a great way for supporters to commemorate the life of a loved one and can be simple for you to set up for your supporters.

Larger charities get more of their income from legacy donations. It is a challenging area of work.  However, it is also a very rewarding area of fundraising with it being likely to be the largest donation an individual can ever give to your charity.

Pros: Large chunks of unrestricted income that can make all other sources of fundraised income pale into insignificance.

Cons: Legacy income is unpredictable and can take years and years from promotion to results.

Find out more on our In Memory page.

Regular gifts

A gift of a set amount at regular intervals e.g. weekly, monthly or annually. Knowing that you have a regular source of income means that charities can plan and put new projects into place as the need arises.

Pros: Regular streams of low-cost income allowing your organisation to better plan and from which gift aid can easily be claimed.

Cons: People need to be persuaded to give in the first place – lowering the barriers to signing a commitment is why charities are so keen on starting out on £2/month.

Find more on our Regular Gifts page.

Easy ways to fundraise

Recycling and Earn while you shop are a simple way to raise extra funds for your cause, and a great way to get a school, workplace or local community involved.

Pros: Quick and simple to set up and an easy way for your supporters to get involved at no extra cost to themselves.

Cons: Returns are small

Find out more on our Easy ways to fundraise page.

Gift Aid

Although Gift Aid is not a form of fundraising it is a great way to make extra money at no extra cost to your supporters. You can claim back 25p every time an individual donates £1 to your charity or community amateur sports club (CASC).

Find out more on our Gift Aid page.