What an ambitious income generation strategy ACTUALLY looks like

Hands up if you’ve ever heard charities talking about having:

“an ambitious income generation strategy”

“an innovative and diverse fundraising portfolio”

“forward thinking, donor focused supporter journeys”

And then continuing to do everything exactly the same?

Modern fundraising is problematic because it is vulnerable to (amongst other things):

• economic events, (which impact people’s ability to give)
• competition
• government decisions around support for core services.

Budgets tend to be decided once every twelve months, exposing charities to risk. Where offered, ‘long term’ funding agreements usually cover a period of 3 years (5 years in rare circumstances).

On top of this, we’re faced with:

• Individual giving across the UK has stagnated for three years, prior to the pandemic (so kudos to you if you’re maintaining income)
• There are fewer charitable trusts with open programmes, supporting wide ranging and multiple causes
• Competition for funds is increasing as new causes enter the market: schools, Community Interest Companies (and other types of charitable organisations), leisure centres, libraries
• Moved by the power of story, donors are choosing to support individuals and social / political movements over charities using GoFundMe pages, Crowdfunders, JustGiving etc (e.g. Extinction Rebellion, Black Lives Matter, Captain Sir Tom Moore’s NHS fundraiser…)
• There is a trend towards ‘public voting’ style grant giving which can exclude all but large, national charities

But in a social good / non profit sector where everyone is being asked to do more with less, we’re left with no choice. It’s time to try something new.

And yet doing new stuff is not easy. An ambitious income generation strategy requires investment in untested areas where there is no guarantee of success. It’s scary, especially for trustees whose expertise lies in the work the charity delivers, not in the intricacies of fundraising.

I’ve just come to the end of a 13-month project with Rowcroft Hospice where I’m delighted to report that they are actually trying something new.

Lots of things in fact.

Allow me to tell you more:

Rowcroft is a charity which provides end of life care to over 2,500 people each year in South Devon. Their services are rated ‘Outstanding’ by the Care Quality Commission.

They’ve given me permission to share their story with you in a bid to start conversations at your own charity and inspire your own ideas for growth, change and being genuinely fit for an as-yet-unknown future.

A bit of background about hospice fundraising

Many hospices (often for very good reasons), remain risk averse when it comes to income generation.

This is definitely changing for the better, and I’ve seen some wonderful examples of good practice in the hospice clients I’ve supported, but even those who are branching out and embracing new types of fundraising will recognise the following:

• A tendency towards transactional forms of fundraising (events, charity shops, raffles)
• Reactive rather than proactive fundraising (most hospices receive a lot of unsolicited gifts which inevitably pushes them into a comfort zone which it can be hard to get out of)
• Lack skilled workforce (I hasten to add, I’m not talking about ALL hospice fundraisers here, but the locations of many hospices has previously limited the availability of a wide pool of candidates, plus reactive fundraising activities lend themselves better to admin rather than fundraising skills sets)
• Fear of philanthropy

Hospices are typically regularly given large, unsolicited gifts, often in recognition of the care they’ve given to individuals and the gratitude felt by family members and loved ones.  But fear of appearing insensitive or riding rough-shod over a person’s grief often prevents them from getting to know donors on a deeper level and creating a longer term, mutually beneficial relationship.

Rowcroft seem to be genuinely doing things differently, recognising that traditional forms of income are unlikely to be sustainable over the long term and in line with growing demand, won’t be enough.

They have estimated that their local population will increase by 8% to 2030 and that demand for services will increase by 11%.

Here is a snapshot of the plans which make up ther ambitious income generation strategy:

1. New social enterprises

Rowcroft is already at the forefront of income generation, with a diversified retail portfolio (including several online stores), a commercial collaboration with a local coffee roastery and a mobile coffee van.

However, they’re not stopping here.

Mobilising the business expertise on their board and within their leadership team, Rowcroft have decided to create 4-5 separately constituted social enterprises (each with their own General Manager and Board of Non-Executive directors) to deliver a financial contribution of up to 10% of total hospice turnover.

The first of these enterprises is Devon Farm Kitchen, a meal delivery service which produces handmade frozen meals using local Devon ingredients and delivers them direct to your home.

The next business will launch later this year.

2. Quick shifts in pandemic fundraising

The fundraising team at Rowcroft did a brilliant job of shifting their fundraising activities in the face of cancelled events and closed shops.

They picked up the phone to supporters much more so that they ever had done previously and trialled online events for the first time.

A Covid-19 emergency appeal in April 2020 was hugely successful and later in the year, the team established both a major gifts and mid-value giving programme which has so far raised over six figures in donations and pledges.

3. An endowment fund

Rowcroft have been inspired by charities such as the St Monica Trust, the Buttle Trust and Guys and St Thomas, who have endowments are now in the fortunate position of having a regular income alongside fundraising and trading income to support their core activities.

An endowment fund will deliver a degree of security which cannot be attained through other income sources.  It will be free from the many fluctuations in donor behaviour / world events to which other streams of income are vulnerable.

Rowcroft have spent considerable time in 2020:

• building their networks and identifying potential future donors
• testing the endowment case for support
• integrating feedback from donors and advocates

It has been a year of gathering information in preparation for a future private phase appeal and other complementary activities (alongside philanthropy) which will support the endowment in its early years.

They recognise that this is a very long-term ambition which is impressive given the short-term nature of most charity planning.

4. Re-thinking their site

Although 80% of Rowcroft’s care is within its community, spanning 300Rowcroft Hospice inpatient unit square miles of South Devon, it operates an inpatient unit within a glorious 22 acre estate. It has ambitious plans to use the estate to care for more of its community and build new income streams. Watch this space.

This and their other initiatives prove that commercial activity not only fulfils unmet needs and generates prosperity in the local community, but that it does so whilst keeping charitable objectives at the heart of everything.

Bravo Rowcroft.

Each week, I shamelessly invite you all to buy me a coffee if you’ve enjoyed our articles and feel that they’re useful to you.

However, this week, I’d love it if you could head over to Rowcroft’s website and donate a few pounds in gratitude for this article and for inspiring us to think differently about what an ambitious income generation strategy looks like.

I reckon it’s their turn for a coffee or two…