Wednesday, 2 January 2008

Gift Horses and the Charity Sector

As someone with several years expertise in what is now termed the third sector I was asked to run some workshops at an event just before the holidays for a group of charities. The delegates were establishing or had already set up trading arms to generate income.

The main problems faced by many UK charities are donor fatigue, (there are just so many charities competing for our donations), and reductions in funding form sources such as Local Authorities.

This wide spread set of challenges has resulted in the need to generate income form other sources, the only problem with that is the Charity Commission rules governing limits on trading activities.

So how do these organisations who are often small overcome this barrier, well the answer is to establish businesses that create income and then feed a large proportion of the income back to the charity.

When setting up these businesses the choices for charities are often a not for profit limited company, a company limited by guarantee, or latterly the new Community Interest Company.

Over the past few years I have though noticed a few challenges for the charities as they establish these businesses because they lack business skills or experience:

A lack of understanding of the market place that they are entering.
Under costing their products or services.
Because they are charities they don’t think that they can charge normal prices.
Poor business planning.
Poor business skills.
Poor financial and management controls.
Entrepreneurial drive and awareness.
Naivety so they are ripped off by suppliers and customers, (especially if they are supplying the public sector).

These organisations often believe that bringing in someone form the outside will be expensive but so is failure or loss of potential income.

Much of my work in this sector is at subsidised cost there are also networks of self help organisations who call in people like me to deliver training to groups of delegates and charge low attendance fees and in many cases free places. Sadly often organisations don’t take up these places at events or even turn up on the day especially if it’s free.

So today’s plea is don’t look a gift horse in the mouth and grab any help you can get!

For more information about available help contact me today.

Alan Briggs

Dynamic Business Strategies Ltd
Tel: 07917 446068


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